Lawmakers are calling for an increase to Social Security payments that would cost the government billions of dollars.
The congressional push comes after the Social Security Administration reportedly indicated there will be no inflationary adjustment to Social Security benefits next year. It would be the first time since 1975 that Social Security benefits would not be subject to a cost-of-living-adjustment (COLA).
Social Security’s annual increases are based on inflation, which was negligible this year due to the recession. Seniors received a 5.8 percent increase in January based on 2008 economic data.
Even though inflation has been low, McCarthy noted in a release that Medicare costs are projected to jump by 9 percent in 2010. She added that the lack of a COLA would affect over 50 million individuals who receive Social Security checks.
It is unclear how much the legislation would cost; the Congressional Budget Office has not released a score of the measure. However, if 50 million Americans received checks of $150, the cost to the federal government would be $7.5 billion.
“I have been hearing from many seniors in my district who are concerned,” McCarthy said. “Seniors rely on these payments and with the increasing costs of healthcare, coupled with hits to their investments, America’s seniors are being shortchanged. This bill will help provide some relief.”
AARP has not formally endorsed the bill, but it has called on Congress to address the economic hardship many senior citizens are experiencing.
McCarthy’s legislation has been referred to the Ways and Means Committee, which wants to tackle the matter.
A Ways and Means panel spokesman said, “Committee members are concerned about the issues surrounding the COLA and will be working in the coming weeks to address them. This legislation will certainly be one approach under review.”
A Senate companion measure has not been introduced, but Sen. Bernard Sanders (I-Vt.) announced last month he plans to draft legislation authorizing a one-time payment similar to McCarthy’s bill.
“It would simply be unacceptable for seniors on fixed incomes to not receive additional income in the coming year, something that hasn’t happened in over three decades,” Sanders said in a statement.