Per a recent Social Security Administration announcement, 1.3 percent is the planned cost of living adjustment (COLA) for 2021 benefits. This equates to an extra $20 per recipient on average.
Democratic representatives Peter DeFazio of Oregon and John Larson of Connecticut intend to introduce legislation that will increase this amount to 3 percent by 2021 as an emergency measure.
“Due to the COVID-19 pandemic, seniors are facing additional financial burdens to stay safe. This absolutely anemic COLA won’t even come close to helping them afford even their everyday expenses, let alone those exacerbated by COVID-19,” DeFazio stated.
The representatives introduced their bill on Friday, entitled the Emergency Social Security COLA for 2021 Act.
The 2021 increase of 1.3 percent marks the second-lowest increase in the history of the program. In 2017, the increase was only 0.3 percent. COLA wasn’t increased at all in 2010, 2011, or 2016.
Since 2010, the increase has averaged 1.4 percent. Comparatively, from 1999 to 2009, 3 percent was the average increase, as tracked by The Senior Citizens League, a non-partisan advocacy group.
“Raising the COLA to 3 percent for 2021 will provide seniors with an immediate, crucial lifeline during the ongoing coronavirus crisis,” said DeFazio. “It’s also critically important that Congress provide a permanent fix to the COLA formula that actually reflects the real costs that seniors face.”
These two lawmakers are independently encouraging change in the way that annual increases are calculated. Presently, the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) is how the SSA arrives at the annual COLA increase.
The CPI-W is calculated using pay received by workers 62 and younger. This ignores cost increases faced by retirees, especially health care costs. DeFazio and Larson advocate using the Consumer Price Index for the Elderly (CPI-E) in separate bills.
Advocacy groups, including The National Committee to Preserve Social Security, the Senior Citizens League, and Medicare and Social Security Works, have lauded these representatives’ efforts to introduce an emergency COLA bill.
“Social Security’s automatic cost-of-living adjustment is one of its most valuable features, even more so in the middle of a pandemic,” said Nancy Altman, president of Social Security Works. “But due to an inadequate measure, Social Security’s modest benefits are eroding. Congress should immediately pass their legislation, which will boost the economy and save lives.”