Congresswoman co-sponsors legislation to provide $250 if there is no cost-of-living adjustment for 2011
WASHINGTON – U.S. Rep. Gabrielle Giffords is co-sponsoring legislation that would provide a one-time $250 payment to Social Security recipients if there is not an annual cost-of-living adjustment for 2011.
“As we prepare to mark the 75th anniversary of Social Security on Aug. 14, recipients face the very real possibility that for the first time, they will face consecutive years without a cost-of-living adjustment,” Giffords said. “With 6 in 10 seniors relying on Social Security for more than half of their income, we must help them offset increases in their daily living expenses.”
Giffords is an original co-sponsor of the Seniors Protection Act of 2010, which was introduced by Rep. Earl Pomeroy of North Dakota, chairman of the Ways and Means Social Security Subcommittee. The bill is strongly supported by a number of organizations including the AARP, the Alliance for Retired Americans and the National Committee to Protect Social Security and Medicare.
There was not a cost-of-living adjustment for 2010 and as a result of a long-standing statutory formula and the sagging economy, it is likely there will be no adjustment for 2011. This would be the first time since automatic COLAs began in 1975 that there would be consecutive years without an increase, Giffords noted.
Under the Seniors Protection Act, if there is no adjustment announced for 2011, each Social Security recipient would receive a one-time payment of $250. Some 57 million Americans receive Social Security payments including seniors, disabled people and retired and disabled veterans.
Social Security benefits are about $14,000 a year for the average retiree and the median income for senior households is a mere $24,000. Giffords said that indicates just how much Social Security means to most elderly Americans. About one-third of retirees have little other than Social Security benefits to live on.
There is likely to be no cost-of-living increase for next year because economy-wide measures of inflation have shown no net increase since the third quarter of 2008, when the last increase was set.
Nonetheless, Giffords pointed out that Medicare premiums and health care costs have increased. And the financial collapse has reduced seniors’ income, with lower values for IRAs, lower interest rates paid for savings and lower values for homes.
Giffords noted that the cost of the Seniors Protection Act will be fully paid with cuts in other federal spending, under terms of the pay-as-you-go law, commonly known as PAYGO. The Arizona lawmaker has been a member of the fiscally responsible Blue Dog Coalition since she joined the House of Representatives in 2007.
Support for the Seniors Protection Act:
Drew Nannis, senior vice president of AARP: “This relief will put money in the pockets of millions of older Americans struggling to make ends meet – money likely to be injected directly into our fragile economy. Since the recession began, older Americans have been among the hardest hit by devastating job loss, shrinking retirement savings, declining home values and rising health care costs. It is time to provide older Americans the relief they need.”
Edward F. Coyle, executive director of the Alliance for Retired Americans: “Seniors are struggling to get by. The $250 may not seem like much on Wall Street, but to retirees on Main Street, it could be what allows them to pay their electric bill or buy groceries. We must make sure Social Security meets today's basic needs.”
Barbara B. Kennelly, president and CEO of the National Committee to Preserve Social Security and Medicare: “I applaud the members of the Congress who understand that helping seniors maintain their purchasing power for necessities like health care, fuel and food, not only improves their quality of life but also helps the local economy.”