President Barack Obama has not released his budget for fiscal year 2015, but he has already let it be known that one good idea won’t be in it: Unlike last year, Obama will not propose the use of a more accurate inflation factor, “chained CPI,” in the government’s annual adjustments to Social Security and other benefits.
This is a huge disappointment. As far as anyone can tell, the president’s view on the merits of chained CPI hasn’t changed. The measure would save $162.5 billion over the next decade, according to the Congressional Budget Office, thus helping to trim the entitlement costs that are on track to drive the U.S. budget deficit unsustainably higher beginning early in the next president’s first term. Appropriately tempered with protections for the very poor and very elderly, chained CPI is an efficient method of long-term deficit reduction that imposes only modest sacrifice on the vast majority of Americans.
Obama’s rationale for taking the idea out of his budget was instead openly political. “The president is not going to be in a position where he’s going to ask senior citizens and middle-class families to make sacrifices in pursuit of reducing the deficit and not ask the wealthy and well-connected to do so, too,” White House spokesman Josh Earnest said Thursday. “The second you bring up the prospect of closing tax loopholes, Republicans walk away.” Translation: I don’t want to take any heat for pursuing a deal with the GOP, even if that would be difficult, and even if it would be the right thing for the country.
In fact, Republican opposition to additional tax increases for the wealthy is only part of the reason for Obama’s change in position. After all, chained CPI could be applied governmentwide, so as to affect tax brackets and benefit programs at an additional savings of $140 billion over 10 years. A more plausible explanation for the president’s move is the revolt on the left wing of his own party, where progressives are clamoring for an increase in Social Security benefits, future deficits be damned.
With his party facing a battle to hold its Senate majority in November, Obama has apparently concluded that the expedient course is to bash Republicans rather than to resist bad policy ideas emanating from his own camp. In so doing, he has abdicated what little leadership on entitlement reform he had shown, making it much more likely that the problem will be left for his successor —contrary to Obama’s repeated assurances, both as a candidate in 2008 and as president.