By Representative John Garamendi (CA-08)
Americans everywhere agree: Social Security is not an entitlement but a benefit that seniors earn through decades of work serving our nation’s economy. According to the Social Security Administration (SSA), approximately 70.6 million Americans received benefits from programs administered by the Social Security Administration in 2022.
Moreover, Social Security is one of the most successful anti-poverty programs in our country’s history. In 1967, almost a third of American seniors lived in poverty. Today, thanks to Medicare and Social Security, less than ten percent of American seniors live in poverty.
However, Social Security benefits and cost-of-living adjustments (COLA) have failed to keep up with reality. In 2022, the Consumer Price Index (CPI) inflation rate reached a record-breaking 7.1%--the highest level since 1981. Yet, that same year, the COLA only increased by 5.9%. This was notably a marked improvement from the minuscule increases in the previous years. Nonetheless, these record-breaking inflation levels mean that Social Security benefits are falling fast behind the real prices of goods and services that seniors face.
A central part of this problem is that Social Security COLAs are calculated using the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W), which fails to reflect seniors’ expenses. This calculation method considers the spending habits of younger workers, who are more likely to spend their dollars on consumer goods. Seniors are more likely to spend money on medical and housing expenses. The prices of these items rise
significantly higher than what the CPI-W calculates. From January 2022 to January 2023, consumer prices for shelter increased by 7.9%, significantly outpacing the 5.9% COLA adjustment.
According to The Senior Citizens League, Social Security recipients have experienced a 36% decrease in their buying power since 2000. In addition, seniors enrolled in Medicare Part B programs or who own homes have faced substantial cost increases. Moreover, out-of-pocket prices for prescription drugs have more than quadrupled since 2000. These significant price increases must be not only reflected, but also fairly weighed, in COLAs for Social Security benefits; our seniors deserve to have their benefits reflect the real price of their expenses.
That’s why I reintroduced my bill, the "Fair COLA for Seniors Act of 2023" (H.R.716), to ensure that Social Security works better for the people it serves. This bill would change the current 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 allowing 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. It is time for Congress to act to ensure American seniors are provided with the resources and financial security they have earned for a safe and secure retirement.
Statements contained in this article are those of the writer and do not necessarily reflect the position of The Senior Citizens League.
