Deflating The Cpi

The Clinton Administration is eyeing a deal with Capitol Hill Republicans to help balance the budget by curbing annual cost-of-living hikes. Economists contend inflation is overstated by the Consumer Price Index, which is used to adjust income tax schedules, Social Security checks, and federal pensions. The GOP loves the idea. Why? Cutting CPI increases by one percentage point would save $281 billion by 2002, estimates the Congressional Budget Office.