9 Chained CPI facts they don’t want you to know

The estimable R.J. Eskow of Campaign for America’s Future has written an almost perfect Chained CPI piece, and I want to both honor it and bring it to you. It’s direct, readable and “gettable” in one pass. Plus it covers every base but one.

Mr. Eskow (my emphasis and some reparagraphing):

9 ‘Chained CPI’ Facts They Don’t Want You to Know

The “chained CPI” proposal in President Obama’s budget continues to draw much-deserved fire, which is only likely to increase as more information about it becomes known. Here are nine embarrassing facts about the chained CPI which the White House and its defenders would prefer to see overlooked[.]

And he leads with these two:

1. Of course it’s a benefit cut.

Chained-CPI defenders say it’s not a benefit cut. It’s just a slowdown in the rate of the benefit’s planned increases. That’s a silly semantic game unworthy of serious leaders or analysts. The Social Security benefit, as laid out on the Social Security Administration’s website, includes adjustments designed to keep pace with the rising cost of living.

Those adjustments aren’t a benefit increase. They’re designed to prevent the benefit from being decreased as a result of inflation. If you lower that adjustment, you’re cutting benefits. Period.

2. Of course it’s a tax hike.

Same goes for the tax impact of the chained CPI.  Our tax brackets were designed to make sure that taxes didn’t go up inadvertently because inflation kicked them into a higher tax bracket.  That was done to make sure that people who weren’t earning more in real dollars – which includes many (if not most) of the “99 percent” – weren’t hit with an unearned tax hike.

If you substitute the chained CPI for the current formula, as the president has proposed, people will be kicked into higher tax brackets earlier. Then they’ll pay more in taxes, even if they’re not making any more “real” money. That’s a tax hike.

I’ll give you the rest of the nine, but you’ll have to go to the piece to read the reasoning.

3. And it’s a tax hike for everybody but the wealthy.

[This one is fascinating.]

4. You could save much more money in other, better ways.

[Nice list of $4 easy trillion, including $1.8 trillion from a financial transaction tax]

5. The White House’s proposed [birthday] “bump” disproves its own argument. 

[The “birthday bump” is the latest White House mumbo; if you live past a certain age, they’ll remove the non–benefit cutting benefit cut for you. Cause if you’re really old, maybe you need the benefits after all.]

6. It’s political suicide for Democrats.

[A set of excellent arguments, including the latest polls. But you knew that, right?]

7. The Social Security cut doesn’t reduce the deficit. 

8. That tax hike on everybody except the wealthy will help a little. But …

9. The deficit’s already shrinking rapidly.

[Bet you didn’t know that one. Check it out.]

See what I mean? Nearly perfect. What’s the only thing missing? The fact that Chained CPI — Catfood CPI — will kill people.

Don’t kill people. Be like Class War Kitteh.


Don’t let Obama bargain away your grandma. Stop any Dem Congress member from supporting Chained CPI. Senate phone numbers here. House phone numbers here.


To follow or send links: @Gaius_Publius

Gaius Publius is a professional writer living on the West Coast of the United States.

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41 Responses to “9 Chained CPI facts they don’t want you to know”

  1. karmanot says:

    Perfectly existential. I like it!

  2. karmanot says:

    and squared.

  3. hollywoodstein says:

    If this is what happens when we win presidential elections, maybe we should lose.

  4. hollywoodstein says:

    or both.

  5. hollywoodstein says:


  6. hollywoodstein says:


  7. hollywoodstein says:

    Well done.

  8. hollywoodstein says:

    Imma gonna hafta have a talk with Nancy.

  9. hollywoodstein says:

    you win by checkmating yourself.

  10. gwiliker says:

    That is the absolute truth. Bravo!They want Corporate Facisim.

  11. GaiusPublius says:

    Thanks for reporting back, Becca. We need more of this!


  12. ezpz says:

    Different thread, maybe?

  13. BeccaM says:

    Tax brackets are tied to the CPI. Incomes are tied to actual real-world inflation. People, especially those in the middle class, will gradually be pushed into higher brackets, hence a tax increase on everyone but those too poor to to pay taxes and those who are rich enough to already be in the highest bracket.

    Social Security benefits are already tied to the current CPI, hence they go up each year. Chained CPI goes up more slowly than the current CPI calculation, hence over time, Social Security recipients get less money

    Seems to me you must’ve played hooky from schools on the days when they taught reading comprehension and critical thinking.

  14. BeccaM says:

    Senate Democrats seem to be mostly on board with it.

  15. BeccaM says:

    Just heard back from one of my Senators, Martin Heinrich (D-NM). Essentially he says he’s sort-of/kind-of against chained-CPI, but would vote for it anyway as long as certain not-exactly-specified exemptions are carved out. Relevant sentence from the letter he sent me:

    While I do not support using “chained” CPI, any comprehensive budget proposal that includes “chained” CPI must also include protections for low-income beneficiaries and include accompanying adjustments to prevent significant hardship for working families.

    Hey Martin: How about just opposing it, period? And tell us, your constituents, that you’ll do everything in your power to block it from being included in the budget?

    Well, looks like I need to write another letter, this time letting him know that if he does vote for it, I’ll be casting my Senatorial ballot for someone else when his term is up.

  16. karmanot says:

    Oh please, the old 11ty dimensional game again?

  17. karmanot says:

    Catch up.

  18. karmanot says:

    “And this flimsy jingoistic slobbering hyperbole is just unacceptable.” such a perfect description of your blather.

  19. karmanot says:

    Just long enough to reach down into your boot pocket and bring out a shiv for the surprise respond.

  20. condew says:

    One other point I’d like to make about Social Security. What do people think happens to the money retirees get? Every penny is spent in their local economy buying goods and services. The economy needs demand, and retirees provide it. When a factory closes and causes massive unemployment, the reason why local small business are on life support and not bankrupt, the reason why there are a still a few jobs, the reason the town is not a total ghost town, is the retirees still buying groceries, medicine, and services. When everyone else has left or is trying to do their own repairs, the retirees are still hiring plumbers, still taking their car in for repairs, and maybe sheltering a few of their kids who had to move back home.

  21. SkippyFlipjack says:

    Sorry, I must be missing something.. What does this have to do with how hospitals treat gay couples?

  22. NorthAlabama says:

    does anyone believe obama’s budget or these cuts have a snowball’s chance in either house?

    it’s disappointing the cuts were offered, but at least obama can claim a compromise was there, and it was ignored. stupid move for the democrats, but harmless none the less.

  23. Mike_in_the_Tundra says:

    “A little learning is a dangerous thing, drink deep or taste not the Pierian spring.”

    You really need to back up and get your terms straight. COLA and CPI are two much different things.

  24. Rambie says:

    Depends how long you suffer with the wound before succumbing to the wound.

  25. nicho says:

    We’ve reached the point where “better” and “worse” have lost any significance. If someone kills you with a handgun, does it really matter what type of gun they use?

  26. Markt says:

    It doesn’t make sense. How is it a benefit cut and a tax hike? My understanding is that SS increases have not kept up with CPI in the past so these forced increases should do better for retirees over time – especially considering the majority of the house is tea party. I can’t parse out his points – it’s really one of the worst hack jobs I’ve ever read. I really don’t get why this issue has sent people over the roof. And this flimsy jingoistic slobbering hyperbole is just unacceptable.

  27. ezpz says:

    That’s exactly what I was saying before the election, the example being Dubya when he began his road show to privatize SS/Medicare. He pretty much had to fold up tent before he even got started.

  28. Rambie says:

    I’m not defending Pres Obama here, just stating that a Pres Romney would have been worse, IMHO. Because I believe that Romney was just a tool of the people who are really running the GOP the Kleptocrats. They would have taken a Romney win and ran hard to the right. We’d be here disusing the total dismantling of SS, Medicade & Medicare.

    Ryan was their real candidate, Romey was just the pretty front man.

  29. karmanot says:

    I doubt it, more likely a deeper shade of blue dogs.

  30. karmanot says:

    It’s just that Mitt has already arrived at where Obama is going—–a complete looting of American public wealth, the final destruction of its productive middle class, and the establishment of a corporate republic with classic fascist hierarchies.

  31. karmanot says:

    Exactly, many of us had to take early SS, because we found ourselves way over 50 and virtually unemployable after being outsourced by that fact. So, our SS is about half of that which still puts one at poverty—especially when the Bush Depression wiped out our retirement savings. Even more egregious was watching that asshole Lawrence O’Donald on MSNBC last night defending Obozo’s Chained CPI as consistent with past Democrat Social Security cuts. Here is an Obama media apologist who makes more in one week than SS retirees make in a year arguing that a few percentage points won’t even be noticed. I could have reached through the screen and ripped his head off. I suspect in the next few years that simmering violence so beloved by Americans will explode and I for one will understand why, if not support it.

  32. karmanot says:

    I never bought into the lesser of two evils and voted for Stein, but may change that direction in an anarchical move. The next elections 2014 & 16 may find me voting for the most evil Republicans running—simply to get the ‘revolution’ moving. If Democrats are going to ruin and make painful these last of my elder days, I will strike back in any damaging way possible to destroy the Party that delivers me to a death panel. The supreme irony is that the Republican clown car was right about Obama (For all the wrong reasons, as befitting their characteristic stupidity). I am dedicated to ruining the Clinton/Obama/corporate coup wherever possible—-and will start locally.

  33. ezpz says:

    That’s the “what” but here is “why” they want these cuts, which, sadly, but not surprisingly, is being omitted from most ‘news’ outlets, and yes, even the so called progressive blogs…

    William Greider:

    “… When it gets to the money roll calls this year and next, individual members of Congress will have to swallow some big lies in order to vote for cutting Social Security benefits. First, of course, the cost-of-living gimmicks Obama has proposed will not shave a penny off the federal deficits or debt. That is because the Social Security benefits are not paid by the federal budget. They are drawn from the Social Security Trust Fund—the money paid in by working people every payday. People know this is their money, not some government handout.

    So who gets tell the folks that their FiCA deductions were a joke—only an accounting fiction? ….When the Congressional Budget Office is required to “score” Obama’s so-called cost-of-living reform, it will be compelled to announce that whacking the old folks contributes not a penny to reducing the federal government’s deficits.

    In fact, there is an even bigger lie concealed by the fiscal scolds and ignored by witless media, too. Again and again, self-righteous critics have portrayed Social Security as the profligate monster borrowing from the Treasury and sucking the life out of federal government

    Guess what? It’s the other way around. The federal government borrows from Social Security. The Treasury has been borrowing from the Social Security Trust Fund for 30 years, and the debt to Social Security beneficiaries now totals nearly $3 trillion. The day is approaching when that money will be needed for its original purpose: paying Social Security benefits to the working people who contributed to the fund.

    That is the real crisis that makes the financial barons and their media collaborators so anxious to cut Social Security benefits. They would like to get out of repaying the debt……The only way to do this is cut the benefits—over and over again. Count on it.


  34. emjayay says:

    Excellent point which I haven’t read anywhere else and didn’t consider myself. Another way of looking at it is that diverting national income to the upper brackets means the rest of us are making less money our whole lives and contributing less to our SS account.

  35. Rambie says:

    I think you give too much credit to the Democrats in the Congress.

  36. nicho says:

    Obama has looked at the problem of an increase in the number of retirees,

    That’s not a problem at all. That’s one of the often-repeated myth of this whole debacle. The system was set up — and restructured — by actuaries. These are very smart people who have access to the birth records, the life expectancy tables, etc. and could figure out pretty closely the number of retirees we could expect way into the future. The increasing number of retirees wasn’t some surprise that came out from under the bed.

    What the actuaries didn’t account for was the skewing of income away from the working class and into the pockets of the ruling class. This places a greater percentage of income in the country above the SS tax cap. The cap — and the formulas for revising it — was intended to tax 90 percent of the income in the country, Now , it taxes less than 80 percent. That’s the problem.

  37. Naja pallida says:

    I don’t buy the lesser of two evils thing at all anymore. Obama has looked at the problem of an increase in the number of retirees, and decided that spreading the butter a little thinner was the solution, instead of increasing the amount of butter to go around. It reminds me of a friend of mine who always used to joke: “Are you staying for supper? I need to know how much more water to add to the soup.”

    As is, Social Security has barely kept up with the rate of inflation, payouts today are almost exactly the same as they were when the program was first implemented in the 1930s. For someone who has worked most of their life, an average payout of about ~$1,200 a month. Matching inflation alone doesn’t really effectively account for cost of living. This entire proposal is an overall weakening of the fabric of Social Security going forward, and making it worse for everyone. An intentional erosion of the quality of life for future retirees, as if the debt is more important than the lives of Americans.

  38. nicho says:

    Maybe the Democrats would have fought him instead of enabling him.

  39. Rambie says:

    I still believe that Mitt would have been much worse.

  40. Bill_Perdue says:

    The fix is on and we’re going to have deep cuts whose effects will be to make the rich richer and workers, especially retirees, the unemployed and children much, much worse off. Welcome to Greece.

    For the unemployed and workers in extremely low jobs the effect of Obama’s austerity program are already being felt and for retired workers the effect become very clear in a year or two.

    The next step is to watch for further signs of anger and organizing among workers, people of color. women, retired workers and immigrant/imported workers. I think the next step in the struggle will be efforts by workers in the most exploited and underpaid industries – Wal-Mart, fast food and hotel service workers – to organize themselves and get the aid of existing unions.

    I appreciate the updates by Gaius Publius and will to continue to raise them in union internet forums and encourage other union members (and non members) to do the same;




    You can use his data and analysis in your own union or union left blog and in the blogs of AARP and similar groups. It’s time to take the struggle to the next step and actively aid organizing drives and spread the truth about these cuts as widely as possible.

  41. nicho says:

    I’m beginning to suspect that Obama really wasn’t the lesser of two evils.

    Michael Hudson has a really good piece on Obama’s fraud.

    One of his chief points is that the claim that they’ll raise taxes on the wealthy is just fraudulent. The wealthy don’t have “incomes.”They have capital gains, deferred compensation, and a host of other things that are taxed as regular income. Those won’t be affected by the supposedly increase. As Leona Helmsley said, incomes are four little people.

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