A bill that aims to increase Social Security benefits and ensure that cost of living adjustments reflect the real rising costs for seniors and disabled Americans has been introduced in Congress.

The “Fair COLA for Seniors Act of 2021” (H.R.4315), proposed by Rep. John Garamendi (D-Calif.) last week, calls for Social Security to use the Consumer Price Index for the Elderly (CPI-E) to calculate a fairer cost of living adjustment (COLA) for seniors. The Department of Labor currently uses Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W), which is based on a fixed market basket of goods and services, to calculate the annual COLA.

“Seniors and disabled citizens rely on Social Security benefits for a large portion of their income, and it’s about time for Social Security benefits to reflect their lifestyles,” Garamendi said in a press release statement dated July 8. “Using COLA that actually reflects how retirees spend their money – especially in health care – is a no-brainer that will increase benefits and make Social Security work better for the people it serves,” he added.

Garamendi noted that from 1982 to 2011, CPI-E rose at an annual average rate of 3.1 percent, compared with 2.9 percent for the methods that are currently used.

The Senior Citizen League (TSCL) and other advocacy groups and labor organization have long supported a Consumer Price Index (CPI) that more closely represents the price changes experienced by retirees, such as the CPI-E.

“We were pleased to learn that Rep. Garamendi reintroduced his Fair COLA bill,” Mary Johnson, Social Security and Medicare policy analyst, The Senior Citizens League, said. She said surveys shows that TSCL members overwhelming (61%) support such legislation.

Johnson noted that the CPI-E index shows inflation as experienced by retirees as growing more quickly in most years than the CPI-W, which does not accurately reflect the spending patterns of retired households. “And retirees tend to spend more on healthcare and housing costs and less on transportation costs,” she noted.

In most years, Johnson said the CPI-E tends to be higher than the CPI-W. For example, the CPI-E was 1.9% versus 1.6% for the CPI-W in 2020, and 1.4% versus 1.3% in 2021. And over time, Johnson said, the CPI-E would yield higher COLAs and more lifetime Social Security income. “The benefit in old age, after 20 years in retirement, would be higher because the COLA is a lot like interest, and compounds over time,” she said.

Johnson noted that the difference between the two indices is the weighting on gasoline. She explained that when gasoline prices spike, as in 2021, the CPI-W, which is weighted more heavily for gasoline and transportation costs would yield the higher COLA. That is likely the case this year, she said.

Social Security Works also applauds Rep. Garamendi for championing Social Security and sponsoring the bill, Nancy Altman, president, said in the press release from the Congressman. “One of the most valuable features of Social Security is its inflation protection … By more accurately accounting for the costs faced by Social Security beneficiaries, this legislation better prevents the erosion over time of Social Security’s modest but vital earned benefits,” she said.

The legislation, according to the release, has already earned the support of 23 original co-sponsorships.