Seniors will get little help from their Cost-Of-Living Adjustment (COLA) next year to cover the expected jump in Medicare costs.  The Social Security Trustees recently estimated that the COLA paid on January 1, 2006 would be about 2% to 2.6%, hardly enough to keep up with a 15% Medicare Part B premium and deductible increase.  Nevertheless, despite the low COLAs in recent years, Congress is considering some Social Security reform proposals that include provisions to cut COLAs. 

Although most supporters of proposals to add private accounts to Social Security have promised that the benefits of current retirees would not be cut, Comptroller General David Walker recently testified before the House Committee on Ways and Means, that some of the proposals to reform Social Security include options to cut COLAs.  The proposals include cutting COLAs so they are less than the CPI, limit the COLA to a specific threshold, or delay COLAs as was done in 1983 as part of reforms under the Greenspan Social Security Commission.

TSCL is fighting proposals that would cut COLAs and instead supports legislation which would provide a more fair COLA by computing the annual increase using a “seniors only” index, the Consumer Price Index for the Elderly.  Legislation S.275 has been introduced in the Senate by Senator Maria Cantwell (WA).

Sources: 2005 Social Security Trustees Annual Report, March 23, 2005. Statement of David M. Walker, Comptroller General U.S. Government Accountability Office, Before the House Committee on Ways and Means, March 9, 2005. “Republicans Consider Slowing Benefits Growth For Most,” Edmund Andrews, The New York Times, March 25, 2005.

June 2005