Social Security COLA Frozen For Second Consecutive Year
Every year from 1975 to 2009 the Social Security Administration (SSA) has passed a Cost of Living Adjustment (COLA) to combat inflation by raising Social Security retirement and disability benefits. This was the first year since the inception of COLA that no benefits increase was passed. Unfortunately for the retired and disabled, the SSA announced today that there will be no COLA for next year as well. According to the SSA, inflation has been too low since the last increase in 2009 to warrant a raise for 2011. To be fair to the SSA, today’s announcement was triggered by a report released by the Labor Department which shows that consumer prices are still lower than they were two years ago, when the last COLA was awarded. Of course this has not stopped Social Security advocacy groups from crying foul.
While consumer prices have not increased, many seniors saw their savings vanish and their home values plummet after the recent financial meltdown. “They are absolutely livid that Congress has bailed out banks, bailed out Wall Street, bailed out big car manufacturers and they didn’t get a COLA,” said Mary Johnson, a policy analyst for the Senior Citizens League. “Their costs are going up, and they cannot understand the government’s measure of inflation. They feel it’s rigged.”
Personally, this seems like another example of the government being fundamentally out of touch with the people. It does not matter if consumer prices have not actually risen in reality. The perception that costs are higher is still there because of the tremendous economic damage caused by the financial collapse, which has left seniors with less money to spend. Not to mention that this is a disastrous move politically with a midterm election right around the corner. Seniors are the most reliable demographic in midterm elections. Democrats are compounding their mistake by promising to schedule a vote after the Nov. 2 election on a bill to provide one-time $250 payments to Social Security recipients. The vote is a good idea, but why are they waiting until after the election?
Michael Steel (not Steele), a spokesman for House Republican leader John Boehner of Ohio, said that if Democrats were serious about a bonus, they would have voted on it before lawmakers went home to campaign for re-election. Steel fails to mention that when Obama tried to push for a similar payment last fall, the proposal failed in the Senate because Republicans, along with about a dozen corporatist Democrats, joined forces to block it. Once again the Republicans are correct on the politics of this issue and wrong on the policy.Click here for reuse options!
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