In 2016, there will be no Cost Of Living Adjustment (COLA) given to recipients of Social Security, including Disabled beneficiaries. Since the bill was enacted in 1975, the annual increase of benefits has ranged from 1.3% in 1999 to as high as 14.3% in 1980. In the 40 year history of the bill, this will be the third time that an increase will not be made due to an outdated formula. The formula is attached to the inflation index. However, Congress’ formula for COLA only takes into account the spending patterns of about 1/4th of the country. The formula is heavily tied to the price of gasoline, which is low, however costs for rent, medicine and groceries have increased. This is causing the predetermined formula to calculate NO increase for COLA this year.
The average benefits received by an SSDI recipient are currently $14,375, which is just slightly above the National Poverty Line of $11,770 for a single person. There are 8.9 million Americans under the age of 65 that have been declared disabled and receive benefits. Can you imagine living on that small sum of money a year with a chronic illness? Now imagine that you don’t get a raise in your benefits, but the highest paid CEOs will.
Senator Elizabeth Warren (D-MA) has offered an alternative. She has introduced a bill, SAVE Benefits Act, which will give a one-time payment in 2016 of $581 to all Social Security recipients. In her address on the floor of Congress, she said that the average salary of the top 350 American CEOs increased by 3.9% last year. That is the same percent increase she is requesting that Congress pass onto Social Security beneficiaries.
The SAVE Benefits Act proposes to pay for this one-time payment by eliminating a tax-free “performance pay” loophole for CEOs of private businesses. The loophole allows CEOs whose bonuses exceed $1 million the bonus as a tax write out for business purposes. In a floor speech, Sen. Warren stated that “in fact, according to the Chief Actuary of the Social Security Administration, closing just this one loophole will create enough revenue to give a $581 raise to seniors and vets and still have billions of dollars left over to help boost the Social Security trust fund for the future.”
Twenty-one Democratic Senators have signed onto the bill. Seven of these Senators spoke on the Senate floor to show their support on Dec 1, 2015. 400,000 people have signed a petition to pass this bill. A one-time payment of $581 is equivalent to three months’ worth of groceries for most Americans on Social Security. In support of this bill, Sen. Charles Schumer (D-NY) reminded Congress that in 2009, in the middle of a recession, they approved a one-time payment of $250 to Social Security recipients when the COLA formula had calculated that no raise would be given that year. Additionally, Sen. Schumer adds that closing the tax loophole will “provide this benefit while also using some of the revenue to extend the life Social Security,” a never-ending battle with no clear way to keep this fund going for years to come.
I, personally, receive Social Security Disability benefits. An extra $581 would help put a dent in my medical bills. This bill will not only help the 8.9 million disabled Americans, but all 70 million who count on income from Social Security. Now is the time to act.
Click here to sign the petition.
To contact your Senators and Congressmen directly, use this link to find contact info.
What would you do with an extra $581?