Senate Republicans to call Obama’s bluff on chained CPI

posted at 4:41 pm on September 25, 2013 by Ed Morrissey

With Ted Cruz wrapping up his 20-hour-plus marathon speech against ObamaCare in the Senate debate over the continuing resolution to keep government funded, Senate Republicans still have to deal with the upcoming fight on raising the debt limit.  They want to force Barack Obama to negotiate on some kind of debt-reduction change as the price of allowing it to pass, even though Obama insists he won’t negotiate at all.  The solution? Give Obama what he wants … or at least claims to support:

Senate Republicans have a strategy for lifting the U.S. borrowing limit: offer what PresidentBarack Obama asked for in his budget, then dare him to refuse.

These lawmakers, looking beyond an effort to derail the president’s health-care law, see the possibility of replacing automatic cuts to federal programs with reductions to entitlement spending. Among these: Obama’s proposal to trimSocial Security cost-of-living increases that would save about $130 billion over 10 years.

“Since the president himself has proposed some of these things, it would seem logical that he would not turn that down,”John Cornyn, the Senate’s No. 2 Republican, said in an interview.

The approach is aimed at gaining enough Democratic support in the Senate to force Obama, who said he won’t negotiate on the debt limit, to accept changes that he has called “manageable” as a first step to shoring up Social Security and Medicare. Republicans also would score a victory that would provide balance to lifting the debt ceiling, something their party base opposes.

A move to chained CPI as a budget reform is not new.  In fact, Senator Bob Corker offered a similar deal in December 2012 as a way to break an impasse on budget negotiations after the election.  At the time, Obama didn’t bite on the proposal, but four months later Obama proposed the move to chained CPI in exchange for tax hikes.  That infuriated some Democrats, who didn’t want Obama legitimizing the reform in how inflation gets calculated for the purposes of cost-of-living increases in Social Security.

Why not? National Journal explained in December:

Here’s how the new metric would save money: Social Security, federal pensions, and military and veterans’ benefits are indexed to rise each year with inflation; so are tax brackets, exemptions, deductions, and credits. But experts say the consumer price index the government currently uses overstates how rising prices affect household spending.

The Bureau of Labor Statistics has come up with a more accurate measure, which accounts for consumers’ tendency to switch to cheaper categories of products when prices rise. Rather than looking at a fixed set of goods—as the standard formula does—the new measure looks at how the set of goods changes, and then “chains” two consecutive months of consumption data together.

The chained CPI rises a little more slowly than the current measure. So if the chained CPI were used to calculate cost-of-living increases, it would mean smaller increases to Social Security checks each year. If the chained CPI were applied to the tax code, it would move taxpayers into higher tax brackets faster.

Opponents of the chained CPI say that it would unnecessarily cut Social Security and other benefit programs, burden the oldest and sickest Americans, and hit almost everyone with a tax increase. The deficit-reduction plans floating around Washington—such as the Simpson-Bowles plan—recommend that a switch to chained CPI involves additional protections for the most-vulnerable beneficiaries.

First, though, the Senate Republican caucus needs to repair the breaches in its unity that have erupted over the last few weeks on the CR fight.  David Drucker reports that the GOP caucus held a closed-door meeting yesterday while Cruz started his marathon speech:

“We’re totally unified in wanting to repeal Obamacare, we’d all like to see it defunded. And so it’s, how can you develop a unified strategy, a unified position that puts us back on the high ground of talking about how harmful Obamacare is going to be,” Sen. Ron Johnson, R-Wis., said upon exiting the meeting. “Those are the issues we ought to be discussing rather than interparty squabbles.”

Sources familiar with the meeting said that about a dozen or so senators spoke during the private Republican gathering, which included a discussion about parliamentary procedure and options for how to approach the continuing resolution approved by the House last Friday. The package defunds the Affordable Care Act, President Obama’s prized legislative achievement, but would ensure that the government has enough money to continue operating through Dec. 15. …

Sen. Roy Blunt, R-Mo., the conference vice chairman and an opponent of the Cruz-Lee strategy to leverage a government shutdown in an attempt to defund Obamacare, speculated that the most of the minority caucus could unify over the next few days. Only 15 senators are signatory to the Lee letter vowing not to support a government funding bill that includes money for the Affordable Care Act.

Cruz hasn’t exactly been conciliatory during his speech, but once the CR issue has become moot, there may be room to dial back and unite on a new project.  If the House sends a CR with a one-year delay in it, that will give the Senate GOP caucus a good opportunity to link arms and demand that red-state Democrats act to protect their constituents against a disastrous rollout.  Meanwhile, the debt-ceiling strategy acts directly on a key issue for rising national debt, and defies Obama to reject his own proposal as a compromise on raising the debt ceiling.  Both should put Democrats back squarely on defense, which is why Obama angered his colleagues with the April proposal.


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Schadenfreude on September 25, 2013 at 4:45 PM

I just heard the other Senator from Texas on Sean Hannity’s radio program. What a worthless douchebag and surrender weasel. He spent the whole interview whining that they didn’t have a majority in the Senate- as if that justifies the kind of mentality we heard from the GOP establishment.

Happy Nomad on September 25, 2013 at 4:45 PM

I’m so confused with this whole thing…

sandee on September 25, 2013 at 4:47 PM

If the House sends a CR with a one-year delay in it, that will give the Senate GOP caucus a good opportunity to link arms and demand that red-state Democrats act to protect their constituents against a disastrous rollout.

Every GOP Senator should be united on eliminating Obamacare. This is more than just a difference of tactics. This is outrage that the leadership has been outed as feckless surrender monkeys.

Happy Nomad on September 25, 2013 at 4:47 PM

To put that $130 billion in “savings” in context, the expected primary (or cash) deficit in the 2013 intermediate scenario between 2014 and 2023 is $1,074 billion.

It doesn’t get SocSecurity off primary deficits in any year, and at most it adds 2 years to the life expectancy of the IOUs.

Steve Eggleston on September 25, 2013 at 4:50 PM

I don’t think the CR is going to “become moot” as quickly as Cornyn, Corker, McVain, Ayotte et al would like. Next up is Plan B, with waiver redress, including for the Congress and staff, as well as some attempt at a delay of the individual mandate. This little drama isn’t done yet. Hallelujah!

MTF on September 25, 2013 at 4:51 PM

I’m so confused with this whole thing…

sandee on September 25, 2013 at 4:47 PM

Are you under 55? Sometime during your life, if nothing is done, your SocSecurity benefits will be cut by over 25%.

If you’re under 47 and retire at the “normal retirement age” of 67, or under 42, you will never see 25% of the benefits you’ve been promised, or more if the geezers weasel out a “hold harmless” carveout for themselves.

Steve Eggleston on September 25, 2013 at 4:53 PM

To put that $130 billion in “savings” in context, the expected primary (or cash) deficit in the 2013 intermediate scenario between 2014 and 2023 is $1,074 billion.

It doesn’t get SocSecurity off primary deficits in any year, and at most it adds 2 years to the life expectancy of the IOUs.

Steve Eggleston on September 25, 2013 at 4:50 PM

There is no such thing as savings in DC. At best they take money from one pot and spend it on something in another.

Happy Nomad on September 25, 2013 at 4:53 PM

I just heard the other Senator from Texas on Sean Hannity’s radio program. What a worthless douchebag and surrender weasel. He spent the whole interview whining that they didn’t have a majority in the Senate- as if that justifies the kind of mentality we heard from the GOP establishment.

Happy Nomad on September 25, 2013 at 4:45 PM

You mean Cornyn? He’s begging to be primaried out of office next year. And this is Texas. If we nominate a Tea Party candidate, that person will win the Senate seat no matter how much the GOP establishment tries to undermine them in the general election.

As for his complaint that they don’t have the Senate, first I would argue that squishes like himself are the reason we failed to retake that chamber last year. If you p-ss off your base and they don’t show up to vote, it’s kinda hard to win elections. And secondly, is Cornyn seriously insinuating that if we control the Senate(and presumably the House) come January 2015 that the Republicans are suddenly gonna grow a pair and take the fight to Obama. Call me crazy, but I predict we’ll start hearing them claim that they need to retake the White House in 2016 first before they can roll back any of the Democrat agenda.

Doughboy on September 25, 2013 at 4:54 PM

There is no such thing as savings in DC. At best they take money from one pot and spend it on something in another.

Happy Nomad on September 25, 2013 at 4:53 PM

Hence the scare quotes on “savings”.

A quick look on my not-recently-updated (i.e. I don’t have the summer numbers put in) rerun of the 2009 intermediate scenario shows that primary deficit between FY2014 (October 2013) and FY2023 (September 2013) to be a tick over $2,000 billion.

Steve Eggleston on September 25, 2013 at 4:58 PM

I’m so confused with this whole thing…

sandee on September 25, 2013 at 4:47 PM

If you have an insurance plan you like – sorry it will be gone.

That means you probably can’t see your doctor anymore.

If you are on expensive medications – you will be scrambling for 3 months to
find some kind of coverage that will pay or at least pay partially for those medications.
(And chances are that you will be denied those expensive medications)
The government said you cannot be denied health insurance, they said nothing
about medications.

Chances are – if you need regular doctor appts to verify and check your body then
you are screwed as far as insurance paying to see your existing doctor.

What this means – you may have to pay out of your pocket to keep seeing your existing doctor.
(That is is he will be able to do that)

While you get to pay for expensive ObamaCare coverage that you don’t need or want.

I am in this exact scenario.

I have stopped taking my medication to see how long I can go before I totally can’t function.

I have calls, e-mails, letters, to the pharmacy to see what I can do.

My doctor’s suck – they have given up. Probably because they are pissed that they have to
trade in their Mercedes for a Buick.

redguy on September 25, 2013 at 5:00 PM

You mean Cornyn? He’s begging to be primaried out of office next year. And this is Texas. If we nominate a Tea Party candidate, that person will win the Senate seat no matter how much the GOP establishment tries to undermine them in the general election.

As for his complaint that they don’t have the Senate, first I would argue that squishes like himself are the reason we failed to retake that chamber last year. If you p-ss off your base and they don’t show up to vote, it’s kinda hard to win elections. And secondly, is Cornyn seriously insinuating that if we control the Senate(and presumably the House) come January 2015 that the Republicans are suddenly gonna grow a pair and take the fight to Obama. Call me crazy, but I predict we’ll start hearing them claim that they need to retake the White House in 2016 first before they can roll back any of the Democrat agenda.

Doughboy on September 25, 2013 at 4:54 PM

The next Senator from Texas -

http://gohmert.house.gov

redguy on September 25, 2013 at 5:01 PM

“We’re totally unified in wanting to repeal Obamacare, we’d all like to see it defunded.”

Yeah, and I’d like to win the lottery. But unlike me, these losers won’t even occasionally buy a ticket. They are disgusting. But Ted Cruz & Mike Lee rock! I’ll buy that ticket.

MikeinPRCA on September 25, 2013 at 5:02 PM

You mean Cornyn? He’s begging to be primaried out of office next year. And this is Texas. If we nominate a Tea Party candidate, that person will win the Senate seat no matter how much the GOP establishment tries to undermine them in the general election.

Doughboy on September 25, 2013 at 4:54 PM

I do mean Cornyn. And he epitomizes everything that is wrong with the establishment politicians. He was lecturing on parliamentary procedure when your average American doesn’t care. They want Obamacare stopped and the excuses about majority leverage are simply that. Excuses.

Happy Nomad on September 25, 2013 at 5:04 PM

Among these: Obama’s proposal to trimSocial Security cost-of-living increases that would save about $130 billion over 10 years.

Arranging deck chairs on the Titanic.

Midas on September 25, 2013 at 5:06 PM

Use the debt limit to continue to go after Obamacare.
The other things are secondary at this moment.

Either we cut out funding for Obamacare.
Or forget raising the debt limit.
Let govt run without adding to the debt, then.

anotherJoe on September 25, 2013 at 5:07 PM

Cornyn? He’s begging to be primaried out of office next year. And this is Texas. If we nominate a Tea Party candidate, that person will win the Senate seat no matter how much the GOP establishment tries to undermine them in the general election.

Doughboy on September 25, 2013 at 4:54 PM

Absolutely! This Fort Worth Texan agrees. Oh and Wendy (catheter) Davis is toast not only as Governor but as State Senator from Fort Worth.

What Ted Cruz (my senator) has done is shine light on the cockroaches both on the left and the right. This is war and the enemy is the Democrats and the RINOs. Time to take out the garbage one socialist and squish at a time.

neyney on September 25, 2013 at 5:08 PM

A move to chained CPI as a budget reform is not new.

Racist…

affenhauer on September 25, 2013 at 5:09 PM

Cruz hasn’t exactly been conciliatory during his speech, but once the CR issue has become moot, there may be room to dial back and unite on a new project.

Unite with whom? The people who just stabbed him in the back? Good luck with that.

Myron Falwell on September 25, 2013 at 5:12 PM

Every GOP Senator should be united on eliminating Obamacare. This is more than just a difference of tactics. This is outrage that the leadership has been outed as feckless surrender monkeys.

Happy Nomad on September 25, 2013 at 4:47 PM

Actually, I’m damn happy that the GOPe as a whole has been outed as worthless surrender monkeys. The only thing I’m mad about is that it didn’t happen sooner.

Myron Falwell on September 25, 2013 at 5:14 PM

You mean Cornyn? He’s begging to be primaried out of office next year. And this is Texas. If we nominate a Tea Party candidate, that person will win the Senate seat no matter how much the GOP establishment tries to undermine them in the general election.

Doughboy on September 25, 2013 at 4:54 PM

I think we need to be careful and just make sure we pick the right opponent to take him on. Cornyn is politically very powerful and there will be substantial efforts made to defend him. A weak enough candidate could lose to him, even though he’s ripe for a challenge. I also hope we don’t see another situation like we have with Graham where no one can be found to step up to the plate.

As to the article itself, it sounds like Cruz’s filibuster has had some effect, though whether it amounts to anything remains to be seen.

Doomberg on September 25, 2013 at 5:19 PM

Yeah. The “chained CPI.” Something no one understands. Except when the Rodeo Clown says “they wanna cut your Social Security and Medicare!” Yeah. That’s the ticket. It’s a winner, for sure! And the media will be ALL OVER this being the Rodeo Clown’s idea in the first place. Yes they will. Winning!

Rational Thought on September 25, 2013 at 5:21 PM

Chained CPI isn’t a bad idea and, rather than arranging deck chairs on the Titanic, would close, by some estimates, 70% of the shortfall in the trust fund.

But the tactic adopted here is frankly dumb. It gives Obama the opportunity stick to his guns on “no negotiations” by fighting Republican attempts to take money from Granny’s pocket. I am looking forward to hearing Cornym say: “if you don’t let me cut your Social Security benefits, I’ll wreck the economy.” Tough case to make.

But, he’s not serious. If he was, he’d introduce a standalone bill that also contained sweeteners for he Dems. Raising a few billion by closing loopholes.

Just another PR stunt by a Texan.

urban elitist on September 25, 2013 at 5:21 PM

If the House sends a CR with a one-year delay in it, that will give the Senate GOP caucus a good opportunity to link arms and demand that red-state Democrats act to protect their constituents against a disastrous rollout.

Every GOP Senator should be united on eliminating Obamacare. This is more than just a difference of tactics. This is outrage that the leadership has been outed as feckless surrender monkeys.

Happy Nomad on September 25, 2013 at 4:47 PM

Amen, brother! I heard that McLame is switching parties!

tomshup on September 25, 2013 at 5:22 PM

Cornyn? He’s begging to be primaried out of office next year. And this is Texas. If we nominate a Tea Party candidate, that person will win the Senate seat no matter how much the GOP establishment tries to undermine them in the general election.

Doughboy on September 25, 2013 at 4:54 PM

Absolutely! This Fort Worth Texan agrees. Oh and Wendy (catheter) Davis is toast not only as Governor but as State Senator from Fort Worth.

What Ted Cruz (my senator) has done is shine light on the cockroaches both on the left and the right. This is war and the enemy is the Democrats and the RINOs. Time to take out the garbage one socialist and squish at a time.

neyney on September 25, 2013 at 5:08 PM

Two excellent posts!!! Well done!

tomshup on September 25, 2013 at 5:26 PM

It seems a bit bigoted to offer spending cuts that Dog Eater has actually talked about wanting without knowing whether or not it will hurt the demorats politically. Let’s ask McCain for his advice first.

Bishop on September 25, 2013 at 5:38 PM

Here’s the dirty little secret on “chained” CPI versus “normal” CPI – while “chained” CPI immediately reflects the effect of people buying less goods, “normal” CPI does that deflation every 2 years (on the even-numbered year if memory serves).

Steve Eggleston on September 25, 2013 at 5:50 PM

I just heard the other Senator from Texas on Sean Hannity’s radio program. What a worthless douchebag and surrender weasel. He spent the whole interview whining that they didn’t have a majority in the Senate- as if that justifies the kind of mentality we heard from the GOP establishment.

Happy Nomad on September 25, 2013 at 4:45 PM

That is what McCain said, “They won.”

davidk on September 25, 2013 at 6:12 PM

Chained CPI isn’t a bad idea and, rather than arranging deck chairs on the Titanic, would close, by some estimates, 70% of the shortfall in the trust fund.

But the tactic adopted here is frankly dumb. It gives Obama the opportunity stick to his guns on “no negotiations” by fighting Republican attempts to take money from Granny’s pocket. I am looking forward to hearing Cornym say: “if you don’t let me cut your Social Security benefits, I’ll wreck the economy.” Tough case to make.

But, he’s not serious. If he was, he’d introduce a standalone bill that also contained sweeteners for he Dems. Raising a few billion by closing loopholes.

Just another PR stunt by a Texan.

urban elitist on September 25, 2013 at 5:21 PM

Hell, I am heartened you acknowledge there as in issue with entitlements.

rob verdi on September 25, 2013 at 6:23 PM

I just heard the other Senator from Texas on Sean Hannity’s radio program. What a worthless douchebag and surrender weasel. He spent the whole interview whining that they didn’t have a majority in the Senate- as if that justifies the kind of mentality we heard from the GOP establishment.

Happy Nomad on September 25, 2013 at 4:45 PM

That is what McCain said, “They won.”

davidk on September 25, 2013 at 6:12 PM

McCain Bashes Cruz: ‘All of Us Should Respect the Outcome of Elections’

http://www.breitbart.com/Big-Government/2013/09/25/McCain-bashes-Cruz

davidk on September 25, 2013 at 6:30 PM

If the price of steak goes up enough to make me switch to hamburger instead, the government argues that the price of steak did not really go up?

Yeah, sure. And if the price of gasoline leads me to dump my car in favor of a bicycle, does that mean inflation has decreased because I have saved money?

Colony14 on September 25, 2013 at 6:48 PM

Looks like the administration is filibustering Obamacare.
http://www.washingtonpost.com/blogs/wonkblog/wp/2013/09/25/d-c-s-obamacare-fail-prices-wont-work-until-november/

docflash on September 25, 2013 at 6:50 PM

McCain Bashes Cruz: ‘All of Us Should Respect the Outcome of Elections’

http://www.breitbart.com/Big-Government/2013/09/25/McCain-bashes-Cruz
davidk on September 25, 2013 at 6:30 PM

Yup, like the Dems do…

http://www.reuters.com/article/2011/02/18/us-wisconsin-protests-idUSTRE71H01920110218

Oh wait.

Obama told us, if you bring a knife the fight, they bring a gun. McCain got all upset that Cruz didn’t stick to the rules and brought a gun, instead of McCain’s government issued butter knife.

Fallon on September 25, 2013 at 7:01 PM

Same old same old, They play this game when cornered, and try to save face with procedural gambits giving the surrender monkeys deniability. They have fooled us before many times. Say we can’t change a law (a damnable Lie)Then They call those that oppose them to be wacko birds, or obstructionist. Those that vote for cloture are the enemy playing the procedural game to have Obama care be funded, all should be recalled and or primaryed. Be honest now when has McConnell done what we as “Republicans” want them to do, no They always find a way to fold. Some call it fear, bullcrap, it’s complicity. Palin/Cruz or any combination thereof.

jainphx on September 25, 2013 at 7:16 PM

All I want from Social Security is the the money I paid in over 52 years of working PLUS interest.

As for the COLA, today it does not include food or housing, the basics of living, but is based on the CORE cost of living which does include machine tools used by manufacturers.

polarglen on September 25, 2013 at 7:47 PM

Could we please insist that all federal workers raises will be now be subject to the Chained CPI???!!!!!!

jeanneb on September 25, 2013 at 9:00 PM

All I want from Social Security is the the money I paid in over 52 years of working PLUS interest.

As for the COLA, today it does not include food or housing, the basics of living, but is based on the CORE cost of living which does include machine tools used by manufacturers.

polarglen on September 25, 2013 at 7:47 PM

Assuming that’s giving away your age, you’re among the last people who will (likely) get that back assuming a normal lifespan. Those of us who are younger won’t even get close.

It is the CPI-W (Consumer Price Index for Urban Wage Earners and Clerical Workers) that is the current measure for the COLA (and the ceiling for the payroll tax/calculation of the initial SocSecurity benefit). It does include food/housing, and it does not include machine tools. Unfortunately for the seasoned citizens, it does not include health care.

Steve Eggleston on September 25, 2013 at 10:26 PM

Also, CPI-W explicitly excludes all the spending habits of the retired.

Steve Eggleston on September 25, 2013 at 10:27 PM

If the chained CPI were applied to the tax code, it would move taxpayers into higher tax brackets faster.

What’s not to like?
/

AesopFan on September 26, 2013 at 10:31 AM