October 19, 2011
PARA President Jean Friday Comments on the Social Security COLA
For Immediate Release
October 19th, 2011
Social Security Recipients to get First
Cost of Living Adjustment in Three Years
Meanwhile, the “Super-Committee” considers COLA cuts
Jean Friday, President of the Pennsylvania Alliance for Retired Americans, released the following statement in reaction to the announcement of Social Security’s COLA for next year:
“After two years of watching prices go up but benefits stay put, Social Security recipients are finally going to see an increase in their benefits next year. The Social Security Administration announced a COLA of 3.6% today. Of course, the COLA will be mitigated by the expected increase in the Medicare Part B Premium. However small, this COLA will be welcome news for the millions of Social Security Beneficiaries who rely on the program for most or all of their income. In 2010, over 11 million seniors lived off their Social Security check alone! Nearly half of Americans over the age of 65 would live in poverty today without Social Security.
“The great irony of this announcement is that it comes just as the ‘Super Committee’ in Washington is considering cuts to the current COLA system. That’s right – a formula that has given seniors increases of 0%, 0% and 3.6% over three years is being considered for cuts! Of course these cuts will come by another name: the ‘Chained CPI’. This new formula is designed to calculate smaller increases in the cost of living, thus cutting benefits from their current promised levels every year from now on. This cut will amount to a different amount for everyone. Just as an example, a person retiring at age 65 in 2011 would lose over $6,000 by the time they reach age 80. For young people just beginning to pay into the system, the cut over the life of their retirement is exponentially higher. Not only would this proposal cost young people tens of thousands of dollars during their retirement, but the ‘Chained CPI’ would also violate every politician’s favorite mantra – that they won’t make any cuts to current beneficiaries of Social Security and Medicare. Make no mistake, the ‘Chained CPI’ is a cut for every single senior in America!
“The ‘Super Committee’ needs to be reminded of a couple points. First, Social Security does not contribute to our budget deficit, and is not a driver of our debt. Social Security has its own Trust Fund, separate from the US Treasury. It also ran a surplus in 2010, despite high unemployment. Therefore, discussions about Social Security policy changes have no place in the deliberations of the ‘Super Committee’ whose charge is to reduce the deficit. Second, it is intellectually and morally wrong to balance the budget on the backs of seniors. Our budget deficit is partly the fault of the historically low tax rates paid by the wealthiest Americans, who are not being asked to share in the sacrifices to get our fiscal house back in order. Our Country also started two wars that are ongoing today. Foolishly, no consideration was given to the costs of these wars when they were started. These are only two examples of real deficit causes that have nothing to do with Seniors.
“The income security of America’s seniors should be a vital national priority. Our nation is wealthy enough to pay for all of its vital priorities if we make a consensus effort to do so. The Pennsylvania Alliance for Retired Americans, our 300,000 members and 142 local affiliates, call on the ‘Super Committee’ to take Social Security COLA cuts off the table during deficit reduction talks, because Social Security is a vital national priority and because the cuts will have no impact on the deficit.”