The Social Security Administration SSA announced on October 13th that Social Security benefits will increase 8.7 % in 2023 — the largest cost-of-living adjustment (COLA) in four decades. On average, Social Security benefits will increase by more than $140 per month starting in January. Acting SSA Commissioner Kilolo Kijakazi hailed the near-historic COLA:
“Medicare premiums are going down and Social Security benefits are going up in 2023, which will give seniors more peace of mind and breathing room. This year’s substantial Social Security cost-of-living adjustment is the first time in over a decade that Medicare premiums are not rising and shows that we can provide more support to older Americans who count on the benefits they have earned.” – Kilolo Kijakazi, Acting Social Security Commissioner, 10/13/22
Max Richtman, President and CEO of the National Committee to Preserve Social Security and Medicare said in a statement today that the 8.7% COLA is enough to keep seniors from falling further behind, but does not put them ahead financially:
“As helpful as the 8.7% COLA may sound, it’s more like a band aid on a gaping financial wound from chronically rising living expenses for seniors — who have had to make do with historically inadequate COLAs (without a boost in base benefits for the past fifty years). In fact, COLAs have been downright paltry (from zero to 2%) for seven of the last ten years.” – Max Richtman, NCPSSM President & CEO, 10/13/22
NCPSSM’s legislative director, Dan Adcock, told CNBC’s Lorie Konish, “The COLAs really are about people treading water; they’re not increases in benefits… They’re more trying to provide inflation protection so that people can maintain their standard of living.”
A 75 year-old retiree in Florida named Gloria Hinojosa told the New York Times that she relies on her Social Security benefits to cover basic living expenses, including a rent of more than $1,200 per month. She says that the roughly $180 extra she will receive starting in January will give her a little more “breathing room” financially.
The current COLA formula, based on the CPI-W, reflects the impact of inflation on urban wage earners, not seniors. There is a newer inflation index available, the CPI-E (Consumer Price Index for the Elderly), that more accurately reflects seniors’ spending patterns. The CPI-E is included in Rep. John Larson’s Social Security 2100 legislation and in Senator Bernie Sander’s Social Security Expansion Act. Both bills would also give seniors a badly needed benefit boost while requiring the wealthy to contribute their fair share to Social Security. (Republicans have proposed adopting an even less generous COLA formula, based on the Chained CPI, along with cutting benefits by raising the retirement age.)
“Unfortunately, neither bill is likely to come up for a vote during the remainder of the 117th Congress, and that’s a shame. Because every year that Congress kicks the can down the road, the closer Social Security’s projected trust fund shortfall draws — and the more dire the financial struggles become for seniors on fixed incomes. Large majorities of the American public across party lines support Social Security and want to see it expanded and strengthened.” – Max Richtman, 10/13/22
Conservatives claim that the 2023 COLA will add to Social Security’s financial challenges by shortening the life expectancy of the program’s trust fund, an assertion echoed in today’s Washington Post. “The increase will help seniors adjust to higher living costs, but it also will further strain Social Security’s finances, bringing forward the date by which the program’s trust fund is projected to be exhausted.” This, like other pieces of propaganda from the right regarding Social Security, is a red herring. The Chief Actuary of the Social Security program, Stephen Goss, has said that the higher than usual COLA “should have (only) a small effect on trust fund financial status.”
As Max Richtman points out, NCPSSM believes that one of the wealthiest nations in the world can afford to boost benefits for one of its most vulnerable populations.
After years of rising costs for older Americans, a deadly pandemic that took a disproportionate toll on seniors, and rampant post-pandemic inflation, one has to wonder what Congress is waiting for. Seniors and their families should weigh their votes carefully this fall — and elect representatives committed to boosting Social Security – including those frequently inadequate COLAs.”