Since it was reported that Chained CPI would be included in President Obama’s budget proposal to be released Wednesday, some have been taking shots that miss the mark. Here are the facts you need to know about Chained CPI:
- Chained CPI is a more accurate measure of inflation based on years of research and analysis by experts.
- Switching to Chained CPI is a balanced approach that would apply equally to all parts of the budget indexed to inflation and result in budget savings from both the revenue and spending side.
- Social Security benefits would still increase under Chained CPI by an amount that more accurately achieves the goal of ensuring that benefits keep pace with the cost of living, instead of increasing faster than inflation as they currently are projected to.
- Chained CPI does not disproportionally affect the most disadvantaged, and proposals which included a switch to Chained CPI, such as the Simpson-Bowles Commission, have also included protections for the oldest and least advantaged.
- Chained CPI is supported by economists across the ideological spectrum as a more accurate measure of inflation and has been included in every major bipartisan deficit reduction plan.
- Chained CPI should not be viewed in a vacuum, but as part of a comprehensive approach that addresses all parts of the budget.
Update: Check out our new video that explains the Chained CPI:
National Debt and You