Social Security Checks Shrink for Millions

No Cost of Living Adjustment for Next 2 Years, Trustees Say; First Time in Generation Payments Would Decrease

(AP)  Millions of older people will face shrinking Social Security checks next year, the first time in a generation that payments would not rise.

The trustees who oversee Social Security are projecting there won't be a cost of living adjustment (COLA) for the next two years. That hasn't happened since automatic increases were adopted in 1975.

By law, Social Security benefits cannot go down. Nevertheless, monthly payments would drop for millions of people in the Medicare prescription drug program because the premiums, which often are deducted from Social Security payments, are scheduled to go up slightly.

"I will promise you, they count on that COLA," said Barbara Kennelly, a former Democratic congresswoman from Connecticut who now heads the National Committee to Preserve Social Security and Medicare. "To some people, it might not be a big deal. But to seniors, especially with their health care costs, it is a big deal."

Cost of living adjustments are pegged to inflation, which has been negative this year, largely because energy prices are below 2008 levels.

Advocates say older people still face higher prices because they spend a disproportionate amount of their income on health care, where costs rise faster than inflation. Many also have suffered from declining home values and shrinking stock portfolios just as they are relying on those assets for income.

"For many elderly, they don't feel that inflation is low because their expenses are still going up," said David Certner, legislative policy director for AARP. "Anyone who has savings and investments has seen some serious losses."

About 50 million retired and disabled Americans receive Social Security benefits. The average monthly benefit for retirees is $1,153 this year. All beneficiaries received a 5.8 percent increase in January, the largest since 1982.

More than 32 million people are in the Medicare prescription drug program. Average monthly premiums are set to go from $28 this year to $30 next year, though they vary by plan. About 6 million people in the program have premiums deducted from their monthly Social Security payments, according to the Social Security Administration.

Millions of people with Medicare Part B coverage for doctors' visits also have their premiums deducted from Social Security payments. Part B premiums are expected to rise as well. But under the law, the increase cannot be larger than the increase in Social Security benefits for most recipients.

There is no such hold-harmless provision for drug premiums.

Kennelly's group wants Congress to increase Social Security benefits next year, even though the formula doesn't call for it. She would like to see either a 1 percent increase in monthly payments or a one-time payment of $150.

The cost of a one-time payment, a little less than $8 billion, could be covered by increasing the amount of income subjected to Social Security taxes, Kennelly said. Workers only pay Social Security taxes on the first $106,800 of income, a limit that rises each year with the average national wage.

But the limit only increases if monthly benefits increase.

Critics argue that Social Security recipients shouldn't get an increase when inflation is negative. They note that recipients got a big increase in January - after energy prices had started to fall. They also note that Social Security recipients received one-time $250 payments in the spring as part of the government's economic stimulus package.

"Seniors may perceive that they are being hurt because there is no COLA, but they are in fact not getting hurt," said Andrew G. Biggs, a resident scholar at the American Enterprise Institute, a Washington think tank. "Congress has to be able to tell people they are not getting everything they want."

Social Security is also facing long-term financial problems. The retirement program is projected to start paying out more money than it receives in 2016. Without changes, the retirement fund will be depleted in 2037, according to the Social Security trustees' annual report this year.

President Barack Obama has said he would like tackle Social Security next year, after Congress finishes work on health care, climate change and new financial regulations.

Lawmakers are preoccupied by health care, making it difficult to address other tough issues. Advocates for older people hope their efforts will get a boost in October, when the Social Security Administration officially announces that there will not be an increase in benefits next year.

"I think a lot of seniors do not know what's coming down the pike, and I believe that when they hear that, they're going to be upset," said Sen. Bernie Sanders, an independent from Vermont who is working on a proposal for one-time payments for Social Security recipients.

"It is my view that seniors are going to need help this year, and it would not be acceptable for Congress to simply turn its back," he said.

[cookie1201200]

I was amazed when I read that Congress claimed prices would be low enough that sr citizens would not need a cost of living increase. If that is the case they must not believe what they are telling the people since they gave themselves hefty cost of living increases. I work in a grocery store and I see the elderly pinch pennies on the food they buy. I would love to see our congress men and women try one month living on a srs social security check, pay rent or house payments and pay utilites and buy food. For those on medication, it is worse. Someone said they should have planned for their retirements, well to the person who said that, not everyone can get a high enough paying job to be able to save that way. If they could more power to them. When our government officials decide they need a pay raise I feel since it is our money paying them, we should have a right to vote on wheather they get it or not. I voted for the President because I thought he was going to make it better for the poor not worse. Guess I was wrong .

[bubazoo]

The price of energy has gone down, yes,
the price of GAS has gone UP!
so we need the rise in SS to keep up with the ever
rising cost of gas.

I'm talking about GAS to heat our homes,
alot of us still have gas furnaces, stoves, etc.

Besides, Even for those of us who are blind, and cannot drive a car,
we still have to pay for rising public transportation costs. THe people who drive us around, still have to charge us more for the ever rising prices.

...and then Obama wants National healthcare?
so essentially he's saying, he wants everyone to be on Medicare?
so that means..he wants everyone to have a Medicare part D cap of $3,000 a year, or just let us die off if a committee tells us we are going to the doctor too much.

[bantamei]

Blaming it on Obama is juts plain stupid. Nobody to blame but republIEcans who tried and almost suceeded in dismantling the economy.

[mrjustice1]

MAJOR MISLEADING U.S. GOVT FACTS

THE TRUE, UNDERLYING INFLATION RATE HAS BEEN SUBSTANTIALLY HIGHER
THAN THE RATE THAT HAS BEEN OFFICIALLY REPORTED BY THE U.S. GOVERNMENT

Just as the Fed covers up and hides the constantly-escalating money supply increase(by now, for about two years) as the result of its massively printing counterfeit-with-no-backing, or worthless $US fiat currency...

... Washington's inner circle of politicians, the Federal Reserve, other high-up elites, as well as the administration, also continue to cover up and hide
the REAL UNDERLYING INFLATION RATE,
which for many years is or has been, some thirty-five to seventy-five percent higher than the 'officially' reported COLA(cost of living allowance) rise ...

SENIORS: REVOLT, AND PARALYZE THE U.S. GOVERNMENT'S ABILITY TO FUNCTION!

SHUT WASHINGTON DOWN.
SHUT REGIONAL U.S. FEDERAL OFFICES DOWN.
SHUT IT DOWN!

Drink extra prune juice so we can give our lying government leaders and politicians back plenty of what they deserve - a river of the same that they have given us for decades!

[trueblueusa]

Just remember,..A Few Short Years ago,..
Shrub Tried VERY Hard to Invest 50 % of the Social Security Fund , in the Stock Market,(before it collapsed !'
How Quickly People Forget !!!!!!

[swin5]

The government got it right this time. Excluding the cost of health care, transportation, natural gas and heating oil, food, rent, housing, and clothing, the cost of living did go down.

[gusthedog]

I have only read about the 500 and some that run this country as elected officials. They have done NOTHING for us with Social Security, but use it, and lose it!! Who cares which party is at fault!! We don't have to listen to excuses, but it is about time that we as a nation of Americans get to the task of getting rid of the excuses, blame and bull crap! I didn't work my whole life to listen to this stupid story. Thank you, to my honest working elected (few). What a bunch of rotten apples we have to live with in this world.

[caliguy55]

President Barack Obama cannot bankrupt the country because it was already bankrupt before he took office. George "Moron" Bush more than doubled the federal debt from $4.5 Trillion to $10 Trillion to pay for his tax cuts for the wealthy and his "war of choice" in Iraq. It's hard to imagine how much better our country would be today, if Bush had been aborted.

[lastranger-2009]

Let?s see.
These guys have bankrupted social security.
Bankrupted Medicare.
And now they want to run the socialized medical program.
Not!

[TNisgoodenoughforme]

I have no problem admiting I just don't get it....I was born in 1969, I will never see all the money they take out over each check for SS. Why are they still taking it out? If I'm never going to see it then why??

[Sloughfoot]

"Seniors may perceive that they are being hurt because there is no COLA, but they are in fact not getting hurt," said Andrew G. Biggs, a resident scholar at the American Enterprise Institute, a Washington think tank. "Congress has to be able to tell people they are not getting everything they want."

With his 6 figure income he can ensure his finacial dominace by elating himself in knowing that those trying to live on 800 - 1000 or even 1500 dollars a month aren't getting any richer on SS.

Oh sure, just keep it up and and see what happens. Sooner or later it's all going to come crashing down and there will be all this finger pointing. Can somebody please get things done right for once?

[sharoncalla]

I have heard all the complaints for social security, now let's have some answers, or suggestions to help social security. On the tax forms there is this question, Would you like $3 to go toward the Presidential Election? We could ask would you like $1.00 to go towards securing social security? Then, social security could invest this donated funding like in cd's and have the interest sent back to social security. This would help secure social security, and give it the funds for Cost of Living Allowances. We need ways and means to aid Social Security, and Congress may have other ideas. If you have a good ways and means idea, send it in. Who knows you may save the day. Yes I know we paid into social security, I did too, but inflation, wars, higher medical cost, all contribute to the need for a booster for social security. So send some good ideas in. We gotta win on this one. We are all in this together. Please don't blame the President, he has only been in office a short time. We need to unite on ways to help our country, now more than ever.

[dragyn30]

One way is to stop making payments to those who came to the USA just to retire and collect Social Security! If I remember right that peanut brain of a President Jimmie Carter allowed this and NONE of the Presidents after him challenged this and they are now wondering why we cannot take care of our own???

Now I do not begrudge anyone from coming to the USA to try and make a better life, my great-grandparents did, but why should non-us citizens be able to move to the USA and collect benefits that the rest of us have to work and pay until the ripe age of 65 to claim??

We also need to cut off ALL AID to the illegals, illegal is illegal and therefore they are not entitled to any benefits whatsoever!

These bleeding hearts for civil rights - they are ILLEGAL!!! There is no civil rights!

[robham777]

http://www.reuters.com/article/newsOne/idUKTRE57K5IV20090821?virtualBrandChannel=11611

The Obama administration expects the deficit to hit a record $1.58 trillion this year, and sees a cumulative $9 trillion of additional red ink in 2010-1019.

We can also subsidize new cars for half a million people at $4500 a pop and subsidize new home purchases to the tune of $8000 (only for first time home buyers, who are already getting a steal in the current real estate market), but we can't help the elderly.

[auntc3]

I find the above totally repulsive..........and they cant give a few pennies to the seniors to keep their head above water.
God Bless Them

[auntc3]

> Commentslindalu1 wrote:
> Seniors need a bailout, they bailed out Wall Street, banks,
> Mortgage companies, Crooked CEO's but they cannot help the
> Seniors who made this country great.
>> angriestdogintheworld wrote:
> ANNUAL COMPENSATION OF HEALTH INSURANCE COMPANY EXECS
> (2006, 2007, or 2008 figures):
>
> ? Ronald A. Williams, Chair/ CEO, Aetna Inc.,
> $23,045,834; $24.3 million in 2008
> ? H. Edward Hanway, Chair/ CEO, Cigna Corp, $30.16
> million
> ? David B. Snow, Jr, Chair/ CEO, Medco Health, $21.76
> million
> ? Michael B. MCallister, CEO, Humana Inc, $20.06 million
> ? Stephen J. Hemsley, CEO, UnitedHealth Group,
> $13,164,529
> ? Angela F. Braly, President/ CEO, Wellpoint, $9,094,771;
> $9.8 million in 2008
> ? Dale B. Wolf, CEO, Coventry Health Care, $20.86
> million
> ? Jay M. Gellert, President/ CEO, Health Net, $16.65
> million
> ? William C. Van Faasen, Chairman, Blue Cross Blue Shield
> of Massachusetts, $3 million plus $16.4 million in
> retirement benefits
> ? Charlie Baker, President/ CEO, Harvard Pilgrim Health
> Care, $1.5 million
> ? James Roosevelt, Jr., CEO, Tufts Associated Health
> Plans, $1.3 million
> ? Raymond McCaskey, CEO, Health Care Service Corp (Blue
> Cross Blue Shield), $10.3 million
> ? Daniel P. McCartney, CEO, Healthcare Services Group,
> Inc, $ 1,061,513
> ? Daniel Loepp, CEO, Blue Cross Blue Shield of Michigan,
> $1,657,555
> ? Todd S. Farha, CEO, WellCare Health Plans, $5,270,825
> ? Michael F. Neidorff, CEO, Centene Corp, $8,750,751
> ? Daniel Loepp, CEO, Blue Cross Blue Shield of Michigan,
> $1,657,555
> ? Todd S. Farha, CEO, WellCare Health Plans, $5,270,825
> ? Michael F. Neidorff, CEO, Centene Corp, $8,750,751;
> $8.8 million in 2008
> ? James Carlson, AMERIGROUP, $5.3 million in 2008
> =====================
>
> you can be absolutely sure their salaries will be going up
> further....
>

[tiredofthebs]

..... But we have money to spend on a war in Afghanistan. We're buying CAR COMPANIES and VEHICLES for consumers, but those who worked their entire lives for these benefits are the ones who suffer.

[girlmiami]

The Congress recently gave themselves a COST OF LIVING increase...I repeat...although Seniors Built the country...fought in the WARS before us...they do not get a Cost of Living Increase for the Next 2 Years...PS The Banks got Billions ...and the leaders have decided that Seniors will be put on hold as they the leaders will be receiving increases and will not SET a example of Integrity and suffer along with the very people they represent...
So...it's all so subtle...also ...quick note ...I read a Senior above who was very much in a agreement...and was bragging how it was no big deal ...because she/he has money and not dependent on the payments...good for you...however the majority are in a week to week ...month to month life...I am amazed how we allow the Leaders to have a Country Club attitude...and most Americans do not know the RULES of what can and will be done to them...they would be better off...being better prepared as the individual above...so their is a twist to my comment...Seniors need to be told that the System is Not going to be there and they need to be prepared...and do whatever they need to do before the system is GONE...so get to work...:) And pack it away..

[girlmiami]

THIS COUNTRY CAN FUND ENDLESS WARS, WORLD WIDE FOREIGN AID, MILLIONS OF REFUGEES AND MAKE WALL STREET GAMBLERS BILLIONAIRES. YET THIS NATION REFUSES TO PROVIDE ITS OWN PEOPLE WITH HEALTH CARE AND IS TRYING TO DESTROY SOCIAL SECURITY. IMPEACH OBAMA YUP I AGREE!

[girlmiami]

THIS COUNTRY CAN FUND ENDLESS WARS, WORLD WIDE FOREIGN AID, MILLIONS OF REFUGEES AND MAKE WALL STREET GAMBLERS BILLIONAIRES. YET THIS NATION REFUSES TO PROVIDE ITS OWN PEOPLE WITH HEALTH CARE AND IS TRYING TO DESTROY SOCIAL SECURITY. IMPEACH OBAMA YUP I AGREE!

[swin5]

It is not up to the government to provide health care for the people. It is up to the people to provide health care for themselves.