Thu Mar 21, 2013, 06:57 PM
Jefferson23 (27,030 posts)
Chained CPI: A direct attack on middle class and working class people
Instead of cuts and tax hikes on working people, elderly and veterans, it is time for "higher taxes on the wealthy".
Last Modified: 19 Mar 2013 12:31
"We pay for Social Security all of our lives, through the regressive payroll tax, and most Americans know this even if some of us have been tricked into believing that Social Security contributes to the overall deficit," says author
Barack Obama "prefers" it. Nancy Pelosi is willing to consider it. The AARP, organised labour, and progressive Democrats in and out of elected office are entirely opposed.
It is "Chained CPI", the new favourite bit of jargon being tossed around in very serious policy circles as a possible bargaining chip in a budget Grand Bargain. The consumer price index (CPI) is a measure of inflation that is used to calculate cost-of-living-increases for programmes like Social Security. The "chained CPI" is a different method of calculation that presumes that when the price of one product goes up, people will simply buy something cheaper. Using this formula to calculate Social Security, veterans' benefits, and other programmes (including, for instance, Pell grants that help lower-income students afford college) would amount to a cut in benefits.
Republicans and many Democrats - including, apparently, the President - want to do it. They want to establish the wildly popular New Deal social safety net as part of the problem and they want to cut it. And this little scheme sounds enough like not cutting benefits that the objective press is able to pretend that it is just a technocratic adjustment, really, instead of what it is. (It is also a stealth tax increase.)
Yet Obama's economic adviser Gene Sperling noted in a Reddit discussion last week that "protections" from the cuts would be necessary for "low-income Americans, certain veterans, and older Social Security beneficiaries". If we need to protect people from it, how is it good policy?
in full: http://www.aljazeera.com/indepth/opinion/2013/03/201331994650651342.html
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