Seniors could get bump in Social Security pay if Gallego bill passes
Many seniors have struggled to keep pace with rising expenses. Rep. Ruben Gallego, D-Ariz., has introduced legislation that could increase their monthly benefits by requiring the Social Security Administration to use a different inflation-calculation formula.
Gallego’s Boosting Benefits and COLAs for Seniors Act in the House of Representatives would set cost-of-living adjustments using a measure known as CPI-E, or the Consumer Price Index for Americans 62 years of age and older. Social Security currently adjusts benefits once a year using CPI-W, or the Consumer Price Index for Urban Wage Earners and Clerical Workers.
“Rising costs mean Arizona seniors on Social Security see the real value of their benefits decrease,” Gallego, who is running for the Senate, said in a statement. "My new bill puts more dollars in the pockets of Social Security recipients to pay their bills, get their medications and pay for housing.”
The fate of the bill is unclear in the Republican-controlled House, which is on track to have one of the least productive legislative sessions in decades.
Greater weight for health-care costs
The current COLA formula doesn’t accurately account for the inflation seniors face, especially in health care, said Roman Ulman, president of AFSCME Arizona Retirees Chapter 97. “It’s important that the COLA reflects how inflation impacts seniors so that we can pay our bills and our monthly Social Security checks stay strong.”
According to Gallego, Social Security benefits have not kept up with costs, and many older adults are struggling to afford food, medication and other necessities. The CPI-E inflation gauge would more accurately reflect the costs incurred by older adults, especially for health care, which are weighted more heavily, he said.
The legislation would direct the Social Security Administration to adjust benefits based on CPI-E rather than CPI-W, in years when using CPI-E would result in a larger increase.
In addition, the bill would direct the federal Bureau of Labor Statistics to calculate and publish CPI-E on a monthly basis. In 2023, for example, Social Security benefits increased by 3.2% compared to 3.7% for CPI-E, though the latter won’t always result in a higher number.
The Social Security Administration has paid COLAs since 1975. In 2019, for instance, Social Security payments rose 1.6%, followed by increases of 1.3% in 2020, 5.9% in 2021, 8.7% in 2022 and 3.2% in 2023.
The bill is endorsed by the American Federation of State, County and Municipal Employees as well as by the Alliance for Retired Americans and the AFL-CIO. Sen. Bob Casey (D, Penn.) has introduced companion legislation in the Senate.
In addition, the legislation would boost benefits by 2% across the board and even more for low-income seniors, students up to age 26 and others.
According to the latest estimate from Social Security's trustees, the program's surplus is scheduled to run out by 2034. Around that time, if no other taxes or other revenues are raised, retirees would receive about 78 cents for each dollar of promised benefits, with the revenue to support that coming from ongoing payroll taxes.
By: Russ Wiles
Source: Arizona Republic