Congressman John Garamendi (D-CA) introduced Thursday legislation that would change the basis of the cost-of-living adjustment (COLA) calculation from the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) to the Consumer Price Index for the Elderly (CPI-E).
The CPI-W is the current index from the Bureau of Labor Statistics (BLS) used for measuring increases in the prices of consumer goods, including housing, clothing, food, transportation, and health care. But many analysts believe the CPI-W inaccurately assesses the costs seniors face in day-to-day living.
If passed, the Fair COLA for Seniors Act of 2021 (HR-4315) would require Social Security to use the Consumer Price Index for the Elderly (CPI-E) to calculate a fairer cost of living adjustment for seniors. More information on the CPI-E can be found from the Bureau of Labor Statistics here.
- SEE ALSO: How Are COLAs Calculated?
“The bill would increase benefits and ensure that cost of living adjustments in Social Security reflect the real rising costs for seniors and disabled Americans,” according to Garamendi’s press statement. “From 1982 to 2011, CPI-E rose at an annual average rate of 3.1 percent, compared with 2.9 percent for the methods that are currently used.” Garamendi introduced similar legislation in 2019.”
“Seniors and disabled citizens rely on Social Security benefits for a large portion of their income, and it’s about time for Social Security benefits to reflect their lifestyles,” said Garamendi. “Using a COLA that actually reflects how retirees spend their money – especially in health care – is a no-brainer that will increase benefits and make Social Security work better for the people it serves.”
NARFE Support
The legislation has support from the National Active and Retired Federal Employees Association (NARFE).
“Federal annuitants and all seniors lose a significant amount of their purchasing power under the CPI-W,” NARFE stated on its website. “When measuring costs experienced by seniors with the CPI-E, inflation is greater by an estimated 0.27 percent per year than what the CPI-W shows. It is time for Congress to adopt the CPI-E to calculate annual COLAs.”
Co-sponsors to the bill include Representatives Chellie Pingree (D-ME), Joyce Beatty (D-OH), Brian Fitzpatrick (R-PA), Marilyn Strickland (D-WA), Seth Moulton (D-MA), Brendan F. Boyle (D-PA), Gregorio Kilili Camacho Sablan (D-MP), Grace F. Napolitano (D-CA), Ted Deutch (D-FL), Jerry McNerney (D-CA), Betty McCollum (D-MN), Derek Kilmer (D-WA), Anthony G. Brown (D-MD), Mark Pocan (D-WI), Ann M. Kuster (D-NH), Jackie Speier (D-CA), Anna G. Eshoo (D-CA), Gwen Moore (D-WI), Steve Cohen (D-TN), Albio Sires (D-NJ), Marcy Kaptur (D-OH), Ted W. Lieu (D-CA), and Debbie Wasserman Schultz (D-FL).
The full text of the bill is available here.