WITH JUST-ANNOUNCED SOCIAL SECURITY “COLA” CLOSE TO ZERO, SCHUMER ANNOUNCES PUSH FOR $581 EMERGENCY PAYMENT TO NEW YORK SENIORS & DISABLED ASAP; ALMOST NON-EXISTENT SS INCREASE WILL HURT MILLIONS OF NY’ERS WHO RELY ON SS FOR MONTHLY INCOME
Social Security Administration Just Announced That Cost-Of-Living Adjustments For 2017 Will Only Rise 0.3 Percent – Or Just About $5 On Average; ‘Raise’ Is One Of The Lowest Ever At A Time When Seniors Face Mounting Costs
Senator Says Congress Must Work Across the Aisle To Craft Fix For Sorry SS Increase; Urges $581 Payment To Help NY Seniors Meet Needs; Pushes Legislation To Get The Job Done
Schumer: $5 SS COLA Is Flat Unfair
U.S. Senator Charles E. Schumer today announced a new push and urged his colleagues to pass the Seniors and Veteran Emergency (SAVE) Benefits Act, which would provide a one-time payment of $581 to Social Security recipients—including New York seniors and individuals with disabilities-- who were denied a cost of living adjustment (COLA) in 2016. Even though living expenses continue to increase, Schumer said that New Yorkers recently learned that they would only be receiving a $5 monthly COLA increase—or 0.3%--for 2017. Schumer said that both sides of the aisle need to work to improve the too low Social Security COLA.
“There is nothing worse than delivering a flat Social Security COLA to our seniors,” said U.S. Senator Charles Schumer. “Millions of New York City seniors, veterans, and individuals who are disabled, need and deserve a fairer amount of money in their Social Security checks to help pay for the ever-increasing cost of rent, medicine and groceries. After a year with no cost-of-living increase, Social Security recipients will only receive an additional $5 each month next year, a paltry amount with which one can only do so much. New Yorkers and all the millions around the country who depend on Social Security need more than a mere $5 increase in order to keep up with living expenses. Congress needs to explore options to make Social Security benefits reflect current spending patterns. In the meantime, too many are in a vulnerable position and that’s why I am pressing my colleagues to support the SAVE Benefits Act, which would provide a one-time $581 payment to Social Security recipients to help make up for their lost dollars.”
According to the federal Social Security Administration (SSA), the purpose of the COLA is to ensure that the purchasing power of Social Security benefits is not eroded by inflation. COLAs are based on increases in the Consumer Price Index for Urban Wage Earners (CPI-E) and Clerical Workers (CPI-W). The annual change in the CPI is used as a measure of inflation. Both CPI formulas tracks the price of the “typical basket” of consumer goods. However, Schumer explained that the federal government’s CPI formula heavily weights the price of gas and energy, which many seniors spend less on.
Schumer blamed a flawed funding formula used by the federal government to determine COLA increases. While the cost of rent and other expenses have increased, Schumer explained that lower gas prices, which do relatively little to help the disabled and elderly, who don’t drive as much as the general population, are largely to blame for the low increase in Social Security benefits. Schumer said this is unfair, because several other cost of living indicators, like groceries, medicine and rent, are increasing, and these items impact seniors on fixed incomes in particular.
Over the past two decades, Social Security recipients typically have seen an average yearly benefit increase of 2.4 percent to keep up with prices. Schumer said that, if one were to take energy out of the mix, where prices have decreased over 9 percent last year, this formula would show a rise in prices by over 2 percent last year.
Schumer explained that the 2017 increase in Social Security COLA will increase by only $5 dollars a month for an average beneficiary receiving retirement benefits. According to the latest COLA, Social Security benefits and SSI payments will only increase by 0.3% beginning in December 2016. According to the Social Security Administration this 0.3% increase will benefit over 65 million people, but this year’s COLA increase is the second lowest increase since the economy emerged from the 2008 recession.
Schumer explained that the last time there was no COLA was in 2015; there was also no increase in 2009 or 2010 However, in 2009, in the midst of the recession, Congress provided a one-time $250 payment to Social Security recipients to help them get through those tough times. Schumer said Congress should do the same thing this year, highlighting the fact that the cost of goods and services are still on the rise even though gas prices are low. Schumer added that many veterans and persons with disabilities are less likely to drive and are therefore saving less than an average consumer from low gas prices. They are, however, impacted by the prices of medicine, grocery and rent which are steadily rising.
Schumer is therefore urging his colleagues in the Senate to pass the SAVE Benefits Act, which would do three things. First, it would provide a one-time check of approximately $581 for seniors and other Social Security recipients, like individuals with disabilities and veterans, to help them make ends meet. Second, it would fully pay for this one-time check by closing a loophole that benefits corporate compensation packages of over $1 million. The SAVE Benefits Act also amends the Internal Revenue Code in the following ways: eliminates the exemption from that limitation for compensation payable on a commission basis or upon the attainment of a performance goal; extends the limitation to any individual who is a current or former officer, director, or employee of a publicly-held corporation; and applies the limitation to all publicly-held corporations required by the Securities and Exchange Commission to register securities and provide periodic reports to their investors. These changes are in regards to the $1 million limitation of deductibility of employee compensation.
Specifically, this bill would give about 70 million seniors, veterans, persons with disabilities and others nationwide a supplementary payment equal to 3.9 percent of the average annual Social Security benefit, about $581 – the same percentage increase as the performance-based compensation rate of top CEOs. Finally, this legislation would provide this benefit while also using some of the revenue to extend the life of Social Security.
Schumer said this $581 is equal to roughly three months of groceries for seniors, or the average annual out-of-pocket expenses for prescription drugs from Medicare. Schumer said providing this one-time check to Social Security recipients in NY and across the country is the right thing to do, as it would help keep benefits on pace with prices.
According to the Social Security Administration’s Master Beneficiary Record, there were a total of 3,513,125 Social Security beneficiaries in NY in 2015. Schumer highlighted what that means for New York City:
- In New York City, there were approximately 1,194,570 Social Security beneficiaries, including 553,940 senior citizens and 503,200 disabled workers.
- On Long Island, there were approximately 544,890 Social Security beneficiaries, including 420,630 senior citizens and 65,540 disabled workers.
The SAVE Benefits Act was introduced by Senator Elizabeth Warren, and is co-sponsored by Senators Ed Markey, Barbara Mikulski, Patty Murray, Charles Schumer, Bill Nelson, Debbie Stabenow, Bernie Sanders, Sherrod Brown, Bob Casey, Sheldon Whitehouse, Jeff Merkley, Kirsten Gillibrand, Al Franken, Dick Blumenthal, Chris Murphy, Mazie Hirono and Tammy Baldwin.
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