Social Security makes it official: No COLA in 2010

[samanthajane13]

By STEPHEN OHLEMACHER, Associated Press Writer Stephen Ohlemacher, Associated Press Writer – 13 mins ago

WASHINGTON – There will be no cost of living increase for more than 50 million Social Security recipients next year, the first year without a raise since automatic adjustments were adopted in 1975, the government announced Thursday.

Blame falling consumer prices. By law, cost of living adjustments are pegged to inflation, which is negative this year because of lower energy costs. Social Security payments do not go down, even when prices drop.

The Obama administration, meanwhile, is pursuing a different way to boost recipients' income. On Wednesday, President Barack Obama called for a second round of $250 stimulus payments for seniors, veterans, retired railroad workers and people with disabilities.

The payments would match the ones issued to seniors earlier this year as part of the government's economic recovery package. The payments would be equal to about a 2 percent increase for the average Social Security recipient.

Social Security payments increased by 5.8 percent in January, the largest increase since 1982. The big increase was largely because of a spike in energy costs in 2008.

"Social Security is doing its job helping Americans maintain their standard of living," said Social Security Commissioner Michael J. Astrue.

But, he added, "In light of the human need, we need to support President Obama's call for us to make another $250 recovery payment for 57 million Americans."

The Labor Department reported Thursday that consumer prices had declined 2.1 percent since the third quarter of 2008. The cost-of-living adjustment for Social Security, or COLA, is based on the change in consumer prices from the third quarter of one year to the next.

Social Security recipients shouldn't get a raise next year because their purchasing power has already increased with falling consumer prices, said the Center on Budget and Policy Priorities, a liberal-leaning think tank.

"Since the purpose of COLAs is to preserve beneficiaries' purchasing power, the decline in overall prices means that beneficiaries do not need a COLA in January 2010," Kathy Ruffing, a senior policy analyst at the center, wrote in a report this week.

Over the past 12 months, gasoline prices have fallen 29.7 percent and overall energy costs have decreased 21.6 percent, the Labor Department said Thursday.

Ruffing noted that government forecasters don't expect consumer prices to return to 2008 levels until 2011.

Some advocates for seniors, however, argue that older Americans spend a disproportionate amount of their incomes on health care costs, which rise faster than consumer prices.

The lack of a cost of living increase triggers several provisions in the law. Among them, the amount of wages subject to Social Security payroll taxes will remain unchanged. The first $106,800 of a worker's earned income is currently subject to the tax.

Also, Medicare Part B premiums for the vast majority of Social Security recipients will remain frozen at 2009 levels. However, premiums for the Medicare prescription drug program, known as Part D, will increase.

Obama called on Congress Wednesday to approve the second round of stimulus payments, and several key lawmakers said they would.

"This additional assistance will be especially important in the coming months, as countless seniors and others have seen their retirement accounts and home values decline as a result of this economic crisis," Obama said in a statement.

The $250 payments would go to Social Security recipients as well as those receiving veterans or disability benefits, railroad retirees, and retired public employees who don't receive Social Security. Recipients would be limited to one payment, even if they qualified for more.

The White House put the cost of the payments at $13 billion. Obama said he would not allow the money to come out of the Social Security trust funds, which would further erode the finances of the retirement program. Social Security already is projected to pay out more in benefits than it collects in taxes in each of the next two years.

However, Obama did not offer any alternatives to finance the payments. A senior administration official said Obama was open to borrowing the money, increasing the federal budget deficit. The official, who requested anonymity, was not authorized to speak on the record.

Senate Majority Leader Harry Reid, D-Nev., said he supports sending out another round of payments, as did Rep. Charles Rangel, D-N.Y., chairman of the Ways and Means Committee, which has jurisdiction over Social Security in the House.

House Speaker Nancy Pelosi, D-Calif., said she would work to "help seniors, veterans, and people with disabilities hit by the worst economy since the Great Depression."

Other lawmakers said seniors shouldn't get the extra payments because the formula doesn't call for it.

"I think it would be inappropriate," said Sen. Judd Gregg, R-N.H. "The reason we set up this process was to have the Social Security reimbursement reflect the cost of living."

The average monthly Social Security payment for all Social Security recipients is $1,094.


http://news.yahoo.com/s/ap/20091015/...lhbHNlY3VyaQ--

[samanthajane13]

Social Security freeze means seniors must scrimp
By MATT SEDENSKY, Associated Press Writer Matt Sedensky, Associated Press Writer – 2 hrs 57 mins ago

PEMBROKE PINES, Fla. – If her check were bigger, 76-year-old Agnes Conti might be able to spring for a better cut of meat for her pot roast. She could afford to send her nine grandchildren more than $20 for their birthdays and Christmas. She'd be able to buy some nice new clothes, like she sees on QVC, not what she settles for at Walmart.

If only. The government has said the Social Security checks Conti and tens of millions of other seniors rely on as their primary source of income will not increase next year as consumer prices have fallen overall. And while the retired hospital clerk will get by, she'll be watching her spending even closer, knowing she can't expect the annual raise she's been accustomed to.

"We were good citizens all our lives. We went to work, we lived by the book, we weren't on welfare, we didn't ask the city for anything," Conti said while taking a break from crafts at a senior center here. "And what do we get?"

At the Southwest Focal Point Senior Center in this Fort Lauderdale suburb, seniors lamented the cost-of-living freeze and praised a White House plan for $250 checks to soften the blow. But they took all of the news in stride, saying they've had a lifetime of experience living on a fixed income and would manage with the money they currently receive.

Frank Ferreira sits in the center's lobby, near a decorative fireplace and an autumn centerpiece. The 90-year-old retired truck driver loves to sing, even practicing on a karaoke machine at home, and loves to dance even more. He gets about $890 a month from Social Security, most of which he hands over to his daughter to help pay his share of the bills.

The money isn't the biggest issue, Ferreira said. It's the message the government is sending about caring for seniors.

"I could use a little more, but that's all right, I get along," he said. "But I think that we deserve it, the elderly. You can't just discard them. You've got to help them."

Nearby, 89-year-old Miriam Danzinger is shuffling along with a walker. She gets about $1,300 monthly in Social Security, and after rent and other expenses, including a MediGap plan, she has little to spare. Her daughter helps pay her bills.

When her Chevrolet Cavalier broke down a few months back, Danzinger was forced to give it up. When she goes to the store, she's thrifty, having learned how to cut grocery costs when she ran a coffee shop. She lives as simply as possible.

"Listen, there's no money. People are going hungry," she said. "But what can I say? I'm only a little ant."

The freeze in next year's checks is the first since automatic Social Security cost-of-living increases were adopted in 1975, and follows a 5.8 percent increase in January, the largest since 1982. By law, the adjustments are pegged to inflation, which is negative this year because of lower energy costs.

The Obama administration plan to send $250 stimulus payments to about 57 million seniors, veterans, retired railroad workers and people with disabilities, would amount to a roughly 2 percent raise for the average Social Security recipient. If approved, the checks would cost about $13 billion, though there is no plan yet how to finance them.

While seniors here have grown used to the annual raises, many of them said they're willing to cut the government some slack given the recession and the federal deficit.

"When they have the money, they give us the raise. If they don't have it, they don't have it," said Lucy Polieto, a retired waitress who lives in Southwest Ranches. She wears a glittery gold sweater and chains around her neck, and walks with a spry bounce that belies her 94 years. "Sometimes, I'm so surprised when I look at the check and I get a raise."

The news this week that checks would be stagnant is buffered by some positives: Seniors won't be getting any less than they already do, most recipients' Medicare part B premiums will freeze as well, and the president's plan could soften the blow. But because the one-time stimulus payments won't be a lifetime raise, it means many seniors will never see what amounts to thousands of dollars.

For those in poverty, the raise could have made a huge difference. But for the average senior simply living on a fixed income, it is seen less in dollars and cents, and more in the tangible costs they might be more careful with.

Polieto cooks eggplant, chicken cacciatori and pasta fazool. A raise could have given her more leeway with her grocery bill.

"Then I could buy some steaks, maybe," she said. "But I'd rather have a pork chop."


http://news.yahoo.com/s/ap/20091016/...curity_seniors

[wind149]

Donna, are you surprised we are not getting a raise this year??? I guess the rich politicians figure since fuel and food came down in price, that we don't have other expenses beyond that and we get the short end of the stick. I counted on at least a little extra and what is a real joke is I get a letter from welfare the other day gleefully informing me that I was getting a whopping $4 raise in food stamps and while that is OK, what I get a month no matter how much hamburger and chicken I live on does not stretch through the month as it is and that is the best the state can do. And it is fine and dandy they send us another $250, but that won't make a dent in anyone's financial woes and I am so grateful that at least MI picks up the tab for my Medicare premiums, otherwise this coming year, I would be paying the $106 charge myself, but I am cautious and not optimistic, that at some point that tool of a gov of ours is gonna try to yank that right out from under us and when that happens, riots will break out in the streets!!! And while the gov is trying to cut costs, I see we are still over in Iraq to the tune of billions of dollars, we get screwed but some Taliban asswipe will get all hooked up. "Oh we shot up your house?" "Let us build you a new one" "OH, your kid was killed, well let us give you something for your pain and suffering" "We blew up your village" "Let us build you a brand new one". So I think I am gonna write a letter to Obama explaining that we NEED the money and not some terrorist.

[samanthajane13]

Not really, Wind.

But I also got hit with a 35% increase n my portion of the rent from Sect. 8, they dropped Katey from my food stamp case, and in January, when she turns 21, we lose her $77 a week child support.

So...my food stamps went DOWN over $125, my rent went UP, and the child support is going to evaporate. And winter is coming. Gas may be down, but the electric to run my furnace isn't. In fact National Grid just gave themselves a BIG RAISE IN RATES!!!

Katey also starts back to school in January...and if we want her back on the food stamp case, she has to work 20 hours a week or join Job Fair and get sent to some damned telemarketing place to work for her share of the food stamps. Or we could just eat dog food, I guess...

When is she supposed to eat, sleep, and study if she's at school full time and working part time???

And she's learning-disabled, too, so when does she get her tutoring???

I'm so damned sick of this "rob Peter to pay Paul" crap.

And it just keeps getting worse.

THANKS FOR THAT NICE DEFICIT, BUSH!!!

I hope you rot in Hell.

[wind149]

Ah yes, my Section 8 cost went from $134 to $147 in July when I had an inspection and had to show Broom Hilda my award letter from SS. But it sounds like they really like screwing you guys over. And here, if a child is in school, child support payments continue till the child is employed and here, the food stamps will also continue till the child is 21 if they are living with a parent. but some of the I know how to mess with the system has got this down to a science but still claiming the kid lives at home and they get away with this and if the kid gets knocked up, grandma or grandpa can now claim the kid too and get more bennies, but honest people get screwed. i am surprised when I bought my car that welfare did not take away anything, in NH if you claim a car, they go by blue book value if it is 1993 Buick and a piece of crap and tick off ADFC and food stamps right out of your bennies, so I used to keep it registered in my sister's name. So my worker here looks at me like I am nuts and says why? And I tell her and she was like, don't worry, now if you were driving a brand new Mercedes, then I would be questioning it!!

[samanthajane13]

My rent portion went from $100 to $134. 33%.

The food stamps were cut in April from $178 to $54.