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Explaining the Pure Cruelty of Obama's Gimmick, "Chained CPI" in Simple Language

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  • scotpeden@cruzio.com
    http://www.alternet.org/economy/explaining-pure-cruelty-obamas-gimmick-chained-cpi-simple-language By Thom Hartmann Explaining the Pure Cruelty of Obama s
    Message 1 of 1 , Dec 20, 2012
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      By Thom Hartmann
      Explaining the Pure Cruelty of Obama's Gimmick, "Chained CPI" in Simple
      If Obama goes along with a “chained CPI,” he will be the first President
      in the history of the Dem Party to have actually cut Social Security.
      December 20, 2012 |

      So, the White House says they want to cut Social Security Insurance
      payments over time, using a tricky little technique called the “chained
      CPI.” Instead of actually measuring real inflation, this particular
      “consumer price index” is “chained” to consumer’s behavior. They call it
      “hedonic and quality adjustments” to make it sound scientific.

      Here’s how it works: If the price of beef goes up, and some people start
      eating cheaper chicken instead, then instead of measuring actual inflation
      (as reflected by the rising cost of meats), the Chained CPI measures the
      behavior of moving from beef to cheaper chicken and lowers the
      cost-of-living adjustment.

      If more and more seniors can’t afford chicken and move to cheaper
      cat-food, then the “chained CPI” adjusts Social Security Insurance
      payments – and millions of disabled vets’ payments that are tied to Social
      Security – so that they can now afford cheaper brands of cat food.
      Republicans love this idea.

      As I’ve pointed out here and here, back in the mid-1970s, Republican
      strategist Jude Wanniski, in an article titled “Taxes and a Two Santa
      Theory,” correctly pointed out that the American people loved Social
      Security, brought to America by Democrats and continually defended by
      Democrats. And Republicans had always played the role of Scrooge, saying,
      “Things like Social Security are not legitimate functions of government.
      Old-age poverty should be fixed by churches, and retirement income should
      be handled by Wall Street.”

      The Democrats, Wanniski pointed out, were essentially the Social Security
      Santa Claus, giving Americans what they wanted, even though Americans were
      also, themselves, gladly paying for that very same Social Security. So the
      job for Republicans was twofold. First, to become Santa Claus themselves.
      Because being the Social Security Santa was already taken, they should,
      Wanniski proposed, become the “tax-cut” Santa Claus. Tax cuts for
      everybody! Especially rich people! And the second really big job was to
      get Democrats to shoot their own Santa Claus – especially Social Security.

      The problem for Republicans was that Social Security was so popular – it
      literally saves lives every day, and has since 1936 – that even
      Republicans wanted some of the glow. And, even more problematic for
      Republicans, Social Security has nothing whatsoever to do with the budget
      deficit, and – as it’s now set – is totally solvent for at least the next
      twenty years. And it will remain solvent forever, with the very small
      tweak of just lifting the payroll cap so millionaires pay the same
      percentage into it as people working at Wal-Mart. Even Ronald Reagan, in
      an rare moment of candor, pointed this out.

      That bears repeating. You could cut Social Security all you want. You
      could even end Social Security altogether. And it wouldn’t reduce the
      budget deficit by a single penny. Social Security is a completely
      self-funded, self-contained program – and it’s sitting on a surplus of
      over $2.6 trillion.

      But it’s the signature program that makes the American people think of the
      Democrats as Santa Claus. And the number one priority of the Republican
      strategists is to get a Democratic President to take a shot at Santa
      Claus. Since FDR brought us Social Security not one single Democratic
      president has ever, in the history of the republic, suggested shooting or
      even nicking the Social Security Santa Claus. Until Obama.

      And what’s particularly astounding about this is how effective this White
      House has been at getting supposedly progressive commentators and
      journalists to jump on board. As Laura Gottesdiener points out at
      AlterNet a number have responded positively to this week’s Democratic
      Party conference call on messaging this, and are actually trying to say,
      basically, “It’s not such a big cut. Not a big deal. No droids in this

      It’s nice to be thought of as an insider. It’s cool to get invited to the
      right parties. And it’s an adrenalin rush to be invited to the White
      House for an off-the-record briefing or conference call. I can tell you
      all those things from personal experience. But all those things said, it’s
      crazy for a Democratic president to shoot the Democrats’ number one Santa
      Claus program, and it’s crazy for progressives to try to pretend it’s
      something else.

      If Obama goes along with a “chained CPI,” he will be the first Democratic
      President in the history of the Party to have actually cut Social
      Security. Even though it doesn’t do a thing – nothing! – to reduce the
      budget deficit. And, as we saw with Bill Clinton “reforming” welfare, once
      the Republicans can corner a Democratic president into shooting a
      Democratic Santa Claus, the Republicans can finish the job through the
      death of a thousand paper cuts over the next decade and in the states, and
      everybody just remembers that it was a Democratic President who started

      President Obama has brought into his negotiations with Republicans an
      offer to cut more out of Social Security than he would cut out of the
      bloated Pentagon budget. So he’s supporting the Republican’s Santa Claus
      and shooting the Democrat’s Santa Claus. And, like with Clinton and
      welfare, this will just be the beginning, once the first cut is made.
      Eventually, the bloody carcass of Social Security will be swept up by
      right-wing cons like Peterson, Simpson, and Bowles, and handed over with a
      bow and a ribbon to the billionaires on Wall Street.

      If President Obama is still pushing a “chained CPI” on December 21st, then
      maybe the Mayans were right. It is the end of the world as we know it. Or
      at least the end of the Democratic Party as we knew it.
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