The Time is NOW for a Fair Social Security COLA!
Jamie McMillen, TSCL Legislative Director
The economy appears to be in a downward spiral, and many seniors we hear from are having a difficult time making ends meet. Members of Congress should step up to the plate and support a fair Social Security Cost-of-Living Adjustment (COLA).
Currently, the Social Security COLA is based on a Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). The CPI-W takes into account the spending habits of younger wage earners that spend less on items such as healthcare. As a result of the CPI-W, the Social Security COLA for 2008 was a meager 2.3%. The 2008 COLA would have been 2.6%, if it were based on a Consumer Price Index for Elderly Consumers (CPI-E). A person having an average monthly benefit of $1,055 in 2007 would have received a COLA of $27.40 per month in 2008 instead of $24.
Although this amount may not sound like much, the modestly higher COLAs compound over time. If the government were to use the CPI-E to calculate the COLA, the senior who had a benefit of $1,055 in 2007 would receive about $18,277 more over a 25-year retirement. By the end of a 25-year retirement period, the monthly benefit would be $150 per month higher using the CPI-E. These days every penny counts!
The Bureau of Labor Statistics, a division of the U.S. Department of Labor, already tracks the CPI-E. The time has come for your Representative and Senators to support a Social Security COLA that is based on the spending patterns of the people receiving those benefits.
Now more than ever, TSCL is encouraging all federal legislators to support legislation that would do just that. Two bills, H.R. 1953 and H.R. 2032, have been introduced in the U.S. House of Representatives that would base the Social Security COLA on the Consumer Price Index for Elderly Consumers (CPI-E). To date, there are more than 70 co-sponsors of these bills.
Rest assured, TSCL’s legislative team will continue meeting with lawmakers to explain and encourage support for Notch reform, improvements to the Social Security COLA, and other legislation important to older Americans.