Payne Cosponsors Legislation to Increase Social Security Payments
Washington, D.C. – Congressman Donald M. Payne, Jr. (NJ-10) cosponsored H.R. 3761, the Seniors Deserve A Raise Act, legislation that ties future Social Security cost-of-living increases (COLAs) to the Consumer Price Index for the Elderly (CPI-E)—an index that tracks the spending patterns of seniors—and provides a 2.9 percent benefit increase to seniors immediately to compensate them for the average difference between CPI-E and CPI-W, the index currently used to calculate COLAs.
“Seniors deserve to live in dignity and have the peace of mind that their hard-earned Social Security benefits will be there for them,” said Congressman Payne, Jr. “This legislation is about protecting our seniors by ensuring that they have the resources to keep up with their needs. Millions of seniors depend on Social Security to live, and we have an obligation to make sure that their benefits allow them to do so.”
On October 15, 2015, the Social Security Administration announced that that there will be no Social Security cost-of-living adjustment in 2016. As a result, the 65 million people on Social Security, including seniors, individuals with disabilities, and children, will see no annual raise in their benefits.
By law, COLA increases are tied to the Consumer Price Index for Urban Wage Earners and Clerical Workers, or CPI-W, a broad measure of inflation. Since inflation has been low over the past year, especially because of low gas prices, Social Security benefit payments will remain flat.
As a measure for Social Security benefits, CPI-W is based on the spending patterns of workers, not retirees. However, retired individuals spend more of their money on medical care than do workers, and medical care prices are rising faster than are prices of other goods. On the other hand, a Consumer Price Index for the Elderly, or CPI-E, would reflect differences in spending between retirees and workers. This would ensure that rising costs are compensated by increased benefits.