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Social Security's Viability
Social Security represents a strong commitment to our nation’s
seniors. Ever since Ida May Fuller of Vermont received the first Social
Security check issued, seniors have had a reliable safety-net to fall
back on in retirement and to supplement individual retirement savings or
pensions. Over 40 percent of all elderly Americans are kept out of poverty
by their monthly benefits, and these benefits are the major source of
income for two-thirds of all beneficiaries.
In their 2006 annual report, the Social Security Trustees calculated
that Social Security's Trust Fund will become depleted in 2040.
The Congressional Budget Office estimates that the Social Security
Trust Fund will become depleted a full decade later, in 2052.
Because Social Security is a pay-as-you-go system, both the Social
Security Administration and the Congressional Budget Office estimate
that after these dates Social Security will still be able to
continue to pay 70 to 80 percent of benefits to all retirees if the
Trust Fund is depleted. America’s seniors deserve the full benefits
that they have been promised. There is no clear solution on how to
preserve Social Security. But what is certain is that we must begin
a serious dialogue about how to gradually reform the program to
ensure that it remains strong for current beneficiaries as well as
future generations. To read a report prepared by the
Congressional Research Service about the financial outlook for
Social Security and Medicare click
here. (.pdf)
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Ida May Fuller |
Social Security COLA
To compensate for the effects of inflation, Social Security
recipients receive a cost-of-living adjustment (COLA) in January of each
year. The Consumer Price Index for Urban Wage Earners and Clerical Workers
(CPI-W), updated monthly by the Department of Labor's Bureau of Labor
Statistics (BLS), is the measure used to compute the change. The Social
Security COLA is based on the percentage change in the average CPI-W for
the third calendar quarter of the previous year to the third calendar
quarter of the current year. The COLA becomes effective in December of the
current year and is payable in January of the following year. The
COLA for 2006 was set at 4.1 percent. To read a report prepared by the Congressional
Research Service about the COLA click the following
link. (.pdf)
In September of 2005 Senator Leahy joined Senator Johnson and others in
cosponsoring the Social Security COLA Protection Act, that would prevent
increases in Medicare premiums from eroding the buying power of Social
Security. Last September, the Administration announced that Medicare
part-B premiums would increase by 13.2 percent for 2006.
Government Pension Offset (GPO) and Windfall Elimination Program
(WEP)
Senator Leahy is a proud cosponsor of
S.619, the Social Security Fairness Act of 2005. This bill would end the
unfair practice of reducing the Social Security benefit of a retiree, or
their spouse, who also receives a pension not covered by Social Security.
Senator Leahy believes that public employees should not be penalized for
dedicating their careers to public service. To read a report
prepared by the Congressional Research Service about the GPO and WEP click
the following link. (.pdf)
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