Damn but just when I reach a point where I think things can’t get any stoopider inside the Beltway, we have a week like this one with the release of President Obama’s “budget” and once again the reality of stoopid is even worse than imagined.
Word leaked last Friday (April 5) that Chained CPI was going to be part of President Obama’s budget, prompting me to point out a simple truth, “A Bad Idea Is a Bad Idea, No Matter Who Proposes It.” Of course, starting Monday, all the usual suspects and even a few somewhat surprising suspects started pushing the idea as a wonderful thing, maybe even as good as sliced bread.
The first cheers I saw, came from the Wall Street Journal. It is difficult to detail all the errors in this piece but it starts with the idea that Social Security has any bearing on the Budget in the first place the goes on to “explain” why Chained CPI is just such a good idea:
The chain-weighted CPI registers slower inflation than the usual CPI because it allows for the substitution effect of price changes. When the cost of one item rises, consumers switch to a similar product that has not risen in price (or not increased as much). The substitution can occur intra-item (whole wheat bread instead of white bread) and inter-item (beer versus wine). The chained CPI takes the shifts into its calculation; the traditional CPI does not.
Of course, these types of discussions never point out how the folks who are already “substituting” are supposed to pay for price increases, just as it fails to recognize the basic facts of Social Security, including the fact that the average monthly benefit is $1,264 per month, which is barely more than a minimum wage job pays and we all know how richly you can live on minimum wage. (Yes, that’s snark.)
The Washington Post also is on the bandwagon and loving them some Chained CPI, once again pretending that Social Security is a part of the overall Federal Budget:
Most important, the president committed himself in writing to more than $100 billion in Social Security spending restraint over the next decade, along with $400 billion in health program reductions.
Ruth Marcus yesterday earned her WaPo0 money by being oh so very concerned with how the Republicans react to the President:
The conundrum of President Obama’s budget is that he has produced a “come let us reason together” proposal aimed at a Republican Party that has demonstrated no interest in being reasonable.
On Tuesday, Jared Bernstein of the Center on Budget and Policy Priorities wrote a blog post comparing Paul Ryan’s “budget” with the President’s by stating that if Ryan’s budget is (self-described) as visionary, then the president’s is “strategic.” Bernstein quotes his colleague, Robert Greenstein (President of CBPP) who produced a statement in favor of President Obama’s budget, and specifically, in favor of Chained CPI.
I can’t begin to detail all the errors in Greenstein’s statement but will try to address the most egregious ones. First off:
As it stands, the package makes tough policy choices while largely adhering to the principle, as enunciated by the Bowles-Simpson commission, that deficit reduction should not increase poverty or inequality. Nevertheless, the budget’s substantial spending cuts, both in entitlements and discretionary programs, would have real-world consequences for millions of individuals and families.
While there was a Bowles-Simpson commission, there was nothing “enunciated” by the commission as there was no report since the recommendations could not achieve the necessary vote count to be accepted as official. And once again, we have someone who should know better (and most likely does) trying to conflate Social Security as part of the overall Federal Budget.
Experts widely regard the chained CPI as a more accurate measure of inflation for the population as a whole. It may well be, however, less accurate for elderly individuals and many low-income people and, thus, understate the inflation that they face.
What experts are saying this? The best I have found is that the NY Times had an article claiming this that they would later correct as Dean Baker points out here.
Tiger Beat On the Potomac (h/t Mr Pierce) of all people, actually gets to the nut in their lede:
President Barack Obama says he’ll protect the most vulnerable seniors from his “chained CPI” proposal – but he’s not going to protect everyone. Not even all seniors.
The White House, fighting back against liberal critics who say he’s giving away too much, released details Wednesday of the protections Obama would include to make sure older seniors and low-income people don’t get hurt by lower benefits.
There it is. As I said the other day and will say many more times I’m sure, IF YOU HAVE TO MAKE SPECIAL PROVISIONS TO ASSURE PEOPLE ARE NOT HURT, YOU ARE DOING IT WRONG.
Such a simple damn concept. But of course, with all the people doing the cheerleading, none of them are people who actually have to live on Social Security so for them, it is only an intellectual exercise, not reality.
And because I can: