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Chained CPI: The Budget Provision Dems Love to Hate

Most Democrats do not appear eager to support the administration’s CPI plan. House Democratic Leader Nancy Pelosi, of California, admitted as much during a Thursday press conference when she said her caucus was still weighing the plan’s potential impact.

“Whatever we are doing, it is about our extending the life and the strength of Social Security,” said Pelosi, who otherwise lauded the president’s plan. “It's not about balancing the budget. And so that's some of the concerns that some of the members have -- why is this in this bill?”

Boehner, who characterized the proposed budget as “not serious,” was dismissive about the president’s entitlement initiative.

“Now, I am encouraged that the president acknowledged that our safety net programs are unsustainable but only offered some modest reforms,” Boehner said. “They are modest. It’s nothing close to what we need in order to preserve these programs and to put ourselves on a path to balance the budget. And still it’s a step back from what he’d agreed to over a year and a half ago. So, there’s no reason we can’t make incremental progress where we can agree.’’

Rep. Paul Ryan (R-Wis.), chairman of the House Budget Committee, was equally unimpressed with the offer.

“I don't see it as entitlement reform, as much as clarifying a statistic,” Ryan told reporters.

Even that clarifying statistic might not proceed very far. Gene Sperling, director of the National Economic Council, said the president is offering chained CPI on a conditional basis – Republicans will have to give on an issue they favor to shepherd it into law,  probably some sort of tax hike.

“Obviously, when you’re having a bipartisan budget agreement it requires give and take on both sides,” Sperling said. “You can’t have an agreement where one side says, if you make a compromise, they say, well, we’ll just take that. That doesn’t work.  And it can’t work -- it couldn’t work the other way. If they said, well, as part of your agreement, we’re willing to support your infrastructure plan but only if you did all the entitlement savings, we couldn’t say, oh, well, thank you, we’ll just take that. You’d understand that was put on the table as part of a compromise.”

In the recent past, Sperling said, Boehner, House Republican Leader Eric Cantor, of Virginia, and Senate Republican Leader Mitch McConnell, of Kentucky, have indicated “that one of the things that they felt was needed for giving revenues was the CPI.”

The offer, Sperling said, “is not an à-la-carte menu and you can’t decide to only pick out the concessions the president has made and not include the concessions that are from the Republican side that need to be part of a bipartisan deal that could pass both houses.’’

Cantor argued that the CPI question should be evaluated on its own merits and not offered as part of a compromise.

“If the president believes, as we do, that the programs like Medicare, Medicaid and Social Security are on the path to bankruptcy, and that we actually can do some things to put them back on the right course and save them to protect the beneficiaries of these programs, we ought to do so,” Cantor said. “And we ought to do so without holding them hostage for more tax hikes.”