Bob Kerrey: “this budget may solve our short-term budget problems, but my concern remains that it does not do enough about the…”

“this budget may solve our short-term budget problems, but my concern remains that it does not do enough about the long-term budget problems we face. If we want to keep the budget in check over the long-haul, we need to adopt policies that will slow entitlement spending in a rational, equitable way. At present, we use the Consumer Price Index [CPI] to determine cost-of-living adjustments in our Federal tax and entitlement programs. There is wide, although not universal, agreement among leading economists, that the CPI overstates the cost-of-living and should be adjusted. Indeed the December 4, 1996 final report to the Senate Finance Committee from the Advisory Commission to Study the Consumer Price Index concluded that: The Commission's best estimate of the size of the upward bias looking forward is 1.1 percentage points per year. The range of plausible values is .8 to 1.6 points per year. Mr. President, we ought not to make the problems we face in funding our entitlement programs even worse by paying benefits based on an overstated cost of living. Spending on entitlement programs is already crowding out spending for the traditional discretionary functions of Government like clean air and water, a strong national defense, parks and recreation, education, our transportation system, research and development, and other infrastructure spending.”