Millions Face Shrinking Social Security Payments

[bonnie]

http://news.yahoo.com/s/ap/20090823/ap_on_go_ot/us_social_security_smaller_checks

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By STEPHEN OHLEMACHER, Associated Press Writer Stephen Ohlemacher, Associated Press Writer – 1 hr 1 min ago

WASHINGTON – 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.

"I will promise you, they count on that COLA," said Barbara Kennelly, a former Democratic congresswoman from Connecticut who now heads the National Committee to Preserve Social Security and Medicare. "To some people, it might not be a big deal. But to seniors, especially with their health care costs, it is a big deal."

Cost of living adjustments are pegged to inflation, which has been negative this year, largely because energy prices are below 2008 levels.

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."

About 50 million retired and disabled Americans receive Social Security benefits. The average monthly benefit for retirees is $1,153 this year. All beneficiaries received a 5.8 percent increase in January, the largest since 1982.

More than 32 million people are in the Medicare prescription drug program. Average monthly premiums are set to go from $28 this year to $30 next year, though they vary by plan. About 6 million people in the program have premiums deducted from their monthly Social Security payments, according to the Social Security Administration.

Millions of people with Medicare Part B coverage for doctors' visits also have their premiums deducted from Social Security payments. Part B premiums are expected to rise as well. But under the law, the increase cannot be larger than the increase in Social Security benefits for most recipients.

There is no such hold-harmless provision for drug premiums.

Kennelly's group wants Congress to increase Social Security benefits next year, even though the formula doesn't call for it. She would like to see either a 1 percent increase in monthly payments or a one-time payment of $150.

The cost of a one-time payment, a little less than $8 billion, could be covered by increasing the amount of income subjected to Social Security taxes, Kennelly said. Workers only pay Social Security taxes on the first $106,800 of income, a limit that rises each year with the average national wage.

But the limit only increases if monthly benefits increase.

Critics argue that Social Security recipients shouldn't get an increase when inflation is negative. They note that recipients got a big increase in January — after energy prices had started to fall. They also note that Social Security recipients received one-time $250 payments in the spring as part of the government's economic stimulus package.

"Seniors may perceive that they are being hurt because there is no COLA, but they are in fact not getting hurt," said Andrew G. Biggs, a resident scholar at the American Enterprise Institute, a Washington think tank. "Congress has to be able to tell people they are not getting everything they want."

Social Security is also facing long-term financial problems. The retirement program is projected to start paying out more money than it receives in 2016. Without changes, the retirement fund will be depleted in 2037, according to the Social Security trustees' annual report this year.

President Barack Obama has said he would like tackle Social Security next year, after Congress finishes work on health care, climate change and new financial regulations.

Lawmakers are preoccupied by health care, making it difficult to address other tough issues. Advocates for older people hope their efforts will get a boost in October, when the Social Security Administration officially announces that there will not be an increase in benefits next year.

"I think a lot of seniors do not know what's coming down the pike, and I believe that when they hear that, they're going to be upset," said Sen. Bernie Sanders, an independent from Vermont who is working on a proposal for one-time payments for Social Security recipients.

"It is my view that seniors are going to need help this year, and it would not be acceptable for Congress to simply turn its back," he said.

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[Jeannieb43]

There's a big difference between "no COLA next year" and "payments will shrink."

As long as the Social Security payments remain level, I don't think the elderly will complain. [And I think that's what is being contemplated.]

[bonnie]

There's a big difference between "no COLA next year" and "payments will shrink."

As long as the Social Security payments remain level, I don't think the elderly will complain. [And I think that's what is being contemplated.]

Probably best to take that up with the author of this article.

[CyberGuy]

There's a big difference between "no COLA next year" and "payments will shrink."

As long as the Social Security payments remain level, I don't think the elderly will complain. [And I think that's what is being contemplated.]

I have read up on this. There will be no COLA increase but Social security payments will be less than this year. WHY? Medicare premium costs have gone up and that is deducted from social security before it is paid to the recipiant. In the past COLA always was more then the Medicare deduction and was not noticed. With a freezing of COLA but medicare deductions going up the check will be less. That is what is going on.

[Woody]

Folks .... this is what you all voted for in the person of Barack Obama. He intends to finance his bailouts on the backs of seniors and the disabled.

[bonnie]

Folks .... this is what you all voted for in the person of Barack Obama. He intends to finance his bailouts on the backs of seniors and the disabled.

The problem is even with a reduction in medicare Obama can't even come close to what this will cost.

There has to be a reduction in medical services. If Obama did as promised and put a pending bill in it's entirety on the internet there would be even more opposition. He cannot answer truthfully as he does not know himself,he can only give soothing words.

Let's have a little tranparency from the most transparent administration, and just a few direct answers.

Obama can't do that our the whole ship will go down

[CyberGuy]

Obama says he will not raise taxes on the middle class. He means a direct tax such as an income tax. However the plan calls for an employor payroll tax of 5 percent on all and possibly a national sales tax of 5 percent or more. Also increase tax on cigarettes and alcohol and increase tax on all sugar drinks and fruit juices and all sugary deserts. Also taxing all medications bought through private health care plans. So indirectly we all pay the tax. It is a sneaky way of taxing everyone but saying he is not taxing the middle class. Expect employors to drop wages another 5 percent to pay for the 5 percent payroll tax. So indirectly we will be paying the tax.

[bonnie]

Obama says he will not raise taxes on the middle class. He means a direct tax such as an income tax. However the plan calls for an employor payroll tax of 5 percent on all and possibly a national sales tax of 5 percent or more. Also increase tax on cigarettes and alcohol and increase tax on all sugar drinks and fruit juices and all sugary deserts. Also taxing all medications bought through private health care plans. So indirectly we all pay the tax. It is a sneaky way of taxing everyone but saying he is not taxing the middle class. Expect employors to drop wages another 5 percent to pay for the 5 percent payroll tax. So indirectly we will be paying the tax.

It can't be any other way but so many follow faithfully along behind what Obama says.

The part where Obama is going to cut costs is with bundling medicare payments. That is part of what is getting the seniors up in arms.

Your Dr will get paid so much a medicare patient per month. Whether the DR sees them or not. When he does he is to get them in and out with a pill or whatever. The more tests ordered the percentage of what the Dr is paid goes down.

It won't take long for employer's to dump the private insurance and pay the 8% penalty to the government.

[Guest]

Originally Posted By: Redwood

Folks .... this is what you all voted for in the person of Barack Obama. He intends to finance his bailouts on the backs of seniors and the disabled.

The problem is even with a reduction in medicare Obama can't even come close to what this will cost.

There has to be a reduction in medical services. If Obama did as promised and put a pending bill in it's entirety on the internet there would be even more opposition. He cannot answer truthfully as he does not know himself,he can only give soothing words.

Let's have a little tranparency from the most transparent administration, and just a few direct answers.

Obama can't do that our the whole ship will go down

No one is challenging what you're saying here because it is the truth and they know it.

[bonnie]

Quote:

No one is challenging what you're saying here because it is the truth and they know it.

What is really just amazing is those that you assume are reasonably intelligent backing all the way something they don't know.

Who in their right mind gives support and willingness to have put in action the terms of a contract that has not been read by the contract holder. Obama can't say yes or no,all he can do is try to demean and make light of those opposed.

Would anyone go into a business deal and not know the terms? I wouldn't but if Obama speaks many will.

He has said much and has not done any of it. I am especially anxious for the five days this bill will be on the internet.

You see mad people now,wait until those that have not read it,do so.

[Guest]

Will they put the whole thing on the internet? That's not in their best interest.

[bonnie]

Will they put the whole thing on the internet? That's not in their best interest.

Obama said when he was elected he would have the most transparent administration and pending bills would be placed on the internet.So far we are waiting

The more people read this and the more Obama talks the more nervous people get.

[Guest]

Obama said when he was elected he would have the most transparent administration and pending bills would be placed on the internet.

Yeah right.

"The check's in the mail"

"My dog won't bite"

"Hi I'm a polititian, I'm here to help"

"I never had sex with that woman"