Congressman Lewis Supports $250 Payment to Seniors

Congressman Lewis supports $250 payments to seniors, because Social Security recipients will not see an increase in their monthly Social Security, SSI, VA Pension and Compensation, and Railroad Retirement benefits in 2011.  This is the result of economic conditions, not the result of Congressional or Presidential action or inaction. The Social Security Cost of Living Adjustment (COLA) is automatically calculated using data on inflation published by the Bureau of Labor Statistics (BLS).  In 2009, Social Security recipients saw a 5.8% increase in their benefits, the largest since 1982, as a result of rising costs; but in 2010 and 2011, there is no COLA.

Congressman Lewis voted for a $250 payment to seniors in 2009, and he again supports at $250 payment to seniors in 2010. Congressman Lewis is an original cosponsor of H.R. 5987, the Seniors Protection Act, to provide a $250 payment to about 54 million Americans in lieu of no increase in their monthly income.   The President has already budgeted for this and Congress will act on this in November of 2010.

Reason for Zero COLA Computation:

The COLA is based on the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W), published on a monthly basis by Bureau of Labor Statistics (BLS).  The CPI-W measures the growth in the price of consumer goods.  The COLA is calculated by comparing the CPI-W from the third quarter of the current year to the last third quarter that resulted in a COLA.  If positive, then the difference is applied to benefits the following January.                     

In 2008, the level of the CPI-W during the third quarter was affected by the unusually high spike in energy costs (primarily gas and oil).  This resulted in an unusually high COLA of 5.8 percent, which was applied to benefits starting in January 2009.  This was the largest increase in benefits since 1982.

However, the CPI-W index dropped 5.0 percentage points immediately after the third quarter of 2008.  Since then, there has been very modest price growth, but not enough to catch up to the level of the CPI-W in the third quarter of 2008. 

In fact, the cost of living in the current quarter is less than what it was at this time in 2008.  However, the law protects Social Security beneficiaries from a "negative COLA" that would reduce benefits; therefore a zero COLA will be applied in 2011.