3% Social Security boost? $1,200 stimulus checks? How to get needed money to seniors

Personal finance

Rep. Peter DeFazio, D-Ore.

Sarah Silbiger | CQ-Roll Call Group | Getty Images

Americans are hurting financially amid the Covid-19 pandemic, and that includes the nation’s seniors.

Now, two House Democratic lawmakers are hoping to help retirees with a bill to increase next year’s Social Security cost-of-living adjustment.

Rep. Peter DeFazio, D-Ore., is introducing a bill today with Rep. John Larson, D-Conn., that would boost the COLA for next year to 3% from 1.3%.

The emergency COLA would help pay for extra expenses seniors face amid the pandemic, such as the cost of having food delivered and higher utility bills as they spend more time at home.

The proposed one-year boost comes as research shows the cost-of-living adjustments have generally not been keeping up with the rising costs older Americans face, even before the pandemic.

Beyond this bill, both lawmakers have advocated for changing the metric for how Social Security calculates the annual increases to an index more aligned with actual costs seniors incur. Using a different index could result in bigger cost-of-living adjustments.

In an interview with CNBC.com, DeFazio shared why the emergency raise for Social Security beneficiaries needs to happen, and what it will take for more stimulus aid to pass.

How an emergency 3% COLA could help

Fertnig | E+ | Getty Images

The proposal for an emergency 3% COLA next year comes as the Social Security Administration this week officially announced a 1.3% increase for 2021.

“The pathetic 1.3% cost of living increase that Social Security is going to give to seniors across the country nowhere near keeps up with the cost of inflation for them, for prescription drugs, utility bills and other things,” DeFazio said.

In addition to the 3% hike, both lawmakers are also advocating for a more long-term fix that would increase how much benefits go up every year.

The Social Security Administration currently uses the Consumer Price Index for Urban Wage Earners and Clerical Workers, or CPI-W. But by changing to the Consumer Price Index for the Elderly, or CPI-E, the calculations would better reflect the actual expenses seniors pay, they argue.

How the proposal could get tied to stimulus aid

The emergency COLA proposal comes as Capitol Hill lawmakers are already discussing how much more financial aid to pump into the economy now.

 ”We hope that it will become part of the negotiations that are ongoing,” DeFazio said.

Millions of Americans are eagerly hoping for more financial help.

However, stimulus negotiations have led to a stalemate between Treasury Secretary Steven Mnuchin; House Speaker Nancy Pelosi, D-Calif.; and Senate Majority Leader Mitch McConnell, R-Ky.

“At this point, unfortunately, it doesn’t look like we will get the critical Covid relief done as soon as we need it, which is now,” DeFazio said.

With the bill is introduced, DeFazio said, the lawmakers plan to approach Pelosi and the House Ways and Means Committee and say: “Hey, make this part of the discussion for a package that we do after the election.”

Why more $1,200 checks are needed

A man fills out paperwork while waiting for his number to be called at an unemployment event in Tulsa, Oklahoma on July 15, 2020.

Nick Oxford for The Washington Post | Getty Images

Another area that definitely should be included in the next round of stimulus funding are second stimulus checks, DeFazio said.

In Oregon, they offered $500 payments to those who needed it using money the state had left over from the CARES Act.

“The lines were blocks and blocks long. The money was exhausted by 10 o’clock in the morning and tens of thousands walked away with nothing,” DeFazio said. “Americans are really hurting with this pandemic.”

Additional checks would also help seniors cover the costs of everything from food delivery to higher utility bills, he said.

“They need help, too. They could use that individual payment,” DeFazio said. “I’m hearing from everybody, ‘Help.'”

How the election may turn the tables

Speaker of the House Nancy Pelosi and Senate Majority Leader Mitch McConnell at the U.S. Capitol on Jan. 15, 2020.

Drew Angerer | Getty Images News | Getty Images

Admittedly, few proposals have been able to pass both the Democratic-led House and Republican controlled Senate.

DeFazio said he has seen his own initiatives met with bipartisan support from the House, only to languish in the Senate. That includes legislation passed by the House about 10 days ago to take antitrust immunity away from the health insurance industry.

“If Mitch McConnell wasn’t killing everything over there except judicial appointments, you’d think they would take that up,” DeFazio said.

McConnell’s office did not immediately respond to a request for comment.

McConnell, the Senate Majority leader, is running for re-election in Kentucky against retired Marine combat pilot Amy McGrath.

DeFazio, who has been in office since 1987, is also running in what he describes as a “tight race.” His opponent is Alek Skarlatos, an Army National Guard veteran who helped stop an armed attack on a train from Amsterdam to Paris in 2015.

DeFazio’s district is one of eight in the country that leans neither Democrat nor Republican.

The outcome of those races could reshape the dynamic on Capitol Hill.

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