* Could a federal idea help fix the state’s pension mess? Maybe…
The chained Consumer Price Index is viewed as a more accurate measure of how people substitute one item for another in the face of a price increase. The result would be lower COLAs over time. COLAs currently are determined using a formula that takes into account increases in the Consumer Price Index for Urban Wage Earners and Clerical Workers, but some experts argue that a chained CPI, which takes into account modifications in purchasing habits as prices change, provides a clearer understanding of inflation.
Republicans are floating the chained CPI proposal as part of their fiscal cliff deal; during the past few years, Obama reportedly has expressed support for switching to a chained CPI, at least in private deficit reduction talks. It also was considered by the joint congressional committee on deficit reduction, and endorsed by Simpson-Bowles, Rivlin-Domenici, and other double-barreled deficit duos.
This is how a 2010 memo from the nonpartisan Congressional Budget Office explains it: “The chained CPI grows more slowly than the traditional CPI does: by an average of 0.3 percentage points per year over the past decade. As a result, using that measure to index benefit programs and tax provisions would reduce federal spending (especially on Social Security and federal pensions) and increase revenues.”
And this is how a February article from the Center on Budget and Policy Priorities puts the issue into context: “Many of the federal government’s retirement, disability and income-support programs — including Social Security, federal civilian and military retirement, railroad retirement, [Supplemental Security Income], and veterans’ compensation and pensions — pay annual COLAs that are linked to the CPI.” The line was included under a subheading that read “Using Chained CPI Would Affect a Number of Programs and Save Significant Amounts.”
[Hat tip: Mom]
What do you think?
* Meanwhile, Gov. Pat Quinn has a new pension reform video. This one’s not bad. It features Quinn staffer Sean Vinck, who does some standup comedy in his free time. Rate it…
* Related and a roundup…
* Franklin County Family Files Lawsuit Against H Group: The lawsuit says at one point, the woman was removed from the H Group because her parents felt the agency and its workers weren’t doing enough to protect her. But she returned to the facility after the defendants insisted L.T. was “being a complete gentleman” and that they had nothing to worry about because Doe was being “watched closely.”
* Iroquois County taxes hiked 29 percent: The hike in taxes was driven almost entirely to boost payments on employee retirement programs, according to board member Dale Schultz, of Clifton, the tax committee chairman.
* Report: Mental health care at juvenile center lacking: Only eight of 17 mental health positions were filled at the Illinois Youth Center-Kewanee, the state’s designated facility for delinquent young people with the worst mental disturbances, when the John Howard Association visited in September. As a result, Kewanee residents get only half as much treatment as all detainees at another, general-population facility.
* Region’s lawmakers disappointed by court ruling: “By closing these facilities the governor’s making the overcrowding problem more of a problem, a serious problem,” Phelps said. “We’re not going to quit fighting. I want to make sure we do everything we can to make sure those facilities stay open. But if they do have to close… my first and main objective would be to make sure we find positions for all those employees that are going to be affected by the closures.”
