Posted on 08/25/2009 4:34:50 PM PDT by SeekAndFind
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.
Prices are up but my check has gone down
Obama is smiling while I wear a frown
‘cause no COLA, no no no no COLA
Counseling every five years unless I get sick
then they'll DNR me, and I'll die real quick
like EBOLA, E-BO-L-A, and still there's no COLA
Well, I don't understand what the showers are for
‘cept to stop global warming, so says Albert Gore
still no COLA, no no no no COLA
I pushed him away, I walked to the door
I fell to the floor, I went down on my knees
and begged and said please
Lies will be truth and truth will be lies
and reform will be death camps wrapped up in disguise
still no COLA, no no no no COLA
no no no no COLA
Thank You businessprofessor! Everyone should be aware of these facts.
I utterly despise Obama and the jackass he rode in on but this is one thing that is not to be blamed on him. The simple facts are that gasoline is much lower than it was at this time last year so according to the formula living costs have fallen since last year, that is why there is no increase in social security. Predictions of no increase next year are based on expectations that living costs will not rise due to a failing economy.
I am a Social Security recipient and I trust a rattlesnake far more than I do Obama but really he had nothing to do with this.
I see that it is expected that Part B premiums will not go up this year, and, while Part A premiums will go up, hardly anyone pays them. So you are correct, SSA net benefits will not be changed next year. I am pleased, since I am one of those collecting them..
.......And what is cost of living based on ? Inflation right ?.....
No, it is based on a formula that was developed to make the calculation. The formula produced a value that is < 0. It indicates deflation in excess of inflation
It is a legislated calculation
They should all be getting anti-colas.
Yeah, well the uninformed masses won’t care. They will blame this on Barry and i couldn’t be happier as far as that is concerned.
Well of course they are ignoring the warnings, they are Democrats. In any event they won’t give us another increase until the cost of living goes up enough that their little formula says we should get one. Right now their formula says we should get a cut but they aren’t allowed to do a cut. They will probably try to change the law next so that they can do a cut.
You’re probably right about the uninformed masses but I would prefer we don’t blame him for things he DIDN’T do, it only makes us look bad and there are plenty of things to blame him for without inventing any.
Boy are they gonna be pissed.
It is beginning to dawn to the elderly that Obama plans to really, really screw them. (Nothing personal... we are all screwed)
However, wait until they begin to realize that Obama care depends on massive cuts in Medicare!!
So where is AARP?
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