Here's what "chained CPI" would do


chart social security chained cpi

So now that Boehner lost control of his own caucus and has thrown the whole fiscal mess into President Obama's lap, is chained CPI off the table? And how about the Social Security wage cap? Can't that be on the table? Because it would put the costs onto the wealthier among us:

The Social Security Administration has announced an increase in the Social Security taxable wage base in 2013 from $110,100 to $113,700. The $3,600 increase is slightly more than the $3,300 increase from 2011 to 2012. The cap was just $106,800 from 2009 to 2011, as inflation ground to a halt during the economic downturn.

The wage cap is the maximum amount of compensation subject to tax under the Federal Insurance Contributions Act (FICA) for old age, survivors and disability insurance (OASDI) — typically called Social Security tax.

So how far are the Dems really willing to go? Is the chained CPI issue just a bargaining tool, something they'd "consider" but never accept? Let's hope so. However (h/t: Digby), Noam Scheiber at The New Republic had this to say:

Boehner clearly couldn’t muster a majority (or anything close) for the compromise he and Obama tossed around Monday—about $1.2 trillion in revenue, with tax rates rising on income over $400,000 per year, and about the same amount in spending cuts, including cuts to Social Security benefits via a stingier cost-of-living adjustment. If Boehner could have gotten remotely close to a majority of his caucus behind this, he would have brought it up for a vote instead of detouring into his cockamamie and disastrous “Plan B.” Clearly, he could not. 

Meanwhile, Obama can’t really make a more generous offer to Boehner at this point. Liberals were essentially told Monday night that this was the offer that was going to secure the deal. They spent the next 24 hours agonizing over whether they could support it. Most came to the conclusion that it was borderline offensive, but that they could hold their nose and accept it rather than risk the uncertainty of going over the cliff

stay tuned

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