Chained CPI, Social Security, and the budget
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About This Event

Event Summary

On Thursday morning at AEI, AARP's David Certner and AEI's own Andrew Biggs convened to discuss the bipartisan proposal to use a Chained Consumer Price Index (Chained CPI) to calculate Social Security's annual cost-of-living adjustment (COLA). Certner explained that he opposes this policy because it would cut benefits for the oldest, most vulnerable Americans exponentially over time.

He further stated that as an off-budget program, Social Security reform should be addressed outside of budget negotiations. According to Certner, in the context of budget negotiations, Social Security reform would become an avenue for short-term deficit reduction, and would therefore fail to improve the program as a whole.

While Biggs agreed that the Chained CPI is bad policy, he did not agree that Social Security should be spared from budget discussions. Instead, he proposed alternative solutions to a Chained CPI. For example, he suggested that Social Security be reformed to incentivize people to work longer and claim benefits later by holding total lifetime benefits constant and increasing benefits at later ages. He also proposed basing Social Security’s COLA on a CPI for the elderly. Both speakers agreed that the Chained CPI would hurt older Americans and do little to fix long-term Social Security problems.
--Brittany Pineros

Event Description

The Obama administration and House and Senate Republicans have reportedly discussed applying the Chained Consumer Price Index (Chained CPI) to the federal budget as part of a “grand bargain” to reduce deficits and debt. The Chained CPI is intended to be a better measure of inflation, but there is no agreement over whether it is a better basis for calculating Social Security cost-of-living adjustments and numerous other aspects of federal spending and the tax code. David Certner, legislative counsel and director of legislative policy for government affairs at AARP, and AEI’s Andrew G. Biggs will discuss how the Chained CPI should fit into our thinking regarding Social Security and the federal budget.

If you are unable to attend, we welcome you to watch the event live on this page. Full video will be posted within 24 hours.

Agenda

8:15 AM
Registration and Breakfast

8:30 AM
Panelists:
Andrew G. Biggs, AEI
David Certner, AARP
Moderator:
Alan D. Viard, AEI

10:00 AM
Adjournment

Event Contact Information

For more information, please contact Veronika Polakova at [email protected], 202.862.4880.

Media Contact Information

For media inquiries, please contact [email protected], 202.862.5829.

Speaker Biographies

Andrew G. Biggs is a resident scholar at AEI. Biggs was the principal deputy commissioner of the US Social Security Administration in 2007, where he oversaw the agency’s policy-research efforts and led its participation in the Social Security Trustees working group. He worked on Social Security reform at the National Economic Council in 2005, and was on the staff of the President’s Commission to Strengthen Social Security in 2001.

David Certner
is the legislative counsel and director of legislative policy for government affairs at AARP. He has been with AARP since 1982, and is a member of AARP’s leadership team. He serves as counsel for the association’s legislative, regulatory, and policy efforts, and for litigation opportunities before the courts. Before assuming his current role in 2007, Certner had served as director of AARP’s 25-person federal affairs shop, where he headed up all federal legislative and regulatory activity. Certner has testified numerous times before both Congress and regulatory bodies, and has made frequent appearances on TV, radio, and in print publications. Certner also previously served as chairman of the Employee Retirement Income Security Act Advisory Council of the Department of Labor, and was appointed as a delegate to the 1998, 2002, and 2006 National Summits on Retirement Savings. He is currently a member of Bloomberg/BNA’s Pension and Benefits Reporter Advisory Board. 

Alan D. Viard was a senior economist at the Federal Reserve Bank of Dallas and an assistant professor of economics at Ohio State University before joining AEI. He has also worked for the US Department of the Treasury’s Office of Tax Analysis, the White House's Council of Economic Advisers, and the Joint Committee on Taxation of the US Congress. Viard is a frequent contributor to AEI's Tax Policy Outlook, AEI's On the Margin column in Tax Notes, and AEI's Marginal Impact column in State Tax Notes. In January 2010, he was nominated for 2009 Tax Person of the Year by Tax Notes. Viard is also the co-author of “Progressive Consumption Taxation: The X Tax Revisited” (May 2012).

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