Back in December, Alex Seitz-Wald had a good piece in Salon on the up and downsides of Chained CPI. It’s notable that (with caveats) many progressive people and organizations have endorsed Chained CPI, including Paul Krugman, the Center for American Progress, and the Center for Budget and Policy Priorities. The caveats are critically important, as is the political context in which this decision is being made. Paul Krugman, for example, would never endorse Chained CPI unless all the realistic alternatives were worse. The administration is probably thinking along the same lines.
“While this is not the President’s ideal deficit reduction plan, and there are particular proposals in this plan like the CPI change that were key Republican requests and not the President’s preferred approach, this is a compromise proposal built on common ground and the President felt it was important to make it clear that the offer still stands,” one senior administration official told The Hill…
“The president has made clear that he is willing to compromise and do tough things to reduce the deficit, but only in the context of a package like this one that has balance and includes revenues from the wealthiest Americans and that is designed to promote economic growth,” the administration official said. “That means that the things like CPI that Republican Leaders have pushed hard for will only be accepted if Congressional Republicans are willing to do more on revenues.”
This cat has been out of the bag for a long time. If you’ve been reading this blog then you know that I told you that Chained CPI would be part of any eventual deal. And I told you that it was least bad thing the president could give the Republicans. So, please, don’t go nuts with the Obama is Hitler stuff. The Republicans probably still won’t take the deal, even if their leadership asks them to. That is because they are crazy.
But, if they do, it will mean the Tea Party fever has broken and we can haz function again.