No Social Security Benefit Increase in 2010 for the First Time in 30 Years

[steven johnson]

The formula on which cost of living adjustments has not kept up with real inflation for at least the past decade. With people's 401Ks and retirement funds shrinking, the fake inflation numbers will really squeeze the retired elderly.

Inflation Statistics Manipulation
The Actual Inflation Rate

By ROBERT PEAR
Published: May 2, 2009
WASHINGTON — For the first time in more than three decades, Social Security recipients will not get any increase in their benefits next year, federal forecasts show.

The absence of a cost-of-living adjustment, calculated under a formula set by law, will be a shock to older Americans already hit by plummeting home values, investment losses and rising health costs. More than 50 million people receive Social Security.

The forecasts, by the Obama administration and the Congressional Budget Office, indicate that Social Security beneficiaries will not receive any cost-of-living increase in 2010 or in 2011. The COLA is intended to preserve the purchasing power of Social Security, by increasing benefits to keep pace with consumer prices. In the last year, overall inflation has been low, largely because of the economic downturn and a decline in energy prices.

A freeze in Social Security benefits would have major implications for Medicare because the COLA, in effect, puts a cap on premiums for Part B of Medicare, which covers doctors’ services.

Social Security Is Not Expected to Rise