It was announced last week that there will be no cost of living adjustment (COLA) for federal retirees and Social Security beneficiaries next year per Consumer Price Index Figures. One Congressman, however, is hoping to change that.
Rep. Alan Grayson (D-FL) recently introduced legislation to provide a 2.9% COLA in 2016.
How would he do this? The legislation, known as the Seniors Deserve a Raise Act (H.R. 3761), would tie future COLAs to the Consumer Price Index for the Elderly (CPI-E), an index which weighs more heavily the items on which seniors tend to spend their money, such as medical expenses.
As we noted in a previous article, the CPI-E has been under review by the Bureau of Labor Statistics for about three decades, but it is still considered an experimental program.
Under the regular Consumer Price Index, medical care is not given as much weight as many other types of expenses. Retirees are more likely to be going to a doctor or a hospital than getting a college education, so the price index does not necessarily reflect your real expenses if you are retired.
Speaking on the legislation, Grayson said, “Simply put, most of our parents and grandparents desperately need a raise. And they clearly deserve one. My bill calls for a 2.9% COLA for 2016, and ensures we give them a more accurate cost-of-living increase in the years ahead. Our seniors are seeing their costs rise – their Social Security payments need to rise as well.”
Rep. Michael Honda (D-CA) has already re-introduced H.R. 3351, the CPI-E Act of 2015, which would essentially do the same thing as Grayson’s bill by adopting the CPI-E to tilt the COLAs in favor of older Americans. The bill has gone nowhere in the House to date, so Grayson’s bill is likely to have the same fate.
While many federal retirees would undoubtedly like to have a 2.9% raise next year, it would be unwise to start spending the money just yet.
