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Showing Original Post only (View all)EZRA KLEIN: The TRICK Washington Is Using To CUT Social Security and Medicare [View all]
Lets get something straight: Chained-CPI cuts Social Security benefits and increases taxes. Thats why its part of the negotiations. Full stop. But you often wouldnt know it. The policy typically gets sold on extremely technocratic grounds. Here, for instance, is the case made by Erskine Bowles and Alan Simpsons Moment of Truth Project:
With so much of government set to autopilot, the measurement we use for inflation plays a very important role in public policy. Currently, the federal government generally relies on the consumer price index (CPI) to index provisions of the budget and tax code to account for cost-of-living changes. However, this measure actually overstates inflation and, as a result, drives up the deficit unnecessarily.
http://www.momentoftruthproject.org/publications/measuring-case-chained-cpi
http://www.momentoftruthproject.org/publications/measuring-case-chained-cpi
Chained-CPI, in this telling, is simply an effort to correct a measurement error in the way we calculate inflation. Its a tweak, a fix, a policy designed to achieve a higher level of technical precision. And who could be against that? Theres something to this line of argument. The way we measure inflation right now really does mismeasure inflation. Chained-CPI really is a bit more accurate. But thats not why were considering moving to chained-CPI. If all we wanted to do was correct the technical problem, we could make the correction and then compensate the losers. But no one ever considers that. The only reason were considering moving to chained-CPI because it saves money, and it saves money by cutting Social Security benefits and raising taxes, and its a much more regressive approach to cutting Social Security benefits and raising taxes than some of the other options on the table.
The question worth asking, then, is if we want to cut Social Security benefits, why are we talking about chained-CPI, rather than some other approach to cutting benefits thats perhaps more equitable? The answer is that chained-CPIs role in correcting inflation measurement error is helpful in distracting people from its role in cutting Social Security benefits. Politicians who are unwilling or unable to offer a persuasive political or policy rationale for cutting Social Security benefits are instead hiding behind a technocratic rationale. Were not cutting benefits, were correcting our inflation measure. A similar dynamic is behind the popularity of raising the retirement age, or the Medicare eligibility age: Its advocates can pretend that its not a cut, but a technical adjustment made to account for the fact that Americans are living longer. Compared to other approaches to cutting benefits, raising the retirement age is, again, a substantively unwise, regressive approach. But it can be justified as a mere technocratic tweak.
This is bad policymaking. If we want to cut Social Security and/or Medicare, we should have a conversation about how to cut Social Security and/or Medicare, decide what our priorities are Progressivity? Making the health-care system more efficient? Total deficit-reduction? and find the policy that does the best job achieving those goals. The effort to mask cuts in technical adjustments just leads to worse cuts, as the top priority isnt protecting the poorest or improving the program, but finding a policy sufficiently confusing that you can pass it before most people realize what it is.
http://www.washingtonpost.com/blogs/wonkblog/wp/2012/12/18/the-trick-washington-is-using-to-cut-social-security-and-medicare/
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EZRA KLEIN: The TRICK Washington Is Using To CUT Social Security and Medicare [View all]
Segami
Dec 2012
OP
Republicans are still doing everything to make Obama look bad. They can tell him something one day
still_one
Dec 2012
#5
1) He wants Bush tax cuts extended to $1M; 2) he doesn't consider national debt interest savings...
WorseBeforeBetter
Dec 2012
#12
Because Social Security is popular, as are the rest of the Federal Entitlements.
happyslug
Dec 2012
#27
IMPORTANT POINT: chained CPI is one of the most regressive approaches to cutting Social Security.
leveymg
Dec 2012
#2
If Dems are willing to chain CPI for SS, then who's to say that they won't do the same for SSI,
amandabeech
Dec 2012
#30
Well, then, he should simply say "means-testing for incomes over" and set an amount. But, this
leveymg
Dec 2012
#31
Just cut to the chase, Ezra. Chained CPI is a lie and a fraud that will cut SS benefits by 10%.
reformist2
Dec 2012
#8