Obama Drops ‘Chained CPI’ From White House Budget

WASHINGTON, DC - DECEMBER 02: U.S. President Barack Obama speaks about AIDS during a World AIDS Day event in the Eisenhower Executive Office Building, December 2, 2013 in Washington, DC. On the 25th anniversary of World AIDS Day, President Obama announced that funding to prevent AIDS will be increased by 100 million dollars. 
National Journal
Billy House
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Billy House
Feb. 20, 2014, 10:33 a.m.

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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