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October 10, 2010 in Nation/World
No Social Security COLA expected for 2011
WASHINGTON — As if voters don’t have enough to be angry about this election year, the government is expected to announce this week that more than 58 million Social Security recipients will go through another year without an increase in their monthly benefits.
It would mark only the second year without an increase since automatic adjustments for inflation were adopted in 1975. The first year was this year.
“If you’re the ruling party, this is not the sort of thing you want to have happening two weeks before an election,” said Andrew Biggs, a former deputy commissioner at the Social Security Administration and now a resident scholar at the American Enterprise Institute.
“It’s not the congressional Democrats’ fault, but that’s the way politics works,” Biggs said. “A lot of people will feel hostile about it.”
The cost-of-living adjustments, or COLAs, are automatically set each year by an inflation measure that was adopted by Congress back in the 1970s. Based on inflation so far this year, the trustees who oversee Social Security project there will be no COLA for 2011.
The projection will be made official on Friday, when the Bureau of Labor Statistics releases inflation estimates for September. The timing couldn’t be worse for Democrats as they approach an election in which they are in danger of losing their House majority, and possibly their Senate majority as well.
This past Friday, the same bureau delivered another painful blow to Democrats: The U.S. lost 95,000 jobs in September and unemployment remained stubbornly stuck at 9.6 percent.
Democrats have been working hard to make Social Security an election-year issue, running political ads and holding press conferences to accuse Republicans of plotting to privatize the national retirement program.
This week’s announcement about Social Security benefits raises more immediate concerns for older Americans whose savings and home values still haven’t recovered from the financial collapse: Many haven’t had a raise since January 2009, and they won’t be getting one until at least January 2012.
“While people aren’t getting COLAs they certainly feel like they’re falling further and further behind, particularly in this economy,” said David Certner, AARP’s legislative policy director. “People are very reliant on Social Security as a major portion of their income and, quite frankly, they have counted on the COLA over the years.”
Social Security was the primary source of income for 64 percent of retirees who got benefits in 2008, according to the Social Security Administration. A third relied on Social Security for at least 90 percent of their income.
A little more than 58.7 million people receive Social Security or Supplemental Security Income. The average Social Security benefit is about $1,072 a month.
Social Security recipients got a one-time bonus payment of $250 in the spring of 2009 as part of the government’s massive economic recovery package. President Barack Obama lobbied for another one last fall when it became clear seniors wouldn’t get an increase in monthly benefit payments in 2010.
Congress took up the issue, but a proposal by Sen. Bernie Sanders died when 12 Democrats and independent Sen. Joe Lieberman of Connecticut joined Senate Republicans to block it. Sen. Olympia Snowe of Maine was the only Republican to support the second bonus payment.
Sanders, I-Vt., said he expects older voters to be angry when they learn there will be no increase for the second straight year.
“I do think there’s going to be political fallout,” Sanders said. “Many seniors who are spending a lot of money on health care and prescription drugs really are going to find it hard to believe that there has been no inflationary costs to their purchasing needs.”
Federal law requires the Social Security Administration to base annual payment increases on the Consumer Price Index for Urban Wage Earners and Clerical Workers, which measures inflation. Officials compare inflation in the third quarter of each year — the months of July, August and September — with the same months in the previous year.
If inflation increases from year to year, Social Security recipients automatically get higher payments, starting in January. If inflation is negative, the payments stay unchanged.
Social Security payments increased by 5.8 percent in 2009, the largest increase in 27 years, after energy prices spiked in 2008.
But energy prices quickly dropped. For example, average gasoline prices topped $4 a gallon in the summer of 2008. But by January 2009, they had fallen below $2. Today, the national average is roughly $2.70 a gallon.
As a result, Social Security recipients got an increase in 2009 that was far larger than actual inflation. However, they won’t get another increase until inflation exceeds the level measured in 2008. The Social Security trustees project that will happen next year, resulting in a small increase in benefits for 2012.
Social Security spokesman Mark Lassiter said the agency has no leeway to increase payments if the inflation measurement doesn’t call for it.
Rep. Earl Pomeroy, D-N.D., chairman of the Ways and Means subcommittee on Social Security, has introduced a new bill to provide $250 payments to seniors, if there is no increase in Social Security. Maybe, he said, there will be more of an appetite in Congress to pass it after lawmakers hear from voters in November.
“Costs of living are inevitably going up, regardless of what that formula says,” Pomeroy said. “Seniors in particular have items such as uncovered drug costs, medical costs, utility increases, and they’re on fixed incomes.”
© Copyright 2010 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
Stocks plummet as outlook in Europe dims 
Scoutster on October 10 at 8:32 a.m.
Well, all this saving money by the govt is fine and dandy, but to not give me more SS!? That’s outrageous! Next thing the govt is going to get all up in my Medicare, too!
Govt: Hands off my SS and Medicare! I want MORE!
Signed— Tea Party Geezer
(for the record, I do not receive either)
Ninch on October 10 at 9:03 a.m.
How about recovering all those $250 payments made to dead people before proposing doing the same again?
polistra on October 10 at 9:11 a.m.
This was the first year in living memory with slight negative inflation.
More deflation, please! Since we’re not getting any interest on savings, deflation serves the same purpose.
liarsinnews on October 10 at 9:11 a.m.
How about asking all the bankers to give back all the bonus checks that the taxpayers provided with stimulus money?
Albert on October 10 at 9:11 a.m.
For those who would criticize and politicize this decision, please keep in mind those seniors - such as myself - who depend upon Social Security for their living expenses. People forget that “we” have paid into Social Security (7.5-15%) of our gross incomes for 47 years and would like a return on our “investment?”. Government employees and union members automatically receive large amounts of COLA without a blink. However when you are a “senior” and paid into a “retirement?” fund for all of your working life, well good friends where is our COLA? It’s not like I’m demanding any type of “federal assistance”…this is my money that was “demanded” of me over these years. The same holds true for the “Medicare” premiums that I have paid for and not utilized. Before you render a mockery of seniors, please remember that soon you will be in the same boat. ROI? Like what ROI???
Radbooks on October 10 at 10:02 a.m.
Albert, not all government and union members get large COLAs on any sort of regular basis. Teachers in this state haven’t gotten one for at least two, possibly three years due to current economic conditions. I’m not complaining, just stating the facts for you.
However, I do think that there should be a COLA for social security seniors - they definitely need it!!
misjustice on October 10 at 10:24 a.m.
Cost of living has gone down? Where? Not in my house!
For those of you thinking the seniors are living high on government assistance? It is a benefit they had to pay into for their retirement years.
How many of you could live on $800 a month? That’s what my husband draws for his SS.
Now try to pay for the new water charges since this city changed the way they charge us for it. (Our water bill doubled with this change!) Deduct & stash enough out of each check to pay the astronomical annual real estate taxes on our small house, buy groceries, pay insurance, electricity, doctor co-pays, gas for the car (when we can afford to go anywhere) & any other charges that seem to pop up each month.
So maybe those of you that aren’t currently living on SS should just try for one month to see what 5 million seniors have to do each month to survive. It’s not living it’s just survival!!
spokanecougar on October 10 at 11:30 a.m.
It’s all Obama’s fault because he is a black muslim socialist communist from Kenya and its all part of his plan to destroy this country and have Sharia Law enacted.
PhiltheBibliophil on October 10 at 11:49 a.m.
If any of these Tea Party Wingnut Whacko’s get in there won’t be any Social Security, Medicare or SSI. Maybe Wal-Mart won’t raise prices again in 2011 because of this, but I wouldn’t bet the 20 year old “beater with a heater” on it!
Dazzeetrader11 on October 10 at 12:51 p.m.
Expect more of this. Obama’s plans are simply unsustainable. This will spiral down for 5 years. This will continue unless he prints more money.
For Cougar, Scoutster, etc…this is what happens when the industries slows down, unemployment gets high. This is why Obama’s trying to offset his obvious incompetence by stealing from small business and what he defines as “wealthy”, and raising taxes. When the ones with the dough run out, it’s socialism’s failure. COming sooner than I thought it would.
The end of the line for socialism has begun. November cannot come soon enough. A firewall will stop this and he’s veto some things but he’d better have a strong pen . He’ll need it. I’m still shocked the liberals can’t see what he’s trying to do and the price we pay for his mischief. Before you blame Bush, remember who is signing Obama’s bills. Never have I seen one person ( unless mental) do everything wrong and nothing right.
Post racial preseident? HAHAHAH!! When he arrived 66% believed that…now only 36% believed he’s help the racial situation. MOST beleieve he’s the problem! Social justice!! hahah…
Anyway..this will continue to get worse untill he and his supporters are rooted out and gone. Hope and change anyone?? Liking it now?
Teseract on October 10 at 12:55 p.m.
For once I agree with Gramma — the change to “Conservation based billing” from our lovely city utilities will increase my city utilities bill from $86/mo to $102/mo based on their “calculator” available on spokanecity.org. Even if I “conserve” 20% of my average water consumption (how to do so considering I already don’t water my lawn, and have 4 people in the house, 3 of them female, they do not say) it only goes down to $99 according to the calculator. All I can say is I was planning on moving in the spring, and it definitely won’t be to anywhere in the city limits (the only place this increase applies!) Boy, I sure wish I could get a 15% raise this year like the city utilities are getting out of me!
Add that to the yearly Avista rate hikes of 3-9%+, and the costs of food going up or packages getting ever smaller while the price stays the same, I can see why the elderly who depend on social security are upset that their benefits aren’t keeping up with the true costs of living.
Mr_Bloggy on October 10 at 1:38 p.m.
Oh come on … Chimpy McRetard and Uncle Evil Dead Heart Demon had eight years to crap brontosaurus sized dookies on the heads of Americans (except the rich) and Obama’s only had a couple to shovel it off.
Gonna take awhile. Too bad all you instant gratification babyboomers don’t understand what No Drama Obama knows instinctually. He’ll get us there and the recovery will be enduring and robust.
And all you purveyors of narcissistic teabaggery will blubber and galoomph with stunned amazement when He does.
Go Team Obamerica!
misjustice on October 10 at 1:39 p.m.
A 3% increase on $800 is $24. Then every time there is a COLA increase there is also an increase in the Medicare dividend. So, the $24 increase would be deducted by about $50 because usually there is a 6% increase in that charge. Do you see where I’m going? The increase doesn’t put more money into the house, it just helps to offset the other increases.
So, when O-Blame-A says we won’t be getting an increase in benefits the entire truth isn’t coming out. You see, this year we won’t get the 3% increase in pay, but the 6% increase in Medicare premiums will continue. Therefore, the $800 check will be reduced by approximately another $50. Now try to live on $750.
Maybe the Obama’s should try living like a senior citizen or “real people” instead of taking extravagant trips around the world!! Yea, right…………
james_l on October 10 at 2:27 p.m.
I understand why people are upset, but this decision is in no way Obama’s.
The formula used to calculate COLA’s is set by statute. The President has no latitude to give or not give COLA’s.
More than 2/3 of the private pensions have been greatly reduced due to insolvency and for the people drawing from their 401k’s it has been even worse in this economic slump. Just imagine the devastation if Social Security had been privatized, like President Bush and the Republican Party platform called for.
Congress could pass legislation, like Obama asked for late in 2009, to grant adjustments and waive Medicare premium increases.
maria on October 10 at 2:34 p.m.
Gramma, you sound bitter and jealous.
gotcha on October 10 at 2:35 p.m.
Did everyone notice Congress managed to get their COLA Voted in.
I thought that was quite gutsey.. It is long past watching these elite that are out to screw everyone of us.. It is time to take action on them..Throw their asses out of office.
Shylock13 on October 10 at 3:29 p.m.
Whether or not Social Security recipients receive a COLA is part of the existing law. Why don’t both parties agree to amend the law to provide for a modest COLA when the “cost of living index” is at or below 0%? As an alternative, possibly all of us on Social Security should automatically get a significant COLA…unless we vote NOT to get one. That’s how Congress gets pay raises. Both Houses passed a law, signed by the President, to that effect. Why? Because the Senators and Representatives did not want to face their constituents if they had voted for their own pay raises.
Diana on October 10 at 3:49 p.m.
Gramma, so you’re a socialist, after all. I love your gimme, gimme, gimme posts.
Mr. Bloggy wins the day!
worthasecondlook on October 10 at 4:05 p.m.
8 years of declaring war and buying military stuff and you expect anyone to fix it in 2? Give it 6 more years of tying up loose ends and building the economy and then let us look at who next can help the USA to the next level. Hopefully, we quit spending overseas and start spending domestically. Destroying other countries and then paying to rebuild them is taxing on our economy.
misjustice on October 10 at 4:45 p.m.
Gramms; when you Gaggers vote in your guys, guess what? Social Security will be GONE! And your “benefits” will be privatized. Which equals a big give away to the Wallsters. Who will you blame then?
straighttalk on October 10 at 5:51 p.m.
Congress is not getting a pay raise. House and Senate members have not voted to give themselves raises. The $4,700 and $5,300 figures are made up out of whole cloth. The true figure is $0. As we reported last year, Congress voted to freeze its own pay for 2010. Any pay raise for 2011 will take place automatically under existing law, unless Congress votes to freeze its pay again before then.
Update, May 17, 2010: There will be no House or Senate raise for 2011 either. Congress passed, and the President signed, H.R. 5146, which eliminates the automatic adjustment in pay for Members of Congress that would have taken place in 2011.
eagleproducer on October 10 at 6:35 p.m.
Grammy: I think you should have shown more personal responsibility during your working years if you wanted to have more than $800 a month and free medical care. $25 a month into an annuity at the beginning of your working days would have resulted in a monstrous payout for such a small sacrifice. It’s called compound interest and my folks taught me about it long ago. Plus they were Apple computer people from day one. 10 grand in Apple stock from 1994 goes a long way these days!
Quit crying, SSI recipients. Most of you drawing benefits now didn’t pay 7.65% into the system for your whole working careers like people who started working in the 80’s. Ronald Reagan is the one who installed the largest tax increase on the working class ever when he raised SSI to the current rate. Then he raided the surplus to pay for his 600 ship navy and Star Wars. People working now are allowed the grand privilege of paying off those debts Reagan incurred for SSI.
http://capitalgainsandgames.com/blog/bruce-bartlett/1632/reagans-tax-increases
oneanddone on October 10 at 6:48 p.m.
Posts on the SR are THE most negative, personal attacks of nearly any news service out there. Many of you fools attack others as if YOUR opinion were written in the Bible. It’s obvious that you have absolutely no personal relationships, as it would be impossible to be within earshot of you. And it’s ALWAYS the same bozos sharing their worthless thoughts. Get a life morons.
misjustice on October 10 at 7:03 p.m.
I don’t want to seem negative, oneanddone, but that was pretty negative.
Dazzeetrader11 on October 10 at 7:09 p.m.
One thing: Obama’s spent the money elsewhere….didn’t protect the COLAs. Gregoire and Marr sure didn’t either.
So when you all wonder why no raises in COLA…ask yourselves why not! What happed?
Bush didn’t cause it. Bloggy would like to blame the past 8 years…when the congress has been Democrat and in control since 2006! Junk logic…nice opinions Bloggy…all heat…no light.
Personally…we all must come to terms with a few baskics: In these entitlement programs…just like publically funded pensions…when the source of funds runs out, best get your lunchbuckets out and get back to being productive. FDR knew it…LBJ knew it. Kennedy avoided it by cutting taxes. The entitlemnts are simply NOT sustainable. When you go brok, you’re brok. It’s only the beginning.
Britains health care system is being phased out and will be gone in 5 years. Tax cuts have reduced personal income tax to 40% now..why? The Brits know that taxing productive people to fund the less productive/no productive doesn’t work. Seden, Germany, France. etc have figured it out. What’s wrong with the uS??? Obama is . Dems are. Entitlements are gifts and are bribes for votes. Vote conservative if you want to save this country. NO on Marr, NO on Obama, NO on Murray…it’s a start that must begin.
Diana on October 10 at 7:16 p.m.
oneanddone, that post was hilarious coming from you.
Bush.
Economic crash - 2008.
I win.
straighttalk on October 10 at 7:32 p.m.
Daisy, you need a cup of tea and a moment of reality.
Erik_T on October 10 at 7:34 p.m.
Hey, they have to pay for their own congressional raises some how…. DURR!!11
misjustice on October 10 at 7:56 p.m.
DAZE; past the pint of no return? ; )
misjustice on October 10 at 8:49 p.m.
My post was deleted. You guys apparently can say what you want about me but when I say something about you it is deleted.
Nice!
looselycoupled on October 10 at 8:59 p.m.
@Daisy Minken
Your ignorant, misleading Fox News talking points reveal how elementary your understanding of economics.
“Expect more of this. Obama’s plans are simply unsustainable.”
===> If you actually bothered to read the article, you’d understand that SS COLA is adjusted automatically based on the consumer price index, which spiked last year because of 2008 fuel prices and has nothing to do with Obama or his policies.
“For Cougar, Scoutster, etc…this is what happens when the industries slows down, unemployment gets high. ”
===> While the Social Security system could certainly be revised by congress because of high deficits and low tax revenues, this COLA issues has nothing to do with unemployment of industry slowdown.
“This is why Obama’s trying to offset his obvious incompetence by stealing from small business and what he defines as ‘wealthy’, and raising taxes. ”
===> 1) Please do not spread your delusion as fact. Obama did not cause the world-wide financial collapse or the recession that started from it. In fact, He was not even in office at the time.
===> 2) Obama is not “raising taxes”. He is letting the Bush tax cuts expire on those making over $250K a year. These are the same tax cuts which helped in large part to double the national debt during Bush’s presidency. For the top 1%, they will return to paying the tax rate that was in effect during the ‘90s — which was one of the most prosperous decades in modern history.
(Ironically, after the bush tax cuts expire, the nominal tax rate will still be lower than that during the Reagan years. )
Upwards of 95% of small business owners do not take home more than $250,000 of net income. Despite misleading reports from conservative “think-tanks”, most of the “small businesses” that fall in that top 5% are actually large corporations making tens of millions of dollars or more in revenue and are only designated a “small business” because of their S-Corp or LLC registration, which limits them to having only 100 shareholders.
3) What is unsustainable is the current spending and taxation level. The deficit is out of control, and there is not much to cut on the spending side considering the military, medicare, and social security take up the majority share of national expenditures. Tax revenue, in some form or another, must be increased in the coming years to reduce the deficit.
“When the ones with the dough run out, it’s socialism’s failure. COming sooner than I thought it would. The end of the line for socialism has begun.”
===> I would love for you to point out exactly which “socialist” policies have been enacted in the two years Obama has been president. On the contrary to your ridiculous assertion, ( no doubt picked up from Glen Beck or some other brainless hero ) The United States has been and continues to be one of the least “socialist” or least progressive “social democratic” developed countries in the entire world.
- Those in the highest federal income tax bracket pay some of the lowest levels in income taxes, including investment and dividend income, in the developed world. In other words, the rich have it quite good in this country. This has not changed under Obama.
- According to the GINI index, which measures economic disparity in a country, the United States is placed alongside such notables as Ghana, Senegal, and Cambodia.
- Really, the only “socialist” elements of United States federal policy are the medicare and social security programs, which enjoy widespread support in the country, even among so-called “conservatives”.
Shylock13 on October 10 at 9:03 p.m.
Congress did NOT vote to reject a pay raise!!! If it did, all of the candidates would be citing that in their re-election blurbs!!!!!!!!!!!!!!!!!!!
Dazzeetrader11 on October 10 at 9:58 p.m.
Sorry libs…your incompetent boy spent too much. He did everything wrong. The fish stinks from the head down. Dems lose big. Then maybe the conservatices can reverse this socialism and get America back on track. I’m in town this weekend. I just had dinner at the SPokane Club with one of the British ER MD’s. She spent some time telling us how England has been depressed for years …and how they’re trying to reverse it.
ONLY the conservatives who are supporting tax cuts for business are doing well…seems as though the private business are flourishing. She seemed worried that the US ( she wants to move here) is turning into England with its socialism and high tax rates. “Why would I move here if the it becomes like what I don’t like and has ruined my country?”.
I told her “Don’t worry, socialism and Barack are already over. We just haven’t been to the polls yet”.
I believe that. Money runs out…the solialist progressive (what a misuse of a word.. lolol) programs get over. Bloated pensions can’t be funded and the crazy programs stop. Maybe we can get back to work then. You guys want the entire society to be homogeneous and things managed by the same crew that can’t keep SSI solvent. Or Meciare..or, or or…how about the postal service??
In some ways I’m thinking it’s lucky Obama was elected. It sharply pointed out in a mere 18 months what the US doesn’t want. What happened when the “pigs go to the trough” when someobody doesn’t fill the trough? Pigs go elsewhere. N’uff said.
509ifyourlucky on October 10 at 10:34 p.m.
Electric bills increased, Rents increased, Garbage pickup rates increased, hidden taxes like found in your phone bill and in your electric bill increased, Property taxes increased. Groceries increased. I will just make one cut and that will be satellite tv
Mr_Bloggy on October 11 at 12:41 a.m.
The Teabagger Prayer for Election Day
“Dear Jesus I need a new awning and a 66 inch plasma HDTV for my RV, and a Confederate Flag airbrushed mural for my Dodge Ram pickup, please may your blessed candidates of the Godliest Old Party (GOP) win in a great white foaming tsunami (that’s Japanese for Big Assed Wave) of white people whitewashing the white picket fences of America to keep the people of those other skin colors that aren’t white from walking all over our Kentucky Bluegrass lawns and playing lawn darts, pinatas, and not cleaning up after their pit bulls and chickens.
Oh Jesus, I beseech thee, as one of our great American Tea Party forefathers would say if he was alive today and organizing a Tea Party and Bingo Event at the Silverwood Theme and RV Park in Godly North Idaho where almost ALL the folks have the skin color of Angels, GIVE ME A JEEP LIBERTY TO TOW BEHIND MY RV OR GIVE ME DEATH.
Blessed Tea”
maria on October 11 at 3:05 p.m.
Tea is the new Kool-Aid
eagleproducer on October 11 at 4:12 p.m.
Dazee: COLA’s tied to inflation were all part of the Republican Revolution brought to us by noted misogynist New Gingrich, et. al.
Thank the right people.
Also, since COLA’s for minimum wage are also linked to the C.P.I., they won’t be getting a raise either.
I think it’s great that those on SSI are having to tighten their belts as well. The rest of us have to, why not you? As well, maybe you’ll get to experience actual need and begin the empathize with those you’ve been demonizing your entire lives.
You want more in SSI? Then pack the halls of Congress on January 2, 2010 and demand they remove the cap on earnings placed on FICA deductions. How many of you complaining about not getting a raise realize people only pay FICA on the first $96,000 and any remaining income above that amount is not subject to FICA? Let the wealthy pay for your COLA and if you don’t get it, don’t blame it on Obama because he wasn’t even born when they devised the income cap on FICA!
I also noticed not a peep from the elderly whiners when it is pointed out you will all get way more in benefits than you paid into the system because you didn’t pay the higher rate instituted by Reagan for most of your working lives.
eagleproducer on October 11 at 4:17 p.m.
oneanddone: Can’t stand the heat…?
These threads are mild compared to some papers. I have a few in right wing U.S. of A I like to visit to flame on some of the bloggers and they are much more rough and tumble, probably because they don’t have a trained blog Nazi like the SR squelching free speech under the guise of “standards” and “guidelines.”
yumasun.com
Check that one out!