This week, The Senior Citizens League (TSCL) released a new study that confirms a major loss of buying power for Social Security benefits. In addition, one new bill that would strengthen and expand the Social Security program was introduced in the House.
New Study Confirms Loss of Buying Power
On Wednesday, TSCL released a new report that confirms a major loss of buying power for Social Security benefits. Due to rising costs and inadequate cost-of-living adjustments (COLAs), Social Security beneficiaries have lost 30 percent of their purchasing power since 2000. Benefits have grown by just 43 percent since then, but typical senior expenses have jumped by 86 percent.
Mary Johnson – a policy analyst for TSCL and the author of the new report – said on Wednesday, “To put it in perspective, for every $100 worth of expenses seniors could afford in 2000, they can afford just $70 today.”
According to the report, the three fastest growing costs for seniors since 2000 have been Medicare Part B premiums (195 percent higher today), out-of-pocket spending on prescription drugs (184 percent higher), and homeowner’s insurance (154 percent higher).
In the past year alone, household expenses have made steep increases. According to data from TSCL’s 2017 Senior Survey, 67 percent of respondents saw their monthly expenses rise by $79 or more last year. However, they received no Social Security COLA to help cover those rising costs in 2016, and this year, seniors received just a few extra dollars in benefits.
Johnson said this week: “When costs climb more rapidly than benefits, retirees must spend down retirement savings more quickly than expected, and those without savings or other retirement income are either going into debt, or going without.”
To better protect the buying power of Social Security benefits, TSCL believes Congress must enact bipartisan legislation like the Consumer Price Index for Elderly Consumers (CPI-E) Act (H.R. 1251). If the COLA were based on the more accurate CPI-E, beneficiaries would be receiving a 2.1 percent COLA this year instead of a 0.3 percent COLA. We will continue to advocate for the passage of the CPI-E Act in the months ahead, and we encourage our members and supporters nation-wide to sign the Fair COLA Petition to express their support.
TSCL Endorses New Social Security Bill
On Thursday, TSCL endorsed new legislation from Congressman Al Lawson (FL-5) that would expand the Social Security program and strengthen its finances for decades to come. The bill – the Social Security for Future Generations Act of 2017 (H.R. 2855) – was introduced with the support of fifteen original cosponsors in the House of Representatives.
If signed into law, it would: base Social Security COLAs on the more accurate CPI-E, reduce senior poverty by creating a new special minimum benefit equal to 125 percent of the poverty line, ensure financial security for widows and widowers upon the death of a spouse, and ask wealthier Americans to contribute their fair share to the program by applying the payroll tax to annual income over $250,000.
In a letter to Congressman Lawson, Art Cooper – Chairman of TSCL’s Board of Trustees – wrote: “Together, these changes would strengthen the Social Security program while extending the solvency of the trust funds responsibly, for decades to come. The Senior Citizens League lends its enthusiastic support and the support of its membership to the Social Security for Future Generations Act of 2017.”
TSCL looks forward to working with Congressman Lawson’s office in the months ahead to help build support for his important new bill. For updates on its progress, visit the Bill Tracking section of our website, or follow TSCL on Twitter.
