'Chained CPI' Worked Into Obama's 2014 Budget
STEVE INSKEEP, HOST:
It's MORNING EDITION, from NPR News. I'm Steve Inskeep, reporting this week from Caracas, Venezuela.
DAVID GREENE, HOST:
And I'm David Green. Good morning. Last night, President Obama had dinner with a dozen Senate Republicans. Steak was on the menu, and a range of topics were on the agenda, including the budget blueprint he unveiled yesterday.
The document does not cut spending as much as House Republicans would like. And it doesn't raise taxes as much as the Senate Democratic budget does. NPR congressional correspondent Tamara Keith reports on how Obama's budget was received in the deeply divided Congress.
TAMARA KEITH, BYLINE: The budget calls for new spending on early childhood education and infrastructure. It identifies cuts and a variety of targeted tax increases. But of all the things President Obama imagines in this $3.8 trillion plan, the items that really got members of Congress talking are his proposed changes to Social Security and Medicare. Changes that he says were championed by Republican members of Congress.
PRESIDENT BARACK OBAMA: And I don't believe that all these ideas are optimal, but I am willing to accept them as part of a compromise, if - and only if - they contain protections for the most vulnerable Americans. But if we're serious about deficit reduction, then these reforms have to go hand in hand with reforming our tax code.
KEITH: The White House estimates changing the way the cost of living is adjusted for Social Security payments and the rest of the government would reduce the deficit by more than $200billion dollars over the next decade. In economic short-hand, it's called chained CPI. For many Democrats, particularly progressives, this idea violates a campaign promise to protect Social Security and the middle class
REP. TOM HARKIN: Chained CPI is not a good deal. No, it's not.
KEITH: Iowa Senator Tom Harkin says it means vulnerable people will see their benefits cut over time.
HARKIN: Think of it as an anchor chain on a boat. And you put it around your ankle and you throw it overboard. It pulls you down. Chained CPI will pull people down. The older they get, the more they lose.
KEITH: The White House says it would partially offset those losses for seniors starting at age 76. Still, liberal groups are threatening primary challenges for members who support chained CPI. And they're railing against the president, saying this offer is a horrible political mistake. And in some ways, all that noise may help President Obama with Republicans. Peter King is a Republican congressman from New York.
REP. PETER KING: And he's putting a Democratic third rail issue on the table. So, you know, it's a long way to go. Now, I would never vote for his budget, but it could be the basis for the beginning of the process.
KEITH: But generally speaking, the niceties stop there. At a press conference, House Speaker John Boehner criticized the president's budget for never actually balancing. Then, Boehner suggested something he's proposed before.
(SOUNDBITE OF PRESS CONFERENCE)
HOUSE SPEAKER JOHN BOEHNER: Why don't we do what we can agree to do? Why don't we find the common ground that we do have, and move on that? The president got his tax hikes in January. We don't want to be raising taxes on the American people.
KEITH: Put another way, he'd be happy to take the president up on his offer when it comes to entitlement changes. But that whole package deal thing, not so much. And for the Democrats who might reluctantly be willing to accept chained CPI, the full package, including tax increases for the wealthy, is very important.
Gerry Connolly is a Democratic congressman from Virginia who wonders, and maybe worries a little bit, about what Republicans will do with this olive branch.
REP. GERRY CONNOLLY: This is pretty dramatic, so where are you? What are you prepared to do in response other than just take it as a proffered gift? And that's not going to work.
KEITH: As if to reassure members of his own party, the president made it clear he doesn't intend to be the only one compromising.
OBAMA: When it comes to deficit reduction, I've already met Republicans more than half way. So in the coming days and weeks, I hope that Republicans will come forward and demonstrate that they're really as serious about the deficits and debt as they claim to be.
KEITH: Or as one senior aide put it, this isn't an a la carte menu. One major thing that isn't clear is whether this is the beginning of a discussion - or the end. Tamara Keith, NPR News, the Capitol.
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