WASHINGTON — With congressional budget negotiations moving behind closed doors, one item apparently on the table is changing the way cost-of-living adjustments are calculated for seniors, veterans and other recipients of government benefits.
The consumer price index, or CPI, is the government’s main gauge of inflation and is used to determine cost-of-living adjustments, often shorthanded as COLAs. It’s a formula used for more than four decades.
But President Barack Obama earlier this year proposed a less generous formula called a “chained” consumer price index, in hopes of saving the government $230 billion over 10 years.
In April, Obama’s proposal was viewed as an olive branch to Republicans that was largely rejected. With budget bills passed by the House of Representatives and the Senate now in a conference committee to narrow differences and a mid-January deadline approaching, the issue is back on the table.
The chairman of the congressional talks, House Budget Committee Chairman Paul Ryan, R-Wis., identified the issue as an area ripe for compromise.
