It?s Definitely Not the Kind of Greeting Card Beneficiaries Want This Holiday Season

2017-07-10T16:09:08+00:00December 2nd, 2015|Social Security|

Each year the Social Security Administration reviews beneficiaries’ benefits and sends out millions of notices to ensure you know what to expect in next year’s Social Security check.  Unfortunately, as was announced last month, there will be NO cost of living increase in 2016.

We review Social Security benefits each year to make sure they keep up with the cost of living. The law does not permit an increase in benefits when there is no increase in the cost of living. So your benefit will stay the same in 2016. There was no increase in the cost of living during the past year based on the Consumer Price Index (CPI) published by the Department of Labor. The CPI is the Federal government’s official measure used to calculate cost of living increases.”…Social Security Administration 2016 Benefit mailing

Since 2009, Social Security beneficiaries have seen a 0% COLA increase three times (2009, 2010, 2016) with an average of just 1.2% increase over those years, confirming yet again, that the current Social Security COLA formula isn’t accurately measuring seniors’ expenses.  Seniors across this nation understand how important having an accurate measure of the increase in their real costs is to their day-to-day survival.  While there has been a lot of talk in Washington about the need to find a more accurate COLA formula; unfortunately, that attention has largely focused on ways to cut the COLA even further.  Leaving many Americans to wonder what’s less than zero?  If accurate inflation protection for seniors is truly our goal, Congress needs to adopt a fully developed CPI for the elderly (CPI-E).

Research has shown that spending patterns differ between the elderly and the general population, especially on health care.  Seniors 65 and older spend more than twice as much on health care, and those 75 and older spend nearly three times more than younger consumers.  Not only do health care expenditures steadily increase with age but health care costs consistently rise much faster than general inflation.  The current price index (CPI-W) does not take these critical differences in the elderly population into consideration.  The chained CPI doubles-down on that flaw.  Even worse, the proposed chained CPI will cut COLAs immediately for current and future retirees, veterans, the poor and people with disabilities.

GOP Presidential candidates Republican Congressional leaders continue to support adoption of the so-called “Chained” CPI because they claim the current COLA formula is too generous and should be reduced.  Reduced?!? 

Senator Elizabeth Warren has proposed legislation to address the immediate need by providing a $580 Social Security boost.  NCPSSM supports Warren’s efforts and will continue to fight for a fully developed cost of living formula geared to America’s elderly.