No COLA increase for social security in 2010
For 57 million Social Security beneficiaries, mostly seniors, the Social Security Administration announced that there would be no COLA increase for social security in 2010. This was announced Thursday, October 15th. Cost of living adjustment increases are due to the inflation rate between the third quarter and the year-ago quarter. This year, consumer prices have fallen, greatly affecting social security COLA, writes CNN Money.
However, President Obama is on top of taking care of America’s seniors, veterans, and people with disabilities. He has asked Congress to send a $250 relief payment to those affected. In a statement on Wednesday, Obama stated, “Even as we seek to bring about recovery, we must act on behalf of those hardest hit by this recession.” This is the first time that benefits from Social Security have not been increased since its inception in 1975.
Last year, the COLA was 5.8%. This was due to rising consumer prices and higher gas prices. Last year was the largest increase since 1982, twenty-eight years ago. Seniors have basically used the increases to make ends meet, so this next year could be a large problem. AARP backs Obama and also called on Congress to make the payment to seniors, writes USA Today. The payment would cost $13 billion over the next 10 years, with the payment equaling a 2% increase in Social Security benefits.
The good news is, if Congress passes it, the extra social security payment would come early in 2010, not the end of it. Other programs that are being considered include the extension of unemployment benefits and the homebuyer tax credit. The extension of unemployment benefits would come in the form of health insurance under COBRA. However, there is still no word if President Obama backs the extension of the homebuyer tax credit.
The lack of increase in COLA must be balanced, however. Social Security benefits cannot decline. This is by law. The Medicare prescription drug program is expected to increase by 11% next year. Seniors who have premiums taken out of their social security may notice a drop in payments. This is according the Barbara Kennelly, the president of the National Committee to Preserve Social Security and Medicare.