This week, the Social Security Administration (SSA) announced that benefits will increase by 2% percent beginning in January 2018. In addition, The Senior Citizens League (TSCL) announced its support for one new bill that would improve the integrity of the Social Security program.
SSA Announces 2018 COLA
On Friday, SSA announced that Social Security benefits will increase by 2% percent beginning in January 2018. While the 2018 cost-of-living adjustment (COLA) is the largest increase in five years, it continues a trend of abnormally low benefit growth.
This year, Social Security beneficiaries are receiving a COLA of just 0.3 percent, and in 2016, they received no COLA at all. Since 2012, COLAs have averaged 1 percent – less than half of the 3 percent average during the decade prior – but most beneficiaries have seen no benefit increase at all in several years due to rising Medicare Part B premiums.
One TSCL member – Barbara B., 75 of Indiana – recently told us: “It’s been 36 months since I’ve had any raise in my net operating Social Security, but my actual household costs continue to go up. This isn’t fair to retirees.” Barbara, who is now 75, retired 9 years ago. Like many seniors around the country, she feels that her Social Security benefits are not keeping up with inflation.
According to TSCL’s research, Barbara is correct. Since 2000, Social Security benefits have lost 30 percent of their buying power due to inaccurate COLAs, and in the last year alone, they have lost 7 percent. This loss of purchasing power has occurred because Social Security COLAs are based on the spending patterns of young, urban workers – not the spending patterns of retirees.
The inflation index that is currently used – the Consumer Price Index for Urban Wage Earners (CPI-W) – fails to capture the inflation seniors experience because items like gasoline and electronics are given more weight than medical costs, prescription drugs, and housing expenses.
In fact, the fastest growing cost for seniors – Medicare Part B premiums – is not accounted for at all in the CPI-W since young workers are not enrolled in the Medicare program. Since 2000, Medicare Part B premiums have increased by 195 percent and prescription drug spending has increased by 184 percent. However, COLAs have increased Social Security benefits by just 43 percent since 2000.
To address the growing issue of inaccurate COLAs, TSCL believes Congress must adopt the Consumer Price Index for Elderly Consumers (CPI-E) Act (H.R. 1251). This bipartisan bill from Congressman John Garamendi (CA-3) would better protect the purchasing power of Social Security benefits by basing the COLA on the spending patterns of retirees.
TSCL delivered letters to Congress this week urging lawmakers in the House and Senate to become cosponsors of the bill, and to sign it into law before the end of this year. For progress updates on the CPI-E Act, visit the Bill Tracking section of our website or follow TSCL on Twitter.
TSCL Endorses New Social Security Bill
This week, TSCL announced its support for Rep. Dana Rohrabacher’s (CA-48) No Social Security for Illegal Immigrants Act (H.R. 3934). The bill, if signed into law, would prohibit unauthorized workers from receiving Social Security benefits based on work done while in the country illegally, using stolen, fake, or fraudulent Social Security numbers.
TSCL enthusiastically supports the No Social Security for Illegal Immigrants Act, and in a survey that we conducted in January of 2016, nearly 90 percent of our members and supporters agreed that such payments should be prohibited. We commend Rep. Rohrabacher for introducing legislation that would protect the integrity of the Social Security program while preventing an unnecessary and unspecified strain on the Trust Fund. We look forward to working with him in the coming months to help build support for his critical new bill.