- Kevin Glass
Managing Editor, Townhall.com
April 05, 2013
President Obama’s budget proposal is due out next week. We’ve already got a relatively good idea of what he’s going to propose – more spending, more taxes, maybe some hints of deficit reduction. It also looks like President Obama will propose a statistical adjustment to Social Security’s adjustment formula – moving to the chained consumer price index (C-CPI) – that the Obama Administration has long portrayed as an important entitlement reform.
What is a C-CPI reform, exactly? It would peg Social Security cost-of-living adjustments to a different – and, economists say, more accurate – form of inflation. The practical effects of this are that there would be modest benefit cuts and modest tax increases over what’s currently projected for Social Security. Over a ten-year period, the CBO projects, there would be a $127 billion spending cut to Social Security and a $123 billion dollar tax hike. Liberals dislike the C-CPI reform due to the spending cuts and conservatives dislike it because of the tax hikes.
A “senior administration official” told the Huffington Post that President Obama’s plan is “not the President’s ideal deficit-reduction plan” and characterizes the C-CPI proposal as a “key Republican request… not the President’s preferred approach.”
This is a dishonest framing at best. As the Washington Post reports, it has consistently been the Obama Administration pushing for a C-CPI reform to Social Security. This is from a WaPo report on December’s fiscal cliff negotiations [emphasis mine]:
Liberal Democrats, too, were on edge about Obama’s offer on the inflation measure, known as the chained consumer price index, or chained CPI. Obama tentatively embraced the change in budget negotiations with Boehner in the summer of 2011.