You are going to hear a lot about chained CPI. If you want to know why progressives hate the idea, this explains it. It’s basically statistical manipulation that is used to lower the cost of living adjustments the government makes to various programs, including Social Security. It means less money for you and me in retirement. A good guess is that we’ll see a three percent reduction in our earned benefits. Why should the elderly pay the price for our stupid wars and tax cuts for the rich?
Well, they shouldn’t. The rich should pay for it all. The vulnerable should pay for none of it.
However, just because chained CPI is unfair and unjustified, that doesn’t mean that the president isn’t in the process of brokering a worthwhile deal. In a negotiated compromise with asshole Republicans, there has to be at least a couple things we hate included. The question in this case is: what do we get in return and what to we get to keep instead? And, then, is it a better deal than we’d get just by going over the fiscal cliff?
It’s not possible to answer those questions definitively until we see the whole package. Democratic advocates of chained CPI see it as more palatable than increasing the retirement age for Medicare. I can’t argue with that, but we don’t need to do either thing if we just off the cliff. So, what do we get for not going over the cliff?
It appears that we get quite a lot. We get an extension of unemployment benefits and a no-drama extension of debt ceiling. We get a modest stimulus bill focused on much-needed infrastructure projects. We limit itemized deductions for the rich. We get a permanent solution for the Alternative Minimum Tax and the Medicare Doc Fix. We avoid rattling the markets or further jeopardizing our credit rating. We regain control over the budget rather than having to put the pieces back together after sequestration takes place.
The Republicans reportedly get tax protection for people making under $400,000 a year, cuts to Social Security cost of living adjustments, a commitment to do tax reform this year, and significant cuts in discretionary spending.
Also, the payroll tax holiday expires. That’s probably a good thing, although it will take a bite out of the economy.
The Republicans are still resisting elements of this deal, so it could get worse. As it stands, it’s weak enough tea for the Republicans that I suspect they will have trouble passing it. It definitely is not a sweet deal for the Democrats, but it would accomplish a lot for the president and give him room to begin governing again like a first world leader instead of fighting over whether we’ll pay our bills.
I find it modestly preferable to going over the cliff and dealing with the ensuing chaos. But only modestly preferable. I suppose that is the nature of these kinds of deals when you have leverage but not dictatorial powers.
