Lipinski Helps Introduce Bill to Require the Federal Government to Create an Accurate Measure of Cost Increases Faced by Seniors
Today, Congressman Dan Lipinski (IL-03) helped introduce the bipartisan CPI for Seniors Act, H.R. 1086, which aims to create a new inflation index that would accurately measure the cost increases faced by older Americans. This is the second consecutive year with no Social Security cost-of-living increase, despite the fact that the cost of health care, gasoline, and food continues to rise even as the economy struggles to grow and low interest rates hurt retirees’ income from savings.
“We need to make sure we understand the reality seniors face at the gas pump, the grocery store, and when they sit down to pay their taxes and other bills,” said Congressman Lipinski, the lead cosponsor of H.R. 1086. “Before last year, the last time seniors had to get by without a cost-of-living increase was 1975. Yet food prices have been marching upward and the price of gas in Chicago has soared by 30 percent since last year, hitting $4 or more in some places. At my Senior Fair in Bridgeview on Monday, I spoke to a number of Third District retirees who reiterated that necessities are costing them more and more. This bill reflects the fact that I continue to listen to local seniors and take action.”
Annual Social Security cost-of-living adjustments are not directly decided by Congress. Instead, by law, they are determined by an inflation gauge known as the Consumer Price Index for Urban Wage Earners and Clerical Workers. As its name suggests, that index was designed to measure the inflation experienced by urban wage earners, not seniors, who spend more on items such as health care. The CPI for Seniors Act directs the Bureau of Labor Statistics to develop a new price index that accounts for seniors’ actual costs. The result will be a more accurate understanding of the economic reality experienced by retirees.
The CPI-W assumes that medical spending accounts for just over 5 percent of consumers’ expenditures. Yet one recent study found that among households with Medicare recipients, health care accounts for more than 14 percent of total spending. Older Americans are also more likely to be homeowners, which exposes them to different costs and budgetary pressures.
Last year, Congressman Lipinski voted to provide Social Security recipients with a one-time $250 payment to make up for the lack of a cost-of-living increase. Unfortunately, the bill did not pass the House. Social Security is the primary source of income for almost two-thirds of retirees, and for one-third of recipients it provides 90 percent or more of their income.
“Having voted against the substantial cuts to Medicare in the health care law, I continue to look out for Third District seniors,” Congressman Lipinski said. “I know that many retirees, along with their families, are still feeling the effects of the economic downturn. Making sure that they receive the benefits they have earned is extremely important to me.”
(March 16, 2011)
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