For Immediate Release
RetireSafe Supports $250 Payment, But Asks for a Correct Senior-Based COLA to Correct the Continuing Inequity
Calls for a Senior-Based COLA to Insure Seniors are Paid Correctly
(Washington, DC) October 19, 2009 . . . The 400,000 strong senior-citizen group RetireSafe applauded the President’s recommendation to grant a onetime payment of $250 to seniors who have suffered the ongoing inequity of a Social Security Cost-of-Living Adjustment (COLA) that doesn’t treat seniors correctly. Thair Phillips, the president of RetireSafe, said the government needs to correct the problem rather than relying on stop-gap measures. Phillips noted, “We look at the $250 as a partial payment for the money that older Americans have lost over the years because the present COLA formula isn’t set up to pay seniors correctly.”
Instead of tracking the inflation that seniors experience using a senior-specific “market basket,” the government uses a CPI that specifically excludes people who receive pension income, the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). Yet seniors have very different patterns of expenditures than younger workers who spend a much smaller portion of their incomes on health care. Phillips pointed out that the Social Security COLAs tend to grow more slowly than overall costs and don’t accurately reflect seniors' costs. He added, “The present health care reform effort is in response to the steep rise in the costs of health care yet those inordinate costs have not been reflected in the COLA for years.”
Phillips continued, “While the $250 is welcomed, it is not a solution. Older Americans are not asking for a handout, they want a fair and accurate COLA.”
RetireSafe will shortly begin a campaign to develop a COLA-S, a Cost-of-Living Adjustment – Seniors.
RetireSafe thinks it is possible to develop a fair and equitable COLA that correctly accounts for the impact of changes in the economy, prices of health care, including the true percentage of the components compared to a senior’s disposable income. The COLA –S should also reflect the inability of most seniors to react to these changes. When times are tough many seniors can’t go get a second job and even if they could in many instances it would lower their social security payments.
Phillips concluded, “It’s time we corrected this travesty and developed an accurate and correct COLA for seniors, and RetireSafe is poised to lead that effort.”
RetireSafe is a grassroots organization representing more than 400,000 older Americans nationwide. Its mission is to preserve, protect and enhance the options and benefits of seniors and near-seniors.