WASHINGTON – Oregon’s Senator Jeff Merkley today introduced the Fair Raises for Seniors Act in the Senate that would increase Social Security benefits for seniors by changing the cost of living adjustment (COLA) formula to keep up with inflation. The current formula fails to account for the fact that seniors spend more of their income on health care, housing and heating fuel than the average household. Merkley’s bill would use a measure of inflation specifically designed to account for seniors’ costs, called the Consumer Price Index-Elderly (CPI-E), to guarantee that seniors’ Social Security benefits retain their value in the long-term.
“It’s time that we stop talking about reducing Social Security benefits and instead focus on giving our seniors a raise,” Merkley said. “I hear too many stories in Oregon about seniors who are struggling to stay afloat on their Social Security benefits and have to make a choice between medication and heating their home. It is unacceptable to have an inflation formula that steadily erodes the purchasing power of Social Security benefits. Seniors deserve better.”
When it comes to Social Security and Medicare, Merkley has said, we need to keep the promises we make to seniors and honor their decades of hard work. People plan their lives according to the promises of these programs, and seniors should be able to count on benefits being there when they need them. Social Security constitutes a majority of income for over half of seniors. For one-third of seniors, the program is a lifeline, providing nearly 90 percent of their income.
Merkley has been an outspoken opponent of proposals that have circulated in Washington to employ a formula called chained CPI in calculating the Social Security COLA, as that change would reduce benefits for many seniors. Currently the Social Security COLA is calculated by the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) formula. Merkley’s Fair Raises for Seniors Act would replace the CPI-W with the CPI-E formula. The CPI-E is calculated by the Bureau for Labor Statistics using the same process and prices as the CPI-W, but using only households of people at least 62 years of age.
The resulting expected increase in benefits would be fully paid for, and in fact the bill would significantly extend the life of the Social Security Trust Fund, by removing the cap on the payroll tax for incomes above $250,000 per year.
Last month, Senator Merkley met with Oregon seniors at the Hollywood Senior Center to announce the legislation.