For the first time in 35 years, Social Security beneficiaries are not receiving a cost of living adjustment, or COLA.
“All I have is Social Security and it’s hard to make ends meet,” said 62-year-old Sue Gilliamwater of Sophia. “My utility bills are outrageous and my car is about to blow up.”
“I’m not the only one in this mess, so I’ don’t know what we’re going to do,” she said.
There are an estimated 425,000 Social Security recipients in West Virginia. Over the last few years, the average cost of living adjustment has meant the addition of approximately $70 a month.
The cost of living adjustment is based on data collected by the Bureau of Statistics in the Consumer Price Index for Urban Wage Earners and Clerical Workers.
The index looks at how a group of urban workers spends its money, and the costs of those goods and services over a period of time.
“For 2010 that time period was the third quarter of 2008 thru the third quarter of 2009,” said Robert Jeffries, Public Affairs officer in Charleston’s Social Security office.
“And since there was no increase in inflation during that period, that accounts for the reason there is no COLA adjustment, no cost of living adjustment for 2010,” said Jeffries.
Critics say the COLA determination is a flawed system because the elderly spend a much greater proportion of their income than young urban workers on health care and prescription drugs which continue to rise well above inflation.
Senior advocates point to the Consumer Price Index for the Elderly, data collected about senior consumer behavior since the 1980’s.
“The problem is they haven’t put it into effect, and so seniors aren’t getting the benefit of the knowledge that the government has that they are spending more on health care,” said Brad Phillips, spokesperson for The Senior Citizens League, a national seniors advocacy group based in Washington, D.C..
Legislation in Congress that would base the Social Security COLA on the Consumer Price Index for the Elderly and an emergency COLA bill that would give Social Security recipients a 3% increase this year have not picked up traction.
“What’s important to remember is the entire purpose of the COLA is to help seniors keep up with inflation,” said Phillips.
“Since 2000, seniors have lost 20% of their buying power. So if they had a dollar ten years ago, it’s down to 80 cents of purchasing power today,” he said.
Last fall Social Security recipients received a one-time check of $250 through the American Recovery and Reinvestment Act. The Obama administration has proposed another $250 check this year.
“Nothing is compounding for the years that seniors are getting that $250 so it comes at the cost of sometimes more than $10,000 of compounding interest that seniors will not get in future social security checks because there was no actual COLA,” said Phillips.
“So in many ways it’s a card trick.”
Many seniors know the implications and are very upset.
“I’m 86 years old, worked 46 years as an electrician in Clarksburg, and I could really use that money,” said Maurice Wine of Beckley.
“And you know I think I deserve it after all the years I paid into it.”