Monday, October 11, 2010

No Cost-Of-Living Raise This Year For Seniors

Although the Social Security Administration has informed Congress that they will not make an official announcement about cost of living increases until later this week, experts are widely expecting the agency not to recommend any adjustment to benefits. The administration has to wait until after October 15th to make a final decision so they can review the September Consumer Price Index (CPI).

According to Huffington Post.com, the CPI would have to show a remarkable uptick in price to effect the SSA's decision not to provide the annual cost of living adjustment (COLA) which, by statute, is based on the rate of inflation.

If there is no measurable increase in the cost of living, then there is no adjustment, a rationale that unsurprisingly placates roughly zero beneficiaries.

Social Security recipients eagerly anticipate the annual increase. Touching a senior's COLA is a political third rail. Florida GOP challenger Dan Webster found that out the hard way when he suggested the federal government "take back some of the COLAs for the entitlement programs." Under withering fire from the elderly, he quickly backed off the suggestion, saying that he meant his comments to apply to federal workers -- who, of course, are not paid by "entitlement programs."

The backtracking largely got him out of the jam, but Democrats will be in their own fix when the announcement is made public. The COLA announcement will come as little surprise, since inflation has remained relatively low all year as a result of Federal Reserve efforts.