No Social Security Cost of Living Increase for 2010 and 2011

By Conor Greene

The federal Social Security Administration has made it official: for the first time since 1975, seniors will not receive a cost of living adjustment in 2010 because consumer prices have fallen over the past year.

Local seniors and elected officials rallied in recent weeks following reports that the federal budget didn’t include funding for cost of liv- ing adjustments for the next two years. This will be the first year without an automatic adjustment since it went into effect in 1975, despite outcry from Social Security recipients and elected officials including Rep. Anthony Weiner (D-Forest Hills) and State Senator Joseph Addabbo (D-Howard Beach).

“To say that the costs for seniors will not go up for two years is to pretend that the laws of economic gravity don’t apply to older people,” said Weiner. “Rent is up. Food prices are up. The purpose of the COLA is to help seniors keep up. The Social Security Administra- tion seems to have forgotten that mission.”

Addabbo said he is “very discouraged” by the announcement, which came last Thursday, and said he called on Social Security Commissioner Michael J. Astrue “to scrap the agency’s plan to cut off costs of living for two years despite rising costs.

“I believe it is important to raise awareness of this critical issue, since the official freeze on Social Security payments for the next two years really puts New York City seniors under a heavy burden, particularly in the weak economy,” said Addabbo, a member of the Senate’s Committee on Aging.

In a statement, Commissioner Astrue noted that Social Security recipients received a 5.8 percent cost of living adjustment last year after consumer prices spiked, largely as a result of higher gas prices. That marked the largest increase since 1982, according to Astrue, who voiced support for President Obama’s proposal for the administration to provide another $250 recovery payment for the 57 million Americans who receive Social Security.

"Even as we seek to bring about recovery, we must act on behalf of those hardest hit by this recession," Obama said in a statement. "This additional assistance will be especially important in the coming months, as countless seniors and others have seen their retirement accounts and home values decline as a result of this economic crisis."

The White House estimated that cost at $13 billion, and Obama doesn’t want the payments to come from Social Security trust funds, since the program is projected to pay out more in benefits than it collects in taxes over the next two years. However, Addabbo was critical of that plan, especially in light of recent federal bailouts of large corporations and industries. “If President Barack Obama can bail out banks, insurance giant AIG and the auto industry, he should do better than his recent call on Congress to approve a second round of $250 stimulus or recovery payments for over 50 million Social Security recipients,” he said.

Addabbo noted that tenants in rent controlled apartments face a six percent increase, while the cost of many items in New York City has also risen, including Medicare prescription drug plans (up seven percent monthly), food prices (one percent) and mass transit (ten percent). “Our seniors need a regional cost of living adjustment. It is not a luxury, but a necessity. Seniors should not have to choose between eating, paying their rent or getting their medication,” he said.

Weiner recently said there is a notion that the Social Security Administration’s “books are being cooked a little” since it was determined months ago that there would be no adjustment, even though the increase is supposed to be calculated each October. Ever more alarming, said Weiner, is that next year’s increase has also been eliminated, more than a year in advance.

In a statement issued last Thursday, he called on the SSA to “immediately open up their books and explain to the American people why seniors will not be receiving a cost of living adjustment...” The first bill Weiner introduced after being elected to Congress would provide a regional cost of living adjustment “to ensure seniors in Brooklyn, New York are not forced to survive on the same benefits as seniors in Brooklyn, Iowa.” If the COLA Fairness Act is enacted, New York seniors would receive an additional two percent in benefits over a five-year period.