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A wary eye on the CPI

For a while, the idea of adjusting the Consumer Price Index was gaining public support. Senate Majority Leader Trent Lott called for a bipartisan panel to revise the inflation measure, and President Clinton originally joined the chorus. Federal Reserve Chairman Alan Greenspan reiterated his view that the index must be revised for accuracy's sake.

Now the idea may as well be a dangling electrical line.

The president apparently abandoned support of a commission and with it his responsibility to lead on one of the most important issues facing the country _ how to deal with runaway entitlement spending. The reason? Too much opposition, most of it coming from Democrats on Capitol Hill who have felt the pressure from groups representing retirees and union members.

With the president and other Democrats unwilling to go along, congressional Republicans aren't about to take the heat alone. A downward adjustment in the CPI would mean lower cost-of-living raises for Social Security recipients and higher income taxes for many of the rest of us.

The CPI should not be adjusted just to help politicians too queasy to do what is needed to balance the budget. But the index should be as accurate as possible. One commission already has determined that the CPI overestimates inflation by 1.1 percent a year. Adjusting the index downward by that amount could reduce the federal debt by $1-trillion in 12 years. Even by the year 2002 _ target date for balancing the federal budget _ the adjustment could mean a $60-billion reduction in the deficit.

Achieving a balanced budget requires much more than fixing the CPI, and it also demands fairness. The budget can't be balanced on the backs of the poor and elderly. The president and Congress should promise that savings derived from a CPI adjustment will be dedicated to deficit reduction and not used to finance tax cuts for the well-off or new federal spending.

Any downward adjustment of the CPI will inflict some pain, and it should be accompanied by protections for the most vulnerable Americans. However, those safeguards can be assured if Clinton and congressional Democrats insist on them. Instead, they are hiding from the issue. It is another example of the sort of non-leadership that created the federal budget crisis in the first place.