By Congressman John Garamendi (CA-3)
Social Security benefits and cost-of-living adjustments (COLA) specifically, have not kept up with inflation. Americans everywhere agree: Social Security is not an entitlement; it is a benefit that seniors earn through decades of work serving our nation’s economy. According to the Social Security Administration, approximately 63 million Americans received Social Security benefits in 2018, and of those 63 million, 72% were retired workers and dependents.
In 2017, seniors received a mere 0.3% COLA increase to their benefits. 2016 was even worse. For just the third time since Social Security was created, America’s seniors received no cost-of-living adjustment at all in 2016. However, in 2018, we saw the highest COLA in years: 2.8%. This is the largest increase since 2012, and we must continue this upward trend.
COLAs are calculated using the Consumer Price Index for Urban Wage Earners (CPI-W). This simply does not make sense for seniors. This method of calculation considers spending habits of younger workers who are more likely to spend their dollars on electronic devices and consumer goods. Seniors are more likely to spend money on medical services and housing expenses. The prices of these items rise significantly higher than what the CPI-W calculates.
According to The Senior Citizens League, recipients of Social Security have seen a 34% decrease in their buying power since 2000. Additionally, seniors who are enrolled in Medicare Part B programs, and those who own homes have faced particularly large cost increases. This is because COLAs have not kept up with the increase in seniors’ expenses, and it is simply unacceptable. This needs to change.
That’s why I am reintroducing my bill, the Fair COLA for Seniors Act, to ensure that Social Security works better for the people it serves. This bill would change from the current ineffective price index used to calculate COLAs to one tailored around the lives and needs of retirees. This index, the Consumer Price Index for the Elderly (CPI-E), accurately reflects how retirees spend their money, with a focus on healthcare and housing. It is a common-sense proposal that will allow for benefits to keep up with costs.
It is unfair and unjust to expect American seniors to settle for a COLA that is less than what they have spent their entire lives working for. This is why it is critical to base COLAs on an index that reflects what seniors actually spend their money on. It is time for Congress to take action and give our nation’s seniors what they deserve.
The opinions expressed in “Congressional Corner” reflect the views of the writer and are not necessarily those of TSCL.