I would like to hear your ideas on why my REPUBLICAN Senators oppose Chained CPI.

[bornskeptic]

20. Chained CPI increases taxes.

Most of the attention on chained CPI has focused on its effect in reducing Social Security benefits, but actually it would increase income tax collections by almost exactly the same amount over the next ten years as it reduced Social Security benefits. This is because the size of the standard deduction and personal exemption and the division points between tax brackets are adjusted based on the CPI. Under chained CPI less income would be exempted from taxation and more would be taxed at a higher rate than under the current CPI computation. Although we don't have the details of President Obama's proposal, we do know that it would have some compensation for the poorest Social Security recipients. Most likely this will mean that the tax increase produced would be appreciably larger than the reduction in Social Security payouts.
Republicans who support the president's proposal risk taking hits from both sides. Seniors, who are a big part of their base, will be angered by the benefit reduction, while the teabagger faction goes berserk over the tax increase. I've said, from the first time that the president offered to agree to chained CPI, that the Republicans would never buy it because of the tax effect.