Washington, DC -- Congressman Eliot Engel (D-NY-17) again called on Congress to support legislation he is re-introducing in the 112^th Congress that would guarantee seniors a cost-of-living increase in their Social Security benefits.  This is designed to help them avoid a repeat of their not getting such increases in the past two years. Due to the way the COLA is calculated, for the second consecutive year seniors did not receive a COLA increase in their monthly benefits. Before 2010, there had never been a year without an increase, since automatic adjustments for inflation was installed in 1975.  Shockingly, seniors have lost about 24 percent of their buying power since 2000. 

Rep. Engel’s legislation, the Guaranteed 3% Cost Of Living for Seniors Act, would guarantee a minimum three percent increase annually in COLA for Social Security recipients.  Seniors spend three times more on medical care than those between the ages of 25-64.  They spend 12.7 percent of their income on health, as opposed to 4.7 percent for people 25-64, according to Bureau of Labor Statistics (BLS) statistics.

“Seniors across the country need to keep up with the growing cost-of-living, especially in New York where it is higher than most states.  Our challenging economic times make it even more important to put more money in their pockets so they can better make ends meet.  Seniors are reliant upon Social Security as a major part of their finances and have counted on the COLA increases for decades.  We must change the way it is calculated to avoid their losing a COLA ever again,” said Rep. Engel.

The Bureau of Labor Statistics announced late last year that since there was no increase in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W), so there was no Social Security COLA increase.  The COLA formula is currently based on the CPI-W which reflects the purchasing patterns of people who earn at least half of their income from wages.

Rep. Engel’s legislation would mandate using another BLS index, the Consumer Price Index for the Elderly (CPI-E).  This captures inflation among those over 62, and is a better indication of seniors’ spending habits.   The CPI-E would have provided seniors a COLA last year and likely would do the same this year. 

Rep. Engel is calling for bipartisan support of his legislation, as these issues cut across all political or geographic lines.  “Social Security has been a vital lifeline to America’s seniors for generations, and the COLA has worked quite well over time to help people manage their budgets.  However, a small tweak would make it even better.  We must protect Social Security for future generations – keep it from privatization, keep the retirement age where it is, and avoid any cuts to benefits.  By improving the COLA formula we bolster the short and long term health of this incredibly important program,” added Rep. Engel.

The Senior Citizens League (SCL) supports legislation that would base the Social Security COLA on a consumer price index that uses the CPI-E. The BLS has tracked the CPI-E since the early 1980’s. For example, a senior who retired with an average monthly benefit of $460 in 1984 would have received almost $12,856 more over the past 27 years with the CPI-E.

“There is no doubt seniors would be better off if my legislation is enacted, and I am proud to say the National Committee to Preserve and Protect Social Security has applauded my bill,” said Rep. Engel.

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