LIPINSKI HELPS INTRODUCE BILL TO REQUIRE THE MEASUREMENT OF ANNUAL COST INCREASES FACED BY SENIORS
(May 26, 2010) Today, Congressman Dan Lipinski (IL-3) announced the introduction of the CPI for Seniors Act, H.R. 5305, which creates a new inflation index that would accurately measure the cost increases faced by older Americans.
This year, Social Security recipients did not receive a cost-of-living increase due to the fact that the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) indicated costs did not rise last year. But as its name suggests, that index was designed to measure the inflation experienced by urban wage earners, not seniors, who spend a higher percentage of their income on items such as health care, the cost of which continues to rise rapidly. 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.
"Despite the fact that the Bureau of Labor Statistics said there was no inflation last year, numerous Third District seniors I've spoken with have made it clear their cost of living kept rising," Congressman Lipinski said. "The problem may be that the index used to measure inflation was created to reflect the costs faced by people who are younger and are working, not retirees. Seniors spend more money on some items and less on others. For example, seniors generally require more medical care, and given that health care and prescription drug costs continue to soar, many older Americans are finding themselves in a bind."
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.
"The CPI for Seniors Act is part of my commitment to defending the interests of Third District seniors and honoring the tremendous contributions they have made to our nation," Congressman Lipinski said. "If we're going to do right by our seniors, we need to accurately measure their cost of living so that we have a better understanding of the economic reality they face. This will allow us to appropriately care for the needs of seniors."
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