Social Security cancels COLAs

posted at 9:30 am on August 24, 2009 by Ed Morrissey

Barack Obama already has had a tough time with seniors on the health-care reform initiative, and for good reasons.  The latest news from Social Security won’t make them any happier about it.  The Social Security administration has canceled cost-of-living adjustments (COLAs) for the next two years, which means the fixed income on which these seniors rely will freeze at current levels.  However, their Medicare premiums will still increase, which means they will get less money over the next two years, the first declines in SSA in more than 30 years:

Millions of older people face shrinking Social Security checks next year, the first time in a generation that payments would not rise. The trustees who oversee Social Security are projecting there won’t be a cost of living adjustment (COLA) for the next two years. That hasn’t happened since automatic increases were adopted in 1975.

By law, Social Security benefits cannot go down. Nevertheless, monthly payments would drop for millions of people in the Medicare prescription drug program because the premiums, which often are deducted from Social Security payments, are scheduled to go up slightly. …

Advocates say older people still face higher prices because they spend a disproportionate amount of their income on health care, where costs rise faster than inflation. Many also have suffered from declining home values and shrinking stock portfolios just as they are relying on those assets for income.

“For many elderly, they don’t feel that inflation is low because their expenses are still going up,” said David Certner, legislative policy director for AARP. “Anyone who has savings and investments has seen some serious losses.”

Inflation has been low enough that the cost of living has remained flat.  Canceling COLAs might make sense with that in mind, except that the SSA’s increase in premiums are predicated on inflation in health care costs.  If that’s true, then the COLAs should remain in place.  Right now, it looks like the government wants to eat its cake and have it, too.  Even those who agree with canceling COLAs when inflation stops have to answer for the premium increases.

Why are the premiums going up?  Health care costs continue to go up — but SSA’s beneficiaries all use Medicare, which is a single-payer government program.  The federal government has never solved the cost problem in Medicare, but now it wants to expand it for all Americans, either now or in the future.  Anyone who has paid attention to the Medicare entitlement crisis understands that the government has no ability to contain costs even within its own existing systems, and the premium increases that will slam SSA recipients will eventually become the norm for everyone in ObamaCare.

Last week, I wrote about the corrosive effect that ObamaCare would have on wage growth, and the impact that would have on solvency for SSA.  The AARP has relentlessly ignored the connection between this policy and the hastened bankruptcy of a system on which their entire membership relies.  Perhaps this will serve as a wake-up call to the AARP, which finally decided to get off the sidelines for this issue, but apparently only to cheerlead slightly less for the Obama administration.  Meanwhile, their members get squeezed in both directions.


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Comment pages: 1 5 6 7

I still think Social Security is a Ponzi scheme.

zmdavid on August 25, 2009 at 2:50 PM

You guys are so involved in a game of “gotcha” you miss the point.
SS morphed into a “ponzi” type scheme when it moved into the general fund, where there were excess money and the “great society” began sucking it up.
If it had been left alone, and not raided, during the 60′s, with just minimal investment, the worth would have grown, and been self supporting.
Rather then a “ponzi scheme” it just became another government program, that was misused.
Wherever there is money in gov. the leaders will find it and spend it…call it whatever you want…it was there, it was funded, it was raided and mismanaged.
If this was private enterprise, the people responsible would be in jail for misuse of funds.
If you take money out of a retirement fund, and “party” with it, you go to jail…these guys get re-elected.
It isn’t a “ponzi scheme” it is a mis-mangaged government program…but if it make you “feel” better call it what it is.
We had a chance to correct it, with just a 2% personal investment program, and a lock box…but the people of the U.S. voted it down. The liberals stole it, they are still have their hand in the cookie jar, and you liberals have basically moved it from a gov. program to a Ponzi style, to an out and out fraud…the Senate and congress should be charged with the RICO act.

right2bright on August 25, 2009 at 3:06 PM

Now it is up to the next generation to pay for the lies that they told themselves?

I’m not sure if I would fall into this category, but I’m sure at one time, this could have been said of my generation.

I’m a 30s something now. And I’ve never deluded myself in thinking that any of that money would ever be for me. It’s an imposed tax, made long before me, and, as with any government institution, will exist well after my brief flicker of light on this Earth is extinguished.

By deciding as a young man that I would try to be a good citizen of this country I accepted certain responsibilities. Among those was paying into the Social Security System to insure that the generation before me was able to live out their final days at least with food on their table and a roof over their head.

Years, years ago, while my wife was still fresh with the liberal thoughts from her parents, the issue of SocSec came up.

“The way I see it,” she told me, “is that I’m paying for my nana’s health and well-being.”

“Yes,” I answered, “but let’s assume that we don’t have grandkids. Who’s going to pay for your health and well-being?”

That pretty much turned her thoughts on the “benefits” of Social Security.

The population at that time was about half what it is now. Allowing for a normal increase in population (and work force) gave a reasonable expectation that when my turn came, younger “good” citizens would accept their responsibility and I could also spend my final days with food on the table.

Weird, because how I grew up–granted, my parents were raised during the Depression, so this shouldn’t seem too off–that our attitude was “charity starts at home.” You don’t expect anyone to care for you. Especially given that said individuals may not be able to (such as dying from disease at an early age). If you wanted to retire (yes, at a time when it was an option!), it was up to you to save up the capital to do so. Your family might be able to provide, but you can’t assume that they’ll carry your weight, as they’ve got their own weight to carry.

Since then a couple of things have happened to negatively affect those expectations.
LBJ and his great society have raped the social security funds. Young people growing up have been taught that they are the be all to end all.

Weird. And all those senior citizens that stamp their feet and raise their voices because Denny’s didn’t give them a 10-cent discount for their afternoon brunch is just a fluke?

…Yeah, didn’t think so. Don’t make assumptions on generations. For every “yungin’” that you can point as being self-righteous and smug, I bet I can point out 2 seniors who are just as so.

That they have no responsibilities to anything other than themselves and that good citizenship means throwing everyone under the bus that might possibly stand in the way of their self gratification.

See my last statement. Again, generational assumptions FTW!

They also believe that the proper way to debate a pressing issue is demean and insult those who disagree with them.
A very liberal trait I might add.

I remember an email back-and-forth I had with someone….about in his 50s at the time, IIRC. I said something (more tongue-in-cheek than anything else) that linked Hillary Clinton to the Black Panthers. His response? To be indignant, insulting, and telling me that because I didn’t live “through that time” that I couldn’t possibly understand.

And the irony of “liberal traits” lumped in with the “insulting those who disagree” is quite delicious. I didn’t even need to add butter to enjoy!

So, I turn it right back around to you: if you want to have a civil and productive discussion, leave your biases at the door.

CatsGodot on August 25, 2009 at 3:13 PM

TMK on August 25, 2009 at 2:43 PM

I have to say that your disrepect for others astounds me. The analogy I will make is that it reminds me how the country turned against our vietnam veterans during that war. In the that same vulgar way I see you taking things out on our senior citizens. I for one will never stand idly by and let you do that.

You are a disgrace to everything America stands for.

kanda on August 25, 2009 at 3:16 PM

CatsGodot on August 25, 2009 at 3:13 PM

Yes, as you point out it cuts both ways. We all make assumptions based on our experiences From what I can see you are a breath of fresh air if you can follow through. Can it be possible that an intelligent conversation can happen in a hot air thread?

kanda on August 25, 2009 at 3:24 PM

CatsGodot on August 25, 2009 at 3:13 PM

Points well taken and I admit my guilt. My posts were after two days of being groin kicked for my views. Tolerance only goes so far.
As far as “those senior citizens that stamp their feet and raise their voices because Denny’s didn’t give them a 10-cent discount”. Screw ‘em. Denny’s is a private enterprise who stays in business only as long as they make a profit.
Just cuz I’m old does not entitle me to discounts. If they’re offered I’ll take them. Stupid not to.
I know someone is going to jump all over that entitled word. I don’t consider my social security benefits “entitled” I consider them earned.

oldernwiser on August 25, 2009 at 3:25 PM

kanda on August 25, 2009 at 3:16 PM

Thank you for your support. It is sincerely appreciated

oldernwiser on August 25, 2009 at 3:37 PM

CatsGodot on August 25, 2009 at 3:13 PM

Here is the way I look at the issue with regards to the very personal attacks made by those who disagree with me.
All of my life I have played by the rules. Now that it turns out that congress didn’t and future generations have a dubious chance of participating in the same system, I am viewed as the bad guy. Not congress. Me and those like me.
Those who are jumping all over me seem to have one attitude. “I don’t think I’m going to have the same benefits as you, so you are a crook. You are a socialist for playing by the rules and wanting what was promised you.” I never felt paying into the system was the same as being robbed by the generation before me. I felt it was an agreement and if I played by the rules of that agreement,my turn would come. An agreement BTW that was put in place several years before I was born.
I don’t get it. These people are the first to call liberals immoral but, isn’t it also immoral to refuse to honor a national commitment? A commitment to people who for the most part will never be able to get back into the work force. These same people, based on the promises made to them by the government of the country they have loved and supported for their entire life,have planned their retirement accordingly.
What would their detractors have them do?
Those who have taken shots at senior citizens are being warned ahead of time that they may have to make other arrangements. Is that what is bothering them? They have to figure out something on their own? That they may not have the government do it for them? They will be lucky if that’s the case and if they have the discipline to do it.

oldernwiser on August 25, 2009 at 4:12 PM

Thank you for your support. It is sincerely appreciated

oldernwiser on August 25, 2009 at 3:37 PM

No problem. It is both a pleasure and an honor to do battle on your behalf against the forces of evil at a time like this. You did it right and with honor.

kanda on August 25, 2009 at 4:36 PM

kanda on August 25, 2009 at 4:36 PM

Thank you. Thank you very much.
Time for this old coot to leave the building.
Time for his “cookies and milk”
well, Some Wild Turkey and a cigar maybe.

oldernwiser on August 25, 2009 at 4:46 PM

Some Wild Turkey and a cigar maybe.

oldernwiser on August 25, 2009 at 4:46 PM

Now you’re talking lets go!!

kanda on August 25, 2009 at 4:52 PM

I don’t know how I missed this yesterday. I’m sure my Gigi is freakin’ out.

How I see it – Obama couldn’t drag all those seniors into the Oval office to “coerce” them into giving up their piece of the pie so he had to go public with the whole thing.

Exit question – do we still need death panels if seniors are starving to death?

gopmom on August 25, 2009 at 4:59 PM

What about the other 300 million that the govt has stolen money from? How do they get their money back? Or do you believe that the fact that you are disabled entitles you to be the only one who gets paid back?
———————————————————–
You need to show me where I said I’m the only one to be paid back stupid. I’ll be damned if I can find where I said that.

pitter43 on August 25, 2009 at 6:33 PM

I have to say that your disrepect for others astounds me.
kanda on August 25, 2009 at 3:16 PM

You have the same respect I give anyone who believes he has a right to what other people have earned. It is a shame we no longer hang horse thieves, or you could have a graphic display of how my ancestors displayed their respect for your kind.

TMK on August 25, 2009 at 6:40 PM

You have the same respect I give anyone who believes he has a right to what other people have earned. It is a shame we no longer hang horse thieves, or you could have a graphic display of how my ancestors displayed their respect for your kind.

TMK on August 25, 2009 at 6:40 PM

When did we stop hanging horse thieves? I bet your ancestors are plumb proud of you carrying on the family tradition and all.

kanda on August 25, 2009 at 6:47 PM

kanda on August 25, 2009 at 6:47 PM

And I’m sure your ancestors would turn in their graves if they discovered their children had become lazy socialists who lack any shame for their thievery as they mock the very men they pillage.

TMK on August 25, 2009 at 7:12 PM

And I’m sure your ancestors would turn in their graves if they discovered their children had become lazy socialists who lack any shame for their thievery as they mock the very men they pillage.

TMK on August 25, 2009 at 7:12 PM

You are too funny. You should get a job with a bottom feeding collection agency. They can use your skills during these hard times. Do you have any other wise and thoughtful remarks?

kanda on August 25, 2009 at 7:37 PM

Obama to seniors: “Sit down, STFU, and die already. We’re sick of paying for you and whoever told you that you were entitled to a COLA?”

Bwaahahahahahaha….sooooooo true !!!

CEA_Agent on August 25, 2009 at 9:42 PM

Hey I got a great idea….

Obama should cut SS checks for seniors by 50% !!

Yeah….that’s the ticket !!

CEA_Agent on August 25, 2009 at 9:49 PM

From The Heritage Foundation:
The public national debt–$5.8 trillion as of 2008–is projected to double by 2012 and nearly triple by 2019. Thus, America would accumulate more government debt under President Obama than under every President in American history from George Washington to George W. Bush combined.
Like giving a high school kid an open ended credit card!

Cybergeezer on August 26, 2009 at 11:14 AM

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