10.15.15

Sens. Reed and Whitehouse Call on Social Security to Recommend Changes to COLA Calculation

Letter from RI Senators Responds to Today’s Announcement that Seniors will not Receive a Boost in Income Next Year

Providence, RI – Following an announcement today that Social Security recipients throughout the country will not receive a benefit increase in the coming year, U.S. Senators Jack Reed (D-RI) and Sheldon Whitehouse (D-RI) are asking the Social Security Administration for a formal review of the calculation used to determine annual cost-of-living adjustments (COLAs). 

“As you know, the Social Security Administration (SSA) today announced there will be no increase in benefits in 2016, the third time in eight years that benefits have been frozen,” Reed and Whitehouse wrote today in a letter to Acting Social Security Administration Commissioner Carolyn Colvin.  “While we understand the law requires the SSA to adjust benefits pursuant to changes in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W), this formula clearly fails to account for the true costs seniors and disabled Americans face.  We’ve heard from numerous Rhode Islanders that frozen benefits in recent years have caused them hardships and tightened their budgets.”

Approximately 216,000 Rhode Islanders receive Social Security benefits with an average monthly benefit $1,234. Beneficiaries have traditionally been able to count on annual increases in benefits to help them keep pace with inflation, but in recent years the formula has failed to produce COLAs despite rising costs on staples like prescription drugs. 

“We look forward to your review and recommendations on how we can improve the methods used to calculate cost-of-living adjustments so that they boost benefits to keep in line with true costs,” Reed and Whitehouse concluded.

The text of the letter is below.

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Dear Commissioner Colvin,
 
On behalf of more than 216,000 retired and disabled Rhode Islanders who rely on Social Security, we write to request a formal review of the methods used to calculate annual cost of living adjustments. 
 
As you know, the Social Security Administration (SSA) today announced there will be no increase in benefits in 2016, the third time in eight years that benefits have been frozen.  While we understand the law requires the SSA to adjust benefits pursuant to changes in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W), this formula clearly fails to account for the true costs seniors and disabled Americans face.  We’ve heard from numerous Rhode Islanders that frozen benefits in recent years have caused them hardships and tightened their budgets.  From prescription drugs and other medical expenses to food, rent, and utilities, too many Rhode Islanders have seen their own expenses rise, even if overall inflation has been low.
 
American workers contribute to Social Security with each paycheck with the understanding that the program will support them when they retire or should they become disabled.   We believe that Congress has a sacred duty to ensure that Social Security remains a secure source of income for millions of Americans.  We look forward to your review and recommendations on how we can improve the methods used to calculate cost-of-living adjustments so that they boost benefits to keep in line with true costs.          
 
Sincerely,

Jack Reed and Sheldon Whitehouse
U.S. Senators