What is up with President Obama’s fixation with chained CPI?


Posted by AzBlueMeanie:

I could not say it any better than Joan McCarter has already said it at
Daily Kos:

Peter Orszag probably thought he was doing his old boss, President Obama, a favor when he penned this op-ed
for Bloomberg, arguing that the chained CPI really, maybe, probably
won't be that big of a benefit cut, and that "the difference between the
chained CPI and the standard CPI has been diminishing. That means the
impact of switching indexes may not be as great as many assume." That's
an attempt to mollify Democrats and the 70 percent of voters over age 50 who absolutely loathe the idea.

Of course that leads to the obvious question: then why bother? Why
not work with the so-far experimental index for seniors, the CPI-E, if a
new index is in order. That answer is easy. Because chained CPI is a
cut, and the administration wants to offer up this sacrifice of the
elderly as a warped expression of "good faith." Good faith to the
Republicans, not to the rest of us. But what Orszag is also saying, as
TMP's Brian Beutler points out, is that switching to the chained CPI isn't going to do all that much for deficit reduction.

In fact it won't reduce the deficit at all. Since President Obama is fond of citing Ronald Reagan as the type of "transformational figure" he would like to be, maybe he should listen to Saint Ronnie Reagan on Social Security.

"Let's lay it to rest once and for all … Social Security has nothing to do with the deficit. Social Security is totally funded by the payroll tax levied on employer and employee. If you reduce the outgo of Social Security, that money would not go into the general fund to reduce the deficit, it would go into the Social Security trust fund. So Social Security has nothing to do with balancing a budget or erasing or lowering the deficit."

McCarter continued:

[I]t wasn't entirely Republicans Obama was reaching out to, Beutler says, and that part of his goal "was to win the battle for elite opinion by positioning himself between those on his left criticizing him for preemptively conceding (and, worse, putting Social Security on the chopping block) and the entire GOP, which evidently can’t take yes for an answer." If so, mission not accomplished. Elite opinion is essentially Republican opinion. [The Beltway media villagers]

* * *

The Very Serious People are the only constituency Obama has in making
this offer. Republicans have already, repeatedly, rejected it. He put
his fellow Democrats in a terrible, terrible position in making it. The
public certainly is massively opposed to it. And now Peter Orszag has ruined his chances of getting the VSPs on his side.

The good news is that this budget is almost certainly DOA. The
bad news is that the Rubicon has been crossed. A Democratic president,
who still has three years in office to try to prove himself to the VSPs,
has sacrificed Social Security benefit cuts, and set himself up to be
pushed into offering up much, much more.

I don't get this at all, it just doesn't make any sense.  I reject the idea that Obama is Mr. Spock playing 11-dimensional chess, and we are all just too dense to understand it. Whoever has advised the president to do this is the one who is dense. There is going to be a terrible political price to be paid.

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AZ BlueMeanie
The Blue Meanie is an Arizona citizen who wishes, for professional reasons, to remain anonymous when blogging about politics. Armed with a deep knowledge of the law, politics and public policy, as well as pen filled with all the colors stolen from Pepperland, the Blue Meanie’s mission is to pursue and prosecute the hypocrites, liars, and fools of politics and the media – which, in practical terms, is nearly all of them. Don’t even try to unmask him or he’ll seal you in a music-proof bubble and rendition you to Pepperland for a good face-stomping. Read blog posts by the infamous and prolific AZ Blue Meanie here.