Berry has several disabilities and has been on SSI for more than 20 years. He exists on not much more than his $830 monthly Social Security check.
“Food’s so high you can’t buy no meat,” said Berry. “They wrote me a prescription the other day for $500, I couldn’t buy it. The power bill goes up, cable goes up, rent goes up, but no raises.”
Berry refers to the lack of a cost of living adjustment (COLA) for Social Security recipients this year – the first time that’s happened in 35 years.
That’s because a year’s COLA is based on the previous year’s inflation level. Since there was no increase in inflation last year, there was no COLA issued in 2010.
The Senior Citizens League, one of the nation’s largest senior advocacy groups, just released a survey concluding seniors have lost 24% of their buying power since 2000.
“What we found is seniors today are losing buying power mainly because their annual COLA really doesn’t take into account the way seniors spend their money,” said Mike Watson, policy analyst for the Senior Citizens League.
Medicare is up 143 percent from $45 to $110, according to the survey. Prescription drug costs are up 44 percent since 2000.
Other findings conclude home owners insurance is up 108 percent, annual real estate tax is up 77 percent, and heating oil is up 150 percent.
In short, the study finds since 2000, the COLA, which is intended to help seniors keep up with inflation, has increased the average Social Security benefit 31 percent while the typical senior’s expenses have jumped 63 percent - more than twice as fast.
While the COLA is based on consumer behavior, Watson calls it flawed because the government bases that behavior on the Consumer Price Index for Urban Wage Earners and Clerical Workers.
“The way it’s calculated is the way young urban wage earners spend their money. It seems kind of counter intuitive,” said Watson. “It would seem a benefit going mostly to the elderly population would take into account how they spend for goods but in fact it doesn’t.”
“And this survey just shows that seniors are falling farther and farther behind each year,” he said.
The Senior Citizens League and other advocacy groups are lobbying Washington to change the COLA calculation system to have it based on other government-gathered data.
The Consumer Price Index for the Elderly indicates seniors spend more than twice as much of their monthly income on health care as young urban workers.
Last fall Social Security recipients received a one-time check of $250 through the American Recovery and Reinvestment Act in anticipation of the loss of this year’s COLA.
The Obama Administration has proposed another $250 check this year, but there’s been no advancement of that legislation.