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Hammering an Idea for Stingier COLAs
Posted By Tamara Lytle On February 7, 2013 @ 11:12 am In Washington Watch | Comments Disabled
This video might leave you with the impression that nobody wants a proposed change for calculating cost-of-living adjustments (COLA). Not older Americans. Not veterans. Not women. Not labor. And certainly not independent U.S. Sen. Bernie Sanders of Vermont.
That the so-called chained Consumer Price Index has no support isn’t the case, of course, or these people wouldn’t have met at the U.S. Capitol to take turns bashing the proposal. Though the formula would slow increases in Social Security, veterans and food stamp benefits, President Obama and a number of Republican lawmakers have, at least in the not too distant past, rolled it into negotiations on reducing the deficit and national debt.
Economists make a technical case for the chained CPI – that it’s a better measure than the current formula, which can overstate inflation.
Deficit hawks make a political case – that the chained CPI will help the nation’s debt problems. Several experts panels on the deficit recommended the change.
Opponents of the chained CPI make a wallet argument – that people will feel the change almost immediately, despite promises from Republicans and Democrats not to cut Social Security benefits for those who are already retired or are near retirement.
Not that Congress is moving all that fast on the issue. Talks about reducing the deficit remain mired in partisan rancor. But with $1.5 trillion or more in deficit reduction on the table, the chained CPI idea will be around for a while.
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