This week, The Senior Citizens League (TSCL) released its annual “Loss of Buying Power” study, which found that Social Security benefits have lost 34 percent of their purchasing power since 2000. In addition, lawmakers in the House and Senate left Washington for the holiday recess.
TSCL Releases 2018 Loss of Buying Power Study
According to the findings of a new report released by The Senior Citizens League, Social Security benefits have lost 34 percent of their buying power over the past eighteen years due to growing costs and inadequate cost-of-living adjustments (COLAs). For every $100 a retired household spent in 2000, the same household can only buy around $66 worth of goods and services today.
The 2018 findings represent a substantial 4 percent loss in Social Security benefit buying power from January 2017 through January 2018. The loss deepened from 30 percent in 2017 to 34 percent in 2018. Of the thirty-nine costs analyzed in the study, twenty-six exceeded the percentage increase in the COLA over the 2000 to 2018 period.
Medicare Part B premiums were found to be the fastest growing cost for seniors, increasing by 195 percent over the eighteen-year period. Average out-of-pocket spending on prescription drugs followed closely behind, increasing by 188 percent. Meanwhile, between 2000 and 2018 the COLA increased Social Security benefits by only 46 percent.
The Social Security COLA was created to protect the purchasing power of Social Security benefits received by older and disabled Americans, but the results of this new study show that seniors are failing to keep up with rising costs. In recent years, inflation and COLAs have been at record low levels, averaging just 1.2 percent per year since 2010. In 2018, Social Security beneficiaries received a COLA of 2 percent, yet most saw no increase at all in their net benefits due to substantially higher Medicare Part B premiums.
The Senior Citizens League believes Congress must address the loss of buying power by adopting the Consumer Price Index for Elderly Consumers (CPI-E) Act (H.R. 1251). If signed into law, H.R. 1251 would base the COLA on the more fair and adequate CPI-E. Currently, COLAs are based on the Consumer Price Index for Urban Wage Earners (CPI-W), and they fail to keep pace with the inflation experienced by older Americans since goods like gasoline and electronics are weighted more heavily than health care and housing costs.
Congressman John Garamendi (CA-3), the sponsor of the bipartisan CPI-E Act, recently said: “Using a Consumer Price Index that actually reflects how retirees spend their money – especially in health care – is a no-brainer that will increase benefits and make Social Security work better for the people it serves.”
TSCL agrees with Congressman Garamendi, and we hope to see his CPI-E Act signed into law before the end of the 115th Congress. For more information on H.R. 1251, visit the Bill Tracking section of our website. To read The Senior Citizens League’s Loss of Buying Power study, click HERE.
Lawmakers Adjourn for Holiday Recess
Late this week, lawmakers in the House and Senate adjourned for a week-long holiday recess. They are expected to return to Capitol Hill on Tuesday, July 10th. In the meantime, many Members of Congress will be attending local events and hosting town hall meetings in their home states and districts.
The Senior Citizens League encourages its supporters to attend these events and to ask important questions of their elected officials, like the following four…
- Medicare is currently prohibited from covering most hearing, vision, and dental services, even though millions of seniors are afflicted with age-related hearing loss, low vision, and poor oral health. When left untreated, these conditions often result in serious injuries and complications. What do you feel should be done about this?
- In April, House lawmakers voted on a balanced budget amendment to the constitution that would have been disastrous for Social Security and Medicare beneficiaries if adopted. Did you support this drastic measure, and if so, why?
- A new study recently found that Social Security benefits have lost 34 percent of their purchasing power since 2000 due to rising costs and inadequate COLAs. Do you support the bipartisan CPI-E Act, which would make the COLA more fair and adequate?
- Most Americans contribute 6.2 percent of every paycheck to Social Security, but due to the payroll tax cap, people earning more than $128,400 contribute nothing over that amount. Eliminating the payroll tax cap would extend the solvency of the program responsibly, without cutting benefits for seniors. Do you agree?
For more information about town hall meetings near you during the holiday recess, call the local offices of your Members of Congress. For contact information, click HERE.