Here's an example of how dead chained CPI is, and why it should be.

[ProSense]

Robert Greenstein and the Center for Budget and Policy Priorities advocated the method. Greenstein defended it recently (posted here: http://www.democraticunderground.com/10022034756)

Since the outrage over the inclusion in the negotiations, Greenstein is now emphasizing the caveats that came with his advocacy:

BOB GREENSTEIN, PRESIDENT, CENTER ON BUDGET AND POLICY PRIORITIES: <...>

The proposal is to use this new method not only for Social Security, but for all benefit programs with cost of living adjustments, and for the tax code. It ultimately raises as much in revenue as it saves from lower cost of living adjustments.

How much lower? About three tenths of a percentage point a year. What does that mean? So if you had a thousand dollars a month Social Security benefit, and there was three percent inflation, instead of going to 1,030, it would go to 1,027. Three dollars isn`t that much in the first year. But over the years, it accumulates.

And if you`re low on the income scale, as you get older and older, this becomes a problem. So where I come out on it is, this is worth considering, but only -- only under three conditions. Number one, it must be accompanied by provisions that protect the very old and the poor. The president has said he is going to try and get those protections if it is in the final plan. It is unclear how Republicans will react to that.

And the other key thing is this is a reduction, relative to what people would otherwise get, in benefits. And therefore it`s really only worth the president considering -- and I think this is his view -- if the Republicans move substantially on revenues in return. Only worth it if there is enough revenue in this plan so we really make progress towards the deficit without skewering things from education, to Medicare, to other things that are very important for the country.

http://www.msnbc.msn.com/id/50260060/ns/msnbc/

Think about all the caveats.

In advocating the program originally, the CBPP called for an exemption of SSI, but look at what it stated if that isn't included:

Policymakers should exempt the Supplemental Security Income (SSI) program from the switch or make other changes to SSI to mitigate the chained CPI's impact. Applying the chained CPI to SSI, which serves the nation's poorest elderly and disabled people and still leaves them well below the poverty line, raises particular problems. Policymakers should exempt SSI from the switch or soften the impact on SSI beneficiaries as described below.

<...>

First, January 1, 2012 is already behind us. Second, the $220 billion figure does not include the costs of the needed adjustments in Social Security and other programs described later in this report, without which this is not a reasonable policy. The savings in the first ten years thus would be smaller, probably in the $100 billion to $150 billion range if the change takes effect several years from now (after the economy has recovered more). The savings would then grow substantially in subsequent decades.

http://www.cbpp.org/cms/?fa=view&id=3690

So with the specified exemption, the savings would be much smaller, and without the exemption the policy isn't "reasonable."

That's a huge indictment. That was February. In its most recent push, the CBPP added even more caveat/exemptions:

Either exempt Supplemental Security Income (SSI) and veterans’ pensions from the switch or make other changes to mitigate the chained CPI’s impact on the poor beneficiaries of these programs. Over time, the percentage cut in SSI benefits (which go to the nation’s poorest elderly and disabled people) and veterans’ pensions would be substantially larger than the percentage cut in Social Security benefits. Policymakers should either exempt SSI and veterans’ programs from the switch or soften the otherwise-harsh impact on beneficiaries, such as by providing a modest benefit increase in these programs, as well, to people who have received benefits for many years and making a few other needed adjustments in SSI.

http://www.offthechartsblog.org/switching-inflation-measure-makes-sense-only-under-certain-conditions/

Not only are they selling this with the acknowledgement that it will hurt and that certain groups of people need to be protected, but they're also reducing even more any justification for the proposal: savings.

To quote Krugman:

"This is not good; there’s no good policy reason to be doing this, because the savings won’t have any significant impact on the underlying budget issues."

http://www.democraticunderground.com/10022037724

This proposal should never again resurface in reasonable discussions about Social Security, and should never be described as "strengthening" the program.

It's unnecessary and unacceptable.

[Tom Rinaldo]

1. K&R. And Thanks for all the work you put into pulling this together. n/t

[ProSense]

3. You're welcome. n/t

[dawg]

2. In order to make this less brutal, lots of complicated provisions need to be added ...

to protect the vulnerable. Doing so would eliminate almost all of the cost savings from Social Security.

So why even consider it in the first place? It is pointless. (But it still might happen.)

[ProSense]

4. It's pointless. n/t

[closeupready]

5. K&R

[ProSense]

6. Kick! n/t

[TheProgressive]

7. Well, Obama did not mention c-cpi directly in the latest 'deal' however

Last edited Fri Dec 21, 2012, 10:32 PM - Edit history (1)

He said " In the next few days, I’ve asked leaders of Congress to work towards a package that prevents a tax hike on middle-class Americans, protects unemployment insurance for 2 million Americans, and lays the groundwork for further work on both growth and deficit reduction.".

We have to be steadfast and watch what they are doing. Obama already put SS cuts on the table - SS and Medicare age might be the stuff he wants to lay the ground work for...

Persistence works in both directions. They are persistent to do these cuts - we have to be persistent to say 'no funking way'.

On Edit: added transcript quote.

[KoKo]

8. But, Obama was this person in 2006...from his own speech at Brookings...

Our President...In His Own Words in 2006 at Brookings: A Speech With Passion!

Last edited Fri Dec 21, 2012, 07:29 PM USA/ET - Edit history (2)
Who Coulda' Known? Only the "CLUELESS" for Sure!


Obama 2006—”Too many of us have been interested in defending programs as written in 1938″

On launch day, enter soon-to-be–presidential candidate Barack Obama to the Robert Rubin–Roger Altman chambers. Remember, Rubin and Altman were Bill Clinton Bigs. Obama felt very much at home in this chamber, with these ideas. Very one of them.

You could call this pb. Watch and see if I’m wrong. It’s not long, it touches most of the bases, and tells you all you need to know about how Barack Obama would govern. (Points if you hear footsteps of 2013 as well.)

Hat Tip to this Guy and his blog for passing along this Video:

&feature=player_embedded#t=0s

[ProSense]

9. Good speech. I don't

"But, Obama was this person in 2006...from his own speech at Brookings"

...get the "but"? What does this have to do with the OP? Is this speech surprising to you?

[KoKo]

10. Many Democrats never heard that speech...so they might, indeed, be surprised. n/t