At least chained-CPI is chained to reality

The good folks at WonkBlog have been castigating the proposed move to a "chained-CPI" to slow the rate of Social Security benefit growth as "obscurantist,"  as Dylan Matthews called it this morning.  Three hours later, Ezra Klein elaborated the complaint:

Chained-CPI, in [Bowles-Simpson's] telling, is simply an effort to correct a measurement error in the way we calculate inflation. It’s a tweak, a fix, a policy designed to achieve a higher level of technical precision. And who could be against that?

There’s something to this line of argument. The way we measure inflation right now really does mismeasure inflation. Chained-CPI really is a bit more accurate. But that’s not why we’re considering moving to chained-CPI. If all we wanted to do was correct the technical problem, we could make the correction and then compensate the losers.

But no one ever considers that. The only reason we’re considering moving to chained-CPI because it saves money, and it saves money by cutting Social Security benefits and raising taxes, and it’s a much more regressive approach to cutting Social Security benefits and raising taxes than some of the other options on the table.

The question worth asking, then, is if we want to cut Social Security benefits, why are we talking about chained-CPI, rather than some other approach to cutting benefits that’s perhaps more equitable? The answer is that chained-CPI’s role in correcting inflation measurement error is helpful in distracting people from its role in cutting Social Security benefits.

Klein may well be right that there are better ways to cut Social Security than moving to chained-CPI and leaving benefits otherwise unaltered (or that we're better off not cutting Social Security benefits at all).  But there's something fundamentally wrong with his critique, too. If he's right on policy, he's wrong on semantics. And frankly, I'm still trying to figure out whether the semantic error may also imply a policy error.

De-deducting your way to $800 billion in new revenue

Available information about Obama's fiscal proposal is surprisingly sketchy, unless I'm missing something.  Forgive me, then, if I get something fundamentally wrong here. But the proposal is said to closely track Obama's 2013 budget, and it seems to me that if you moderately expand a key revenue raising proposal in that budget, it would be possible to raise $800 billion in revenue over ten years by reducing deductions for the wealthy. Maybe not desirable as an opening gambit, but hardly mathematically impossible.

The provision in question, on page 39 of the budget, would reduce the value of itemized deductions and other tax preferences to 28 percent for families with incomes over $250,000 and individuals with incomes over $200,000 (at 2009 levels, to be adjusted for inflation).  That is, suppose you're taxed at a 33% rate and you make $3600 in charitable contributions. At present, deducting that amount would lower your tax bill by $1200.  At a 28 percent deduction level, your bill would be lowered by $1008; you would pay $192 more.  That change, across all deductions, is projected to reduce the deficit by $584 billion over ten years.