There’s good news for the 65 million people receiving the Social Security benefits they have earned. In 2023, Social Security benefits will increase nearly nine percent. That means that the average retired worker will receive an additional $146 a month, the largest increase in more than four decades.
A Gallup poll found that 89 percent of Americans receiving Social Security rely on it to cover their expenses. Three out of five people aged 55 and older rely on Social Security as their principal income. For one third of them, Social Security is virtually their only income. Our Social Security system lifts more than 21 million Americans—including over a million American children—out of poverty and lessens the depth of poverty of millions more.
As essential as Social Security is in good economic times, it has been even more so during the pandemic. Because people receiving Social Security are so at risk, their modest benefits—retirement benefits average less than $1,700 a month—have been stretched even thinner during the pandemic. To protect themselves as much as possible from Covid-19 infection, they have incurred costs for deliveries of medicine and food, as well as additional medical costs if they become sick.
One of Social Security’s most important features—not found in its private sector counterparts—is that all benefits are automatically adjusted every January to offset the effects of inflation. To repeat, the automatic adjustment for 2023 will be 8.7 percent, or an average of $146 a month for a retired worker. The inflation offset is much needed. Many older adults, people with disabilities and all other people receiving Social Security have seen their costs increase significantly over the last year. For example, prescription drug prices for more than 1200 drugs rose an average of 31.6 percent between July 2021 and July 2022, way higher than inflation.
Large as the announced 8.7 percent increase in benefits may appear on paper, it is not enough for older adults and people with disabilities on fixed incomes to make ends meet. Social Security undermeasures the inflation older adults and other people receiving Social Security experience. That is because the cost of living adjustment for Social Security is based on inflation experienced by workers, not by retirees and people with disabilities who are unable to work.
That index, the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W), was the only measure that the government produced in 1972, when Congress wisely decided to automatically adjust Social Security benefits every year to prevent their erosion. Because that measure was the only one available, that was the best Congress could do. It was better than nothing.
But workers and the public more generally have significantly different spending patterns from people receiving Social Security benefits and, therefore, experience significantly lower inflation. Older adults and people with disabilities spend more on health care, prescription medications, and long-term care—where prices continue to rise faster. They spend less on clothing, recreation, the latest technology, and other items—where prices tend to rise more slowly—than younger, healthier Americans.
Many members of Congress recognized the obvious shortcomings of the CPI-W when applied to Social Security. In 1987, our policymakers instructed the Bureau of Labor Statistics (BLS) to produce an index measuring the cost of living of the elderly. In response, BLS developed the Consumer Price Index for the Elderly (CPI-E), but Congress has not yet applied it to Social Security. It’s long past time to fix that.
CPI-E is part of President Joe Biden’s plan to update and expand Social Security. It is the right policy. According to numerous polls, it also represents the will of the people. It is included in numerous bills to protect and expand Social Security, pending in Congress or soon to be introduced. One of those bills is the Social Security 2100: A Sacred Trust Act, sponsored by Representative John Larson (D-CT), Chairman of the Social Security Subcommittee, and cosponsored by 90 percent of his fellow Democrats.
Social Security’s benefits are modest by virtually any measure. Providing an automatic, annual cost of living increase is not a benefit increase, but an update. It ensures that benefits will not erode over time. An accurate cost of living adjustment is essential to keep today’s modest benefits from eroding, particularly for women and Hispanics, who have longer life expectancies, on average.
No Republicans have either cosponsored one of the many pending bills that expand benefits and update the cost of living adjustment. Nor have they introduced their own. So far, Republicans have not supported the efforts to expand Social Security.
In fact, Republican politicians in Congress seem bent on cutting Social Security, or worse, ending it as we know it. Eliminating the ironclad guarantee of those earned benefits, Senator Rick Scott (R-FL) has released a plan to require an affirmative vote on Social Security and Medicare every five years for these vital institutions to continue. Not to be outdone, Senator Ron Johnson (R-WI) wants to put Social Security and Medicare on the chopping block every year.
More immediately, Minority Leader Kevin McCarthy (R-CA), who is in line to become Speaker of the House if Republicans take control, recently threatened that he will take hostage the need next year to raise the debt limit. As ransom, he said he wants cuts to “entitlements,” insider code for cuts to our Social Security and Medicare. He appears willing to wreck the national economy to get his way.
After lifetimes of work, Americans have earned their Social Security. It is well past time they get a raise. Once Americans begin to receive their earned Social Security, they should be able to rely on the fact that those benefits will not erode as they age, but will maintain their purchasing power, even if they live to 100 or older.
Here’s more from Just Care:
- Medicare Open Enrollment: Don’t trust insurance agents
- Social Security: Always there for you in a crisis
- Expand Social Security, don’t means test it
- HIPAA and why you need a health care proxy
- Free and low-cost ways to address hearing loss
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