Q: Will Social Security recipients be denied a cost of living increase next year? Are Democrats to blame?
A: There won’t be a COLA increase paid this January, and probably not in January 2011, either. But the cause is volatile oil prices, not anything done by the current Congress.
I received this e-mail yesterday:
For the first time in history, the Democratic Congress will not allow an increase in the social security COLA (cost of living adjustment).
In fact, The Henry J. Kaiser Family Foundation predicts there may not be any COLA for the next three years.
However, the per person monthly Medicare insurance premium will be increased from the 2009 premium of $96.40 to $104.20 in 2010 and to $ 120.20 for the year 2011.
Send this to all seniors that you know. Remind them to not vote for the incumbent senators and congressmen in the 2010 and the 2012 elections.
Social Security checks have gone up automatically every year since 1975, when the first automatic cost-of-living adjustment (COLA) took effect. Prior to that, a separate act of Congress was required to grant any adjustment to compensate for inflation. But this January, there won’t be any COLA, for the first time in the 35 years the system has been in operation.
The reason is simple: The official measure of the cost of living has gone down, not up.
And the major reason for that is that oil prices plunged from the peaks of the previous year.
It’s a reversal of what happened last year, when soaring fuel prices pushed the cost of living measure sharply upward, producing the 5.8 percent COLA increase that went into effect last January. That was the largest increase since 1982.
That came about because, by law, the COLA is determined by the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W), which is tabulated by the career professionals at the U.S. Bureau of Labor Statistics. And from the third quarter of 2007 to the third quarter of 2008 (the period determined by law) the CPI-W went up 5.8 percent.
But now things are different. The CPI-W peaked a year ago, just before the 5.8 percent increase was calculated, and took a nose dive in the months that followed. Quarterly figures won’t be available until October, but based on monthly figures, the CPI-W now stands 1.9 percent below where it was 12 months before