Chained CPI, Social Security, and the budget

Video

Event Summary

On Thursday morning at AEI, AARP's David Certner and AEI's own Andrew Biggs convened to discuss the bipartisan proposal to use a Chained Consumer Price Index (Chained CPI) to calculate Social Security's annual cost-of-living adjustment (COLA). Certner explained that he opposes this policy because it would cut benefits for the oldest, most vulnerable Americans exponentially over time.

He further stated that as an off-budget program, Social Security reform should be addressed outside of budget negotiations. According to Certner, in the context of budget negotiations, Social Security reform would become an avenue for short-term deficit reduction, and would therefore fail to improve the program as a whole.

While Biggs agreed that the Chained CPI is bad policy, he did not agree that Social Security should be spared from budget discussions. Instead, he proposed alternative solutions to a Chained CPI. For example, he suggested that Social Security be reformed to incentivize people to work longer and claim benefits later by holding total lifetime benefits constant and increasing benefits at later ages. He also proposed basing Social Security’s COLA on a CPI for the elderly. Both speakers agreed that the Chained CPI would hurt older Americans and do little to fix long-term Social Security problems.
--Brittany Pineros

Event Description

The Obama administration and House and Senate Republicans have reportedly discussed applying the Chained Consumer Price Index (Chained CPI) to the federal budget as part of a “grand bargain” to reduce deficits and debt. The Chained CPI is intended to be a better measure of inflation, but there is no agreement over whether it is a better basis for calculating Social Security cost-of-living adjustments and numerous other aspects of federal spending and the tax code. David Certner, legislative counsel and director of legislative policy for government affairs at AARP, and AEI’s Andrew G. Biggs will discuss how the Chained CPI should fit into our thinking regarding Social Security and the federal budget.

If you are unable to attend, we welcome you to watch the event live on this page. Full video will be posted within 24 hours.

Also Visit
AEIdeas Blog The American Magazine
About the Author

 

Alan D.
Viard

 

Andrew G.
Biggs

What's new on AEI

We still don't know how many people Obamacare enrolled
image The war on invisible poverty
image Cutting fat from the budget
image Speaker of the House John Boehner on resetting America’s economic foundation
AEI on Facebook
Events Calendar
  • 15
    MON
  • 16
    TUE
  • 17
    WED
  • 18
    THU
  • 19
    FRI
Tuesday, September 16, 2014 | 5:00 p.m. – 6:00 p.m.
The Constitution as political theory

Please join us for the third-annual Walter Berns Constitution Day Lecture as James Ceasar, Harry F. Byrd Professor of Politics at the University of Virginia, explores some of the Constitution’s most significant contributions to political theory, focusing on themes that have been largely unexamined in current scholarship.

Wednesday, September 17, 2014 | 8:10 a.m. – Thursday, September 18, 2014 | 1:30 p.m.
Third international conference on housing risk: New risk measures and their applications

We invite you to join us for this year’s international conference on housing risk — cosponsored by the Collateral Risk Network and AEI International Center on Housing Risk — which will focus on new mortgage and collateral risk measures and their applications.

Thursday, September 18, 2014 | 2:15 p.m. – 3:00 p.m.
Speaker of the House John Boehner on resetting America’s economic foundation

Please join us as Speaker John Boehner (R-OH) delivers his five-point policy vision to reset America’s economy.

Friday, September 19, 2014 | 9:15 a.m. – 11:00 a.m.
Reforming Medicare: What does the public think?

Please join us as a panel of distinguished experts explore the implications of the report and the consumer role in shaping the future of Medicare.

Event Registration is Closed
No events scheduled this day.
No events scheduled this day.
No events scheduled this day.
No events scheduled this day.