LEESBURG, Florida / Daily Commercial / Social Security / October 20, 2010
For the first time since 1975, there will be no cost-of-living adjustment for the 50 million or so older Americans who increasingly rely on Social Security for all or most of their income. These COLA adjustments historically have protected the nation's senior citizens from the inflationary cycles that can wreak havoc with those on fixed incomes.
Before all the provisions of the new health insurance law take effect in 2014, seniors will continue to face rising health care costs. Not surprisingly, seniors tend to use these services much more often than younger Americans.
And that's a big part of the problem.
Senior spending patterns tend to be different. If they spend much more on the one segment of the economy that continues to drive prices up, their total exposure to price inflation is much greater than for the average citizen.
Like many others, seniors also have seen their retirement accounts and home values take a direct hit from the current recession. As a result, their fixed incomes purchase far fewer goods and services than in previous years.
Perhaps the Consumer Price Index for Elderly Consumers Act of 2009 will remedy this unfortunate situation. The bill would monitor spending by Americans 62 or older and would use the spending patterns of seniors, rather than of all Americans, to calculate Social Security and Medicare benefits. But even if the bill is passed -- and that's not a sure bet when the electorate is so divided over health care --it would have no effect on the current problem.
Now, such diverse groups as the AARP and the Social Security Administration itself are banding together to urge Congress to pass legislation enabling seniors to compensate for the lack of a COLA. The vehicle most often mentioned is a one-time $250 payment.
We applaud this plan and urge our local members of Congress to approve it. Why? Because the lack of benefit increases is something that neither the Congress nor either major political party ever planned for.
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