The chained-CPI proposal (SS reduction) was picked up a couple weeks already

[chill_wind]

by some advocacy groups and financial journals and bloggers.

This piece of it getting all the latest attention- the chained CPI- was out there well before WAPO and other reports of it the other day.


The Biden Talks with Congress/Gang of Six have been going on since May. They and privy others have discussed various snippets with the press all along the way. And just as typically both sides have withheld whatever they deemed they wanted to keep under wraps until they were ready to package it their own way publicly.

May 5, 2011, 4:58 pm
Biden Calls First Deficit Meeting ‘Productive’
http://thecaucus.blogs.nytimes.com/2011/05/05/biden-calls-first-deficit-meeting-productive/

Nevertheless, whether we were all paying that much attention, the chained CPI proposal has been out there and there is nothing mythical about the actual fact that it's been under active consideration for some time.

-----------------------------------------------------
June 24, 2011

New Report Shows Women Will Be Hit Hardest By Changes to Social Security's Cost-Of-Living Adjustment
Deficit-reduction proposal using new calculation for cost-of-living adjustment will result in significant cuts, National Women's Law Center finds


Various deficit-reduction plans call for switching to the chained CPI, and it is reportedly being considered in the deficit talks convened by Vice President Joe Biden.

http://www.nwlc.org/press-release/new-report-shows-women-will-be-hit-hardest-changes-social-securitys-cost-living-adjust

----------------------------------------------

06/22/2011
America's Latest Proposal To Deal With Its Insolvency And Pursue Stealth Dollar Devaluation: Change The CPI
http://www.zerohedge.com/article/americas-latest-proposal-deal-its-insolvency-and-pursue-stealth-dollar-devaluation-change-cp
Tyler Durden


-----------------------------------

6/22/2011 12:41 AM, Dow Jones

Change To Inflation Measurement On Table As Part Of Budget Talks -Aides

WASHINGTON -(Dow Jones)

WASHINGTON -(Dow Jones)- Lawmakers are considering changing how the Consumer Price Index is calculated, a move that could save perhaps $220 billion and represent significant progress in the ongoing federal debt ceiling and deficit reduction talks.

According to congressional aides familiar with the discussions, the proposal would shift how the Consumer Price Index is calculated to reflect how people tend to change spending patterns when prices increase. For example, consumers tend to drive less when gas prices increase dramatically.

Such a move is widely seen by economists as resulting in a slower rise in inflation. That would impact an array of federal programs that are linked to CPI including the Social Security program and income tax brackets set by the federal government.

The proposal could lower federal spending by around $220 billion over the next decade, **based on calculations by last year's White House deficit commission, which recommended the change as part of its final report.**

According to two congressional aides familiar with the budget negotiations, the shift is being "seriously discussed" as part of the ongoing talks to strike a budget deal, that would be used to ease the passage of a required increase in the country's debt limit.

Those talks involve Democratic and Republican lawmakers from both chambers and are led by Vice President Joe Biden. The group held its latest meeting Tuesday as they strive to reach the broad outlines of a compromise on federal spending by the end of the month.

In a press conference that took place before the meeting, House Majority Leader Eric Cantor (R., Va.) declined to comment on the specific proposal, other than to say that "a lot of things are on the table." But asked whether the proposal would be interpreted as a tax increase and therefore a non-starter for Republicans, Cantor said it could be seen as both impacting tax rates and benefits paid out by the federal government.

When asked about the idea after the meeting, Rep. Jim Clyburn (D., S.C.) said everything is being discussed.

It is a rare proposal in that it would likely lead to both lower benefits paid to seniors and higher taxes paid by most people who pay federal income tax. As such, it could allow Republicans to argue they are tackling federal entitlement programs such as Social Security, and permit Democrats to say they are increasing taxes as part of any budget deal that is reached.

It could be easier for both parties to agree on than a significant overhaul to the Medicare proposal or an increase of taxes on wealthier Americans.

"It's certainly something that is going to be considered," said James Horney, director of federal fiscal policy at the Center for Budget and Policy Priorities, a liberal think tank. "There are questions whether it would be politically easy."

Several senators that are not party to the Biden-led talks voiced support for the proposal including Budget Committee Chairman Kent Conrad (D., N.D.), while Sen. John Thune (R., S.D.), a member of the Republican leadership team, said it should be looked at as part of the negotiations.

MORE: http://www.tradesignalonline.com/charts/news.aspx?id=815113&filter=&catid=0


It doesn't mean it's going to fly. If that was a balloon the other day, it's safe to say it's being sent back in royal tatters so far. We can make whatever we wish of the assertions of surprise by Nancy Pelosi and some others, while it's evident Biden and Dems were talking about this piece of things for fact. Nancy Pelosi doesn't want to call it a benefit reduction and have to have Dems own that term. But an economist like Dean Baker will readily tell you why it is.

http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=103&topic_id=612538&mesg_id=612538

[EFerrari]

1. I follow laughingliberal on twitter and she was talking about it

before the WaHo. I'm slow to pick up on financial stuff most of the time.

It's telling that Nancy is worrying about how it gets constructed and no about how improper it is to cut Social Security and not something else. But if this thing gets slowed down or tabled, it may wind up being because of her.

[chill_wind]

3. It's far from certain how this will go, but

to see its existence as a possibile part of negotiations still being pooh-pah'd by anyone at this late hour as something fictitious and "mythical" bothers me. I'm glad the advocacy groups that got wind of this idea didn't wait to see if it might happen to assess in the meantime what it would mean.

[EFerrari]

4. Yes, it has been disturbing to see how many people still insist the WaHo

fabricated the whole thing, even after so many reports of Congress, the Senate and other leaders like Nancy talking about the details of this negotiation which isn't supposed to be happening.

[DJ13]

2. I dont think the WH cares if the trial balloon exploded like the Hindenburg

They really havent cared WHAT the people have wanted since the 08 election.

Their ability to (completely, totally) ignore the people when they shitcanned the public option shows thay care little what anyone thinks.

Towing the conservative line is all they care about.

[joshcryer]

5. Just more MSM inspired outrage, glad I didn't fall for it.

[chill_wind]

6. Are you still tryng to maintain the proposal being looked at - and reported

as being looked at- is fiction? Or just that you are indifferent to the possibility of it's adoption?

:shrug:

[joshcryer]

7. I have no doubt in my mind that Obama looked at it at all. Indeed, it's even possible it was top...

...of the list of solutions.

What I'm saying is that all the outrage over that was clearly MSM inspired and motivated.

As far as indifference, I prefer to be indifferent about any topic, but as far as Chained CPI I have come out that it would be a worse COLA, however, there are even worse options than that.

[Samantha]

8. It was proposed by the Deficit Commission Obama appointed

I am sorry, the "Cat Food" commission.

Sam

[chill_wind]

9. Yep. And both parties have toyed with it long before this. Clinton liked it.

Just posted an interesting recollection by Dean Baker about how Ted Kennedy enlisted him and got this off the table when Dems wanted to do it years ago. It was something Baker wrote in a tribute of sorts shortly after his death,

http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=103&topic_id=612538&mesg_id=612634

And the creative political gimmickry never changes.

It was the same angle then:

"And, the great thing was that Congress could do this cut by claiming it was just a technical adjustment."

[chill_wind]

10. ..