With deficit reduction negotiations running into the federal debt limit deadline, cost-of-living adjustment (COLA) cuts remain on a short list of dwindling options for Congressional leaders and the White House.
With deficit reduction negotiations running into the federal debt limit deadline, cost-of-living adjustment (COLA) cuts remain on a short list of dwindling options for Congressional leaders and the White House. A recent editorial appearing in The Washington Post called the proposed switch to the more slowly-growing “chained” consumer price index (CPI) “a relatively easy way to save about $300 billion over the next decade…” saying that the change “… has been endorsed by groups across the ideological spectrum.”
TSCL is fighting any cut to the growth of COLAs because the boost is growing too slowly already. A recent study by TSCL found that seniors have lost almost one-third of their buying power since 2000. While the COLA increased Social Security benefits about 31 percent, typical senior expenses have jumped 73 percent.
Living costs for seniors 65 and older are rising faster than younger households because seniors use more medical care and health care costs are growing faster than prices for most other goods and services. According to a fact sheet released by the National Academy of Social Insurance (NASI), households headed by seniors 65 or older spend two to three times as much of their budgets on medical care as younger households do and disabled individuals spend even more. NASI also says that healthcare costs have grown faster than prices for other goods; and services for more than three decades. Monthly premiums for Medicare Part B have grown “fifteen-fold” since 1976 — from $7.20 to $115.40 in 2011.
What you can do: Members of Congress are more likely to re-think voting for legislation when they see a large number of seniors adamantly opposed to cutting COLAs. Join more than 290,000 seniors and add your name to TSCL’s Social Security Fairness Petition. Have your costs jumped this year? Send us an email telling us your story.
Sources: “The Chained CPI, An Easy Way To Save Money,” The Washington Post, May 26, 2011. 2011 Loss of Buying Power Study, The Senior Citizens League, May 2011. “Should Social Security’s Cost-of-Living Adjustment Be Changed?,” National Academy of Social Insurance, April 2011.