Lawmakers Push for Emergency 3% COLA in 2021

Oct 20, 2020 / Amanda Chase, Horsesmouth Assistant Editor

House lawmakers are proposing emergency legislation to increase the 2021 Social Security cost-of-living adjustment to 3%. The move comes just days after the Social Security Administration announced that the COLA for 2021 would be 1.3%. “Due to the COVID-19 pandemic, seniors are facing additional financial burdens in order to stay safe,” said Rep. Peter DeFazio, D-Ore., in a statement on Thursday. “This absolutely anemic COLA won’t even come close to helping them afford even their everyday expenses, let alone those exacerbated by COVID-19.”

Nancy Altman, president of the advocacy group Social Security Works, said “Social Security’s automatic cost of living adjustment is one of its most valuable features, even more so in the middle of a pandemic. But due to an inadequate measure, Social Security’s modest benefits are eroding. “To offset that erosion, Representatives DeFazio and Larson are wisely proposing an ad hoc 3% increase. Social Security Works applauds their leadership and enthusiastically endorses their proposal. Congress should immediately pass their legislation, which will boost the economy and save lives,” she explained in a statement.

The Social Security Act ties the annual COLA to the increase in the Consumer Price Index for Urban Wage Earners and Clerical Workers, known as CPI-W, as determined by the Labor Department’s Bureau of Labor Statistics. There were no increases in 2010, 2011 or 2016. The CPI-W, to which COLAs are tied, reflects prices paid by working adults under age 62 and gives greater weight to items like gas and electronics. At the same time, this measure gives less weight to housing and medical expenses, which are the biggest areas of spending for older consumers, the Senior Citizens League says.

You can find the full article at ThinkAdvisor.

 

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