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Civil Rights for Seniors

A Non-Profit Corporation

Blog

Keeping social security recipients alive

Posted on March 5, 2017 at 12:15 AM

Social Security benefits must be sufficient to keep recipients alive!

There are two parts to this discussion:

First, every recipient should be allowed a base amount sufficient to allow them to live independently – “Cost of Life”. This amount should be based upon the cost of life in the closest urban area. This means that beneficiaries will not receive amounts they paid into Social Security retirement, but would receive an amount sufficient to allow them to live independently. There must be no reduction for federal or state income taxes, nor should recipient have to pay sales tax or any other tax. Medicare, Medicaid, dental care, hearing aids and public transportation will be provided free.

Second, discussions on how to adjust the base with COLA, Cost of Living Adjustment, continue. If we use a cost of living adjustment, then we will need adjustments only for housing (rent), food and clothing. Recreation costs will not be adjusted. This discussion always starts when current recipients have their benefits reduced, or as in 2016, zero adjustments. The Consumer Price Index for urban wage earners, CPI-W, which is currently used for the Social Security COLA, does not reflect the spending patterns of older Americans and therefore understates inflation. The CPI-W understates the inflation for the elderly because it does not reflect how large a share of their budget goes for medical care, where prices have been rising rapidly. Dental and Hearing aids are not included under Medicare – both of which consume large expenditures by seniors. The elderly also tend to be hurt by the introduction of new consumer technology because they consume relatively less of these goods and do not benefit as much as the rest of the population from the initial declines in prices.

Congress has asked the Bureau of Labor Statistics to calculate a new index for persons 62 and older CPI-elderly (CPI-e). A study by the “Center for Retirement Research” at Boston College, Do We Need a Price Index for the Elderly? Munnell and Chen found that this new CPI will not be of much help to seniors.

 

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