White House courts progressives on chained CPI

Senior Obama officials defend their plan to Salon, make case for why potential cut to Social Security isn't so bad

By Alex Seitz-Wald

Published April 10, 2013 1:15PM (EDT)

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.

The whole point of the CPI change is to give the GOP something in exchange for new tax revenues, which they hate. Liberals criticize the White House for putting the Social Security cut on the table as an opening move, instead of waiting until Republicans force them to concede it, but the senior administration officials say it wouldn't have made a difference either way -- because they had already floated it in their offer to Boehner, and the GOP would hammer them on it either way, if they wanted to.

The White House adds that it feels it can win any political fight on entitlements -- even if Republicans try to tie Obama to the Social Security cuts -- after the successful test case of the 2012 campaign, when Republicans tried to make an issue of the $700 billion in Medicare savings contained in Obamacare, but didn't land any body blows.

The officials said the president would never enact chained CPI on its own and that no one in the administration likes it, but that it's the least bad option on a menu of bad things to hand Republicans. They say this all started when the entire GOP leadership demanded entitlement cuts, and specifically mentioned chained CPI and/or raising the retirement age to 67. The administration and Democratic leaders in Congress all agreed chained CPI was less bad, so Obama embraced that.

Notably, when asked by Salon why they didn't instead propose more progressive alternatives to addressing Social Security than chained CPI, such as raising the income tax cap, the White House officials said there had been no talk of it. Their reasoning: Republicans would never accept that (because it raises taxes) and the discussion has not been about fixing Social Security, per se, but about deficit reduction via the bipartisan negotiations.

While the officials touted the progressive elements in the budget -- universal pre-K, investment for clean energy, and infrastructure spending -- they said the budget writers started with the offer to Boehner and its $4 trillion in deficit reduction, and then added in the progressive elements on top to show the deficit and investment are not incompatible.

The White House remains committed to a grand bargain, the officials said, and will probably not entertain offers for more piecemeal approaches, such as shutting off the sequester in exchange for chained CPI, or raising revenues in exchange for the Social Security cut. But the officials said no one has made those kinds of offers yet, so they can't say for sure.

Of course, whether the above explanation will satisfy critics of the proposal remains to be seen. What is known is that the White House press operation has its work cut out for it.

Alex Seitz-Wald

MORE FROM Alex Seitz-WaldLIKE Alex Seitz-Wald