Social Security announces new increase in benefits for seniors: law is ready

Grandfather holds money in his hands. An elderly man counts dollars in the room by the window

The Social Security Administration has announced a proposed increase in benefits for senior citizens, responding to the heightened cost of living that disproportionately impacts this vulnerable group. Despite efforts to manage expenses, many seniors find their financial resources insufficient. To address this, Representative Ruben Gallego of Arizona has proposed legislation to modify the inflation calculation method used by Social Security.

The proposed “Boosting Benefits and Cost of Living Adjustments (COLAs) for Seniors Act” would transition from the current CPI-W index to the CPI-E, which specifically reflects the spending patterns of Americans aged 62 and older. The CPI-W, while effective, does not fully account for the unique financial challenges faced by seniors.

Gallego advocates for his bill, highlighting that it aims to preserve the purchasing power of Social Security benefits amidst rising costs, ensuring seniors can afford essentials like housing and healthcare.

The bill also calls for the Bureau of Labor Statistics to include the CPI-E in their monthly reports, providing transparency and accuracy in benefit adjustments during economic fluctuations. For instance, in 2023, Social Security benefits saw a 3.2% increase, slightly below the 3.7% rise indicated by the CPI-E.

Although COLAs have been a feature of Social Security since 1975, with annual adjustments made in the past five years, the increases have not kept pace with escalating expenses.

The legislation has garnered support from various organizations and has a companion bill in the Senate, introduced by Senator Bob Casey of Pennsylvania. While the bill does not specify funding sources, it aligns with President Biden’s budget proposals aimed at bolstering Social Security’s finances, including the Social Security 2100 Act, which enjoys widespread Democratic support.

However, the bill’s passage is uncertain, given the Republican majority in the House and the anticipated low productivity of the current legislative session. Gallego’s initiative represents a concerted effort to safeguard seniors’ financial stability in the face of rising living costs.

Source: Lagrada