Number: RL32293
Title: The Chained Consumer Price Index: How Is It Different?
Authors: Brian W. Cashell, Government and Finance Division 
Abstract: As part of its continuing efforts to construct a better measure of changes in the cost of living, BLS introduced the chained consumer price index for all urban consumers (C-CPI-U). In testimony before the House Budget Committee in 2004, then Federal Reserve Board chairman Alan Greenspan suggested that Congress might consider replacing the CPI with the C-CPI-U to make automatic cost-of-living adjustments to federal programs. He pointed out that, at that time, if the C-CPI-U had been used instead of the CPI over the previous 10 years that the federal debt would have been about $200 billion less. This report explains how the C-CPI-U is calculated, and discusses how it differs from the existing CPI.
Pages: 9
Date: February 21, 2008