April 5, 2013, 8:21 am
Desperately Seeking “Serious” Approval

Sigh. So Obama is going with the “chained CPI” thing in his latest proposal — changing the price index used for Social Security cost adjustments. This is, purely and simply, a benefit cut.

Does it make sense in policy terms? No. First of all, there is no reason to believe that the chained index is a better measure of inflation facing seniors than the standard CPI. It’s true that the standard measure arguably understates inflation for the typical household — but seniors have a different consumption basket from the young, one that includes more medical expenses, and probably face true inflation that’s higher, not lower, than the official measure.