Economic Recovery for Seniors

The Social Security Administration announced today that there will be no cost of living increase next year for more than 50 million seniors. Senator Bernie Sanders called on Congress to provide a one-time payment of $250 for Social Security recipients and disabled veterans, an idea endorsed yesterday by President Barack Obama.  Without the emergency legislation, benefits will go down for the fist time since automatic adjustments were adopted in 1975.  “In my view, the current formulation for determining Social Security cost-of-living adjustments does not reflect the reality of senior citizens’ lives,” Sanders said. “Seniors spend a disproportionate amount of their income on health care and prescription drugs, and those costs are rising rapidly.”

Cost of living adjustments are pegged to inflation and overall consumer prices declined this year as the nation suffered through a severe recession. Social Security payments, by law, cannot go down, but in reality monthly payments for millions of seniors will be reduced because rising premiums for prescription drugs are deducted from Social Security.

At the White House, President Obama said the $250 payments “will be especially important in the coming months, as countless seniors and others have seen their retirement accounts and home values decline as a result of this economic crisis.”

The $250 payments were proposed in legislation introduced on Sept. 17 by Sanders in the Senate by Rep. Peter DeFazio (D-Ore.) in the House of Representatives.

Nearly 70 percent of beneficiaries depend on Social Security for at least half of their income, and Social Security is the sole source of income for 15 percent of recipients.

“Over the long term, we can better address the needs of seniors by establishing a Consumer Price Index for the Elderly to determine an appropriate COLA,” Sanders said, “but, for 2010, the least we can do is to provide seniors with a modest increase in their benefits so that they have the ability to pay for their added expenses.”

To watch the senator's floor speech, click here.

To read the bill, click here.