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Arizona Representative Ruben Gallego has introduced a groundbreaking bill that could significantly alter the calculation of yearly cost-of-living adjustments (COLA) for Social Security benefits. The Boosting Benefits and COLAs Act aims to amend Title II of the Social Security Act, mandating the use of the Consumer Price Index for Elderly Consumers (CPI-E) for COLA calculations instead of the current Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). This shift could potentially lead to higher benefit payments for retirees and other recipients.
The current COLA system relies on the CPI-W’s percentage increase between the third quarter of the previous year and the third quarter of the current year. However, Gallego argues that this method fails to account for the unique financial challenges faced by retirees, particularly escalating medical expenses. By utilizing the CPI-E, which better reflects the spending patterns of the elderly population, Gallego aims to ensure that Social Security benefits keep pace with the true cost of living for retirees.
The introduction of this bill has garnered support from various quarters, including Roman Ulman, President of AFSCME Arizona Retirees Chapter 97, who emphasizes the importance of COLA reflecting the inflation seniors experience in healthcare costs.
A companion bill to Gallego’s proposal has been introduced in the Senate by Senator Bob Casey of Pennsylvania. If passed, this legislation would come into effect for determinations made on or after September 30, 2024, potentially reshaping the landscape of Social Security benefits for millions of Americans.
The proposed changes underscore a commitment to addressing the evolving needs of retirees and ensuring that Social Security remains a reliable source of financial security in the face of rising living costs.
Reference
Social Security Benefits Could Be Dramatically Changed Under New Bill (newsweek.com)