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Senate Democrats Press Obama on Chained CPI

 The proposed method for calculating benefits would cost the sick, the elderly and veterans.

George Zornick

March 12, 2013

Senate Majority Leader Harry Reid. (AP Photo/Susan Walsh.)

President Obama visited Capitol Hill on Tuesday afternoon in an effort to get Senate Democrats on board with his sequester replacement plan, which contains some tough sells for the caucus—particularly on Chained CPI, a new and less generous way to calculate government benefits.

When Senate Democrats proposed their sequester replacement last month, it didn’t have Chained CPI, and many members have openly spoken out against it. Accordingly, Obama was repeatedly pressed on the issue—and appeared to hold firm in his position.

Senator Bernie Sanders described the exchange to The Nation on Tuesday afternoon. “The issue came up. The president raised his concerns about the long-term sustainability of programs like Social Security, and indicated that he believed something like Chained CPI is an effective way—what he considers to be [an effective way], to protect the program,” said Sanders.

On that, Obama got pushback from multiple senators. “Some of us suggested there are other ways to address the problem in terms of the long-term solvency of Social Security, such as doing what he proposed in 2008, which is to lift the cap of taxable income,” said Sanders.

Indeed, Obama’s preferred approach in 2008 was to move the ceiling on FICA taxes, which fund Social Security, to $250,000. (It is currently around $113,000.) He briefly raised this on the campaign trail in 2012 in an appearance before AARP members, but also embraced the general goals of the Simpson-Bowles deficit reduction plan during his acceptance speech at the DNC, and is now calling for Chained CPI.

After getting pushback, Obama mainly stuck to his position, according to Sanders, though he sense a little bit of daylight. “I think the president, while he continues to voice his support for the Chained CPI, I think he does understand that there are other ways to tackle this problem, and I think he left the door open a little bit to hear other points of view.”

Other press reports indicate that another Senator pressing Obama on Chained CPI was Tom Harkin, who told reporters outside the meeting that Obama was warned “We don’t want to start whacking away at Social Security … or Medicare or things like that, which we have pathways to get out of this one without putting it in some kind of a grand bargain that pulls the rug out from our elderly or our sick, our needy.”

Beyond Social Security, Sanders said he specifically highlighted to the president what Chained CPI would do to veterans. According to the Congressional Budget Office, the new formula would cost a veteran who began receiving benefits at 30 $1,425 at age 45 and $3,231 at age 65.

“I just don’t think that this president should develop a legacy to be the guy who cuts back on benefits for people who lost their arms and legs in Iraq and Afghanistan, or widows who lost their husbands,” said Sanders. “So there was a discussion.”

Meanwhile, Democrats have indicated they'd be willing to lower top tax rates—for something in return, George Zornick writes.

George ZornickTwitterGeorge Zornick is The Nation's former Washington editor.


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