Political Quotes

“today I am dropping in a bill to change the way the CPI is computed for Government payouts. The Consumer Price Index, CPI, is probably the most widely used measure of inflation. A number of Federal Government programs are tied to these increases in CPI, such as Social Security benefits, the personal income tax rate, Government retiree payments, many wages, and State and local government payouts as well. The problem is that a 1-percent increase in the CPI results in a $5 billion additional cost to the Federal Government the first year. The CBO estimates that with compounding and the increased number of recipients the additional cost would be over $100 billion in the 5 years of our budget proposal. The bill that I am introducing takes alcohol and tobacco products out of the so-called market basket of goods that is used to calculate the Consumer Price Index. From my discussion with the U.S. Department of Labor, Congressional Budget Office, and Congressional Research Service, it is estimated that a 75 cent increase in the cigarette tax would increase the Consumer Price Index [CPI] by 0.7 percent, and thus, increase Federal Government COLA payments by $3 to $4 billion the first year. The cost to State and local governments would be equally significant. The Government should not increase Government payments to individuals as a result of rising prices for a product that may be harmful, and is not used by most of those individuals having their benefits increased.”