To ensure that Social Security benefits do not erode over time, they are adjusted every January. Notwithstanding the annual adjustments, those benefits do not keep pace with inflation. Shockingly, rather than make those adjustments more accurate, some politicians support making them more miserly, through a change, known as the "chained CPI" -- a cruel and deceptive benefit cut, hitting hardest the oldest of the old, the poorest, and those disabled at young ages, including our brave wounded warriors.
The 2014 Social Security cost-of-living adjustment (COLA) is scheduled to be released soon by the Department of Labor, though the exact announcement date is uncertain because of the government shutdown. Although the precise COLA adjustment will depend on September's inflation numbers, it will reportedly only be about 1.5 percent. This adjustment will be received by 57 million seniors, workers with disabilities, children who have lost parents and others. This adjustment will also apply to Supplemental Security Income benefits, which provide income for the very poorest elderly and disabled, as well as to a variety of other benefits.
The 2014 COLA, the fourth smallest inflation adjustment since automatic COLAs began in 1975, will be of little help to seniors, people with disabilities, and survivors. Most are already struggling to make ends meet. Medicare premiums, out-of-pocket health and long-term care expenses, housing, food, and other costs keep rising. Those fortunate to have savings have seen those savings shrink, and sometimes disappear. The Great Recession, stagnating wages, job loss, unindexed employee pensions, declines in the value of homes and diminished returns from investments have taken a heavy toll on the old and are contributing to the retirement income crisis facing working Americans. Having their Social Security benefits gradually but inexorably lose value because they do not keep pace with inflation makes it even harder for those on fixed incomes to make ends meet.
Today's Social Security COLA understates inflation experienced by the elderly and people with disabilities. The Bureau of Labor Statistics produces another measure geared to specifically measure the living costs of seniors, called the CPI-E, or experimental Consumer Price Index for the Elderly. It tracks the cost of the basket of goods seniors actually consume, taking into account, among other things, the higher health care costs for seniors. It rises about 0.2 percentage points more per year on average than the current CPI, thereby better protecting beneficiaries against inflation. The higher rate is largely because seniors -- and people with disabilities -- have, on average, higher medical costs, and those costs have been rising more rapidly than other goods and services.
No one is getting rich from Social Security. Benefits are extremely modest, by virtually any standard. But they are vitally important. About two-thirds of seniors rely on Social Security for half or more of their income. As a group, disabled beneficiaries rely on Social Security for a majority of their family income. In short, Social Security beneficiaries have little flexibility in their household budgets. They paid into Social Security throughout their working lives, and have earned a COLA that should keep their benefits at pace with inflation.
Many in Congress seem to think that the Social Security benefits that our seniors and people with disabilities receive today -- under $15,000/year on average -- are too high, and have made cutting them one of their primary goals in Washington's serial budget crises. But as a recent survey from the National Academy of Social Insurance shows, the American people strongly disagree. Seventy-one percent would prefer a package of changes that includes changing to the CPI-E to more accurately reflect the level of inflation experienced by seniors. We wholeheartedly agree, and with the 2014 elections only a year away, Congress would do well to heed their will.
Although many in Congress talk about the need to cut "entitlements" -- an insulting reference to Social Security and Medicare, both earned benefits -- they do not seem to have the courage of their convictions. They propose cutting the COLA through the so-called chained CPI, a technical, hard-to-understand change, rather than say straight-out that they want to pull $127 billion dollars out of the pockets of their constituents over the next 10 years. And even though most politicians have promised not to cut the benefits of persons aged 55 or older, many are fully prepared to break their word.
Fortunately, a growing number of representatives and senators understand that the chained-CPI doesn't pass the "smell test." They aren't sitting back and doing nothing.
• One hundred and twenty five members of the House of Representatives signed onto the resolution sponsored by Representative David Cicilline (D-RI-1) opposing the chained CPI.
• Senators Bernie Sanders (D-VT), Senator Elizabeth Warren (D-MA), Representative Keith Ellison (D-MN-5), Representative Raúl Grijalva (D-AZ-3), Representative Jan Schakowsky (D-IL-9) and others are outspoken champions of an honest COLA measure.
• Senator Tom Harkin (D-IA), Senator Mark Begich (D-AK), Representative Theodore Deutch (D-FL-21) and Representative Linda Sánchez (D-CA-38) are sponsors of bills that would base Social Security's COLAs on the more accurate CPI-E.
It's high time Congress enacted the CPI-E for Social Security and other programs providing benefits to seniors and people with disabilities. Instead though, too many politicians think that next year's COLA, just 1.5 percent, is too high. Everyone who disagrees should find out the position of those running in 2014 -- and make sure that those who don't believe in Social Security are voted out of office.
Nancy Altman, author of The Battle for Social Security , and Eric Kingson, Professor of Social Work at Syracuse University, are Founding Co-Directors of Social Security Work and Co-Chairs of the Strengthen Social Security Coalition . The authors both served as staff to the 1982 National Commission on Social Security Reform (a.k.a. "The Greenspan Commission").
How will Donald Trump’s first 100 days impact YOU? Subscribe, choose the community that you most identify with or want to learn more about and we’ll send you the news that matters most once a week throughout Trump’s first 100 days in office. Learn more