Senior citizens received more bad economic news as Washington D.C. announced their Social Security checks would not be the beneficiary of a cost of living (COLA) increase, in 2011. Along with increasing gas prices, health care costs and normal price increases, the no COLA increase will affect over 58 million retirees in the United States, says “Govt: No call for Social Security Increases in 2011.”
This will be the second consecutive year of no cost of living increase. These two years are the first with no COLA increase, since Congress authorized them in 1975.
The law said the Social Security Administration would yearly allow for increases in the monthly checks, based on the Consumer Price Index for Urban Wage Earnings and Clerical Workers that’s used to calculate inflation. Inflation in the months of July, August and September of one year, is compared to inflation in the same months from the preceding year. Inflation indicates a bigger check, and conversely, no inflation means no increase in the size of Social Security checks.
Statistics show 64 percent of people who get Social Security checks depend on them to subsist, and a third of them rely on the benefit. The average Social Security check is about $1072.
The announcement is bad news for those seniors whose home values, and savings vehicles, are still recovering from the financial downturns in 2009. For those who depend on Social Security the news is worse, because they haven’t had a raise since 2009, and the next possible one is 2012.
Seniors who doctor regularly, and are paying for prescriptions will find it hard to believe there is no inflation.
Although lack of inflation is not technically the fault of the Democrats, they are the ones in power. In addition, with the economy in bad shape and the out of control spending coming out of Washington, it’s hard for people to differentiate.
It’s also bad for the Democrats, because they have made Social Security an issue by running ads talking about the Republicans wanting to privatize Social Security. They are trying to capitalize on the idea people don’t want to privatize Social Security, but if Social Security is not working, privatizing it might not be a bad idea.
A bill introduced in the House of Representatives wants to pay seniors $250 to compensate for the no COLA increase. That’s all well and good, except it increases the National Debt, which harms the younger generation more than it helps senior citizens.
Steve Olemacher: Gov’t: No Call for Social Security Increase in 2011: Yahoo! News.mgt