“This means the Obama budget contains a tax increase on 10 percent of middle class taxpayers — anyone who pays the federal income tax,” the conservative Americans for Tax Reform said in a blog post. The group warned Republicans that supporting chained CPI would violate the anti-tax pledge of its founder, Grover Norquist.
The Club for Growth, another group that promotes conservative economic policies, threatened to find a primary opponent for Walden. President Chris Chocola noted that in 2005 “it was Republicans who said no” to President George W. Bush’s more ambitious plan to overhaul Social Security by adding private accounts.
“We have to reform entitlements, and this is a very minor measure,” Chocola said. “If you’re going to back away from this, you’re not serious.”
The White House and other analysts have argued that adopting the chained CPI is a more technical adjustment than genuine reform. The Bureau of Labor Statistics developed the measure after a commission led by Stanford University economist Michael Boskin concluded in 1996 that standard measures overstated inflation, in part because they did not account for the tendency to make substitutions between purchasing categories when prices rise. So although a grocery shopper’s switch from Honeycrisp apples to Gala, for example, would be covered, the switch from apples generally to bananas would not.