- The Washington Times - Friday, October 14, 2005

ASSOCIATED PRESS

Social Security checks for nearly 50 million Americans are going up next year an average of $39 a month, the biggest boost in 15 years, although rising energy bills and higher Medicare premiums will erase a big chunk of the gain for many.

The 4.1 percent cost-of-living adjustment (COLA) announced yesterday by the Social Security Administration is the biggest increase since a 5.4 percent gain in 1991. Last year’s increase was 2.7 percent.

The average Social Security check will increase from $963 to $1,002 in January.

Rising energy prices, including a record-breaking surge in September, were the driving force behind the big cost-of-living increase, which is based on changes in the government’s Consumer Price Index. The inflation figure rose 1.2 percent in September, the biggest monthly increase in a quarter-century, mostly because of a huge hurricane-linked rise in energy costs.

About one-fourth of the monthly Social Security gain will be eaten up by a rise in Medicare premiums, which will grow by $10.30 per month starting in January.

Still, with gas prices high and home heating oil and natural gas prices following suit, seniors across the country were thankful for anything.

“It’s something. It’s going to pay for probably the telephone bill,” said Murray Levine, 86, as he maneuvered a shopping cart full of groceries in downtown Philadelphia.

The government estimated this week that natural gas bills will rise by 48 percent this winter over last winter and heating oil bills will go up by 32 percent, reflecting energy prices that have soared higher in the aftermath of the Gulf Coast production shutdowns caused by Hurricanes Katrina and Rita.

In addition to the higher premium for Medicare Part B, Medicare recipients who decide to take advantage of the new prescription-drug benefit will start paying a premium of about $32 per month in January. The amount will vary depending on which plan they choose.

Bill Novelli, head of AARP, said that without the Social Security cost-of-living adjustments, inflation over the past decade would have reduced beneficiaries’ incomes by more than 25 percent. He said the eight out of 10 Americans 65 and older who rely on Social Security as the largest part of their incomes see the COLAs as a critical lifeline.

President Bush had hoped to get Congress this year to pass a Social Security overhaul he viewed as the centerpiece of his second term. However, the measure has failed to attract widespread support in Congress.


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