More than 58 million retirees and disabled Americans will get no increase in Social Security benefits next year, the second year in a row without a raise.
The Social Security Administration said Friday inflation has been too low since the last increase in 2009 to warrant an increase for 2011. The announcement marks only the second year without an increase since automatic adjustments for inflation were adopted in 1975. The first year was this year.
The cost-of-living adjustments, or COLAs, are automatically set each year by an inflation measure that was adopted by Congress back in the 1970s.
To make up for the lack of a COLA, the House will vote in November — after congressional elections — on a bill to provide $250 payments to Social Security recipients, House Speaker Nancy Pelosi said.
President Obama is also pushing for the payment, which would be similar to one included in the economic recovery package last year, White House spokesman Robert Gibbs said Friday.
But even if the House passes the bill, it faces opposition in the Senate. Senators defeated a similar proposal last fall, when a dozen Democrats joined Republicans to block it on a procedural vote.
The absence of inflation will be of small comfort to many older Americans whose savings and home values still haven’t recovered from the recession. Many haven’t received a raise since January 2009, and they won’t be getting one until at least January 2012. And the timing couldn’t be worse for Democrats as they approach an election in which they are in danger of losing their House majority and possibly their Senate majority.
“We’re a little bit upset because our bills are going up and our Social Security isn’t,” said Betty Dizik of Tamarac, Fla., a retired tax preparer and social worker.
Mrs. Dizik, 83, said her only source of income is a $1,200 monthly payment from Social Security.
“I’m like a lot of other people in my predicament who live on Social Security,” she said. “It’s hard. We cannot make ends meet.”
Claire Edelman of Monroe Township, N.J., said she was so hard up that at age 83 she applied for a temporary job as a census taker for the 2010 census. She didn’t get the job, so she gets by on a small pension from her job with the state and her monthly Social Security payment of $1,060.
“I just hope there is some way to reconsider that decision [on the COLA] because it is going to affect so many people,” Mrs. Edelman said. “I can’t understand why the Congress hasn’t seen that there’s been an increase in everything.”
A little more than 58.7 million retirees and disabled Americans receive Social Security or Supplemental Security Income. Social Security was the primary source of income for 64 percent of retirees who got benefits in 2008.
The average Social Security benefit: $1,072 a month.
Social Security is supported by a 6.2 percent payroll tax — paid by both workers and employers — on wages up to $106,800. Because there is no COLA, that amount will remain unchanged for 2011.