Congressman John Garamendi, D-CA, recently introduced the Fair COLA for Seniors Act, H.R. 1553, to end inadequate retirement cost-of-living adjustments (COLAs) that don’t account for the effects of inflation on older Americans.

H.R. 1553 would require a switch to the Consumer Price Index for the Elderly (CPI-E) from the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) in calculating annual COLAs for federal and military annuities, Social Security benefits and veterans’ benefits.

This change would result in COLAs that accurately reflect the spending patterns of retired seniors age 62 and over, rather than the spending habits of the general working population. From 1982 to 2011, CPI-E rose at an annual average rate of 3.1 percent, compared with 2.9 percent for the method that is currently used.

Notably, the CPI-W underemphasizes seniors’ disproportionate spending on medical care, pricing of which has far outpaced price increases for other consumer goods.

As a result, the current method of COLA calculations shortchanges retired public servants, veterans and all seniors who rely on Social Security for much-needed retirement income each year. Millions of seniors living on fixed incomes rely on every dollar to see them through retirement, and the antiquated use of the CPI-W cuts deeply into their earned retirement income and jeopardizes their long-term financial security

The legislation has already earned broad support, with 17 original co-sponsorships and key support from leading advocacy groups and labor organizations.

For the most recent information on the progress of the Fair COLA for Seniors Act, H.R. 1553, click here:  https://www.congress.gov/bill/116th-congress/house-bill/1553/all-info

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