POLITICS

Grover Norquist: Chained CPI Violates Taxpayer Protection Pledge

04/10/2013 12:10 pm ET | Updated Apr 10, 2013

WASHINGTON -- Members of Congress who have pledged never to raise taxes will be breaking their promise if they support changing how the government measures inflation for Social Security and tax purposes.

President Barack Obama unveiled a budget proposal on Wednesday morning that would switch tax brackets and Social Security cost-of-living adjustments, which are indexed for inflation, from the current version of the Consumer Price Index to a "chained CPI," which says inflation rises more slowly. The change would reduce future benefit increases and push more taxpayers into higher brackets, a phenomenon known as "bracket creep."

Americans for Tax Reform, the advocacy group that asks lawmakers to sign a formal "Taxpayer Protection Pledge," said Tuesday that chained CPI violates the pledge.

"Chained CPI as a stand-alone measure (that is, not paired with tax relief of equal or greater size) is a tax increase and a Taxpayer Protection Pledge violation," the group said in a blog post.

Anti-tax crusader Grover Norquist, leader of the organization, criticized the policy via Twitter on Wednesday. "Chained CPI is a very large tax hike over time," Norquist wrote. "Hence Democrat interest in same."

The Congressional Budget Office estimates that chained CPI would reduce Social Security spending by $127 billion and increase tax revenue by $123 billion over 10 years.

When asked Friday if chained CPI represents a tax hike on the middle class, White House spokesman Jay Carney said, "I'm not disputing that." The White House has stressed in recent days that it's only proposing chained CPI as a way to get Republicans to sign on to a big budget deal, since adopting the policy for Social Security benefits would be a major concession from Democrats. Republicans might be less impressed by Democrats' concession on benefits if they realized it's a simultaneous tax increase.

Americans for Tax Reform has been sour on chained CPI for tax brackets since at least 2011.

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