Do the right thing: Fix the COLA for seniors

It starts with the Bureau of Labor Statistics (BLS) formula used now to measure price increases and set the Social Security COLA. BLS uses the CPI-W index, the Consumer Price Index for Urban Wage Earners and Clerical Workers, hardly a correct measure of price inflation for older Americans struggling with higher health care costs as they age, plus increasing costs for basic needs like food, gasoline, heating fuel, clothing, and rent. While some costs have pulled back recently, they remain higher on a year-over-year basis.

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Also, while many of these prices are volatile, characterized as “headline” inflation, there can be no argument that seniors have faced tremendous price spikes since 2009, the last year they got a COLA increase. Clearly long-term commodity price trends are up. For example, a 2012 soybean shortage and higher food prices are projected; and some predict crude oil closing the year 18 percent higher, pushing gasoline prices up. These, plus ever-increasing health care costs, hit fixed-income seniors the hardest. We must fix the flawed CPI for our seniors with a CPI just for older Americans, one that will finally provide an accurate, ongoing, and fair measure of senior cost inflation. That is why the CPI for Seniors Act must be enacted.
 
But wait, as they say in the TV ads, didn’t a 3.6 percent Social Security COLA just take effect in January, 2012? Clearly a “catch-up COLA,” after two years with no COLA, this COLA will be worth just $43 each month to the average retired worker on Social Security, increasing their check to just $1,229 per month. The annual COLA increase total for 2012 will be $516 for the average beneficiary. By adding 2012 to the previous 24 months, you get a clearer picture of what seniors actually got thanks to the flawed CPI -- $516 total increase over 36 months, or just over fourteen dollars a month more. This is not an issue of “greedy” seniors as some suggest, but rather one about older Americans and military retirees who have earned and deserve fairness and accuracy. Resolved, before Congress reforms anything, they must fix the broken CPI and provide seniors with a fair and accurate COLA each and every year!

Thair Phillips is president and CEO of RetireSafe, a 20 year old nationwide non-profit senior’s advocacy organization that represents over 400,000 supporters nationwide.