Washington, DC -- Despite having Congressman Eliot Engel’s (D-NY-17) full support, the House failed to pass legislation to give Social Security recipients a one-time $250 payment to make up for the lack of a Cost-of-Living-Adjustment (COLA) for 2011.  A low rate of inflation means that for the second consecutive year, Social Security retirees, veterans, and people with disabilities will see no increase in their monthly Social Security, SSI, VA Pension and Compensation, and Railroad Retirement benefits.  These are the first two times since 1976, when the COLA system was established, that recipients did not receive COLA.  

Democrats brought the bill to a vote on the House floor under a system called “Suspension of the Rules.”  Doing so prevents a multitude of amendments to be added to the bill, but requires a two-thirds vote of those present for passage.  The bill had a majority of votes – 254-153 – but fell just short of the two-thirds threshold as Republicans voted en masse against the bill.  “The Republicans made it clear this week that they are all for providing the richest Americans with plenty of tax breaks, but are opposed to helping seniors buy groceries and keep the heat turned on,” said Rep. Engel.

The Senior Protection Act (H.R. 5987) would provide a $250 payment to about 54 million Americans in lieu of the COLA increase.  In addition to his support for this one-time payment, Rep. Engel is the author of the Guaranteed 3% Cost Of Living for Seniors Act (H.R. 4193) which would guarantee a minimum three percent increase annually in COLA for Social Security recipients. 

“I was proud to support this short-term fix to the problem faced by seniors across the country and am very disappointed that not enough of my House colleagues chose to vote for giving relief to seniors.  Seniors need to keep up with the growing cost-of-living, especially in New York, and not having a COLA increase can be devastating.  Our challenging economic times make it doubly important to put more money in the pockets of seniors 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 the mistaken policy of assuming seniors’ expenses haven't risen,” said Rep. Engel.

H.R. 5987 is supported by AARP, Alliance for Retired Americans, National Committee to Preserve Social Security and Medicare, the Disabled American Veterans, National Association of Retired and Veteran Railways Employees, National Active and Retired Federal Employees Association, National Treasury Employees Union, and Military Officers Association of America.

The Bureau of Labor Statistics announced that since there was not an increase in Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W), there will not be a 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 index of the Bureau of Labor Statistics, the Consumer Price Index for the Elderly (CPI-E).  This is geared towards capturing inflation among those over 62, and is a better indication of seniors’ spending habits on goods and services like health care which the current price index fails to calculate accurately.   The CPI-E would have provided seniors a COLA last year and likely would do the same this year.  Rep. Engel is also a co-sponsor of H.R. 2365, the Consumer Price Index Elderly Consumers Act.

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 the Bureau of Labor Statistics.  Shockingly, they have also lost about 24 percent of their buying power since 2000. 

“Seniors deserve reassurance that help is on the way so they can properly budget their expenses. We must protect Social Security for future generations – keep it from privatization, maintain the current retirement age where it is, and avoid 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 (TSCL) supports legislation that would base the Social Security COLA on a consumer price index that uses the CPI-E. The Bureau of Labor Statistics 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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