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Social Security

The Social Security Act governs the process by which the Social Security Administration (SSA) determines whether a Cost of Living Adjustment (COLA) can be applied to Social Security and Supplemental Security Income (SSI) benefits. Under the formula provided in the Social Security Act, the COLA is linked to the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). This past October, the SSA announced that for the first time since 2008, the CPI-W increased by 3.6 percent over the statutorily required measuring period comparing the third quarter of 2008 to the third quarter of 2011. As a result, Social Security beneficiaries received a COLA increase beginning with their December 2011 benefits, which was paid in January 2012. Increased payments to SSI recipients began December 30, 2011. 

According to the SSA, for Social Security beneficiaries, the estimated average monthly benefit amount for all retired workers rose from $1,186 to $1,229. The maximum Federal SSI monthly payment to an individual rose from $674 to $698. For a couple, the maximum Federal SSI payment will rise from $1,011 to $1,048.

This is the first time Social Security beneficiaries received a COLA since 2009. With the exception of the past two years, seniors have received an annual COLA raise since 1975. While I am happy that they will see an increase again at the end of this year, I still have concerns about using the CPI-W formula because of the projected increases in Medicare and other healthcare-related costs for our senior citizens.

Today’s beneficiaries and those nearing retirement are depending on these programs to help meet their healthcare and living expenses. However, as more retirees enter these programs and fewer workers pay into them, the solvency of both Social Security and Medicare is at risk.  We need to address this first by reducing spending on wasteful government programs and reducing unemployment by strengthening the economy so that businesses will begin hiring more workers who can pay into Social Security and Medicare.  This is one of my top priorities in Congress.