In 2017, Social Security beneficiaries are receiving a cost-of-living adjustment (COLA) of just 0.3 percent. The increase is so small, it is the lowest payable COLA in the history of the program. Since 2010, the annual COLA has averaged just 1.2 percent — less than half of the 3 percent average during the prior decade.
TSCL believes that the index that is currently used to measure inflation — the Consumer Price Index for Urban Wage Earners (CPI-W) — underestimates the inflation that Social Security beneficiaries experience. In a recent survey that we conducted, 72 percent of respondents said their monthly expenses had increased by more than $79 in 2015, despite the lack of growth in inflation.
To address this issue, TSCL enthusiastically supports the adoption of the Consumer Price Index for the Elderly (CPI-E) — a measure of inflation that more accurately tracks the spending patterns of seniors. If the COLA were based on the CPI-E today, Social Security beneficiaries would not have received a 0.3 percent in 2017 — they would have received a 2.1 percent COLA, according to the Bureau of Labor Statistics.
The CPI-E regularly puts the spending inflation for seniors at two-tenths of a percentage point higher than the rate at which the CPI-W increases. That may seem like an insignificant amount, but over a twenty-five-year retirement, COLAs do compound significantly. We estimate that a senior who filed for Social Security with average benefits in 1984 would have received nearly $14,000.00 more in retirement if the CPI-E had been used.
TSCL supports legislation like the CPI-E Act, the CPI for Seniors Act, and the Guaranteed 3% COLA Act, all of which would make the COLA more fair and accurate for beneficiaries. We also support legislation that would protect seniors in years like 2010, 2011, and 2016 — when no COLA was paid — by providing a guaranteed increase each year. In addition, we will continue to tirelessly fight proposals that aim to reduce Social Security benefits by adopting the “chained” COLA in the 115th Congress.