A week after the Congress reversed course on a plan to save money by limiting yearly cost-of-living-adjustments for military retirement pay, the White House made clear its new budget for 2015 will not include a similar plan to limit yearly increases in Social Security benefits as a way to save billions of dollars.
"Democrats applaud the President for eliminating chained CPI from his budget," said House Democratic Leader Nancy Pelosi, as more liberal groups hailed the White House move.
"'Chained CPI' is a fancy term for a boneheaded idea: Social Security benefit cuts that hurt seniors," said MoveOn Executive Director Anna Galland.
Budget watchdog groups were not as excited.
"We are incredibly disappointed to learn that the President has decided to drop his proposal to correct the way in which the federal government measures inflation," said Maya MacGuineas, who heads the group Campaign to Fix the Debt.
The White House though did say the Chained CPI plan remains on the table in terms of a broader budget deal - but only if Republicans agree to higher taxes, which seems a remote possibility.
Proponents of Chained CPI say it would give a more accurate economic measurement to determine how much federal benefit programs like Social Security should increase each year, while critics say it's nothing but a cut in benefits for seniors.
A report from the Congressional Budget Office last year said the approval of Chained CPI starting in 2014 would save the following amounts over ten years:
+ $127.2 billion in Social Security payments
+ $37.5 billion in 'other' COLA programs like "civil service retirement, military retirement, Supplemental Security Income, veterans pensions and compensations, and other retirement programs with COLAs triggered directly by Social Security or civil service retirement"
+ $28.5 billion from Medicare and Medicaid, along with savings due to changes in federal poverty guidelines
+ Refundable tax credits would also be impacted by the change, saving $17.9 billion
+ The CBO also found the plan would cause a series of changes that would bring over $123 billion in new revenues, providing almost $340 billion in budget savings over ten years.
While both parties had talked about the possibility of a deal on Chained CPI as part of a broader 'grand bargain' on the budget, the chances of a deal on that seemed slim to start with in this election year - and this budget change only reinforced that political reality.
While Republicans have championed Chained CPI, GOP leaders in the House have never forced a vote on the issue - and one seems unlikely this election year.
So, if those type of entitlement savings aren't really in play, how does the federal budget get balanced?
At this point, the only way the budget will get balanced is by a big surge in new revenues coming in due to economic growth.
And right now, that type of big surge doesn't seem to be in the cards either.
And so, the red ink keeps piling up, both from the discretionary budget and from entitlements like Medicare, Social Security and Medicare.
Both parties say they want to do something about it.
Talk is cheap.
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