Chained CPI is not just bait; Obama actually “prefers” it

That’s right. Barack “Grand Cuts” Obama really “prefers” to cut Social Security benefits via switching to “Chained CPI” — which reduces the cost-of-living allowance year after year after year — and he wants to do it on its merits, not just as some carrot he’s dangling before Republicans.

This information comes just this week, again via Gene Sperling, one of Obama chief economic advisers, in a chat on Reddit. Thanks to Digby, we hear this from Sperling  (my emphasis and paragraphing):

The cost of living question relates to how the government measures inflation. Today, we use a measure of inflation called the “CPI” or consumer price index. An alternative would be to switch to what is known as the superlative or “chained” CPI. [Note the reframing in the alternative term "superlative CPI" — if it's "superlative" it must be better.]

The superlative CPI makes two technical corrections to the standard CPI: it accounts for consumers’ ability to substitute between goods in response to changes in relative prices and accounts for biases arising from small samples. Most experts agree [note: they do not agree] that the Superlative CPI provides a more accurate measure of the average change in the cost of living than the standard CPI.

The President would prefer to have this adjustment in the context of a larger Social Security reform, but he has said to Speaker Boehner that if it is part of a larger agreement that would include tax reform that would raise revenue by cutting loopholes and expenditures from the most well off, that he would be willing to agree to it because in divided government, if we’re going to make progress, we have to be willing to compromise.

Here’s the Reddit link, if you have an account.

See my interspersed notes above for the trickiness of the first two statements. Chained CPI is a benefit cut, and even Simpson-Bowles shill and Obama economics surrogate Alice Rivlin (that’s her in the clown costume) agrees. In addition, a great many experts also agree that benefits need to be increased, not cut, since we’re staring down the barrel of at least five more years of demand-driven recession (my call on that), made worse by austerity measures such as this one. If we get the austerity Obama wants, make that 10 years of recession.

How do we know that Obama and Sperling are dancing around the idea that his proposals will hurt people? In the very next sentence Sperling says:

Don’t worry, Chained CPI is not a problem, and we know how to fix it.

OK, that’s my fun paraphrase. What he actually wrote to Reddit was:

One important note: any agreement to make this change to the CPI must include a dedication of a portion of the savings to protections for low-income Americans, certain veterans, and older Social Security beneficiaries. Our current offer which reduces the deficit by $230 billion over the next 10 years includes those protections.

Why do low-income Americans, veterans, and the elderly need to “protection” from something that’s desirable, “preferable,” and nothing more than an “more accurate measure”?

Digby answers this way:

You know, I have never understood the logic that says changing to this new cost of living formula more accurately reflects the real cost of living, but don’t worry we will fix the part where it hurts the poor, veterans and really old people. The “real” cost of living should be the real cost of living, no? If it isn’t a cut, why would these people be hurt?

The fact is that Social Security is already inadequate for millions and millions of people, and not just the poorest of the poor and veterans. … For reasons that I cannot completely understand, they want to make it worse. There’s just no other way to think about this.

The hubris of this administration seems boundless at this point. Obama just digs himself deeper and deeper into the “I’m determined to cut benefits” coffin-shaped hole. For example, when Senate Democrats put up a fuss earlier this week, he dug in.

Let him; let him dig deep. This is not about personalities; it’s about the signature social programs of the Democratic Party, the last bastion many citizens have between them and poverty. The less tricky Obama is, the more blunt and determined he becomes, the easier to make him seem what he is — a traitor to the ideals of the party whose name he soils.

As I’ve said many times over, their hubris is our friend, and thank god for that.

Obama to meet with Senate Republicans to sell benefit cuts

As you may know, Obama’s been on a Charm Tour lately selling everyone who counts (not you, just the Bigs) on his Grand Cuts idea. Earlier this week it was Senate Dems (that went well). Today he meets with Senate Republicans. Guess what’s on the lunch menu for their oh-so-upscale gathering — Maine lobster and Catfood (the fancy Friskies kind):

Obama_no-to-benefit-cuts

Just so you know. Someone is going to eat well, and someone else is not.

Just say No to Cuts, Mr. and Ms. Congressperson. And if he asks you, just say No to Mr. “Grand Cuts” Obama as well. No friend of yours would ask you to risk your job like this.

GP

To follow or send links: @Gaius_Publius


Gaius Publius is a professional writer living on the West Coast of the United States. Click here for more. Follow him on Twitter @Gaius_Publius and Facebook.

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  • john

    If his idiot butt wants to cut anything it should be military spending and close down some parks and libraries and crap like that. We have too many military bases and personal as is. We have way too many parks and libraries. People need and depend on SS, they don’t need all that other crap.

  • john

    The monkey in the White House needs to get his act together. If he messes with SS then he will have hell on his hands from all of us pissed off people.

  • Kim_Kaufman

    Apparently Obama’s popularity is falling. So perhaps his promises to help campaign in 2014 will be less of carrot to voting for unpopular cuts.

  • GaiusPublius

    Not so, Josh, but it takes some thinking to “get” that sentence.

    Look at my headline. The usual formulation of an offset would be — “I want chained CPI but I prefer it in exchange for revenue increases.” That’s the formulation of a trade, something they want for something he wants.

    Now look again at the sentence as written: “The President would prefer to have this adjustment in the context of a larger Social Security reform,”

    This means — “I want the bad thing, but I’d prefer it bundled with something even worse.” That’s not the language of a trade. That’s the language of two surrenders.

    There is no meaning of “Social Security reform” out of Obama’s mouth that means well for Social Security as we know it.

    GP

  • GaiusPublius

    Henry, I love “catfood CPI”. I may start using it. Thanks.

    GP

  • Ford Prefect

    IT doesn’t. The “basket of goods” assumes that something too expensive will be replaced with something cheaper. It doesn’t matter what’s being replaced with the other item. This, of course, is how technocrats can avoid taking any moral responsibility for the changes in people’s dietary (or other health related) habits they are enforcing.

  • ronbo

    What is truly tragic is that the Democrats selected Obama without a fight. Choosing the Republican you know over the Republican you don’t is pathetic…when you are a Democrat,

  • Roberta Eidman

    The tragic thing is if we hadn’t opted for Obama in 2012, we’d be stuck with the amoral robot Romney and his Chuckie Boy Bot, Ryan. I think it will be years, decades – if ever – before the American people demand and achieve a reasonable society.

  • Sweetie

    CPI = citizenry plundered indefinitely

  • Sweetie

    Ok, so we’re seeing the chains. Where are the whips?

  • http://www.rebeccamorn.com/mind BeccaM

    And low-income Americans. At the same time.

  • ezpz

    Not only do the so called liberals ‘smile through his systematic betrayal of liberal values’ — they now speak fluent and perfect Orwell, e.g. they have to kill medicare to save it.

  • condew

    Nice contrast.

  • condew

    So Obama has joined the most radical part of the Tea Party that wants to cut benefits for those over 55 and those currently retired, in addition to royally screwing everyone under 55.

  • condew

    What they say: “… protections for low-income Americans …”.

    Translation: We’re going to screw the middle class.

  • condew

    So chained CPI takes into account “consumers’ ability to substitute between goods in response to changes in relative prices”. So how many times do they count the change from tuna to catfood?

  • htfd

    If the Chained CPI is so “superlative” and favored by Obama why isn’t being used on the military industrial complex or the Congress’s pay? After all we tax payers are paying their wages

  • FauxReal

    AARP has a calculator to determine the impact of the chained CPI. For me, it means over $800 less over 5 years but that jumps to almost $3,200 over 10 years and over $6,700 over 15 years. This doesn’t affect just current recipients but future recipients will be getting less.

    Here’s a link to the AARP calculator:

    http://action.aarp.org/site/PageNavigator/SocialSecurityCalculator.html

    I think that’s a big contribution from my Social Security check as compared to what the impact is on the wealthiest of a small increase in taxes – like for those hedgefund managers.

  • http://www.rebeccamorn.com/mind BeccaM

    We still often do.

  • http://adgitadiaries.com/ karmanot

    Thank you. Many of us woke up to Obozo by his second year and had to suffer the slings and down-arrows by Obots on this site.

  • lynchie

    It has been the way of Democrats since Clinton, platitudes for the left and kiss the ass of the 1% and the right. Clinton/Obama lots of brash grandiose talk but sadly lacking in substance. Anthem speeches, the media wets their collective panties and the middle class, poor and elderly and called on to take less, expect less and by grateful they even make sound bites about our plight. the left continues to believe because the majority of us hear the words and are so unconnected we fail to see nothing gets done. In all the budget battles, debt ceiling, sequester bullshit name a single Dem who has passionately stood up and shouted for what is right for this country. Answer–not a single swinging dick one of them. They don’t give a shit. They have their orders get rid of Medicare, SS and any programs which the 99% might use to live some kind of a life when they retire and they are dead set on it. It is all about increments, no cap removal for the rich, but we work longer and collect less seems fair to me. I expect Obama is already having is corporate masters writing this chapter to the new testament of Obama or How I saved America for the wealthy.

  • Indigo

    Charm tour? Barry gave away the store in his first term in office. If there’s anyone left to charm, it’s the liberal community that has so patiently smiled through his systematic betrayal of liberal values. A Blue Dog is a DINO, folks, just another Democrat in name only.

  • RonThompson

    Oh, thank God. Now that the Republicans know Obama is really for it, there’s no way they’ll agree to it.

    Maybe it’s just me, but I perceive a far more critical tone toward Obama at Daily Kos and other blogs over the last few weeks. Not from the Obamabots who write on the front pages, but from the comments, many of which are openly contemptuous of not only Obama but the milquetoast Democratic “leadership” of Harry Reid, Dick Durbin, and others.

  • http://www.rebeccamorn.com/mind BeccaM

    Chained CPI keeps getting put back on the table by Obama. Raising the payroll tax cap to restore the intended 90% coverage rate never is.

    Eventually we must accept the fact these are intended features, not ‘bugs’ or negotiating tactics.

    Anyway, cutting Social Security benefits and raising the Medicare eligibility age have been favored proposals for Obama going all the way back to his Illinois Senate days.

  • Ford Prefect

    Chained CPI was Obama’s idea in the first place. Are they talking about lifting the cap? Nope. Only benefit cuts. This is how Neo-Liberals (and Republicans, but I’m being redundant) “reform” things they don’t like. For Obama, “reform” = “sabotage.”

  • http://twitter.com/fleetadmiralj Fleet Admiral Josh

    You’ve got to be kidding me. What he’s saying is that *IF* Chained-CPI gets done, they would prefer it to be part of a larger package on Social Security (presumably so that it is easier to include things like increasing the payroll tax level and other things that would mitigate switching to Chained CPI).

    In no possible reading of that sentence that is actually honest can one conclude that Obama wants Chained-CPI for it’s own sake.

  • henrythefifth

    I love how the recently passed “tax” bill has the exemption for the Estate Tax level rising by tracking inflation, so that millionaires get an even better tax break every year, but when it comes to poorer old folks who need the money, they get catfood CPI. Lovely.

  • ronbo

    Thank you Gaius. Many have been lulled into lethargy by the son of a single mom, who is a minority, who speaks of Democratic ideals; yet, chooses the Republican path, time after time.
    This trojan-horse must not stand.

  • Drew2u

    is there a chart of revenue being brought in versus government spending?

  • MyrddinWilt

    Is the plan for ‘superlative CPI’ to just replace spending or would it also affect automatic increases for tax rates as well?

    Changing Social Security to Chained CPI has no effect on the budget deficit as that is off the books. It would change when the trust fund is exhausted and needs topping up but not the deficit.

    Changing the indexing of tax thresholds would have a big effect over time though. And it might be something the GOP could pretend was not a tax rise.

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