Washington, DC -- Congressman Eliot Engel (D-NY-17) again called on Congress to support his legislation to help seniors avoid repeating the loss of a cost-of-living adjustment (COLA) for Social Security.  Due to the way the COLA is calculated, for the second consecutive year seniors will not receive a COLA increase in their monthly benefits.  There had never been a year without an increase, since automatic adjustments for inflation was installed in 1975, until last year.

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. 

“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 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 these types of pitfalls,” said Rep. Engel.

The Bureau of Labor Statistics announced that since there was not an unexpected 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 ould 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.   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. 

Rep. Engel is calling for bipartisan support of his legislation, as these issues cut across any 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 (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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