An Update from Washington- Celebrating Social Security's Anniversary and Making Tough Spending Decisions
This past weekend marked the 75th anniversary of the signing of the Social Security Act. Over the last 75 years, Social Security has provided our seniors with peace of mind about their retirements. In fact, approximately 60% of seniors rely on Social Security for more than half of their income. Social Security is a great success story and is the ultimate trust between generations: today's workers pay into the system to help provide for current retirees with the understanding that future generations will be there for them when they reach retirement age.
Social Security is not without its problems, however. Last year, millions of seniors were shocked to learn that they would not receive a cost-of-living-adjustment (COLA) in their Social Security payments. It was the first time since 1975- when COLAs were first issued automatically based on a formula that accounts for inflation- that recipients did not receive such an adjustment.
Although the formula for determining COLAs showed no inflation in 2009, Medicare premiums and health care costs for seniors have continued to rise. Moreover, seniors' additional income through IRAs, pensions, and general savings are still recovering from the economic downturn of the last several years. Put simply, the 53 million Americans who rely on Social Security take little comfort in a formula determined over 35 years ago telling them their cost of living hasn't risen.
To address these concerns, I recently co-sponsored the Seniors Protection Act of 2010. This legislation will provide seniors a one-time, $250 COLA if the formula shows no inflation once again. If considered, The Seniors Protection Act would be pay-as-you-go compliant through spending offsets.
A one-time payment would be a temporary fix to the problem and we need to create a new formula for determining COLAs. Last year, I co-sponsored the Consumer Price Index for Elderly Consumers Act. This bill will use the Experimental Consumer Price Index for Americans 62 Years of Age and Older (CPI-E) to calculate the COLA as opposed to current formula, which is weighted heavily towards younger workers. The CPI-E would give seniors a more equitable and fair COLA that is actually based on their increased cost-of-living, such as rising health care and energy costs.
These are smart and sensible proposals, and I am pleased we are addressing this issue early. As Social Security begins its 76th year, this is a more than appropriate way to honor its legacy and provide our seniors assistance in economic hard times.
Tough spending decisions
The House unexpectedly returned to session last Tuesday to take up legislation to provide $26 billion in new spending to help states struggling to balance their budgets retain teachers, firefighters, and policemen, as well as meeting their state matching requirements for Medicaid. Though it was a tough decision, I had no choice but to vote no.
While I am greatly concerned about potential job losses and social service cutbacks at the state level, I am also concerned with the precedent this legislation could set for future state budgetary crises. It doesn't make much sense for the federal government to spend money it doesn't have to help states avoid making tough spending decisions. Balancing the budget at the state level can't come with the understanding that the federal government will make up potential shortfalls, especially when the federal government is in the middle of a terrible fiscal crisis itself.
The federal government cannot prop up any industry or government experiencing economic difficulties. It's not sound public policy, and will only further the reckless spending habits that have plagued both parties over the last 10 years.
Balancing the budget works at all levels of government. It worked when I served as mayor of Montgomery, it works for the 49 states whose constitutions require it, and it would work at the federal level if we would pass the Constitutional Amendment to balance the budget that I have co-sponsored. We can't keep putting off fiscal responsibility for future generations. It's time to begin making those tough choices, which is why I voted against $26 billion in new spending.