Social Security Proposal Would Substitute COLA Loss


Seniors and members of Congress proposed emergency Cost-of-Living Adjustment (COLA) legislation to compensate for Social Security cuts this year.

Sen. Bernie Sanders (I-Vt.) and Rep. Peter DeFazio (D-Ore.) met with seniors from the National Committee to Preserve Social Security Wednesday morning to discuss their proposal that would guarantee Social Security recipients a one-time payment of $250. The proposal, the “Emergency Senior Citizens Relief Act,” would substitute the COLA seniors have received in pervious years.

This year is the first year Social Security recipients will not receive a COLA since 1975. According to, the COLA is designed to counteract the effects of inflation and is usually equal to the percentage increase in the consumer price index (CPI) for urban wage earners.

“A failure to provide a Social Security COLA in 2010 for seniors would be a very critical mistake and will have a very negative impact on them,” said Rep. Maurice Hinchey (D-NY). “We know the cost of prescription drugs are going up 3-4 times faster than the standard cost of living.”

However, lawmakers claim the current form of measurement does not take the needs of seniors and the rising costs of medical care into account.

“Over the long term, we need to better address the needs of seniors by establishing a CPI for the elderly which accurately reflects the purchasing habits of senior citizens,” Sanders said.

The proposed $250 amounts to about a 2 percent cost-of–living adjustment comparable to COLA payments in years past. The funds would come from taxing those in the $250,000 to $359,000 income brackets. The wealthiest one percent as well as those below the $250,000 bracket will be exempt from the tax.

“We don’t have a good measure of what the inflation rate is for seniors, but we do know that pharmaceuticals continue to escalate, medical care costs continue to escalate, their rents, mortgages haven’t gone down, and utilities have gone up,” DeFazio said.

According to Barbara Kennelly, president and CEO of the National Committee to Preserve Social Security and Medicare, premiums and out-of-pocket expenses not covered by Medicare will eat up a third of the average Social Security check next year. Part D of Medicare, the part dealing with prescription drugs, has increased 130% since 2000. Nearly 70 percent of Social Security recipients depend on it for at least half of their income.

“You can bail out the banks, they certainly wanted you to bail out the auto companies, but seniors, right now…the majority of seniors are trying to make ends meet,” she said. “$250 will mean a lot for seniors.”

The NCPSSM obtained over 120,000 signatures supporting the legislation and plan to present their proposal to Congress.

Fifteen percent of Social Security recipients depend on the monthly checks for income, including Esther Lenette of Bethesda, Md.  At 91, she lives independently but relies on Social Security checks because she is unable to find work.

“I don’t know where I’d be today without social security. I’d like to work and earn a little extra money, but there aren’t many jobs out there for seniors my age,” she said. She receives about $13,000 a year that goes towards her monthly prescriptions and basic needs.

“Getting a COLA each year means that for me and millions of other seniors like me, we have a better chance of keeping up with our bills and necessities,” she said.

Senator Robert Casey of Pennsylvania voiced concern for seniors, saying a little boost will go a long way.

“The least that we should do in the midst of a terrible recession for older citizens and families across the country is to make sure that we can provide some measure of relief that this legislation will provide,” said Casey.

Trustees of the Social Security System say there most likely won’t be a COLA in either 2010 or 2011.


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