SENIOR ASSEMBLY FEDERAL PROPOSAL NO. 1

INTRODUCED BY SENIOR ASSEMBLY MEMBER LOH

LEGISLATIVE COUNSEL'S DIGEST

AFP 1: SOCIAL SECURITY: COST-OF-LIVING ADJUSTMENT.

UNDER EXISTING LAW, THE UNITED STATES SOCIAL SECURITY ADMINISTRATION PROVIDES SUPPLEMENTAL SECURITY INCOME TO PERSONS 65 YEARS OF AGE AND OLDER AND OTHER SPECIFIED PERSONS. THE SOCIAL SECURITY ADMINISTRATION USES A TOOL CALLED THE FEDERAL POVERTY LINE TO CALCULATE SUPPLEMENTAL SECURITY INCOME, WHICH INCLUDES AN ANNUAL COST-OF-LIVING ADJUSTMENT.

THIS MEASURE WOULD MEMORIALIZE THE LEGISLATURE AND THE GOVERNOR TO ENACT LEGISLATION THAT WOULD AUTHORIZE THE UNITED STATES SOCIAL SECURITY ADMINISTRATION TO
REPLACE THE FEDERAL POVERTY LINE AND COST-OF-LIVING ADJUSTMENT WITH THE ELDER ECONOMIC SECURITY STANDARD INDEX.

VOTE: MAJORITY.

AFP 1: RELATING TO SOCIAL SECURITY: COST-OF-LIVING ADJUSTMENT

WHEREAS, ONLY 18 PERCENT OF WORKERS BELIEVE THEY WILL HAVE ENOUGH MONEY FOR THEIR RETIREMENT, A NINE-POINT DROP FROM 27 PERCENT IN 2007 AND THE SHARPEST ONE-YEAR DROP IN 18 YEARS, ACCORDING TO THE INDEPENDENT NONPROFIT ORGANIZATION, EMPLOYEE BENEFIT RESEARCH INSTITUTE, WHICH FOCUSES ON RETIREMENT AND FINANCIAL SECURITY ISSUES; AND

WHEREAS, ONLY 29 PERCENT OF CURRENT RETIREES ARE CONFIDENT ABOUT THEIR FINANCIAL SECURITY, A 12-POINT DROP FROM 41 PERCENT IN 2007, WHICH LOSS OF CONFIDENCE IS ATTRIBUTED TO HIGHER GAS PRICES, RISING HEALTH CARE COSTS, DECLINING HOME VALUES, AND LACK OF JOB OPPORTUNITIES; AND

WHEREAS, THE FEDERAL POVERTY LINE (FPL), COMBINED WITH THE COST-OF-LIVING ADJUSTMENT, IS A TOOL USED BY THE UNITED STATES SOCIAL SECURITY ADMINISTRATION TO ADJUST THE FOLLOWING YEAR’S SOCIAL SECURITY DISTRIBUTION. THE FPL IS A FOUR-DECADES-OLD, ONE-SIZE-FITS-ALL, NONSCIENTIFIC MEASURE BASED ON A FOOD BUDGET FOR ADULTS WHO ARE 65 YEARS OF AGE AND OLDER, CALCULATED TO MEET THE MINIMUM NUTRITIONAL REQUIREMENTS; AND

WHEREAS, CALIFORNIA INCOME STATISTICS SHOW THAT, IN ORDER TO SURVIVE ON AN ANNUAL BASIS, A SENIOR HOMEOWNER WITH A MORTGAGE NEEDS $30,038 PER YEAR, A SENIOR HOMEOWNER WITHOUT A MORTGAGE NEEDS $20,111 PER YEAR, AND A SENIOR RENTER NEEDS $17,106 PER YEAR. YET, IN CALIFORNIA, AVERAGE ANNUAL SUPPLEMENTAL SECURITY INCOME IS $12,560 PER CAPITA, MEDIAN ELDER RETIREMENT INCOME IS $16,172 PER CAPITA, AND THE FPL SUGGESTS THAT SENIORS CAN SURVIVE ON $10,210 PER CAPITA; AND

WHEREAS, A RESEARCH ARM OF THE UNIVERSITY OF CALIFORNIA AT LOS ANGELES CENTER FOR HEALTH POLICY RESEARCH, THE CALIFORNIA ELDER ECONOMIC SECURITY INITIATIVE PROGRAM, DEVELOPED A TOOL, CALLED THE ELDER ECONOMIC SECURITY STANDARD INDEX, WHICH IS AN EMPIRICALLY-BASED FINANCIAL MEASURE THAT MORE ACCURATELY FORECASTS SENIOR ECONOMIC NEEDS THAT THE FPL; NOW, THEREFORE, BE IT

RESOLVED, BY THE SENIOR ASSEMBLY AND THE SENIOR SENATE, JOINTLY, THAT THE SENIOR LEGISLATURE OF THE STATE OF CALIFORNIA AT ITS 2008 REGULAR SESSION, A MAJORITY OF THE MEMBERS VOTING THEREFOR, HEREBY PROPOSES THAT THE CONGRESS OF THE UNITED STATES REPLACE THE FLAWED FPL WITH
A MORE ACCURATE METHOD TO GUIDE THE YEARLY SUPPLEMENTAL SECURITY INCOME ADJUSTMENT; AND BE IT FURTHER

RESOLVED, THAT THE CONGRESS OF THE UNITED STATES ADOPT THE ELDER ECONOMIC SECURITY STANDARD INDEX TO ENSURE ACCURACY IN EVALUATING THE ECONOMIC SECURITY OF SENIORS; AND BE IT FURTHER

RESOLVED, THAT THE SENIOR LEGISLATURE OF THE STATE OF CALIFORNIA RESPECTFULLY MEMORIALIZES THE CONGRESS AND
THE PRESIDENT TO ENACT APPROPRIATE LEGISLATION THAT WOULD ADDRESS THE CONCERNS SET FORTH IN THIS MEASURE; AND BE IT FURTHER

RESOLVED, THAT A COPY OF THIS MEASURE BE TRANSMITTED TO THE PRESIDENT AND VICE PRESIDENT, THE SPEAKER OF THE HOUSE OF REPRESENTATIVES, THE CHAIRPERSONS OF THE HOUSE AND SENATE COMMITTEES ON AGING, AND TO EACH SENATOR AND REPRESENTATIVE FROM CALIFORNIA IN THE CONGRESS OF THE UNITED STATES.

RN 08 21937

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