By JD Chang
December, 20th, 2012 —
You may have heard a lot of talk recently about “Chained CPI” or the adjustment to inflation measures on Social Security. This is because Chained CPI is about the only spending adjustment or savings that’s being discussed between the two parties right now. If you wanted to know what the Chained CPI is in layman’s terms, Jason Fichner of Marketwatch does a good job:
What does this mean in actual dollars? Theaverage retired worker on Social Security received $1,240 a month in 2012. The scheduled 1.7% COLA for 2013 will increase this average monthly benefit to $1,261, or a $21 increase per month. If the COLA was instead based on the chained CPI , the 1.5 % increase would bring the average monthly benefit up to $1,259, a $19 increase in monthly benefits and only $2 less per month than based on the current CPI.
The Social Security Trust Funds are currently estimated to become insolvent in 2033 . While I understand every dollar counts when you’re on a fixed income, a difference of $2 a month ($24 a year) hardly amounts to draconian benefit cuts for seniors. That said, I think it’s important to stress that moving to a chained CPI isn’t just about saving money or slowing the growth of benefits, it’s primarily about getting the measure of inflation correct. The change to a chained CPI should be made even if it didn’t produce appreciable savings. It should be done because it’s a more accurate measure of inflation. The goal of the COLA is to protect beneficiaries’ purchasing power accurately, and moving to a chained CPI accomplishes this goal.
Fichner does what journalists should do: describe the situation accurately, explain the pros and cons of both sides, and then inserts his opinion at the end. Reading it this way, it’s hard to see why any sensible person couldn’t support this in light of the country’s debt woes.
In other news, Barack Obama was named Time’s Person of the Year and Sarah Palin says that’s irrelevant because she was once on that list too:
“I think there’s some irrelevancy there, to tell you the truth,” Palin told Greta Van Susteren. “I mean consider their list of the most influential people in the country and the world, some who have made that list — yours truly! That ought to tell you something right there regarding the credence that we should give TIME magazine and their list of people.”
Palin’s got a fight on her hands for the title of GOP’s “head stupid” though. That person is John Boehner says John Tamny of Forbes. Greg Sargent of the Washington Post posits Boehner isn’t stupid, he’s really just a scourge of the wealthy. What’s that saying from Forrest Gump? — stupid is as does? Well, the Washington Post says that Obama v. Boehner is like deja vu all over again:
The dueling press conferences today by President Obama and House Speaker John Boehner regarding the fast-approaching fiscal cliff had an eerie feeling of deja vu for political observers. After all, this was the exact same way that the attempts by Obama and Boehner to strike a big debt and spending deal over the summer collapsed. Threats over who would be blamed? Check. Assertions that each side has gone more than halfway to compromise? Check. Calls to “get serious”? Check.
(And, for you history buffs out there, the back-to-back press conferences was also the way the 1996 balanced budget/government shutdown showdown between President Bill Clinton and then House Speaker Newt Gingrich ended too. Thanks to the Post’s Glenn Kessler for reminding us of that.)
Finally, if you haven’t been paying attention, Piers Morgan is making gun control a personal crusade. It got to a boiling point here:
Tagged: barack obama, Chained CPI, current-events, John Boehner, Person of the Year, piers morgan, Sarah Palin, Social Security, Time Magazine
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