Cost of Living Adjustments for Social Security Beneficiaries Would Accurately Reflect Higher Health Care and Every Day Costs
Contacts: Linda Andros (202) 778-4384
Wayne Ranick (412) 562-2444
(Pittsburgh) – The United Steelworkers (USW) today strongly endorsed legislation by Sens. Sherrod Brown (D-Ohio) and Barbara Mikulski (D-Md.) that would adopt a much more accurate consumer price index for elderly consumers (CPI-E). Developed by the Bureau of Labor Statistics, this index would base its calculation on a market basket of goods purchased by retirees.
It is well understood that retired Americans spend much more of their financial resources on health care and housing than the general population. The current formula for calculating the annual Cost of Living Adjustment (COLA) for Social Security beneficiaries, however, does not accurately reflect their everyday costs, understating in particular, health care costs that are rising well beyond the rate of inflation.
A typical Social Security recipient receives a modest benefit of about $14,000 annually. Social Security is the primary source of income for about two-thirds of older American households receiving benefits. Approximately one-third of those households depend on Social Security for all of their income.
Half of those 65 and older have annual incomes below $18,500 and most have suffered financially from the economic collapse in 2008 that caused significant losses in retirement savings, pension benefits and home values.
“Social Security was established in the midst of the Great Depression to ensure that the elderly would not live out their years in poverty, ill-health and fear,” said USW International President Leo W. Gerard. “A great nation does not sacrifice its elderly and most needy so that millionaires and billionaires don’t have to pay one more cent in taxes.”
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The USW represents 1.2 million active and retired members in the United States, Canada and the Caribbean. It is the largest private sector union in North America, representing workers in a wide diversity of industries.
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