Social Security Gets 2.6% Hike Budget-Cutters May Shave Future Colas
Ap, St Louis Post-Dispatch (MO)
The nation's 43 million Social Security recipients will get a 2.6 percent increase in their benefit checks starting in January.
Next year's average increase of $18 per month is triggered by national inflation figures made public Friday. One proposal before Congress would pare that increase by $7 per month or $84 per year. Senior citizens groups are upset about that prospect.
Opponents of the proposal contended that Democrats and Republicans scrambling to come up with enough spending cuts to balance the budget were trying to sneak through changes in the cost-of-living adjustments under the smoke screen that the current calculation overstates inflation.
Evelyn Morton, congressional lobbyist for the American Association of Retired Persons, said, "If the Congress wants to cut the cost-of-living adjustment, let them say so up front. I don't think the American people want to see Social Security COLAs cut for the sake of reducing the deficit."
The plan for a 2.6 percent increase for next year will mean that the average monthly Social Security benefit of $702 will increase to $720, starting with the Jan. 3 checks.
In addition to Social Security beneficiaries, 6 million poor people who receive Supplemental Security Income benefits will see those payments rise as well. The maximum monthly SSI payment for an individual will increase to $470, compared with $458 this year.
The increases are based on the change in the Labor Department's Consumer Price Index for the 12 months ending Sept. 30. In 1975, Congress legislated automatic annual adjustments to the Social Security benefits based on the performance of the index.
The idea of reducing the cost-of-living adjustment has been floated by House Speaker Newt Gingrich, Senate Majority Leader Bob Dole and Sen. Daniel Patrick Moynihan, top Democrat on the Senate Finance Committee.
Moynihan is pushing a proposal to limit cost-of-living adjustments to 1 percentage point below the index increase, citing comments by various economists, including Federal Reserve Chairman Alan Greenspan, that the current index overstates inflation. …