Posted on 09/17/2010 12:44:44 PM PDT by blam
No increase to Social Security Benefits for 2011 (unofficial)
by CalculatedRisk
9/17/2010 11:28:00 AM
It won't be official until the BLS releases the September CPI-W report, but we can already say there will be no increase in Social Security benefits or the Maximum Contribution Base in 2011 (assuming no new legislation).
The BLS reported this morning that the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) was at 214.205 in August (CPI-W was at 213.898 in July).
Here is an explanation of why there will be no change (some repeated from a post last month):
The calculation dates have changed over time (see Cost-of-Living Adjustments), but the current calculation uses the average CPI-W for the three months in Q3 (July, August, September) and compares to the average for the highest previous average of Q3 months. Note: this is not the headline CPI-U.
In 2007, the average of CPI-W was 203.596.
In 2008, the average was 215.495. That gave an increase of 5.8%.
In 2009, the Q3 average of CPI-W was 211.013. That was a decline of -2.1% from 2008, however, by law, the adjustment is never negative - so the benefits remained the same this year.
Click on graph for larger image in new window.
This graph shows CPI-W over the last ten years. The red lines are the Q3 average of CPI-W for each year.
The COLA adjustment is based on the increase from Q3 of one year from the highest previous Q3 average. So a 2.3% increase was announced in 2007 for 2008, and a 5.8% increase was announced in 2008 for 2009.
In Q3 2009, CPI-W was lower than in Q3 2008, so there was no change in benefits for 2010.
For 2011, the calculation is not based on Q3 2010 over Q3 2009, but based on the average CPI-W for Q3 2010 over the highest preceding Q3 average - the 215.495 in Q3 2008. This means CPI-W in Q3 2010 has to average above 215.495 for there to be an increase in Social Security benefits in 2011.
In July 2010, CPI-W was at 213.898, and in August CPI-W was at 214.205 - so CPI-W would have to increase by almost 2% in September for the Q3 average to be at or above the Q3 2008 average. There is no evidence of a huge surge in inflation this month, so there will be no increase in Social Security benefits in 2011.
Even though there was no increase last year, and there will be no increase this year, those receiving benefits are still ahead because of the huge increase in Q3 2008.
Note: See post last month for a discussion of CPI-W and the Contribution Base.
Now the question is: Will Social Security benefits be flat in 2012 too? That is possible.
So which party is throwing wheel-chaired granny down the stairs?
Oh shit!
Obama takes from the old people and gives to his reparations community.
Redistribution of wealth, that’s all.
Hope and change starves out the old folks.....
My parents draw more in SS than they ever earned in all their years working. Yes we were poor. But HOW could this EVER be sustainable!
I actually think this is a good thing. A sizable increase during a period of stable cost of living will only be compounded for then ext 30 years, as benefits never go down.
The old don’t vote Democrat.
“The old don’t vote Democrat.”
Beg to differ. They overwhelmingly vote Democrat.
There goes the over-60 vote for sure
"Beg to differ. They overwhelmingly vote Democrat."
Of all age groups, the over 60s were the most Republican in 2008, the 45 to 59 year olds were next, below that it was all Obama.
They should just pay us old folks back up to what we put in and cancel this monster. If I had just got a savings bond for all the dough I paid in I would be flush now.
However, I do believe that SS should be, and should have been, phased out and privatized.
I seem to recall that there was a similar circumstance in the Reagan presidency. His administration gave in and allowed an increase anyway, which disappointed me even then as a young man. It’s an election year. Get ready for the coming increase in benefits as long as T-bills will sell.
If that post wasn’t clear, the old are more conservative than the young, and now days that is true to the hard extremes. The current under 30 crowd are far left and voted for Obama by an incredible, unheard of 66%.
You are dead wrong!
Dad made at the most in his lifetime one year $20,000 gross. Now with Mom and his combined SS they take in more that $24,000. She never worked. What!?
Which means that retired Military won’t get COLA raises either.
EZ enough for you to say!
It balances out somewhat when you convert everything to constant dollars. IOW, your dad's $14k job in 1963 would actually be a $99k job in 2010.
Nancy get a new office look, Obie get a new office look, Governmental departments are getting an increase, Senates are...All the folks who are not worth their weight in dung are getting increases....but the heck with the old people...No COL again
He never made $14,000 in 1963. Try $100 per week max “maybe”. Do the math. Has anyone here been poor or are you all just a bunch of college educated elitists that you constantly b@tch about? No, we never took charity either. We grew are own garden and gave food baskets to the even poorer blacks. Polk County Florida was a hell hole!
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