It seems that the Social Security Cost of Living Adjustment will elude senior citizens for the first time in 3 decades. Stagnant prices which are the basis for the COLA associated with Social Security will prevent the increase.
President Obama has suggested a one time payment of $250 to offset the annual raise which usually comes in January each year. In a good year the cola is about 5%. Disabled Americans would be eligible for the same $250. The cost of this one time payout is estimated to be at least $13 billion dollars.
The Washington Post reports:
An increase in benefit checks each January has been a yearly ritual since the mid-1970s, when the government moved to ensure that its subsidies to retirees, pension recipients and others who receive Social Security benefits kept pace with inflation. Thursday’s announcement by the Labor Department will mark the first time that the federal formula used since then, which is tied to the consumer price index, will translate into no increase at all. That is because consumer prices have remained stagnant in the weak economy — a sharp reversal from this past year, when Social Security checks grew by 5.8 percent, an unusually large amount.
Congress and President Obama seem to be scrambling to make this all happen and to at least make it look like they haven’t forgotten the seniors. To me, it seems $250 is like pissing in the ocean.
Will Congress get a raise this year? What is their raise based on? Performance? (Bwwaaahahahahahaha) Is there some formula that determines what their raise will be? How about benefits? Do you suppose they pay as much for their health care as say a senior citizen living on social security does? Just Medicare Plan B costs about $100 a month now. They just snip that right out of the social security check as a courtesy, to save the seniors from buying stamps. Then there are the bridge policies and the rx policies. People I have talked to pay at least $300 a month. That’s getting pretty steep. I am willing to bet Congressmen and Senators don’t pay this much. I wonder how one would find out?
If people thought there were pissed off seniors before, they ain’t seen nothing yet.
I’m with NoVa scout… no cost of living increase (as reflected in the CPI), no COLA. That’s the system we designed. If we don’t want to see the Country go broke, we need to stay within the system. Money isn’t “free”. Printing more money and covering our debt by borrowing from the Chinese isn’t a great long term strategy.
Even the greatest Governments in History failed eventually due to creeping excesses on one area or another. I don’t want to contribute to our Government failing sooner vice later… and would like to see it last for a while.
NOVA,
There has been an increase though, in medicare payments to the govt. That would definately qualify as a COLA increase, don’t you think.
Elena, that’s a Progressive interpretation of Locke (and the Constitution, which he greatly influenced). I understand your perspective; however, I disagree with it.
“He isn’t going to be putting in nearly as much as Tom has put in.”
I wouldn’t have any issue if Tom puts in more money, Tom should get more out. But remember that Tom had increasing salaries and at some point, let’s assume the salary was greater than the capped amount which used to be something under $100K–don’t remember much. So most of the contributions Tom makes is actually at the end of the career.
So then you take Larry who upon retirement goes to work in the same field as he did for the government. Larry probably commands a salary that is equal to Tom and pays the same amount so that in the end, the two retire with nearly the same contributions to SS. But Larry cannot receive the same amount as Tom due to the special law that takes into account the fact that Larry gets a retirement that he also paid into, which by the way took more of Larry’s salary because the Fed system had a higher percentage.
The bottom line is a fairness question. Two people who contribute the same amount should get the same reward but the law was written to say that Larry’s amount in the SS is not the same as Tom’s and that Larry shouldn’t get as much.
I think there is also a problem with spousal retirement as well but I am not up to speed on it. There is also some offset for spouses that have a spousal benefit from the Fed system even though they earned SS on their own. But I am not certain of the conditions–I just understand there is something.
Didn’t mean to have this as an important discussion, it just doesn’t strike me as fair but I don’t spend a lot of time thinking about it. Life isn’t fair sometimes.
Opinion, wow a nice debate, we can agree to disagree. I thoroughly enjoyed our exchange, thank you.@Opinion
Thanks PW Rez. I am with you in that I haven’t spent a lot of time pondering it. But you are far more up to speed on such matters than I am. Light-years even. I was never a fed employee so there was never a need for me to know. I do see now that Tom put in lesser amounts early on over the years thus reducting his overall contributions. That was the part I was stuck on. Larry was pretty consistent during his 10 or so years.
I even had to look up the 40 quarters. I had heard it but never bothered to find out…so that means you have to work the equivalent of 10 years non stop in private sector?
Supposedly most people get out what they put in the first 8 years they draw on ss.
What is the maximum a person can get per month if they are at their correct age to draw?
@Elena
Elena, I Also enjoyed our exchange and hope for more in the future.
This is really how blogging should be. We are all exchanging info and ideas, some of us are disagreeing but we have all remained pleasant and civl. Hell of a concept!
I have learned a great deal from this thread actually. I am also finding that age old problem, I get the answer to 1 question and 6 more questions pop up~
I find this a very informative, instructive and “fun” blog where opinions are freely expressed and generally respected. You relly can’t ask for much more than that!
I’m feeling all warm and fuzzy 🙂
Virtual group hug? OK… let’s sing a couple rounds of Kumbaya… everybody now!
I will just lip sync. You don’t want me to sing!!! It is not a pretty sound. They don’t call me Moon-howler for nothing. Although PWC Rez has called me Wolfie, which I think is sort of cute.
Hey, Wolfie, save some keystrokes–Rez is just fine.
Works for me! Hoooooooooooowl!!!!!
Rez it is!