Monday, August 31, 2009
Editorial: No raise for Grandma
From the RoundTable blog
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Grandma and Grandpa have had a rough summer. As if worrying about death panels weren't enough. Now the government's coming for their Social Security checks.
At least that's what the news stories indicate: Millions of older people will see their Social Security payments shrink. Shrink! It would be a blow if it were accurate.
Social Security payments aren't getting smaller. They just won't grow. It's the first time since 1975, when an automatic cost-of-living adjustment was added to the benefit, that the cost of living did not increase. So Social Security income will be as stagnant as many millions of Americans' paychecks this year.
Some sharp-eyed retirees might notice a slight decrease in their deposit -- by about $2 a month. That's the anticipated average premium increase for their prescription drug benefit that many have deducted from their check.
It's hardly a life-changing amount, less than the price of a loaf of bread, and certainly doesn't warrant the charge to give them a raise anyway. There is a movement to grant a 1 percent increase or award retirees a one-time $150 bonus -- at a cost of about $8 billion.
That movement forgets three key things:
n The COLA is not intended to be a "raise"; rather, it is to keep beneficiaries at an equitable pace with inflation.
n Social Security recipients received a huge 5.8 percent increase this year -- at a time when most Americans saw their wages frozen or reduced by furloughs and layoffs. That increase was due to the calculation of COLA that included last year's inflated fuel prices. Fuel costs have since dropped substantially.
n On top of the raise, the elderly this year received $250 stimulus bonuses.
The economy has been hard on most Americans, the elderly included. But they aren't the only ones making do on the same or less. The law protects their "fixed income" in that payments can never decrease. Most are further protected in that increases in their Medicare Part B coverage cannot be greater than their Social Security increase. (The drug benefit, currently about $28 a month, doesn't carry this provision.)
Workers -- many of whom have seen their checks reduced this year by pay cuts or increased health costs -- would appreciate a fixed, guaranteed amount for next year. Or, at least, the knowledge that Social Security will still be solvent when it comes their time to retire.
