Rep. Tammy Duckworth (D-IL) introduced a bill December 1 that would provide a 3.9 percent increase in benefits at year’s end for people receiving Social Security benefits, including the more than 19 million individuals receiving either Social Security Disability Insurance or Supplemental Security Income benefits.
In October, the Social Security Administration announced there would be no annual cost-of-living-adjustment (COLA) in 2016, for only the third time since it began using its current formula calculating adjustments in 1975.
“Veterans know not to leave anyone behind but without Congressional action that’s exactly what our government will do to them—as well as millions of seniors and people with disabilities—at the end of the year,” Rep. Duckworth said in a news release.
The 3.9 percent increase would be a one-year stopgap measure, offset by the closure of a tax loophole, known as the “performance pay” loophole, that allows CEOs of corporations to write off executive bonuses for tax purposes as a business expense. The 3.9 percent figure is equivalent to the average increase in compensation last year for the CEOs of the country’s 350 largest companies.
“If we do nothing, on January 1st, more than 70 million seniors, veterans, and other Americans won’t get an extra dime in much-needed Social Security and other benefits. And while Congress sits on its hands and pretends that there’s nothing we can do, taxpayers will keep right on subsidizing billions of dollars’ worth of bonuses for highly paid CEOs,” Sen. Elizabeth Warren (D-MA) said in a news release. “Giving seniors a little help with their Social Security and stitching up corporate tax write-offs isn’t just about economics; it’s about our values.”
The COLA formula for measuring inflation is based on the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). Due in large part to the nationwide drop-off in gasoline prices this year, inflation measured just 0.4 percent under the CPI-W.
For years, advocates have urged the SSA to replace the CPI-W with a separate index, known as the Consumer Price Index for the Elderly (CPI-E), that the Bureau of Labor Statistics has calculated annually since 1982. Proponents argue that this index is more in line with the spending habits of elderly and people with disabilities, particularly in regard to health care costs.
In October, Rep. Alan Gray (D-FL) introduced the Seniors Deserve a Raise Act, which would tie future adjustment to the CPI-W formula. It would also provide for a 2.9 percent increase for beneficiaries in 2016, which is the equivalent of the this year’s inflation rate under this alternate formula.