New Jersey congressmen Chris Smith and Jeff Van Drew today introduced legislation to significantly increase the annual cost-of-living-adjustment (COLA) for Social Security recipients after it was announced earlier this week by the Social Security Administration that the COLA effective December 2020 is going to be 1.3 percent.
The Smith-Van Drew proposal would increase the 2020 COLA to 3 percent in 2020, and no less than 3 percent more in 2021.
With the average Social Security payment to individuals being $1,514 a month, or $18,168 annually, the announced SSA increase would only provide a $236 COLA for 2021. The Smith-Van Drew bill would increase the average COLA to $545 for both 2020 (retroactively) & 2021, or an estimated $1,090, over two years.
“COVID-19 has not only disproportionately harmed senior citizens—causing death to many especially in nursing homes—but has devastated them economically as well,” said Smith (NJ-04).
“HR 8600, the COVID-19 Emergency Social Security Cost of Living Increase Act, is aimed at helping seniors and other Social Security recipients keep up with rising costs they experience in their daily lives, especially in health care,” Smith said. “The COLA announced this week does not reflect the costs seniors cope with every day. It is unfair, and the COVID-19 Emergency Social Security Cost of Living Increase Act will help remedy that unfairness.”
Rep. Van Drew (NJ-02) said, “The burden on South Jersey seniors from taxes, tolls and Coronavirus has been enormous. Social Security recipients need more assistance to ensure the promise made to them is kept; this legislation is a key part of that commitment and we will fight as hard we can to ensure it is enacted.”
The legislation would also reform the formula for calculating annual COLA increases by using a senior consumer price index (senior CPI) beginning in 2021.
Social Security COLAs are currently based on the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) which excludes items like taxes, such as state and federal income taxes, and does not accommodate the disproportionate impact of health costs on seniors. Smith’s bill would provide a 3 percent increase retroactively for 2020 to address the COVID-19 impact, as well as at least a 3 percent increase in 2021. It would also permanently address the shortcoming of basing annual COLAs on the standard CPI-W in favor of a “Senior CPI.”
Ocean County Freeholder Director Joseph H. Vicari says a higher COLA is needed by seniors to pay for necessities such as food, shelter, utilities and medications.
“I am extremely thankful for the immediate response received from Congressman Smith as we struggle with ways to have the annual Cost of Living Adjustment for Social Security actually reflect the current state of the economy where prices are going up and financial help is not,” said Vicari, who serves as Chairman to the Office of Senior Services. “In Ocean County, where almost 200,000 senior citizens live, it’s unconscionable to just except an increase of 1.3 percent in the 2021 Social Security benefits,” he said. “Social Security is not a hand-out. Our seniors have paid into this their entire working lives.”
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