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New bill endorses CPI-E as a means to avoid steady loss of seniors’ purchasing power
At last week’s Aging Committee hearing on preserving and protecting Social Security, Sen. Bob Casey (D-PA) summarized the newly-introduced Boosting Benefits and COLAs for Seniors Act as intending to “help seniors contend with rising costs by changing the way that Social Security cost of living adjustments (COLAs) are calculated to increase benefits and more comprehensively reflect the costs incurred by older adults.” The bill, co-sponsored by Sen. Richard Blumenthal (D-CT), Peter Welch (D-VT), John Fetterman (D-PA), Kirsten Gillibrand (D-NY), and Bernie Sanders (D-VT), calls for the Social Security Administration to use the Consumer Price Index for Americans aged 62 or older (CPI-E) as the basis for cost-of-living adjustments (COLAs) rather than the current basis, CPI-W. Read the Casey analysis here.
The Boosting Benefits and COLAs for Seniors Act seeks to address the oft-reported inability of the current COLA calculation to keep pace with the cost categories facing seniors in their retirement years. For example, the Senior Citizens League (TSCL) has published studies showing that seniors have suffered a 36% loss of buying power in their monthly benefits since 2000, a situation that TSCL notes can lead to “significant hardships that include more rapid depletion of savings than expected, growing debt, and even worse health outcomes.”