Congressman: Urges Congressional Action On Cost Of Living Adjustment For Seniors In Letter To Speaker Pelosi

Letter

Congressman: Urges Congressional Action On Cost Of Living Adjustment For Seniors In Letter To Speaker Pelosi

In a letter to Speaker of the House Nancy Pelosi, Congressman Joe Courtney urged the Democratic leader to rescue seniors from the loss of their annual Social Security Cost of Living Adjustment (COLA). Each year, Social Security recipients receive an increase to their regular retirement benefit to keep up with the cost of inflation. However, it is expected that the Social Security Trustees will announce no increase for 2010 and quite possibly, no increase for 2011.

"It is widely expected that next month the Social Security Trustees will announce that beneficiaries will not receive a COLA for 2010 for the first time since 1975. In addition, it is likely that a COLA would not be allocated for 2011 as well," Courtney wrote.

"To this end, as Congress considers any additional measures to extend unemployment benefits or boost the economy, I strongly urge you to consider including a temporary supplemental increase in Social Security payments to offset the lack of a 2010 COLA," he added.

Congressman Courtney is also concerned that if the zero COLA is approved, many seniors will see a net decease after deducting higher Medicare Part B and Part D premiums, which are expected to increase.

The letter is attached below:

September 2, 2009

The Honorable Nancy Pelosi

Speaker of the House

H-232, US Capitol

Washington, DC 20515

Dear Speaker Pelosi:

I write to you today to express my strong concern about the financial well being of our seniors as our nation continues to rebuild the foundation of our economy. As I have travelled extensively across my district during the district work period, seniors in eastern Connecticut have expressed their urgent concerns to me an important issue they are facing: the lack of an upcoming increase in their social security benefits.

As you well know, seniors face a truly unique set of budgetary challenges, based largely on the higher cost of their health care. Seniors, more than any other segment of our population, spend a larger more of their income on basically necessities such as food, housing and health care as compared to average working-aged Americans.

Since 1975, automatic cost of living adjustments (COLA) in Social Security benefits have helped seniors get by on tight budgets. These adjustments, made annually through a formula pegged to the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W), have helped to partially mitigate some of the cost increases in drugs, health care premiums and other needs. This past January, for example, seniors received a 5.8 percent cost COLA in their Social Security checks for 2009. Still, rising heath care costs have generally outpaced Social Security increases, and the disparities are only expected to continue to grow.

Alarmingly, it is widely expected that next month the Social Security Trustees will announce that beneficiaries will not receive a COLA for 2010 for the first time since 1975. In addition, it is likely that a COLA would not be allocated for 2011 as well, unless the CPI-W improves significantly. Seeing no increase in their Social Security checks for the next year or two is an understandably frightening prospect for seniors who will be forced to make ends meet in the face of increases in costs for basic needs. Consider that over the past decade, Social Security COLA increases resulted in an aggregate benefit increase of approximately 27 percent. However, during that same time, Medicare Part B premiums have more than doubled.

Historically, growth in health care costs has outpaced Social Security benefit increases and the lack of a COLA will only compound this problem. Congress has already taken steps to help seniors through the economy, providing a one-time $250 payment to all Social Security and Veterans pension recipients through the American Recovery and Reinvestment Act (ARRA). However, like the very concerned seniors I represent in Congress, I have serious reservations about the effects of a flat COLA on their economic well being - especially for those with low and moderate incomes.

In addition, it is important to point out that the American economy is struggling, in part, due to flat or level growth in incomes, which in turn depresses consumer spending. It is clear that congress will have to act this fall to extend unemployment compensation to address the needs of families unable to find work. An extension of unemployment will also help keep consumer spending afloat at the same time which is critical to maintaining the positive signs of growth that have emerged in recent weeks. The absence of a COLA for the next year or two only aggravates this problem, leaving seniors with less income to spend beyond addressing cost increases in their day-to-day basic needs.

To this end, as Congress considers any additional measures to extend unemployment benefits or boost the economy, I strongly urge you to consider including a temporary supplemental increase in Social Security payments to offset the lack of a 2010 COLA. The flat, and in many cases, declining incomes of our seniors in this difficult time are no less an urgent issue than continuing to assist those struggling with unemployment. Our seniors can, and must, be a part of our economic recovery - but rising costs and flat benefits will only force our already struggling seniors to sit on the sidelines.

Thank you for your consideration of this important request. I look forward to continuing to work with you to support our seniors.

Sincerely,

JOE COURTNEY

Member of Congress

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