Washington, D.C.--Congressman Eliot Engel issued the following statement after the Senate rejected legislation to give seniors $250 to supplement their income. The legislation was put forward because there will be no Cost of Living Adjustment (COLA) increase this year, and most likely no increase next year. Rep. Engel has introduced legislation to award a minimum three percent annual increase to seniors.

“Many seniors live on a fixed income and have come to depend on their annual COLA to pay for ever-increasing living expenses, such as health care costs. This is especially vital for New York’s seniors, as our state has some of the highest costs of living in the nation.”

“For the Senate to refuse to give 57 million seniors nationwide, along with veterans and persons with disabilities, $250 to help in this time of enormous economic difficulty is mind-boggling. While $250 may not make a big difference in some budgets, for low-income seniors it could mean the difference between paying for prescription drugs or not, or successfully paying the rent or the utility bill. The nonpartisan Congressional Budget Office listed it as one of the best ways to provide a short-term stimulus to the economy. For those who rejected this band-aid for our seniors, I wonder if they truly have a grasp of the challenges facing America’s seniors in making ends meet.”

Since 1975, retiree benefits have been adjusted annually to keep pace with inflation. The Social Security COLA is tied to the consumer price index (CPI-W), which represents the cost of consumer goods and services consumed by average workers, compared with the same quarter of the previous year. As a result, seniors received a record increase in a COLA last year, as inflation skyrocketed due to unprecedented increases in the cost of gas and oil. However, it dropped precipitously in December and has remained low since. It is highly unlikely the economy will grow fast enough this year to overcome the difference. Instead of using the CPI-W, Rep. Engel suggests that COLA's be calculated through the use of the Experimental Consumer Price Index for Americans 62 Years of Age and Older (CPI-E), also calculated by the BLS, which takes into account seniors’ spending habits.