The Social Security Administration has announced that there will be no social security COLA again this year. A COLA is a cost-of-living adjustment. This will be the second time in history that there has been no automatic adjustment. The first time there was no COLA was 2010.
According to the Richmond Times Dispatch:
The cost-of-living adjustments, or COLAs, are automatically set each year by an inflation measure that was adopted by Congress in the 1970s. Based on inflation so far this year, the trustees who oversee Social Security project there will be no COLA for 2011.
The projection will be made official on Friday, when the Bureau of Labor Statistics releases inflation estimates for September.
The timing couldn’t be worse for Democrats as they approach an election in which they are in danger of losing their House majority, and possibly their Senate majority as well.
“If you’re the ruling party, this is not the sort of thing you want to have happening two weeks before an election,” said Andrew Biggs, a former deputy commissioner at the Social Security Administration and now a resident scholar at the American Enterprise Institute.
“It’s not the congressional Democrats’ fault, but that’s the way politics works,” Biggs said. “A lot of people will feel hostile about it.”
This past Friday, the same bureau delivered another painful blow to Democrats: The U.S. lost 95,000 jobs in September and unemployment remained stubbornly stuck at 9.6 percent.
Democrats have been working hard to make Social Security an election-year issue, running political ads and holding press conferences to accuse Republicans of plotting to privatize the national retirement program
I am not at all sure how this affects the Democrats. Supposedly those on social security will feel hostility and that they are not getting ahead. It would seem to me that the idea that there was low inflation might slip into those thoughts but I guess not. On another not, this kind of news usually affects other retirement plans such as pension COLAS.
