Is it sad that Social Security has made it official about the cost of living increase?
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, however, cannot go down. Thursday’s announcement comes a day after President 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 200
The Social Security Administration announced that were would be no cost-of-living adjustment made to payments. They cited falling consumer prices as the reason for not adjusting the payments upward. That doesn’t take into account that medical costs continue to go up. The Obama administration has proposed a $250 payment to seniors to compensate for the lack of cost-of-living adjustment. From ABC: Older Americans had dreaded hearing the news for months — and today the government made it official: For the first time since 1975, there will be no cost-of-living adjustment, or COLA, for Americans receiving Social Security checks next year. Under the law, Social Security payments are supposed to increase annually if U.S. consumer prices increase. But over the past 12 months, prices have declined. Specifically, the CPI-W — the price index upon which Social Security adjustments are based — has dropped 1.7 percent since September 2008. Many, including President Obama and the AARP, are calling
