Masking Entitlement Reform

Dec 19 2012 @ 3:40pm

Chained_CPI

Why Ezra Klein dislikes chained CPI, which is part of the fiscal cliff negotiations:

If we want to cut Social Security and/or Medicare, we should have a conversation about how to cut Social Security and/or Medicare, decide what our priorities are — Progressivity? Making the health-care system more efficient? Total deficit-reduction? — and find the policy that does the best job achieving those goals. The effort to mask cuts in technical adjustments just leads to worse cuts, as the top priority isn’t protecting the poorest or improving the program, but finding a policy sufficiently confusing that you can pass it before most people realize what it is.

Suderman sees the issue differently:

The gravitation toward chained CPI, and its prominent place in the fiscal cliff negotiations, tells us a lot about why budget reform is so hard. The long term budget problem is, more than anything, an entitlement spending growth problem. And while Social Security is not as big of a problem as Medicare, it’s still a contributing factor. Yet restraining the growth of our big entitlements is so unpopular that politicians have had to resort to technical tweaks that aren’t widely understood. And even then, those tweaks, designed to modestly slow spending growth, are decried as cuts.

Derek Thompson provides the above chart to help explain chained CPI. I think it's one flawed way to reconcile Americans' unreasonable demands of government with their equally unreasonable refusal to pay for it.