WASHINGTON, June 23 /PRNewswire-USNewswire/ -- A proposed one percent Social Security Cost of Living Adjustment (COLA) cut would cost seniors as much as $54,954 throughout a 25-year retirement, according to a new analysis released today by The Senior Citizens League (TSCL).
TSCL is one of the nation's largest nonpartisan seniors advocacy groups with 1.2 million supporters.
The proposal to slash the Social Security COLA was detailed last month in a bipartisan report released by the Senate's Special Committee on Aging. That report is expected to serve as a blueprint for President Obama's Commission on Fiscal Responsibility and Reform, which will offer recommendations to slash the federal budget deficit.
The Commission is scheduled to meet on June 30, and is expected to consider this proposal.
TSCL's study looked at three different scenarios compiled by the Senate Committee: a one percent COLA cut, a one-half percent COLA cut, and the introduction of a "chained" COLA, a cut of roughly three-tenths of a percent. It then analyzed the amount of money seniors would lose in Social Security payments over a 10-, 20-, and 25-year retirement period:
Length of Retirement
One Percent Cut
One-Half Percent Cut
"We recognize the need for the Social Security program to be put on more solid financial ground, but this is not the way to do it. We strongly oppose narrow-minded efforts to slash the COLA," said Daniel O'Connell, TSCL chairman. "America's seniors know better than anyone how badly their Social Security checks have trailed inflation, and it would be bad policy to pass along even more severe pain to future retirees."
A recent analysis by TSCL found that seniors have lost 24 percent of their purchasing power since 2000. A majority of the 37 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 rely on it for 90 percent or more of their total income.
TSCL is delivering a letter and issue brief to every Member of Congress today, both of which strongly advocate against cutting the Social Security COLA for seniors. TSCL is also encouraging its members to contact their lawmakers to help fight for a more fair COLA.
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 does track the spending patterns of older Americans, and has done so since 1983 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 $12,856 more over the past 26 years with the CPI-E.
With 1.2 million supporters, The Senior Citizens League is one of the nation's largest nonpartisan seniors groups. Its mission is to promote and assist members and supporters, to educate and alert senior citizens about their rights and freedoms as U.S. Citizens, and to protect and defend the benefits senior citizens have earned and paid for. The Senior Citizens League is a proud affiliate of The Retired Enlisted Association. Visit www.SeniorsLeague.org for more information.
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SOURCE The Senior Citizens League