IN SUPPORT OF MORE ACCURATE COLA ADJUSTMENTS TO SOCIAL SECURITY

WHEREAS, in 2016, the Social Security Administration did not increase Social Security benefits as there was no increase in the consumer price index (CPI) from the third quarter of 2014 to the third quarter of 2015; and

WHEREAS, the annual cost-of-living adjustments (COLA) are based on the consumer price index for urban wage earners and clerical workers; and

WHEREAS, the annual COLA to Social Security is intended to guard against an erosion of the purchasing power of Social Security recipients; and

WHEREAS, research has shown that seniors have different spending patterns than younger, working Americans, with seniors who are 65 and older spending more than twice as much on healthcare than younger people, and those 75 and older spending nearly three times more; and

WHEREAS, this becomes significant in factoring Social Security benefits because healthcare costs, including medical, dental care and prescription drugs, have risen much faster than prices in other categories that determine the CPI; and

WHEREAS, the U.S. Bureau of Labor Statistics also has an experimental index to track the cost of living for elderly Americans—the CPI-E—which shows a higher rate of increases than other consumer price indexes; and

WHEREAS, from 1990 through 1995, the CPI-E rose 15.9 percent while the CPI increased 14.1 percent:

RESOLVED, that the American Federation of Teachers will call on Congress to direct Social Security to use the CPI-E as the basis for annual COLAs to ensure an adequate Social Security payment to our country’s seniors, who have given so much to our country and deserve our support in their retirement years.