My Politico oped on the new Ryan budget is up and my wife just read it, liked it, but said, reasonably, that she didn’t get this part:
Ryan also dings President Barack Obama for abandoning the “one significant reform he’s embraced,” changing the way Social Security payments rise with inflation, but he once again offers neither that nor any other policy change to Social Security, instead proposing a process for somebody else to figure out what to do about long-term solvency of the program.
So, as she does a lot for me, the least I can do is explain this as it’s really quite irksome.
For numerous years, President Obama’s budgets included a policy that applied the chained-CPI to the increase in Social Security benefits. Since this inflation measure grows more slowly than the one currently used, its use represents a reduction in benefits relative to current policy.
This change was and is anathema to many supporters of the program but the President included it in his budget as a symbol of good faith negotiations with Republicans who were constantly at him to do something “serious” on entitlements.
As it turned out, these R’s never showed any interest in actual negotiations. Rep. Ryan never included the chained-CPI or any other Social Security reforms in any of his budgets. And yet, when the President decided he’d had enough of this nonsense and left the chained-CPI offer out of his most recent budget, Ryan dinged him for it. And still, he–Ryan–leaves it out of his own budget.
What I personally think of all the chained-CPI stuff is a different, though related, matter. I do think chained indexes are more accurate, but if I were going to make the change, I’d be sure to do it with a chained index of prices faced by the elderly, which probably would grow more quickly than the overall chained-CPI.
But that’s not the point.
OK, that wonkish, weedish paragraph has been unpacked. Next question?