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The "chained CPI" proposal in President Obama's budget continues to draw much-deserved fire, which is only likely to increase as more information about it becomes known.
Here are nine embarrassing facts about the chained CPI which the White House and its defenders would prefer to see overlooked:
1. Of course it's a benefit cut.
Chained-CPI defenders say it's not a benefit cut. It's just a slowdown in the rate of the benefit's planned increases. That's a silly semantic game unworthy of serious leaders or analysts. The Social Security benefit, as laid out on the Social Security Administration's website, includes adjustments designed to keep pace with the rising cost of living.
Those adjustments aren't a benefit increase. They're designed to prevent the benefit from being decreased as a result of inflation. If you lower that adjustment, you're cutting benefits. Period.
2. Of course it's a tax hike.
Same goes for the tax impact of the chained CPI. Our tax brackets were designed to make sure that taxes didn't go up inadvertently because inflation kicked them into a higher tax bracket. That was done to make sure that people who weren't earning more in real dollars - which includes many (if not most) of the "99 percent" - weren't hit with an unearned tax hike.
If you substitute the chained CPI for the current formula, as the president has proposed, people will be kicked into higher tax brackets earlier. Then they'll pay more in taxes, even if they're not making any more "real" money.
That's a tax hike.
3. And it's a tax hike for everybody but the wealthy.
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