Sparring on CPI Change

Congressional Republicans and the administration continued to spar over the Consumer Price Index and possible changes that would have a budget impact on cost-of-living increases for federal programs, including federal reirees' benefits.

Republicans have said they want the administration to take the lead on the issue, and Senate Majority Leader Trent Lott, R-Miss., has called for creation of a commission to make recommendations. House Budget Committee Chairman John Kasich, R-Ohio, and others clearly are worried that whoever goes first in pushing a CPI change will be attacked for cutting cost-of-living increases.

"My greatest concern is that the demagogues will rule the day when it comes to doing the right thing," Kasich declared. And he told Bureau of Labor Statistics Commissioner Katherine Abraham that some people are unhappy that the BLS has not taken the lead on the issue.

"A lot of people are frustrated that they haven't been able to get [the BLS] to move fast enough," Kasich said.

Abraham disputed the accuracy of the findings by a Senate commission that the CPI is overstated by 1.1 percent, while questioning whether several issues addressed by the commission really have an impact on the CPI.

Abraham acknowledged the BLS is not effective in quickly adding new products to its calculations, while saying it will take until 1998 before cellular phones are added to the so-called market basket, a notion that Kasich found puzzling.

"With 2,500 people going to work every day, why can't you fix this yesterday?" Kasich asked. Abraham acknowledged that "it sounds really bad," but questioned whether such issues really have an impact on the CPI.

Abraham's testimony followed an earlier news conference at which members of The Coalition, informally known as the Blue Dogs, were joined by Rep. Tom Campbell, R-Calif., a member of his party's moderate wing, in appealing to Congress and the administration to find a bipartisan way to adjust the CPI.

The Coalition's budget includes a plan for a 0.8 percent adjustment in the indexation of government programs that are tied to the CPI, while using that money to help boost the Social Security trust fund.

"The change we propose improves the accuracy, ensures across- the-board fairness and still protects the most vulnerable of our society," said Rep. Charles Stenholm, D-Texas, co-chairman of The Coalition's budget task force.

The Concord Coalition and former White House Council of Economic Advisers Chairman Michael Boskin, who headed the Senate commission on the CPI, endorsed the group's effort.

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