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NARFE President Applauds Introduction of CPI-E Bill to Improve COLAs at Capitol Hill Press Conference.
March 1, 2017

NARFE President Richard G. Thissen made the following remarks at a press conference on the introduction of H.R. 1251, the CPI-E Act of 2017, hosted by the bill sponsor, Congressman John Garamendi, D-CA-3.

Thank you, Congressman Garamendi, for including NARFE at today’s event, and for your dedication to our nation’s seniors.

While the CPI-E Act of 2017 amends a complex calculation, it provides a rather simple improvement, rooted in common sense.  What this bill says to seniors is that your cost-of-living adjustment will more accurately reflect your cost of living. That’s it!  It’s that simple! It’s so simple, in fact, that many of your colleagues may not get it.

The fact that we do not use the CPI-E already is shocking. Instead, cost-of-living adjustments for seniors collecting Social Security and federal civilian or military retirement benefits are based on the costs experienced by “urban wage earners and clerical workers.” They are not based upon the costs retired individuals experience.  And that does not make a lot of sense.

Worse yet, it is costing seniors, including federal civilian and military retirees, precious dollars every year.  The 2017 COLA was 0.3 percent, and the year before, there was no COLA at all.

Yet, over these two years, the actual cost of living incurred by seniors increased by 2.7 percent – 2.1 percent in 2016 and 0.6 percent in 2015.  That is what seniors should have received and that is what this bill would provide them.  For the average federal annuitant, that would have meant an increase of approximately $950 per year.

That is just from the last two years.  Over time, the difference adds up to tens of thousands of dollars.  For those living on fixed incomes, every dollar counts.

But, if it is that simple, why hasn’t the formula been changed?  And, why is there a difference between how we determine COLAs now, and how this bill would require it?

Well, it turns out that the so called CPI-W, the cost index used for COLAs now, is simply a historical relic.  When Congress first made COLAs automatic, it was the only price index available.

But since 1982, the Bureau of Labor Statistics has been calculating an index measuring prices experienced by those 62 years of age and older, called the CPI-E.  Between 1982 and 2014, it showed prices increased for those individuals by 0.2 percent more, per year, on average. That’s mostly because seniors rely more on medical care and medical price increases have far outpaced the increases for other consumer goods.

So we have an index that accounts for price effects on seniors – that would give seniors a fair COLA – yet Congress has failed to adopt it.

The good news is that this bill offers that simple fix, and is an equitable improvement for the millions of seniors relying on their earned Social Security benefits and millions of federal and military retirees who have served their country both in and out of uniform.

Thank you again Congressmen Garamendi for leading on this issue. I urge the rest of Congress to follow Congressman Garamendi’s lead and pass this bill.  

National Active and Retired Federal Employees Association
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