Elizabeth Warren proposes one-time $580 raise for Social Security recipients
The 3.9 percent increase would be the same as top CEOs got last year.
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Elizabeth Warren wants to give people on Social Security the same raise that the top CEOs got last year.
With no cost-of-living adjustment scheduled in 2016, the Democratic Massachusetts senator introducedlegislation Thursday to provide the 70 million recipients of Social Security, veteran benefits, or other government retirement programs an extra, one-time payment of roughly $580.
The payment would equate to a 3.9 increase in Social Security payments — the same rate of increase that CEOs at the top 350 U.S. firms got in 2014.
The bill is co-sponsored by 18 other Senate Democrats, including Massachusetts junior Sen. Edward Markey and Vermont Sen. Bernie Sanders.
Next year will be just the third time since the cost-of-living adjustment went into effect in 1975 that recipients will not get the annual raise, which adjusts the amount Social Security pays out to account for inflation. However, largely due to decreased gas prices, inflation (as measured by the Social Security Administration) actually declined this year.
But as CNN explains, inflation may not be the best way to account for how Social Security recipients spend their money.
Seniors don’t benefit as much from lower gas prices as the average American worker because most are no longer driving to and from work. Medical costs have also increased faster than overall inflation, and a greater percentage of seniors’ spending is on health care.
A study by the Senior Citizens League found that Social Security benefits have lost about 22% of their buying power since 2000, despite the benefit increases due to the COLA.
Warren argues if Congress chooses to subsidize CEO pay through preferential tax treatment and loopholes that allow deducations for corporate bonuses, Social Security recipients should get the same treatment.
“Congress’s formula is volatile and does a poor job of reflecting what older Americans actually spend,’’ said a release from Warren’s office. “So even though official government data shows core goods and services are up about 2%, seniors who usually get a raise on January 1 won’t see an extra dime next year.’’
Warren says the estimated $40 billion cost of the bill — Seniors and Veterans Emergency (SAVE) Benefits Act — would be paid for by closing the aforementioned “performance pay’’ loophole, which allows unlimited corporate tax deductions on performance-based pay.
As of September 2015, the average monthly Social Security payout for retired workers was $1,337.57. Since 2009, the payment has been increased more than 2 percent only once, including in 2010 and 2011 when there was no cost-of-living adjustment.
Warren points out that Congress provided an emergency payment of $250 to Social Security recipients in 2009, and attempted to enact a similar measure in 2010, but the bill was unable to overcome a Republican filibuster.
Unlike in 2009 and 2010, Republicans currently control both the House and the Senate.
Regardless of the SAVE Benefits Act’s long odds of passing Congress, Warren has much of her first term in the Senate — as Mother Jonesdocumented — to influence the 2016 presidential debate surrounding Social Security expansion.
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