Historically feeble SS COLA gives Republicons cause to celebrate

[pinto]

3. CPI-W vs CPI-E

CPI for the Elderly (CPI-E)[edit]

Since at least 1982, the BLS has also computed a consumer price index for the elderly to account for the fact that the consumption patterns of seniors are different from those of younger people. For the BLS, "elderly" means that the reference person or a spouse is at least 62 years of age; approximately 24 percent of all consumer units meet this definition. Individuals in this group consume roughly double the amount of medical care as all consumers in CPI-U or employees in CPI-W.[4]

In January of each year, Social Security recipients receive a cost of living adjustment (COLA) "to ensure that the purchasing power of Social Security and Supplemental Security Income (SSI) benefits is not eroded by inflation. It is based on the percentage increase in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W)".[5]

However, from December 1982 through December 2011, the all-items CPI-E rose at an annual average rate of 3.1 percent, compared with increases of 2.9 percent for both the CPI-U and CPI-W.[4] This suggests that the elderly have been losing purchasing power at the rate of roughly 0.2 (=3.1-2.9) percentage points per year.

In 2003 Hobijn and Lagakos estimated that the social security trust fund would run out of money in 40 years using CPI-W and in 35 years using CPI-E.[6]

Robert Reich, former United States Secretary of Labor, says there is an easy fix to the concern that the Social Security trust fund could run out of money: Just lift the ceiling on income subject to Social Security taxes, which is now $113,700.[7]

http://en.wikipedia.org/wiki/United_States_Consumer_Price_Index#CPI_for_Urban_Wage_Earners_and_Clerical_Workers_.28CPI-W.29