This week, negotiations on raising the debt ceiling continued between President Obama and members of the House and Senate leadership. In addition, support continued to build for pieces of legislation to provide a fair cost-of-living adjustment (COLA), and legislation that would provide compensation to those born during the Social Security “Notch” years.
New Cosponsors of Key Legislation
This week, eight Members of Congress signed on as cosponsors of Rep. Charles Gonzalez’s (TX-20) and Rep. Peter DeFazio’s (OR-4) versions of the Consumer Price Index for Elderly Consumers (CPI-E) Act (H.R. 456 and H.R. 798, respectively). The new cosponsors are: Reps. Bobby Rush (IL-1), Jared Polis (CO-2), Carolyn Maloney (NY-14), Andre Carson (IN-7), James McGovern (MA-3), Stephen Lynch (MA-9), Jerrold Nadler (NY-8), and Eliot Engel (NY-17). There are now 46 different Members of Congress who support CPI-E legislation.
If signed into law, the CPI-E Act would calculate the Social Security COLA based on the spending patterns of seniors. Currently, the COLA is based on the CPI-W, which tracks the way young, urban workers tend to spend their money.
TSCL estimates that a senior who retired with average benefits in 1984 would have received $13,723.16 more through 2011 if the CPI-E had been used to calculate the COLA. We believe that the CPI-E better reflects the spending patterns of seniors, and that it should be fully implemented and utilized for determining seniors’ COLAs each year.
In addition, two new cosponsors – Reps. Judy Biggert (IL-13) and Jason Altmire (PA-4) – signed on to Rep. Mike McIntyre’s (NC-7) Notch Fairness Act (H.R. 1001). The cosponsor total is now up to 24.
Deficit Reduction Talks Continue
This week, deficit reduction negotiations continued between President Obama, House Speaker John Boehner, and Senate Majority Leader Harry Reid, among others.
Throughout the week, Democrats and Republicans held strong to their partisan principles. Most Democrats seemed to refuse supporting a plan that would reduce spending on Medicare and Social Security. On Friday, a Concurrent Resolution was introduced by several Democrats in the House of Representatives formally expressing their hope that Social Security benefits will not be reduced. Republicans have seemed to refuse to back down as well. They continued to press for spending cuts, and consistently rejected any proposals that included tax hikes.
In an attempt to settle on a $4 trillion compromise, President Obama expressed his willingness to take on Social Security and Medicare reform, as well as a tax-code overhaul. Specific proposals have not been announced, but many see the switch to a “chained” CPI for COLA calculations as a possibility. The talks over such a “grand bargain” appeared to collapse over the weekend, and the path forward continues to remain murky.
Using a “chained” CPI would reduce COLAs by about .3 percentage points each year, and over a 25-year retirement, it could amount to an $18,000 cut in benefits for someone who retires with average benefits this year! TSCL is adamantly opposed to including any such proposals in a deficit reduction plan.
TSCL will continue to closely monitor the deficit negotiations, and work to educate Members of Congress about the potential harms of cutting COLAs for seniors.