MONTPELIER — Vermont Sens. Patrick Leahy and Bernie Sanders have joined with Massachusetts Sen. Elizabeth Warren and 17 other Democrats in seeking a cost-of-living increase for seniors on Social Security.
The Seniors and Veterans Emergency Benefits Act, introduced by Warren, a first-term Democrat, seeks to boost payments to about 70 million seniors, veterans and people with disabilities with a bonus payment of just under $600. It was determined in October by the Social Security Administration that there will be no increase on Jan. 1 for beneficiaries.
It will be just the third time in 40 years that beneficiaries do not see an increase in the benefit.
Social Security benefits are tied to the Consumer Price Index for Urban Wage Earners and Clerical Workers, so benefits rise when consumer prices go up. But the bill’s sponsors say the formula Congress uses to determine inflation is does not accurately portray what seniors actually spend.
Seniors typically spend more than the average American on medicine and medical needs and less on consumer products like televisions. Official government data shows the cost of core goods and services are up about 2 percent, but Social Security benefits are not slated to rise accordingly.
The bill’s sponsors say the one-time payment of $581 is equal to 3.9 percent of the average annual Social Security benefit. That percentage increase would be the same percentage raise that CEOs at the top 350 companies in the U.S. received last year.
Leahy, a Democrat and the longest-serving member of the Senate, said keeping flat benefit levels will have dire consequences for many.
“For the nearly two-thirds of beneficiaries who depend on Social Security for at least half of their income, and for the 24 percent of those where Social Security is the sole source of income, this news is not just distressing – it is devastating,” he said.
The cost of the additional payments would be covered by closing a tax loophole that allows companies to write off executive bonuses as a business expense for “performance pay.” The revenue raised beyond what is needed for the payment would be used to bolster and extend the life of the Social Security and Disability trust funds.
“By no longer allowing corporations to receive tax deductions for performance pay packages for their executives, we could give a one-time, emergency payment to our nation’s seniors and increase the solvency of the Social Security Trust Fund without adding a penny to the deficit,” Leahy said.
Sanders, an independent seeking the Democratic Party’s nomination for president, has repeatedly called for expanding social security benefits on the campaign trail.
“It is unacceptable that millions of senior citizens and disabled veterans did not receive a cost-of-living adjustment this year to keep up with their rising living expenses. At a time when senior poverty is going up and more than two-thirds of the elderly population rely on Social Security for more than half of their income, our job must be to expand, not cut, Social Security,” he said. “At the very least, we must do everything we can to make sure that every senior citizen and disabled veteran in this country receives a fair cost-of-living adjustment to keep up with the skyrocketing cost of prescription drugs and health care.”
Congress approved a similar $250 supplemental Social Security payment in 2009. Another effort to provide a supplemental payment in 2010 was not successful.
Watch Sen. Patrick Leahy’s remarks on the Senate floor: