Is Chained CPI More Accurate?

     The "chained CPI" method of computing Social Security's Cost of Living Adjustments (COLAs) is being touted on two grounds. First, it saves money. Second, it's more accurate. Undoubtedly, it would save money but the second point is debatable. The chained CPI method is based upon the observation that if green beans get more expensive, consumers are more likely to substitute broccoli. A COLA based in small part on the price of green beans may be inaccurate because consumers will substitute an equivalent lower priced item. However, as Dean Baker at FDL argues, there is no proof that the chained CPI method is more accurate when applied to the elderly. The Bureau of Labor Statistics computes the CPI-E, the Consumer Price Index for the Elderly, that takes into account the increased health care expenses of the elderly among other age related spending differences. The CPI-E has been running higher than the chained CPI but has not been used in the computation of the Social Security COLA. There is no chained CPI-E, that is a chained CPI computed for the elderly. No one knows what it would show but the odds are high that a chained CPI-E would not be so unfavorable for the elderly as the plain chained CPI. It might be even more favorable for the elderly than what is being used currently to compute the Social Security COLA.

     In the end, the chained CPI has one real advantage -- it would save money. There's no proof that the chained CPI method of computing the COLA would be more accurate. Of course, I should mention that the chained CPI method has one big political advantage. It's so abstruse that few Social Security recipients understand it. However, they could probably understand a television ad criticizing a politician for "cutting" Social Security and that ad would have the advantage of being accurate.

Merry Christmas

Merry Christmas

There's Your Problem

     From Mark McKinnon writing for The Daily Beast:

Increasingly, it is becoming clear that the [Republican] party is against everything and for nothing.

Nothing on taxes. Nothing on gun control. Nothing on climate change. Nothing on gay marriage. Nothing on immigration reform (or an incremental, piece-by-piece approach, which will result in nothing). It’s a very odd situation when the losing party is the party refusing to negotiate. It may be how you disrupt, but it is not how you govern, or how you ever hope to regain a majority.

And so, we have a Republican Party today willing to eliminate any prospect for a decent future for anyone, including itself, if it cannot be a future that is 100 percent in accordance with its core beliefs and principles. That’s not governing. That’s just lobbing hand grenades. If you’re only standing on principle to appear taller, then you appear smaller. And the GOP is shrinking daily before our eyes.

Merry Christmas

Merry Christmas

"Conduct Unbecoming A Federal Officer"

     From the Smoking Gun:

A federal employee was formally reprimanded this month for excessive workplace flatulence, a sanction that was delivered to him in a five-page letter that actually included a log of representative dates and times when he was recorded “releasing the awful and unpleasant odor” in his Baltimore office.

In a December 10 letter accusing him of “conduct unbecoming a federal officer,” the Social Security Administration employee was informed that his “uncontrollable flatulence” had created an “intolerable” and “hostile” environment for coworkers, several of whom have lodged complaints with supervisors. ...

A redacted copy of the letter was recently circulated among officers of the American Federation of Government Employees (AFGE), the union that represents the SSA worker. Contacted today at his office, the employee said, “I can’t talk to you about this, I’m sorry.” The employee is being represented in connection with the reprimand by a lawyer for his union, AFGE Local 1923. Cynthia Ennis, president of the Baltimore-based local, did not respond to e-mail and phone messages about the matter.  ...

The employee is a claims authorizer at the SSA center that handles disability cases for the entire country.

Merry Christmas

What Follows Plan B?

     When House Speaker's Boehner decided to go ahead with his "Plan B", we started down a track that seems to lead directly over the "fiscal cliff." I'm not sure that the failure of "Plan B" in and of itself made the jump into the abyss more likely but the lack of progress over the past few days and the fact that the House of Representatives is adjourning until after Christmas makes that terrible outcome seem nearly inevitable.

     At this point, I think the "chained CPI", which would reduce the Social Security Cost of Living Adjustment (COLA), is less likely to come to pass than it was last week. It appears that nothing can be passed in the House of Representatives without Democratic votes and the price of those votes is the end of the chained CPI. The current 2% reduction in the F.I.C.A. tax is almost certain to end on December 31. That might be revived later but I wouldn't bet on it. Social Security and other agencies will almost certainly get hit by sequestration on January 1. Sequestration dramatically lowers the agency's budget and will eventually bring about employee furloughs. However, the Office of Management and Budget is telling agencies to send out messages to their employees that do not mention furloughs. I take that to mean that there is enough leeway for Social Security and other agencies to delay furloughs in the expectation that sequestration will not last long.

     Also, I hate to mention it, but we're approaching the statutory cap on the federal debt. Even with everything that happens with the fiscal cliff, we'll still get to that cap sometime in January or early February. The consequences of getting to that cap are almost incalculable. Even shutting down the federal government will probably be inadequate to prevent the country defaulting on its debts. It may take significant reductions in everything including Social Security payments, which, in its own way, would be a default on a federal debt.

How Is This Witness Tampering?

     From the St. Louis Post-Dispatch:

A security guard has been indicted in federal court here for allegedly outing a federal investigation by the Social Security Administration, charging documents claim.

The indictment says that Mamie Wills, 66, was working as a security guard at an unidentified St. Louis County office building when on April 4, she spotted an officer of the Social Security Administration's Cooperative Disability Investigations Unit tailing a man who was claiming to be disabled. The man was going to a medical appointment in the building.

Wills apparently became suspicious and wrote down the license plate number of one officer's car, causing another officer to “intervene” and tell her who they were and that they were conducting an investigation, the indictment says.

When their target left, Wills told him that he was being followed and videotaped by investigators, the indictment claims.

Wills was indicted on a witness tampering charge Dec. 13 and appeared in U.S. District Court here Wednesday to plead not guilty to the charge.