CPI Changes Not Likely To Happen Soon
WASHINGTON (AllPolitics, Dec. 19) The Bureau of Labor Statistics today disputed the findings of a recent report that said the federal government's method of calculating inflation seriously exaggerates it.
BLS Commissioner Katharine Abraham told a news conference that the agency has determined there is only 0.25 percentage points of possible bias in the current Consumer Price Index, not the 1.1 points the Boskin Commission estimated.
The five-member commission on the CPI, chaired by Michael Boskin, who was the Bush Administration's chief economic advisor, issued a report two weeks ago recommending changes to the government's inflation gauges.
Abraham also said that any possible change to the price index would not likely take effect for another two years. "There is not a lot in the short term that we can do to adjust for these problems," she said.
A new calculation could dramatically reduce the federal deficit and could help Congress and the Clinton Administration balance the budget by 2002. The commission predicts that $1 trillion could be saved over the next ten years.
Until now, government leaders have been cautiously optimistic that the technical adjustments to the CPI endorsed by the Boskin Commission could provide a easier fix to the government's growing deficit.
Abraham said that the BLS was unwilling to adopt any changes simply because politicians are eager for a way to balance the budget without cutting domestic programs.
"Pressuring the statistical agencies of government to do something with their data is a very bad idea. I think everybody understands that," she said. "We will continue to do our job using our best judgments."
BLS's conclusions may dampen any momentum toward changing the index. This week, Treasury Secretary Robert Rubin hinted that the Clinton Administration would be willing to consider adjusting the CPI, but he said such a move was contingent on BLS's approval.
Likewise, congressional Republicans, who have agreed for the most part with Boskin's findings, say they will only follow the White House's lead on this issue.