Untangling The Chained CPI Hairball

Chained CPI is a bad idea and an unnecessary concession. Stand up and tell the White House to take it off the table.

True confession: When I first started writing this post, I was willing to give the president and his advisors the benefit of the doubt. As I dug deeper and listened more carefully, I realized Ezra Klein's carefully crafted justifications for cutting Social Security made absolutely no sense politically or policy-wise.

On a policy level, chained CPI is terrible, awful, Pete Peterson policy and shame on David Axelrod for spouting those policy ideas on Rachel Maddow's show and shame on the president if he's actually buying that bill of goods.

  1. It makes almost no dent in the deficit or debt now or in the future.
  2. It takes from those who can least afford it.
  3. It relies on the false premise that Social Security is somehow compromised or bankrupt, neither of which are true.

Chained CPI also has an impact on tax preferences and Medicare benefit payment schedules to providers, so it is ostensibly a way to slow the growth of tax preference items and Medicare costs. While it's important to contain those costs, chained CPI is the gnat straining at an elephant. There is no unbendable law that says chained CPI can't be used for tax preferences without linking Social Security benefits.

All of that leaves this Obama supporter confused about what possible reason he could have for including this in the White House budget proposal, particularly when he campaigned on protecting Social Security and Medicare.

According to Politico the purpose of the offer was to resolve the budget battles and move on to other pressing agenda items, like immigration and guns and pre-K for all. If that's the case, then someone should have clued this unnamed "Obama aide" in:

“We’re not going to have the White House forever, folks. If he doesn’t do this, Paul Ryan is going to do it for us in a few years,” said a longtime Obama aide, referring to the 2012 Republican vice presidential candidate who proposed a sweeping overhaul of Medicare that would replace some benefits with vouchers.

Stupidest. rebuttal. ever. Not even worth the effort to mock. Between Axelrod and this doofus, it's no wonder the White House is feeling anger from all sides. Other unnamed sources told Politico this:

Anxiety, not ideology prodded Obama to push for entitlement savings, people close to the president say. Obama has told people in his orbit that he feels “squeezed” by the rise of entitlement spending and sees it as a threat to getting anything else done, especially his plans for increased education and infrastructure spending.

For the past two years, Obama has championed what he calls “a balanced approach” to debt and deficit reduction, demanding $700 billion in high-earner tax hikes from Republicans earlier this year as a prerequisite to budget cuts and reform of runaway Social Security and Medicare costs.

The time to pay up is now, Obama’s aides say, and the White House needed to offer something to bring Republicans back to the bargaining table. They insist that he’s opposed to deeply cutting entitlements and is willing to do only the bare minimum needed to get a deal done.

The idea of bringing Republicans back to the bargaining table is laughable. Can we talk about the other times Republicans 'came back' to the bargaining table, sucked the trough dry, and walked away laughing? Like maybe during the debt ceiling insanity of 2011, or in 2010 when the Bush tax cuts got extended for another couple of years?

It isn't as if Republicans didn't telegraph their strategy days after he was first elected in 2008, after all. Usually that kind of message strengthens resolve, not the other way around.

I'm frustrated, too. It drives me crazy every time Republicans, with the full-throated song of the Villagers, shift our priorities back to their only talking points: debt, deficit, debt, deficit. Meanwhile, the stupid sequester rolls on, takes more people down right now and actually will cut their Social Security benefits first before the stupid chained CPI finishes them off. Fear notwithstanding, I don't really see the political or policy benefits of giving these idiots a way to run to the left of Democrats in 2014 in the name of "bringing them back to the table."

There are two possible bottom lines here. Either Obama has partaken of the Pete Peterson magic billionaire tripe and actually believes a Grand Bargain is a pre-requisite to other more important policy debates, or else he really believes he's employing some kind of reverse child psychology trick here, since we all know wingnuts will reject whatever it is he supports. Unfortunately, those same wingnuts are smart enough to know when they've gotten a lovely parting gift from the White House dinner they just attended.

Let's make this simple. Republicans will take whatever anyone gives, but that's all they'll do: take. Democrats don't cut Social Security and Medicare. Period. That's something the White House and every Democrat on Capitol Hill needs to hear. Make your voice heard. Call the White House and tell them to take chained CPI off the table.

Update: It looks like the president did drink too much of the Peterson Kool-Aid. Salon's historian takes us back to 2008, where he first announced that plan.

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