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Both Parties Divided Over GOP ‘Cliff’ Idea

Wall Street Journal (12/09/12) John D. McKinnon

As part of a proposal to avoid the “fiscal cliff,” Republican leaders want to change annual cost-of-living increases for numerous programs, pegging benefits to the chain-weighted consumer price index in an effort to shrink spending and boost tax collections. Democrats worry that such a move would hurt lower-income households and put a damper on safety-net programs, and even some Republicans are wary of it. By using a different inflation measure, annual increases in Social Security checks, federal pensions, and veterans’ benefits would slow, as would increases in the size of the standard deduction and income thresholds for various tax brackets. The Tax Policy Center indicates that the move would boost taxes by around $100 annually on nearly all households earning over $30,000 by 2021.