For the first time since benefits were linked to the Consumer Price Index in 1975, Social Security recipients will not get an automatic increase because of a cost-of-living adjustment.
That's because since this time last year the CPI has actually fallen by 2.1 percent, with energy prices, a key part of the index, falling by almost one-fourth. Since benefit levels by law never go down, even if the CPI does, that means retirees' purchasing power has undergone a modest increase.
Last January, thanks to the index, Social Security benefits increased by 5.8 percent. This January, according to the law, there should be no increase and none until January 2012. But it also means there will be no increase in the Medicare Part B premiums.
Social Security benefits aren't the only ones indexed. So are veterans' benefits, railroad retirement and disability benefits. In all, about 57 million people will not get an increase they have come to see as almost automatic.
But President Barack Obama is asking Congress to approve a second round of $250 payments to the beneficiaries, and lawmakers seem sympathetic to the idea. The payments are being justified as stimulus. But, unlike the "Cash for Clunkers" program, the amount is too small to cause people to go out and buy something they otherwise wouldn't. The effect on the sector of the economy struggling the hardest, the job market, would be negligible.
The single payment in lieu of an inflation-triggered benefit increase also goes to the integrity of the cost-of-living adjustment. It was intended to relieve Congress of the task of raising benefit levels, which it tended to do at times the seniors' votes were needed.
Congress should consider carefully whether we can afford this well-intended gesture. The cost, $13 billion, all of it borrowed, suggest we cannot.
(Distributed by Scripps Howard News Service, http://www.scrippsnews.com)
This is, of course,
This is, of course, ridiculous. Seniors, the primary beneficiaries of such a proposed action, aren't affected by energy prices as much as the rest of the populace. And many seniors have seen their incomes slashed by much more than 2.1% in this economy. As Sen. Charles Schumer aptly put it: "Any senior living in the real world knows that the cost of living has gone up over the last year." In addition, Rep. John Boehner suggested that the cost-of-living adjustments could be completely paid for by using unspent funds from last year's stimulus legislation.
social security stimulus
I agree partly that this is a bad idea. I think if you really want to stimulate the ssa recipients you should at least double it. to about 500.00 per person i know this would cost more but at least people could at that point look at buying more than just paying down bills or buying food. It might actually stimulate the economy a little bit more. Or even more give 250 or more to every american citizen be it elderly, adult, young adult, teenager or baby. That would really help.
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