The short answer is no. We can’t afford it.
Giving seniors raises while workers face wages that either are declining or stagnant is not fair. Seniors actually are the demographic that is holding up best in this recession/depression because of guaranteed checks in the mail, other pension income and guaranteed medical care.
However, expect to see more debate about how the COLA is calculated. It is done by increases in the Consumer Price Index. Critics argue that goods and services calculated in the index are those that tend to be used by younger workers. And that makes it a poor measure to determine Social Security increases because seniors spend their money on different things. Because of that, a senior price index has been devised to more closely track the cost of living increases faced by seniors.
The biggest difference is that seniors spend a higher percent of their money on health care. So in the senior price index, increases in medical costs are more heavily weighted than in the standard Consumer Price Index.
Apparel, transportation, and recreation are categories in the CPI that have seen very low inflation, keeping the CPI down. But seniors spend less money on these things than younger people.
So why don’t we go to a senior price index? A calculation was done, and I’ve included an excellent analysis here that you should read, that says the senior index would result in bigger payments, which would bankrupt the Social Security fund quicker.
In other words, we can’t afford it.
I feel for seniors. But I feel just as much for young couples with young children facing loss of jobs, loss of health care and loss of their homes.