(1) Each year the Bureau of Labor Statistics of the Department of Labor prepares and publishes consumer price indices (the most notable being the Consumer Price Index or ‘CPI’) that measure the rate of inflation in the economy of the United States.
(2) A derivative of the CPI is used to determine an annual cost-of-living adjustment (hereinafter referred to as ‘COLA’) for millions of senior citizens (individuals aged 62 and over) who depend on their respective Social Security benefits.
(3) The Social Security COLA is calculated using the Consumer Price Index for Urban Wage Earners and Clerical Workers (hereinafter referred to as ‘CPI-W’), a subset of the population covered by the Consumer Price Index for All Urban Consumers (hereinafter referred to as ‘CPI-U’).
(4) While the experimental Consumer Price Index for Americans 62 Years of Age and Older (hereinafter referred to as ‘CPI-E’) is a more accurate measure of the average price of consumer goods and services purchased by senior citizens than the CPI-W, it too is derived from the CPI-U.
(5) According to numerous credible authorities, the present methods (CPI-U, CPI-W, and CPI-E to a lesser extent) used to measure inflation are flawed and deficient in measuring the average price of consumer goods and services purchased by senior citizens, and the overall impact of inflation on such citizens.
(6) The present sampling regarding senior citizens is too small under the methods referred to in paragraph (5), creating an opportunity for sampling error.
(7) Prices used under the methods referred to in paragraph (5) are based on geographic areas, retail outlets, and sample items used and purchased by younger consumers and are not necessarily representative of the geographic areas, retail outlets, and sample items used and purchased by senior citizens.
(8) The locations used under the methods referred to in paragraph (5) are urban locations that do not reflect the economic challenges faced in rural communities, which often have a far larger demographic segment of senior citizens.
(9) Senior citizens neither have the flexibility or the ability that younger consumers have to substitute necessary purchases in response to changes in prices, nor the same options as younger consumers have to supplement their income.
(10) Premium increases for part B of Medicare, part D of Medicare, and other health care costs affecting senior citizens are not adequately considered under the methods referred to in paragraph (5).
(11) The cost of taxes on Social Security income is not considered under the methods referred to in paragraph (5), thus putting senior citizens at a greater economic disadvantage each year.
U.S. Congress - Text of H.R.5305 as Introduced in House CPI for Seniors Act of 2010
