Except for Los Angeles Times columnist Michael Hiltzik, and a few stray media outlets here and there—The Providence Journal, The Palm Beach Post and, of course, The Washington Post—there had been little media attention to possible changes in the way Social Security cost-of-living adjustments would be calculated. That is, until the last several days. Almost as if on cue, Beltway columnists came forth with their takes on what is called the “chained CPI,” a method of calculation that is near the top of the wish list for DC deficit hawks and budget cutters.
Why is the chained CPI (chained Consumer Price Index) so attractive to such people? As we reported a couple of weeks ago, it cuts spending and raises revenue. The Congressional Budget Office Office estimates it could produce some $217 billion in savings over ten years, with about $145 billion coming from cuts to Social Security benefits and other government pensions.
It’s a juicy target for another reason, too: the public knows next to nothing about it. Its obscurity may have led Slate to characterize it as “the sneaky plan to cut Social Security.” The headline on a blog post by The Atlantic’s Derek Thompson called it “The Sneaky, Complicated Idea That Could End the Fiscal Cliff Showdown.”
Whether that will happen is very much up in the air at the moment. Some Washington writers and columnists aren’t keen on the idea. The idea behind “chaining” is to allow for the way people substitute cheaper goods and services when prices rise. Timothy Noah, writing for The New Republic blog, gave a good description of why the Chained CPI may not measure the cost of living with as much accuracy as its advocates promote. “Would chaining really bring Social Security benefit increases in line with spending patterns? Actually no,” he argues, pointing out that the proposed index doesn’t deal with healthcare spending very well. Healthcare is the biggest expense for many of the elderly, and consumes a larger share of their budgets than does for the rest of the population. If you need a heart bypass, you can’t substitute a hernia operation, the way someone might substitute chicken for steak.
While it didn’t take a position on the proposed formula, the National Journal’s good reporting clearly explained what the new index was all about. It noted the drawbacks of making a change, even quoting Andrew Biggs, a resident scholar at the conservative American Enterprise Institute and former principal deputy commissioner of the Social Security Administration, who expressed serious doubts about switching over to the chained CPI. “One reason is, it’s not based on the purchasing habits of the elderly,” Biggs said. “The consumption patterns of a working household aren’t the same as the consumption patterns of, say, an 85-year-old Alzheimer’s patient living on a fixed income.”
Others in the media seemed to be in the “on the one hand, on the other hand” mode. Count Matthew Yglesias in Slate and Thompson in The Atlantic in this camp. Says Thompson at the very end of his post:
There is a real risk that low-income seniors who live long lives could see smaller Social Security checks than they would today. But if this moderate and slow-moving deficit saver is the linchpin to an otherwise fair deal, Republicans and Democrats can do much worse than adopting a chained CPI.
It’s too early to tell whether media resistance to the chained CPI is a mini meme in the making, but as CJR has urged, the press is beginning to examine what it will and won’t do, and how it will affect America’s oldest and most vulnerable citizens.
Here’s the short version: Chained CPI increases benefits 0.3 percentage points less, on average, each year than the current cost-of-living formula, according to Social Security’s chief actuary. Importantly, the slower increase in benefits adds up each year, so that as a person gets older, the effect is greater.
NO ONE should be surprised by this G.O.P. congressional maneuvering, they are experts at sleight of hand. Their ONLY concern is padding the wealthy from having to be taxed at a fair rate, not with aiding the middle class or the elderly.
#1 Posted by Jerrie, CJR on Tue 18 Dec 2012 at 03:41 PM
The ' Chained CPI ', will put Senior Citizens, into ' Health Deprived Prisons '.
The President & Congress, should not change the ' Medicare & Social Security ', promise made to Senior Citizens. They have worked hard for it and have PAID into the FUND, like any other Insurance plan.
Taxes should be increased, on income above $ 250,000
The rich can afford to pay more in taxes, but Middle Class Senior Citizens, cannot afford to lose, even a few Dollars, a year. They are barely able to survive, even now.
#2 Posted by Akbar Matadar, CJR on Tue 18 Dec 2012 at 10:02 PM
Chained CPI should be chained to Obama and the minority leader. Had I known he was going to choose this direction he would not have gotten my vote. I did a lot for the President and I am in shock. That this is where he chooses to change benefits As for the minority leader where is her head. We cannot afford these future cuts to those of us who have worked so hard and lost so much, that our thanks is to steal from our aging seniors. Shame on our leaders and any democrats who vote for this
#3 Posted by holidaypro, CJR on Wed 19 Dec 2012 at 12:37 AM
Digby's has been doing some work on this:
http://digbysblog.blogspot.com/2012/12/bumping-up-to-premium-catfood.html
http://digbysblog.blogspot.com/2012/12/fiscal-cliff-notes-1218.html
It is a tragedy that the body politic is comprised of people who do not care about the American constituency.
There are neo-liberals, neo-conservatives, social-conservatives, libertarians, third way blue dogs, etc.. But the poor? No one from their ranks gets a voice. The small groups of people that speak for them are marginalized as bleeding heart, know nothings - they aren't serious. Cont..
#4 Posted by Thimbles, CJR on Wed 19 Dec 2012 at 03:27 PM
And the question that needs asking is 'Why? Why is it that the people who represent the 99% American constituency are small and marginalized in the body politic?
Brad Delong has a post on the passing of Robert Bork in which Bork and Kennedy discuss the poll tax.
http://delong.typepad.com/sdj/2012/12/robert-bork-has-died-rip.html
"KENNEDY: Well, it was not only on the basis of race. It was also on the question of discrimination against the poor. I remember very well, because I offered that amendment on the Voting Rights Act. I suppose the question is, how high a price should a poor person have to be able to pay to exercise the fundamental right to vote. You and I may not have to worry about where each dollar goes but there are a lot of Americans who do. To suggest that a poll tax, if it is small enough, does not deprive a poor person of a fundamental aspect of citizenship, well that reminds me of Anatole France's famous remark that "the law in its majestic equality forbids the rich as well as the poor to sleep under bridges and to beg in the streets and to steal bread."
The oath every judge and justice takes requires them to do equal right to the poor as well as to the rich."
There is no longer have a poll tax on the vote - though the conservatives plan to marginalize certain votes in other ways - but we have a 'poll tax' on the process of representation. You cannot be poor and unconnected to rich funders and expect electoral success. Your ideas don't matter. If you are poor, it doesn't matter how much 99% of the people prefer your approach and connect with your ideas, you are out of the running. You are unserious because, if you were serious, you'd have money.
The exceptions are small and marginal. The system is designed to reflect the interests of the wealthy.
We have to not only be prepared to fight the system as it takes away more from us to give to those who've paid 'the poll tax', we have to change the system so that there is no poll tax.
The electoral poll tax is an anethema to a representative republic and its democratic process. Much of the limits of our current political process are rooted in this poll tax we've come to accept. It is a tax to tamper with our representation as much as poll taxes in the past tampered with our franchise. It is time we sent that tax to the ash bin of history, much like what was done with its precedent.
#5 Posted by Thimbles, CJR on Wed 19 Dec 2012 at 03:53 PM