It's official: No raises for seniors

WASHINGTON (RNN) - The Social Security Administration announced Friday that for the second year in a row there will be no cost-of-living increase adjustment for seniors.

By law, no increase was warranted because consumer prices remain flat.

"As determined by the Bureau of Labor Statistics, there is no increase in the CPI-W from the third quarter of 2008, the last year a COLA was determined, to the third quarter of 2010. Therefore, under existing law, there can be no COLA in 2011," said the administration in a press release.

Social Security is the main source of income for 64 percent of the nation's retirees. More than 58 million retirees and disabled Americans receive the benefits.

"It makes me feel sad that we worked all our lives, and we paid in our money, and they can't give it back to us," said Mobile, AL resident Virginia McFarlane, 81, who lived through the Great Depression. "And that makes me sad, especially for the really poor people who depend on us. And the higher-ups in Congress get raises. And that makes all of us seniors angry."

The move has wide-reaching implications. It will prevent an increase in the maximum allowable earnings as well as the retirement earnings tax-exempt status, said Social Security Press Officer Mark Lassiter.

The news was not well received by several members of Congress. Rep. Earl Pomeroy, D-ND said regardless of the government's cost of living estimates, expenses for seniors continue to rise.

"Our seniors have everyday expenses for drugs, utilities, housing and food that have increased, regardless of the government's CPI formula," Pomeroy said. "Social Security benefits are very modest, amounting to only about $14,000 annually, on average. And seniors are already stretching their income as thinly as possible to make ends meet."

As in most election years, political candidates have made social security a hot-button issue. In August, Michigan Rep. Sander M. Levin, a Democrat and chairman of the House Ways and Means Committee, noted that the program hasn't missed a check in its 75 years.

"America overwhelmingly rejected privatization under President Bush and we will continue to fight plans by Republicans in Congress to undermine and jeopardize this trusted and vital program," Levin said.

In anticipation of the announcement, Pomeroy introduced H.R. 5987, the Seniors Protection Act of 2010, which, if passed, will write a one-time $250 check to 54 million seniors.

A similar payment was approved by Congress in 2009.

"We've already taken steps to help seniors weather the economic downturn, providing seniors with a $250 check as part of the Recovery Act and giving seniors who fall into the Medicare Part D coverage gap or 'donut hole' a rebate," said Rep. John B. Larson, D-CT, who is also on the House Ways and Means Committee.

That's not enough for McFarlane, who thinks that an overhaul of the whole system is necessary.

"I'm voting straight Republican, and the reason I am is because they want to try and straighten this out in Congress for the public," McFarlane said.

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