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Resolutions & Amendments

32nd International Convention - Chicago, IL (1996)

Social Security Cost-of-living Adjustments

Resolution No. 21
32nd International Convention
June 17-21, 1996
Chicago, IL


Social Security is the foundation of retirement income for the majority of Americans, providing at least 50% of income for three out of five senior citizens; and


Annual cost-of-living adjustments (COLAs), which fully compensate for the rise in the Consumer Price Index (CPI), maintain the buying power of Social Security benefits throughout a beneficiary's retirement, keeping millions of seniors above the poverty line; and


A recent independent study by a small group of economists tentatively claims that the CPI overstates inflation by at least one-half percent because it doesn't account for consumer substitution of less expensive goods, discount shopping, and improvements in the quality of goods and services; and


Many other economists disagree with this finding, and note that as the CPI pertains to Social Security COLAs, it fails to account for the elderly's higher medical spending and may actually understate inflation in relation to Social Security beneficiaries; and


Some members of Congress have seized on the CPI study to justify cutting the Social Security COLA in order to reduce the deficit and pay for tax breaks aimed mostly at wealthy Americans; and


The Social Security Trust Fund is in surplus, does not contribute to the federal deficit, and can only be used to pay for Social Security benefits, so there is no connection between a COLA reduction and deficit reduction except in terms of sleight-of-hand bookkeeping that hides the deficit under Social Security reserves.


That AFSCME opposes any attempt to balance the budget or to provide tax cuts to wealthy Americans on the backs of senior citizens by reducing the Social Security cost-of-living adjustment.


Henry Bayer, Executive Director and Delegate
AFSCME Council 31