Newspaper article St Louis Post-Dispatch (MO)

Clinton Ducks Hard Decisions

Newspaper article St Louis Post-Dispatch (MO)

Clinton Ducks Hard Decisions

Article excerpt

If a bank inadvertently adds a zero to the figure on your deposit slip, you do not get to pocket the gift money. You are obliged to give it back.

If the IRS mistakenly sends you too big a refund check, you don't dare reply to the subsequent correction letter with: Too bad, it's mine now. You pay it back, and, if you're stubborn about it, with interest.

But if you have friends in high places - say, Big Labor and the senior citizens' lobby - and the government has for years been inflating your Social Security checks because it overestimated your cost-of-living adjustment, the ordinary rules do not apply. Not only do you get to keep your past windfall - that goes without saying - but the president himself dares not deny you the right to keep collecting that windfall until the end of time, or until Social Security is driven into bankruptcy. Welcome to the great Consumer Price Index (CPI) debacle, the single worst example of political cravenness in this decade. Everyone knows - and a nonpartisan congressional commission of economists has confirmed - that the CPI overestimates inflation. (The current error is about 1.1 percent.) And because the CPI determines the size of the annual Social Security cost-of-living adjustment (COLA), Social Security recipients have been overpaid for decades. Moreover, each year's error exaggerates the next, producing a compound error now in the hundreds of billions of dollars. Nobody, of course, is asking seniors to give back their past bonuses. But by what logic do they now have a right to future inflated COLAs? The CPI is wrong. Even its compiler, the Bureau of Labor Statistics, admits that it does not accurately measure the cost of living. Fixing it would singlehandedly cut the federal deficit by half. And it would do so with perfect equity. The COLA increase was meant to protect seniors from the ravages of inflation. It was not meant to give them an inflation bonus taken from the pockets of every other American taxpayer. In Washington, however, logic, equity and prudence cannot hold a candle to clout. Washington's two 800-pound gorillas, the AFL-CIO and the American Association of Retired Persons, have come out thunderously against the proposed 1. …

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