Fox on 15th Imagines a Deficit Commission Report That Does Not Exist

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Wednesday, 20 July 2011 04:52

As its drive to cut Social Security and Medicare builds steam, the Post is throwing reality to the wind. It again refers to the deficit commission report in its lead editorial. This should not be a tough one -- the report did not have the support of the necessary majority to be approved by the commission. It therefore should be referred to as the report of the co-chairs, former Senator Alan Simpson and Morgan Stanley director Erskine Bowles.

The editorial also praises the plan by the Senate's "gang of six" to change the annual cost of living adjustment for Social Security to the chained CPI. The Post calls this a more "accurate" measure of inflation. Actually, the Post does not know whether the chained CPI is a more accurate measure of the rate of inflation experienced by the elderly. An experimental elderly index constructed by the Bureau of Labor Statistics (BLS) shows a somewhat higher rate of inflation than the current measure.

If the Post is interested in accuracy, it can call for the BLS to construct a full elderly index. As it stands, we do know that the chained index will show a lower measured rate of inflation, leading to an average cut in Social Security benefits of close to 6 percent.