The Fair COLA for Seniors Act of 2023, H.R. 716, would ensure the consumer price index used to determine annual cost-of-living adjustments (COLA) accurately measure seniors’ spending. Specifically, the bill would ensure the Bureau of Labor Statistics adopts the Consumer Price Index for the Elderly (CPI-E) to measure goods and services seniors frequently purchase instead of the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) which tracks the spending habits of the urban workforce.
Under the CPI-W, seniors lose purchasing power due to underestimated inflation. They spend more on medical care and goods specific to their needs compared to the average spending of the public. In contrast, the CPI-E would only track the spending habits of Americans aged 62 and older and can better determine appropriate cost adjustments. When measuring costs experienced by seniors with the CPI-E, inflation is greater by an estimated 0.27 percent per year than what the CPI-W shows, highlighting the need for Congress to take up this key legislation.
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