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Social Security checks will average $720 in 1996, up from $702 this year. The 47 million Americans receiving Social Security or Supplemental Security Income checks will get a 2.6 percent cost of living adjustment, the second smallest in 21 years. Even at that, many members of Congress think the increase should be smaller. Reason: the Consumer Price Index, which determines the cost of living adjustment, overstates inflation. Senator Daniel Patrick Moynihan has recommended cutting the CPI by a percentage point to save the government $634 billion over the next decade, mostly from Social Security. "Most economists agree that the cost of living has actually only increased 1.6 to 2 percent," notes economics correspondent Suneel Ratan. "If you were to shave off that extra .5 percent, it would only amount to five to seven dollars a month from the average Social Security check. That doesn't sound like much, but over several years it adds up." Maybe so, but $5 to $7 can also mean a great deal to an elderly, poor or disabled person. Ratan says the issue will be raised later this fall as Congressmen scramble for new ways to balance the budget without cutting Medicare. "But it's a very politically dangerous thing to do this. You don't want to make it look like you're cutting benefits, and at the same time raising taxes." Or cutting benefits for the poor while cutting taxes for the rich.