Therefore, I have introduced, along with Congressman Peter DeFazio, the Emergency Senior Citizens Relief Act. Under this legislation, all Social Security recipients, railroad retirees, SSI beneficiaries and adults receiving veterans’ benefits will receive a one-time additional check of $250 in 2010. Since seniors living on fixed incomes are most likely to spend this money, this legislation would provide a major boost to the economy as it emerges from the economic crisis.
This legislation is fully paid for by simply applying the Social Security payroll tax to household incomes above $250,000 and below $359,000 in 2010. Under current law, only the first $106,800 of earned income is subject to the Social Security payroll tax. Thus, a worker earning $106,800 pays the same payroll tax as a CEO making $35 million. This legislation begins to correct this inequity in 2010, while making sure that seniors receive a fair increase in benefits next year. No one earning $250,000 or less would see their taxes go up under this legislation.
For more than three decades, seniors have relied on a COLA in their Social Security benefits to keep up with their increased expenses. Unfortunately, the current formulation for determining Social Security COLAs does not accurately take into account the purchasing needs of senior citizens, who often do not buy items like laptop computers and cellular phones, but spend a disproportionate amount of their income on health care and prescription drugs.
It would simply be unacceptable for seniors on fixed incomes to not receive additional income from Social Security in the coming year to keep up with the increased prices that seniors pay for prescription drugs and medical care – let alone to receive less than they did this year. Nearly 70 percent of beneficiaries depend on Social Security for at least half of their income. And Social Security is the sole source of income for 15 percent of recipients.
Over the long-term, we can better address the needs of seniors by establishing a Consumer Price Index for the Elderly to determine an appropriate COLA. But, for 2010, the least we can do is to provide seniors with a modest increase in their benefits so that they have the ability to pay for their added expenses.