U.S. Lawmakers propose a 3% emergency social security cost-of-living adjustment

The Social Security Administration, earlier this week, announced that the cost-of-living benefits will be 1.3% in 2021.

The increase only amounts to $20 per month, for the average retirement benefit, barely enough to cover the extra costs retirees and other beneficiaries are facing amid the pandemic. The current economic hardships, including rising healthcare costs, has made it quite burdensome for most seniors, especially those with Medicare Part B premiums. A 1.3% increase would achieve almost little to nothing for beneficiaries as COLAs have barely been able to help beneficiaries maintain their buying power amid inflation.

Putting into consideration retirees and other beneficiaries, two Congressional Democrats – Reps. Peter DeFazio (D-Ore.), and John Larson (D- Conn.) are proposing a bill to raise an emergency 3% cost-of-living adjustment in 2021. The bill is titled Emergency Social Security COLA for 2021 Act.

“Due to the Covid-19 pandemic, seniors are facing additional financial burdens in order to stay safe,” said DeFazio, in a statement. “This absolutely anemic COLA won’t even come close to helping them afford even their everyday expenses, let alone those exacerbated by Covid-19.”

The current 1.3% increase is the second-lowest since the history of social security administration. The lowest was in 2017 at 0.3%, while in 2010, 2011, and 2016, the COLA rate was zero. On average, the COLA increase since 2010 has been 1.4%. A decade before then, the COLA annual increases on average was 3%, according to research from The Senior Citizens League.

The lawmakers’ proposal for an emergency COLA is backed by several senior advocacy groups, including the National Committee to Preserve Social Security and Medicare and Social Security Works.

“Raising the COLA to 3% for 2021 will provide seniors with an immediate, crucial lifeline during the ongoing coronavirus crisis” said DeFazio. “It’s also critically important that Congress provides a permanent fix to the COLA formula that actually reflects the real costs that seniors face.”

Besides proposing an emergency COLA raise, both lawmakers are separately advocating for the measurement used to calculate annual increases, to be changed. The SSA currently uses the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). DeFazio and Larson are also proposing a change in the measurement of the Consumer Price Index for the Elderly (CPI-E), as well.

“Social Security’s automatic cost-of-living adjustment is one of its most valuable features, even more so in the middle of a pandemic,” said Nancy Altman, Social Security Works president, in a statement. “But due to an inadequate measure, Social Security’s modest benefits are eroding.”

Adding that, Congress should treat the matter as urgent and “immediately pass their legislation, which will boost the economy and save lives.”