Obama's official budget has been released in full today. For a more general overview of the budget items you can check out the breakdown from The Hill.
Not much has changed in my outlook since the trial balloon came out on Friday.
But I thought I would check the budget for any details regarding Chained CPI. I held out hope that perhaps there was a mechanism to permanently protect those dependent upon Social Security, disability, etc. from the change (essentially a back-door to means-testing).
I was mortified to see the actual part of the budget dealing with Chained CPI...
Those following at home can turn to page 46 to see this "comprehensive" breakdown:
USING A MORE ACCURATE MEASURE OF INFLATION
In the interest of achieving a bipartisan deficit reduction agreement, beginning in 2015 the Budget would change the measure of inflation used by the Federal Government for most programs and for the Internal Revenue Code from the standard Consumer Price Index (CPI) to the alternative, more accurate chained CPI, which grows slightly more slowly. Unlike the standard CPI, the chained CPI fully accounts for a consumer’s
ability to substitute between goods in response to changes in relative prices and also adjusts for small sample bias. Most economists agree that the chained CPI provides a more accurate measure of the average change in the cost of living than the standard CPI.
Okay let's stop there. Dean Baker has swiftly debunked the accuracy of Chained CPI-U for use in seniors' benefits (
as they have a totally different basket of consumption).
Additionally, we know that most economists DO NOT agree that the Chained CPI provides a "more accurate measure." The IGM Forum, which conducts regular surveys of top economists to get an idea of what economists generally have a consensus on and what is more controversial, has already addressed this issue:
So 37% of economists are uncertain, 32% agree, 5% "strongly agree."
Even if you combine the agreements, there's a dead-heat between "uncertain" and "agree" at 37%.
How in the world does Obama think that Chained CPI is "accepted by most economists as being more accurate" when a fairly right-wing (IGM is conducted at the University of Chicago!) survey of economists reveals a torn opinion on whether it is actually more accurate or that the current CPI overpays benefits?
So the premise of Obama's argument is torn apart.
The next item I'd like to address regarding Chained CPI is this part:
The President has made clear that any such change in approach should protect the most vulnerable. For that reason, the Budget includes protections for the very elderly and others who rely on Social Security for long periods of time, and only applies the change to non-means tested benefit programs.
No details, no specifics, no outline of just how the vulnerable will be protected.
In Romneyesque fashion, Obama wants us to merely trust him that those vulnerable and elderly will be protected, without providing the nitty-gritty details for us to examine and confirm that those protections will be adequate.
In the end, this budget falls short of alleviating the concerns I have had about the cuts to Social Security in particular, the Chained CPI.
There's a proven-faulty logic being used to push it ("most economists agree" -- nice try...), and there's no details on how the vulnerable will be protected. This is absolutely unacceptable.
While the budget does give us the Buffett Rule (30% minimum tax on $1M+ incomes) and a tax deduction cap on the wealthy, and carried interest loophole gone along with some corporate welfare, cutting Social Security is a deal-breaker that makes the budget on its whole very unfavorable to the middle class and the needy in society.
For those who have not yet signed Dr. Robert Reich's petition to Obama to refuse to institute Chained CPI, please do so now.
We must send the message to President Obama that we will not sell our seniors or veterans or the vulnerable in society short.
Oh and in case anyone was wondering about that SEC head Mary Schapiro that ran off to the "Promontory Financial Group" and claimed she wasn't "part of the revolving door", William Cohan (at Bloomberg!) has gone into detail about how that's a total scam and the Obama revolving door is worse than ever.
It's becoming harder and harder to find any good news or policy from this president.