WASHINGTON, Oct. 17 /PRNewswire-USNewswire/ -- Earlier this morning, the Social Security Administration announced that seniors will receive an additional 2.3 percent in their Social Security checks beginning in January, 2008. That represents the lowest increase in four years.
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But despite the increase, at least five million people aged 65 and over will remain in poverty, since costs are rising significantly faster than the annual Social Security Cost of Living Adjustment (COLA).
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Between 2001 and 2008, Medicare Part B premiums will have soared by more than 93 percent while the COLA will have crept up just 19 percent, leaving many seniors on their own to cover all other rising costs. Part B premiums cover doctors' visits, tests, and outpatient hospital care.
Although the COLA is intended to help seniors keep up with inflation, a recent study by The Senior Citizens League (TSCL) that analyzed eight key expenditures found that people 65 and over have lost 40 percent of their buying power since 2000. Expenses such as home heating oil and gasoline have more than doubled since the beginning of the decade, while food staples such as potatoes and butter have increased by 47 and 39 percent, respectively.
A majority of the 48 million Americans aged 65 and over who receive a Social Security check depend on it for at least 50 percent of their total income, and one in three beneficiaries relies on it for 90 percent or more of their total income.
"Social Security is supposed to protect seniors in need -- but with five million seniors below the poverty line, it's clear the system is failing them," said Shannon Benton, executive director of The Senior Citizens League. "An annual increase of two percent just isn't enough to shield seniors from costs that are rising by double digits."
To help offset the cost of Medicare Part B, TSCL is lobbying for a change in the Consumer Price Index (CPI) used to determine the COLA. The government currently calculates the COLA based on the CPI for Urban Wage Earners and Clerical Workers (CPI-W), a slow-rising index that tracks the spending habits of younger workers who don't spend as much of their income on health expenditures.
However, the government also tracks the spending patterns of older Americans with the CPI for Elderly Consumers, or CPI-E. By tying the annual increase in the COLA to the CPI-E, seniors would see much needed relief in their monthly checks.
For example, a senior who retired with a benefit of $460 in 1984 would have received almost $10,300 more over the past 23 years with the CPI-E.
TSCL supports two similar bills in the current Congress, H.R. 1953 and H.R. 2032, entitled "The Consumer Price Index for Elderly Consumers."
With 1.2 million supporters, The Senior Citizens League (TSCL) is one of the nation's largest nonpartisan seniors groups. TSCL is a proud affiliate of The Retired Enlisted Association. Visit www.SeniorsLeague.org for more information.
SOURCE The Senior Citizens League
