[Congressional Record Volume 143, Number 30 (Tuesday, March 11, 1997)]
[House]
[Pages H816-H817]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




        OPPOSE HASTY ACTION ON REVISING THE CONSUMER PRICE INDEX

  The SPEAKER pro tempore. Under the Speaker's announced policy of 
January 21, 1997, the gentleman from New Jersey [Mr. Saxton] is 
recognized during morning hour debates for 5 minutes.
  Mr. SAXTON. Mr. Speaker, I rise this morning to express my strong 
opposition to hasty action on the issue of revising the Consumer Price 
Index to adjust Federal income tax and benefit programs. Congress 
should closely examine the technical issues involving the Consumer 
Price Index until it has all the information needed to make policy 
changes in this area. A trillion dollars in tax increases and benefit 
restraints in programs like Social Security would affect too many 
millions of people to make decisions on the basis of incomplete 
information.
  After all, it took a panel of five professional economists 2 years to 
sort out these issues in producing a report, which is known as the 
Boskin report, which came out last December. Members of Congress need 
to carefully consider the main issues in this report and judge for 
themselves whether its recommendations for congressional action are 
warranted or not.
  The Consumer Price Index is produced by the Bureau of Labor 
Statistics, the same agency that generates employment and unemployment 
figures. The CPI is a fairly old statistic, and a committee headed by 
George Stigler reported to the JEC in 1961 its finding on issues 
related to this index involving product substitution, product quality 
changes, updating market baskets, treatment of new products, and a 
number of other issues. More recently, the Boskin Commission report 
reviewed many of these same issues, and this report has sparked 
considerable controversy.
  I think it is fair to say that although there is consensus that the 
CPI may be overstating inflation, the extent of the overstatement is 
very debatable and questionable. It is also worthwhile to note that 
Congress, rightly or wrongly, choose to index a variety of Federal 
benefits and tax provisions after the Stigler committee issued its 
report in 1961. There would seem to be ample reason for Congress to 
examine these issues carefully before making hasty policy decisions.

                              {time}  1300

  Now, as I have pointed out, the policy decisions made regarding the 
CPI would affect millions of Americans. According to a recent Joint 
Economic Committee analysis, about 40 percent of the direct effects of 
legislative reductions to the CPI would comprise tax

[[Page H817]]

increases. That is, taxes would go up if the CPI is adjusted downward, 
and that would of course be primarily on middle class taxpayers, with 
tax increases averaging over $400 per year by the year 2008, and the 
remainder of the adjustments would fall on entitlement beneficiaries 
like Social Security recipients who would get lower annual cost-of-
living adjustments. Congress should consider whether this mix of policy 
for deficit reduction achieves the desired results in the best way.
  To date, the debate has been framed by the Boskin Commission report, 
but additional information and analysis is needed for balanced 
decisionmaking on this complicated issue. For this reason I have 
requested an indepth Bureau of Labor Statistics study of the technical 
issues raised by the Boskin Commission.
  It is my hope that the BLS will complete its investigation and report 
this summer. In fairness to the many millions of Americans that could 
be affected by these policy changes, I would hope that Congress would 
receive and digest the forthcoming BLS study before hasty actions are 
taken. Though the BLS is certainly not above criticism and perhaps 
should have acted more strongly in this area heretofore, more than one 
perspective is needed, and the BLS can provide that perspective for 
sound policymaking with respect to the CPI.
  Mr. Speaker, the American people have seen enough tax increases, and 
they are entitled to know that Social Security cost-of-living 
adjustments will be safe. They do not need these programs tampered with 
through the back-door adjustment of the CPI.

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