TSCL strongly believes that the Social Security cost-of-living adjustment (COLA) that seniors are currently receiving does not accurately reflect how they must spend their money.  The COLA is based on a consumer price index (CPI) that reflects how young urban workers tend to spend their money and substitute products when prices fluctuate.  Older Americans spend a disproportionate share of their household budget on health care.  Since health care costs continue to rise so quickly – and since most health care spending cannot be substituted out for something cheaper – TSCL believes that seniors would be better served if their COLA was based upon a different consumer price index, one that already in fact exists.

The Bureau of Labor Statistics has been keeping track of a consumer price index for elderly consumers, or CPI-E, for more than 20 years.  This calculation regularly puts the spending inflation for seniors at three-tenths a point higher than the rate at which the consumer price index for young urban workers – the CPI-W – increases.  TSCL members and supporters believe that this consumer price index for the elderly – CPI-E – should be fully implemented and utilized for determining seniors’ Social Security cost-of-living adjustments each year.

TSCL estimates that a senior who retired with average benefits in 2007 would receive about $18,277 more in benefits over a 25-year retirement if the government were to use the CPI-E to calculate the COLA.

TSCL is very supportive of the Consumer Price Index for Elderly Consumers Act, which would base the Social Security COLA on the CPI-E and is hopeful that this legislation will be introduced in both chambers of Congress during the 111th Congress.