This is just the third time in 40 years that Social Security recipients won’t get a raise.
Advertisement
The Social Security COLA decision is based on changes in consumer prices.
That’s because prices for things like gas have gone down over the past year. “Where are you going to get the money to live on?” said Susan Bradshaw, who lives in a retirement community in Atlanta. However, there is still a few silver lining to the dark COLA cloud, especially for the high-income employees.
Sanders would go after the upper middle class in restarting the 6 percent Social Security tax, which now kicks out at 118,500 of earnings, on all income above $250,000. They prefer to claim, as does the New York Times’ favorite establishment economist, Paul Krugman, that “Social Security does not face a financial crisis; its long term funding shortfall could easily be closed with modest increases in revenue”.
That’s because the state has about a million Californians who are dually eligible for Medicare and Medi-Cal, and for those people “the premiums still go up but they’re held harmless”, Becerra said.
There was practically no inflation over the past year, which means that 60 million people living on Social Security won’t be getting an annual inflation adjustment in their benefits. That means most seniors will be stuck with an average monthly check of $1,341 ($2,212 for retired couples who are both receiving benefits). By law, it is the official measure used by the Social Security Administration to calculate COLAs.
Monthly Medicare premiums will go up for those who don’t have deductions taken out of their Social Security checks. Well, using current mortality rates, rich males are now expected to receive roughly $130,000 more in lifetime entitlement benefits, and rich females are now expected to receive roughly $30,000 more.
For the poor, research shows that as incomes have stagnated, so have life expectancies. The deductible is the annual amount patients pay before Medicare kicks in.
Senate Democrats, led by Sen. By contrast, medical care costs have risen by 2.4 percent since previous year, according to The Fiscal Times.
The AARP and other retiree groups are still hoping to prevent giant increases in Medicare premiums.
In future years, there will very likely be increases in Social Security benefits.
However, in the past decade, the COLA has been that big only once.
The government ties changes in the cost of living to the Department of Labor’s Consumer Price Index, which hasn’t risen since the last cost-of-living adjustment in 2015. Critics to the existing formula charge that fuel prices are less important in determining cost of living for the nation’s seniors – individuals ages 65 and older make up only 16 percent of all licensed drivers in the United States.
Limiting benefits and collecting more from the wealthy could do the same, although the proposals are fraught with fairness issues. If prices drop or stay flat, benefits stay the same.
The CPI-W numbers for September were released Thursday. In the last 30 years, there has been a massive transfer of wealth from the middle class to the top 1%, while billionaires and large corporations continue to exploit tax loopholes their lobbyists created. There are lots of healthy stocks with dividend yields of 3% or more, and even a simple, broad-market index fund sports a dividend payout yielding about 2.1% now.
However, other prices are up.
“Seniors spend far more on health care and heating and cooling their homes than on televisions or new cars”, said Congressman John Larson, D-Conn. The way cost-of-living adjustments are calculated “is clearly broken and must be fixed”, he added.
“When you actually look at the long-term effects, it can be staggering”, Cloud says.
Share with Us – We’d love to hear eyewitness accounts, the history behind an article, and smart, constructive criticism. There might be arguing and sharp differences of opinion – how could there not be? – But in the end, government would work.
Advertisement
