Monday, October 11, 2010

No Cost Of Living Increase For Social Security Pensioners

Washington, D.C. - With perfect timing, the federal government announced over the weekend there will be no cost-of-living increase in Social Security benefits for the second year in a row.

According to economic experts, there are more people signing up early for the supplemental annuity income at this time than ever before because employment is so difficult to obtain.

This marks only the second year – in a row – that no increase has been granted since such inflation-weighted increases were introduced in 1975.

Social Security was the primary source of income for 64 percent of retirees who got benefits in 2008, according to the agency that administers the trust fund which governs the annuity accounts. More than 58.7 million persons receive Social Security or Social Supplemental Income. The average benefit is about $1,072 per month

When it became clear a COLA would not be granted, President Barack Obama attempted to stir Congress to grant a second $250 economic stimulus payment. A proposal by Senator Bernie Sanders died in committee when Senator Joe Lieberman joined Republicans to block it. Sen. Olympia Snowe of Maine was the only Republican to support the proposition.

“I do think there's going to be a political fallout,” Senator Sanders said.

Federal law requires the Social Security Administration to base annual payment increases on the Consumer Price Index for the Urban Wage Earners and Clerical Workers, which measures inflation.

Officials compare inflation in the third quarter of each year – the months of July, August and September – with the same months in the previous year.

If inflation increases from year to year, Social Security recipients automatically get higher payments, starting in January. If inflation is negative, the payments stay unchanged.

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