The introduction of the Boosting Benefits and COLAs for Seniors Act would bring about significant changes to the way that monthly Social Security benefits are calculated for citizens aged 62 and older, making adjustments an annual affair. This new initiative proposed by Democratic congressman Ruben Gallego from Arizona aims to better reflect the financial strain seniors face, particularly with rising living costs.
The proposed legislation takes into account a series of expenses specific to this age group, such as healthcare, housing, and utilities, with the intent of providing accurate monetary aid. It also includes yearly cost of living adjustments (COLAs) to ensure an adequate standard of living for seniors.
However, whether the Act will pass in the House remains uncertain due to its controversial approach towards inflation. Supporters of the Act argue for a more reflective measure of inflation, while critics warn of potential fiscal strain and social bias.
Adjusting Social Security benefits for seniors
Numerous alternatives have been suggested, with the common goal of achieving a fair and sustainable system.
One proponent for the Act is Roman Ulman, president of AFSCME Arizona Retirees Chapter 97, who believes the current Cost of Living Adjustment (COLA) undervalues the actual inflation rates affecting senior citizens. He argues that adjusting COLA benchmarks to accurately reflect real-time inflation would provide seniors with a more adequate budget.
The Act also expects the federal Bureau of Labor Statistics to publish the proposed Consumer Price Index (CPI-E) monthly. However, no details were given on how the government plans to fund the potential increase in benefits leading to questions over its financial feasibility.
One solution, according to Congressman Gallego, is to source additional funding through application of FICA taxes to individual earnings over $400,000 per year as laid out in the Social Security 2100 Act. This would potentially increase benefits by 2% for low-income seniors and students up to age 26 along with other vulnerable demographics. As the Social Security program’s surplus is projected to deplete by 2034, this change may prove to be vital for the numerous seniors reliant on their guaranteed benefits.
