Salon.com > Chained CPI

Robert Reich: Chained CPI makes no sense for seniors

Wed, 24 Apr 2013 15:32:00 +0000

The GOP’s opening shot on Obama’s Social Security cuts

Thu, 11 Apr 2013 15:10:00 +0000

The White House took a big risk in including chained CPI in their budget proposal, despite fierce protestations from their political allies, but they're confident they can win any fight with Republicans who attack them for wanting to cut Social Security benefits, as two senior administration officials explained to us this week. Now we will find out if they're right, as a key Republican has become the first in his party to attack the president from the left on social safety net cuts.

Speaking with CNN's Wolf Blitzer yesterday, Oregon Rep. Greg Walden -- the chairman of the National Republican Congressional Committee, the campaign arm of the House GOP -- said Obama's budget represents "a shocking attack on seniors":

“I think you’re crossing that line very quickly here in terms of denying access to seniors for health care in districts like mine certainly and around the country."

Could Obama really learn something from Reagan?

Thu, 11 Apr 2013 13:18:00 +0000

Between 2005 and today, a series of elections took place that fully rejected the Republican economic worldview that says America must cut successful programs like Social Security. Yet, eight years after President Bush first proposed cutting Social Security, we have somehow arrived back where we started - only instead of a Republican president championing Social Security reductions it is a Democratic president.

This bizarre repetition of presidential history was the subject of Rachel Maddow's MSNBC interview last night of President Obama's top political consigliere David Axelrod. The discussion was significant for how Axelrod tried to avoid answering why, when it comes to Social Security, President Obama is now positioning himself to the right of Ronald Reagan. He is doing this by invoking deficits and debt as the reason to propose cutting Social Security, even though that program that has almost nothing to do with the national deficit and debt.

White House courts progressives on chained CPI

Wed, 10 Apr 2013 13:15:00 +0000

Even before the White House releases its budget today, the line item that's made the most waves is the inclusion of a switch to the so-called chained CPI, which would reduce benefits for Social Security recipients by changing the way inflation is calculated. This naturally touched off a firestorm on the left from many who say that, in addition to being bad policy, it's political suicide for a Democratic president to cut a social safety net program.

We've given plenty of space to the detractors, and on Tuesday, two senior White House officials laid out their case to Salon and a small group of other reporters in a background briefing. Here's what they're thinking:

First of all, the officials insisted, the White House will not go any further than what they're offering now. As they see it, they went halfway with their last offer to House Speaker John Boehner and the CPI switch, so now they're looking to see if anyone will meet them there. This way, if a grand bargain never materializes -- which they acknowledge is the most likely scenario -- it will be harder for Republicans to blame them for killing it.

Who’s winning the Democrats’ civil war?

Sat, 06 Apr 2013 11:00:00 +0000

When it comes to economic issues, Democrats are not a united party. There are economic liberals, in the vein of Elizabeth Warren, who believe that very rich people who lead a good life can afford to pay more in taxes to support basic services for struggling people, seniors, and others who are vulnerable. And then there are “pro-business” Democrats, or what might be called SPECs (Socially Progressive Economic Conservatives). These are the pro-fracking, self-described "entitlement reformers" -- like omnipresent former Gov. Ed Rendell -- who talk about the need to keep taxes low and make “bold” decisions like cutting the social safety net, in an effort to fix the debt, restore “balance” and "get serious."

Boehner rejects Obama budget

Fri, 05 Apr 2013 15:50:00 +0000

So much for moving to the middle to find common ground with Republicans. Just a few hours after the White House released its official budget, which included the Social Security cuts that liberals hate, House Speaker John Boehner rejected it out of hand, saying it doesn't go nearly far enough. "Despite talk about so-called balance, the president’s last offer was significantly skewed in favor of higher taxes and included only modest entitlement savings. He said he could go no further toward the middle, and that’s why his last offer was rejected," Boehner said in a statement.

There's not even lip service paid to the fact that Obama is risking mutiny in his own party by putting Social Security on the table. Instead, Boehner sees Obama's move a sign of weakness and demands more. "If the president believes these modest entitlement savings are needed to help shore up these programs, there's no reason they should be held hostage for more tax hikes," he said.

There's no way Boehner even had time to read the whole thing. And thus, the problem with pre-conceding to something that Republicans were not even asking for.

Liberal groups threaten primaries over Obama budget

Fri, 05 Apr 2013 15:14:00 +0000

Today may mark a nadir in the often strained relations between President Obama and the "professional left," as Robert Gibbs derisively called the progressive movement, which has been pushing for months to prevent Obama from endorsing cuts to the social safety net. When the White House released its budget today, it was clear the president hadn't listened to the increasingly urgent threats and pleadings from the people who helped elect him, as his spending proposal includes a change to the way Social Security benefits are calculated, called the chained CPI, as well as changes to Medicare.

The cut is anathema to liberal activists and lawmakers, who have gone all in to oppose the cut, warning Obama would face a "huge backlash" from his own base if he endorsed it. Now they're threatening primary challenges against any Democrats who vote for their president's budget.

Obama making historic mistake on Social Security

Fri, 05 Apr 2013 12:15:00 +0000

President Obama reportedly is unveiling a budget using the chained CPI inflation measure to cheat elderly Americans out of the benefits they were promised. In two previous posts I’ve explained the perversity of the current debate about Social Security. The tax-favored private components of America’s mixed private-public retirement system — programs like employer pensions, 401Ks and IRAs — are inefficient, volatile and subject to manipulation by overcompensated, fee-extracting money managers. In contrast, the Social Security program is simple and efficient, and has low overhead costs. And yet the bipartisan establishment, including many “progressive” Democrats as well as Republicans, wants to cut Social Security — the part that works — and expand tax-favored private savings, the inefficient, unstable and inequitable part.

How Republicans really view Social Security

Mon, 18 Mar 2013 18:04:00 +0000

Democrats surprised or angered by President Obama’s apparent willingness to reduce Social Security benefits may wonder why his entreaty has elicited mostly a snooze from Republicans, who speak often of their interest in "entitlement reform." I worked on Capitol Hill as an economist for several Republican lawmakers, so let me explain.

The first point to consider is that in reality, Obama and his fellow Democrats would only be persuaded to sign off on changes to Social Security as a part of a grand bargain, in which the Republicans gave up something major in return, like significant additional tax revenues. While suggestions by House leadership this weekend that the party would never accept additional revenue under any circumstances is just posturing, in my view, it's obviously still something conservatives have little reflexive enthusiasm for, having just swallowed them in January.

Obama’s push to cut SS annoys Dems, fails to move GOP

Wed, 13 Mar 2013 15:00:00 +0000

If the president offered up entitlement reforms, but no one but his increasingly annoyed friends seemed to notice, would it make a grand bargain? That’s the predicament Barack Obama finds himself in as he works towards ending sequestration and finding a comprehensive compromise to reduce the deficit that he seems to have his mind set on.

Later today, he’ll meet with House Republicans for the first time in two years in what is sure to be a tense summit. But his meeting yesterday with Senate Democrats had its own antagonism, according to reports, as liberal Democrats hammered the president over his offer to cut social safety net entitlement programs

The Hill’s Alex Bolton and Justin Sink report that while Democrats, including Majority Leader Harry Reid, warned the president that he couldn’t count on their support for Social Security cuts, “Obama stood firm.”

“Most of the conversation I caught was on Social Security,” Democratic Sen. Chris Murphy said of the closed-door meeting. Obama has proposed shaving benefits by changing the way inflation is calculated in Social Security cost of living adjustments to the so-called chained or superlative CPI.

Why is Obama really meeting with Republicans?

Thu, 07 Mar 2013 20:55:00 +0000

Does President Obama's newly packed social calendar mean the fever of partisan bickering in Washington is breaking? That’s the question today after President Obama sat down for dinner with a dozen Republican senators last night and even picked up the tab himself. But don't hold your breath.

Yes, Obama is engaging in a charm offensive, lunching with House Budget Committee Chairman Paul Ryan. Next Thursday, he'll join the entire GOP Senate caucus at their weekly luncheon.

But will this gastronomical diplomacy actually lead to a deal to turn off sequestration, or maybe even the elusive “grand bargain” that Obama has been lusting after for almost two years?

Sen. Lindsey Graham, who attended last night’s dinner and chose the other 11 senators on the guest list, thinks it's possible. “What I see from the president is probably the most encouraging engagement on a big issue since the early days of his presidency," Graham told reporters. "He wants to do the big deal.”

Will Obama address Social Security cuts in his State of the Union?

Tue, 12 Feb 2013 20:57:00 +0000

One thing to watch for in President Obama's State of the Union address tonight: Whether or not he mentions adopting "chained CPI" as part of the budget negotiations, a policy that would mean paying Social Security beneficiaries less by adjusting the way cost of living is calculated.

On Monday, White House spokesman Jay Carney said that raising the Medicare eligibility age is not an option, but again indicated that chained CPI is still on the table. From the official transcript of Carney's press briefing:

Will Obama cave on Social Security?

Sat, 12 Jan 2013 12:00:00 +0000

A top official at the nation’s largest union federation slammed a Social Security cut proposal that’s been floated by President Obama, but stopped short of calling it a deal-breaker in the next round of budget wars.

“We remain strongly opposed” to chained CPI, AFL-CIO government affairs director Bill Samuel told Salon. “It’s a very substantial benefit cut.”

“Chained CPI” is a proposed alternative method of calculating cost of living adjustments, which would reduce future increases in Social Security benefits. Samuel said that for many seniors on fixed incomes, even “the current system may not be adequate.” He called the claim that chained CPI could be implemented in a way that would be fair to such retirees “sort of ludicrous.”

Obama has repeatedly touted chained CPI as an aspect of a potential “Grand Bargain” with Republicans to reduce the deficit. In a “Meet the Press” interview aired on Dec. 30, the president highlighted it both as an example of his willingness to make concessions to the GOP and part of his “pursuit of strengthening Social Security for the long-term.”