President Barack Obama prepares to walk away from a table, Wednesday, Feb. 19, 2014, in a conference room in flight aboard Air Force One.
Jacquelyn Martin/AP Photo

Obama moves away from chained CPI

Updated
Last spring, President Obama signaled to congressional Republicans that he was serious about a long-term debt-reduction deal. GOP leaders made it explicitly clear: if the White House really wants a deal, Obama will have to accept a change to how Social Security benefits are calculated – a policy called “chained CPI,” in reference to the Consumer Price Index.
 
To the severe disappointment of his progressive allies and Democratic base, the president agreed, including chained CPI in his budget as a demonstration of his commitment. “You’re serious about a deal?” Obama seemed to be saying. “I’m prepared to accept the Republicans’ top priority on entitlements – and I’m prepared to prove it by putting it my budget.”
 
In theory, this was poised to be a breakthrough moment for a bipartisan debt-reduction agreement. But in practice, the president’s effort was for naught – most congressional Republicans said they simply couldn’t consider any comparable concession as part any negotiations, while other GOP lawmakers said they no longer liked the chained CPI policy their party insisted the White House accept.
 
A year later, the president has decided there’s no point in offering Republicans what they want if they’re not prepared to take “yes” for an answer – Obama’s new budget plan drops chained CPI.
The president’s budget request for fiscal 2015, which is due out March 4, will not call for a switch to a new formula that would limit cost-of-living increases in the entitlement program, the White House said Thursday.
 
Obama last year proposed the new formula for calculating benefits as an overture to Republicans.
 
The White House said that the offer to Speaker John Boehner (R-Ohio) “remains on the table for whenever the Republicans decide they want to engage in a serious discussion,” but that the concession would not be included in the new budget request.
The report from The Hill added that Obama has “yielded to pressure from congressional Democrats,” but that’s simply not what’s happened.
 
The timeline of events is quite simple:
 
1. Republicans said any debt-reduction deal would have to include chained CPI.
 
2. Obama offered Republicans a debt-reduction deal that included chained CPI.
 
3. Republicans said they still weren’t prepared to make a debt-reduction deal.
 
Congressional Democrats pushed the president to give up, and Obama ultimately did, but if GOP lawmakers expressed even the slightest interest in reaching a compromise, the White House wouldn’t have been so eager to walk away from the policy.
 
And then, there was this.
A spokesman for Boehner slammed Obama for the about-face and said the president is “already throwing in the towel” on fiscal reforms.
 
“This reaffirms what has become all too apparent: the president has no interest in doing anything, even modest, to address our looming debt crisis. The one and only idea the president has to offer is even more job-destroying tax hikes, and that non-starter won’t do anything to save the entitlement programs that are critical to so many Americans,” said Boehner spokesman Brendan Buck.
This is among the more inexplicably, demonstrably wrong statements out of the Speaker’s office in a while. First, there is no looming debt crisis. Second, Obama has practically begged Boehner and his colleagues to work with him on a compromise, including a $4 trillion “grand bargain” Republicans turned down in 2011 and the president’s chained-CPI offer in 2013. (The president also accepted over a trillion dollars in spending cuts when the Speaker’s party held the debt ceiling hostage.)
 
And third, “more job-destroying tax hikes” is an interesting phrase since taxes on the wealthy went up last year, over GOP objections, and last year was the best for U.S. job creation since 2006, and the second best since 1999.
 

Barack Obama, Chained CPI, Debt Reduction and Social Security

Obama moves away from chained CPI

Updated