Social Security
Social Security
Social Security is one of America’s most successful government programs. It has helped millions of Americans avoid poverty in their golden years, upon becoming disabled, or after the death of a family wage earner.
Approximately 55 million Americans receive a monthly Social Security check, benefiting Americans of every age and condition. 1 in 3 beneficiaries is not a senior citizen, but instead a surviving spouse or child of a deceased breadwinner, a dependent spouse or child, or a person with disabilities. For seniors nationwide, 1 in 3 rely on Social Security for more than 90 percent of their income.
Social Security is a self-financed program. It is funded directly by our payroll contributions. Any income that is not needed immediately to pay benefits is held in a trust fund that can only be used to pay for Social Security benefits. The trust fund is currently valued at $2.6 trillion, and will grow to $4 trillion before the Baby Boom generation reaches eligibility age.
The trust fund is large enough to pay full benefits until 2035, after which payroll contributions will be sufficient to pay about 75 percent of scheduled benefits. Congress will need to make adjustments to Social Security financing to ensure that benefits can be paid in full after 2035, but this does not mean that we need to make radical changes or dismantle the structure of Social Security, which has worked well for Americans for over 75 years.
I support balanced, common sense reforms that will sustain Social Security without jeopardizing our economy or the program as we know it. We need to make sure Social Security continues to provide the retirement safety net not only for our parent’s generation, but also for our generation and our children’s generation. I oppose drastic cuts or the privatization of Social Security because we could all lose that safety net.
Cost-of-Living Adjustments (COLA)
The Social Security COLA is based on the rate of inflation on goods bought by workers. The Consumer Price Index (CPI-W) is the tool that is used to track price increases on the prices of food, clothing, shelter, energy, charges for doctors’ and dentists’ services, drugs, and other goods and services that people buy for day-to-day living.
However, this measurement index does not reflect the inflation experienced by older Americans. For example, Americans 65 and older spend more than twice as much of their total spending on healthcare and healthcare costs, which have consistently risen more rapidly than inflation. Between 1982 and 2009, the CPI-W increased at an annual rate of 2.9%, compared with a 5.2% rate of increase for the medical care component.
In response to concerns about the CPI-W not accurately measuring the spending patterns of older Americans, the Bureau of Labor Statistics has created a new index known as the CPI-Elderly or CPI-E. From 1985 to 2009, the CPI-E has risen about 0.3 percentage points more per year, on average, than the present index used to calculate Social Security COLAs.
In hope of providing our nation's seniors, veterans, and people with disabilities with a more fair COLA, I support legislation that would change the Social Security cost-of-living adjustment index to the Consumer Price Index for Elderly Consumers (CPI-E), to make it a more accurate measurement of cost increases that older Americans face.