More Lawmakers Now Working to Increase COLA for Social Security Recipients
The Seniors Trust has been working diligently to pass the Social Security Expansion Act. Once approved, this landmark piece of legislation will not only secure the long-term solvency of Social Security but also expand benefits for seniors.
One of the ways the bill will accomplish this is by using the Consumer Price Index for the Elderly (CPI-E) to calculate Social Security cost-of-living adjustments (COLAs) instead of the Consumer Price Index for Urban Wage Earners (CPI-W) used currently. The CPI-E takes the unique spending habits of seniors into account — particularly regarding the cost of healthcare — and offers a more realistic COLA for retirees.
This change is needed now more than ever. Just last month, the Social Security Administration announced that the cost-of-living adjustment for 2021 would be a measly 1.3%. That’s far below what seniors need and deserve.
With this meager COLA, the average social security recipient will receive an additional $236 per year. When you consider the rising cost of food and healthcare due to the coronavirus pandemic, it’s obvious that cost-of-living adjustment is simply not big enough.
More COLA Please
Fortunately, the Social Security Expansion Act is no longer the only piece of legislation calling for a COLA based on the Consumer Price Index for the Elderly (CPI-E) – or “senior CPI.”
U.S. Rep. Chris Smith and Rep. Jeff Van Drew, both of New Jersey, recently introduced a bill calling for the Social Security COLA to more than double – effective immediately. These lawmakers are looking to provide more money to seniors, a group hit especially hard by the pandemic’s devastating effects on the economy and healthcare.
Their COVID-19 Emergency Social Security Cost of Living Increase Act would increase the 2020 COLA to 3% (to be paid retroactively) – and guarantee a minimum 3% increase in 2021. In actual dollars, this would mean an increase of $545 each year. That’s something we think everyone can stand behind!
Both the Social Security Expansion Act and the COVID-19 Emergency Social Security Cost of Living Increase Act are fighting for fairness. They want to end the policy of basing the Social Security cost-of-living adjustment on the Consumer Price Index for Urban Wage Earners (CPI-W) because it does not take into account taxes or the disproportionate impact of health costs on seniors.
However, the COVID-19 Emergency Social Security Cost of Living Increase Act is only a short-term fix. It only covers 2020 and 2021. Congress must pass The Social Security Expansion Act to permanently solve this problem.
To learn more about why it is crucial that the Social Security COLA be based on the Consumer Price Index for the Elderly check out this Social Security Expansion Act fact sheet.
