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Door left open for chained CPI comeback

Mar. 6, 2014 - 04:17PM   |  
By ANDY MEDICI   |   Comments
President Obama Delivers Statement On Ukraine In B
President Obama makes a statement to the news media March 6 about Ukraine at the White House March. While a proposal to use a lower inflation marker to calculate federal retiree benefits from its fiscal 2015 budgets was dropped, lawmakers say it might not be gone for good. (Chip Somodevilla / Getty Images)

Even though the administration dropped a proposal to use a lower inflation marker to calculate federal retiree benefits from its fiscal 2015 budgets, lawmakers say it might not be gone for good.

The administration proposed moving to the chained CPI in its fiscal 2014 budget request, saying that it is a more accurate measure of inflation and that making such a move would cut projected future deficits by at least $230 billion.

Critics countered that the chained CPI doesnt account for medical costs which make up a larger share of expenses for older people than for the population as a whole and would over time cost federal retirees thousands of dollars.

But lawmakers and federal employee groups say while its been dropped from the budget, it can always return as part of a larger agreement on tax reform.

Sen. Ben Cardin, D-Md., said he doesnt think the chained CPI will make a comeback unless it is part of a broader set of budget negotiations.

Any consideration of those issues need to be in context to a larger budget agreement that puts us on a solid footing for the future. That is not what is before Congress this year, Cardin said.

Rep. Steny Hoyer, D-Md., said the chained CPI is part of a large number of options that budget negotiators could look at.

I dont think anything is gone for good, Hoyer said.

Rep. Gerry Connolly, D-Va., said Republicans have shown no willingness to negotiate over a larger budget deal.

For that reason, the president pulled it and its probably dead, Connolly said.

Rep. Sarbanes, D- Md., said he does not believe the chained CPI should be on the table at all and there are other ways to balance budgets without cutting into the benefits of retirees.

I dont think its the right solution to however you want to describe the problem, Sarbanes said.

Colleen Kelley, president of the National Treasury Employees Union, said she never thinks issues such as the chained CPI are gone for good because they keep getting raised as issues by lawmakers targeting federal employees.

I hope its gone for good, but I dont believe it is, Kelley said.

Patricia Niehaus, president of the Federal Managers Association said while the chained CPI was taken out of the 2015 budget request, the administration has left the option on the table for future budget talks.

She said switching to the chained CPI would reduce benefits for retirees and Social Security recipients.

We appreciate that the president saw fit to remove this proposal from the FY15 budget, and urge this harmful calculation method to be taken off the table for good, Niehaus said.

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