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Obama Drops 'Chained CPI' From White House Budget Obama Drops 'Chained CPI' From White House Budget

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Obama Drops 'Chained CPI' From White House Budget

(Mark Wilson/Getty Images)

photo of Billy House
February 20, 2014

A mixture of applause, scorn, and caution spilled from Capitol Hill on Thursday regarding news that President Obama's upcoming budget will not embrace lower cost-of-living increases in Social Security benefits.

Congressional Democrats who have been urging Obama against using the so-called chained consumer price index were relieved Thursday that he is dropping the notion—for now. White House deputy press secretary Joshua Earnest said the idea "remains on the table" but will not be part of his fiscal 2015 spending plan.

Meanwhile, a spokesman for House Speaker John Boehner complained that it shows the president—with three years left in office—is "already throwing in the towel" when it comes to addressing the nation's debt and entitlement costs.


Some liberal groups outside of Congress say they are taking a wait-and-see attitude to determine whether there are still cuts to benefits buried in the details of the final budget document, given the administration's previous openness to such a move.

The president's 2015 spending plan is expected to be released March 4.

Senate Majority Leader Harry Reid, in a statement, said he sees the president's upcoming budget plan as a "blueprint for creating jobs for the middle class, forging an economy where economic opportunity is shared by all—not just the top 1 percent—and protecting retirement security."

"In particular, I commend President Obama for his commitment to keeping Social Security strong, and for rejecting Republican calls to cut badly needed cost-of-living increases," Reid said.

House Minority Leader Nancy Pelosi was among those Thursday celebrating Obama's decision not to call for switching how Social Security benefits are adjusted by tying them to the chained CPI. Some warn that would cause unacceptable hits on payments to those who can't afford them.

Pelosi even included in her response a bit of recent history (at least history from her perspective).

"Democrats applaud the President for eliminating chained CPI from his budget, and we look forward to working across the aisle to adopt a responsible fiscal framework," Pelosi said in a statement. She also asserted that House Democrats had stood behind Obama's "honest efforts in recent years" to forge a bipartisan "grand bargain" with congressional Republicans.

"In the course of those negotiations, [Obama] put chained CPI on the table as a gesture of good faith; yet Republican leaders were unwilling to budge or close a single unfair tax loophole, and decided to walk away from opportunities to find common ground," Pelosi said.

Pelosi's history lesson referred to the negotiations that Boehner and Obama had quietly entered into in the summer of 2011, when a debt-limit crisis loomed over Washington.

At that time, Republicans and Democrats were deadlocked over rival approaches to deal with the debt ceiling. But amid the clamor, Obama and Boehner themselves were quietly pursuing a "grand bargain."

Those talks entailed—as has been reported since—House Republicans agreeing to new tax revenue in return for some cuts to entitlement programs. But Boehner walked away when Obama was pushed by fellow Democrats—incensed over the idea of giving in on entitlements—into upping the level of revenue increase he was demanding in return.

In the years since, Democrats in both chambers have made a point of writing and otherwise urging Obama not to include the change in calculating Social Security cost-of-living adjustments in his proposed budgets by tying it to the chained CPI. Switching to that would be devastating for seniors, veterans, federal retires, disabled people, and others, they say.

But Boehner spokesman Brendan Buck suggested Thursday that the news shows the president "won't do anything to save entitlement programs that are critical to so many Americans," or doing anything "even modest" to address the nation's debt.

"With three years left in office, it seems the president is already throwing in the towel," Buck said.

Others outside of Congress were also applauding the news that such a move would not be part of Obama's proposed budget.

"This is a huge progressive victory—and greatly increases Democratic chances of taking back the House and keeping the Senate," said Stephanie Taylor, cofounder of the Progressive Change Campaign Committee, in a statement. "Now, the White House should join Elizabeth Warren and others in pushing to expand Social Security benefits to keep up with the rising cost of living."

But others were more cautious.

"While it's great that President Obama has figured out, a year later, that it's a bad idea to push for cuts to Social Security benefits, progressives won't be dancing in the streets until we're confident that there aren't other earned benefit cuts buried in the details of the final budget," Democracy for America Executive Director Charles Chamberlain said in a statement.

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