No 2010 COLA...

Ok, I'll go ahead and say it....although I'm stepping into the political mud.

I think this $250 suggestion is total BS. If CPI is zero (actually it's been negative), then why in the he!! should people get more money?

Now some of you might say that although the CPI is down, costs for seniors are up because they spend so much on health care, which is skyrocketing. That is a very good argument, and I agree completely....soooooooooo.....they should not index SS payments to the CPI, rather they should create a new or hybrid index that includes health care and any other such factors and link SS increases to that new index.

Geesh, these politicians get me all fired up. (and not the good kind of FIREd lol)
 
Dave,
Great points about the fiscal irresponsibility of government. Pandering has become so common it is almost institutional. It really makes my blood boil to see where the politicians spend our money to buy votes. While there may have been better places for the government to "invest" that $250, I believe it should have stayed with the people who earned it. It was never the governments money to spend. This is especially true in the current economy where job losses are rampant and pay cuts common place.
Ok. I have vented and feel better!:blush:
 
Worker Bee said:
While there may have been better places for the government to "invest" that $250, I believe it should have stayed with the people who earned it.
Click to expand...

The people that will earn that $250 have not been born yet.:rolleyes:
 
"The people that will earn that $250 have not been born yet."

Two generations of Americans will enjoy a lifestyle and financial benefits that neither their forefathers nor their children will enjoy. That so few people see this as reprehensible, selfish, and morally abhorrent is more a commentary on the inherent selfishness of mankind than anything else.
 
Finance Dave said:
Now some of you might say that although the CPI is down, costs for seniors are up because they spend so much on health care, which is skyrocketing. That is a very good argument, and I agree completely....soooooooooo.....they should not index SS payments to the CPI, rather they should create a new or hybrid index that includes health care and any other such factors and link SS increases to that new index.
Click to expand...

The BLS has been calculating a special CPI-E since 1982. The experimental consumer price index for elderly Americans (CPI-E): 1982–2007 (EXCERPT), Monthly Labor Review Online, April 2008
It just hasn't gotten into the law.

One issue with medical care expenses is that the higher cost is partially driven by new treatments. So should we "protect" seniors from the cost of new treatments that weren't available a decade or two ago?

Note that Medicare Part B premiums (about $1,200 per year per person) are frozen for low and median income people in 2010 because there is no SS increase. The Center for Medicare and Medicaid hasn't announced what it's going to do regarding premiums for about a quarter of Medicare enrollees who are "higher income". At least I can't find a news release- they are late, last year the announcement was made on Sept 19.CMS ANNOUNCES MEDICARE PREMIUMS, DEDUCTIBLES FOR 2009
 
mickeyd said:
$250 will buy a few senior citizen votes, no doubt.
Click to expand...
DING DING DING We have a winner! Obama and his buds (not that Repub's are any better) bribe another group at taxpayers expense. Shooting fish in a barrel...

It takes a village to raise a child. The village is Washington. You are the child.
-The Hellary book, condensed by P. J. O'Rourke

Politics: The art of bribing us with our own money. We complain about the politicians and yet we perpetuate it at the polling booth generation after generation. Ultimately we have no one to blame but ourselves. Rant off...
 
Independent said:
The Center for Medicare and Medicaid hasn't announced what it's going to do regarding premiums for about a quarter of Medicare enrollees who are "higher income". At least I can't find a news release- they are late, last year the announcement was made on Sept 19.CMS ANNOUNCES MEDICARE PREMIUMS, DEDUCTIBLES FOR 2009
Click to expand...

You can bet that any government announcements of this type will be reviewed and approved at the very highest level. It could take awhile to get this approval. My guess is the new higher rates for higher income seniors will be announced one day after the full Senate vote on the final health care plan.
 
There may be no COLA increases til 2012.

Bad News For Those Born In 1947 - Forbes.com


"Social Security COLAs are calculated every October by comparing the third-quarter data of the Consumer Price Index for Urban Workers (CPI-W) with the previous year's numbers. An increase in the CPI results in a COLA the following January for retirees and other Social Security beneficiaries. Rising energy prices caused a 5.8% COLA to be ordered in the fall of 2008. However, plummeting prices between the fall of 2008 and the beginning of COLA payments in January 2009 caused the CPI as a whole to drop by around 5%. In effect, the 2009 Social Security COLA compensated retirees for inflation that no longer existed.To make up for this overpayment, Social Security will pay no COLAs until prices rise back to their previous fall 2008 levels, which, according to the Congressional Budget Office, won't be until 2012."
 
tjscott0 said:
In effect, the 2009 Social Security COLA compensated retirees for inflation that no longer existed.To make up for this overpayment, Social Security will pay no COLAs until prices rise back to their previous fall 2008 levels, which, according to the Congressional Budget Office, won't be until 2012."
Click to expand...
I wonder if we can expect the income ceiling subject to SS taxes to remain unchanged until 2012....
 
Midpack said:
DING DING DING We have a winner! Obama and his buds (not that Repub's are any better) bribe another group at taxpayers expense. Shooting fish in a barrel...

It takes a village to raise a child. The village is Washington. You are the child.
-The Hellary book, condensed by P. J. O'Rourke

Politics: The art of bribing us with our own money. We complain about the politicians and yet we perpetuate it at the polling booth generation after generation. Ultimately we have no one to blame but ourselves. Rant off...
Click to expand...


Nothing new here.
 
oN FURTHER NOTE...
If the current working kids find all this SS business as paying Seniors to much for putting in too little? Just as maybe their Grandparents got?

Just consider this, left out fact..
This Country and you kids Didn't have to live thru either 29-32' Crash, Go thru 2 World Wars and Didn't have to go thru living in fear of During the Decades Of The DRAFT, let alone Loose your Grandfather, Father and /or Sons in those wars, let along Viet Nam yrs.. and maybe it's just another way the Congress is Repaying those that Lived and sacrificed to our country , that made it what it is today...

I think anyone who served in the Service should have to pay ANY Income taxes on their first $50k after and if they made it out alive, and those that came out handicapped? Should be Paid the 'Avearge Median Income" for the rest of their Life, Tax Free...and let those others who didn't serve pay the bills, along with The Companies that made Billions on those wars..

Those that Didn't Serve their country? Not so much
 
Dennis said:
Just consider this, left out fact..
This Country and you kids Didn't have to live thru either 29-32' Crash, Go thru 2 World Wars and Didn't have to go thru living in fear of During the Decades Of The DRAFT, let alone Loose your Grandfather, Father and /or Sons in those wars, let along Viet Nam yrs..
Click to expand...
Yeah, it's my fault that I was born when I was.
 
Independent said:
Note that Medicare Part B premiums (about $1,200 per year per person) are frozen for low and median income people in 2010 because there is no SS increase. The Center for Medicare and Medicaid hasn't announced what it's going to do regarding premiums for about a quarter of Medicare enrollees who are "higher income". At least I can't find a news release- they are late, last year the announcement was made on Sept 19.CMS ANNOUNCES MEDICARE PREMIUMS, DEDUCTIBLES FOR 2009
Click to expand...

A bill passed out of the house with a large majority to freeze everyone's Medicare Part B premium for 2010. It was read into the Seante Finance Committee and as far as I know nothing has been done yet.

I am sure the government would happily throw the small "high earner" minority who pay the increased premium each year to the gators, but there are other issues. Medicaid pays the Part B premium for Medicaid recipients, of whom there are quite a few. Also, there are Medicare recipients who do not yet get SS payments, so they pay the Pt. B premium out of pocket. With no action, this group will also pay quite a bit more. Overall, I feel that it likely will pass, and that this is the reason for the delay in announcing 2010 premiums.

Ha
 
tjscott0 said:
There may be no COLA increases til 2012.

Bad News For Those Born In 1947 - Forbes.com


"Social Security COLAs are calculated every October by comparing the third-quarter data of the Consumer Price Index for Urban Workers (CPI-W) with the previous year's numbers. An increase in the CPI results in a COLA the following January for retirees and other Social Security beneficiaries. Rising energy prices caused a 5.8% COLA to be ordered in the fall of 2008. However, plummeting prices between the fall of 2008 and the beginning of COLA payments in January 2009 caused the CPI as a whole to drop by around 5%. In effect, the 2009 Social Security COLA compensated retirees for inflation that no longer existed.To make up for this overpayment, Social Security will pay no COLAs until prices rise back to their previous fall 2008 levels, which, according to the Congressional Budget Office, won't be until 2012."
Click to expand...

This point was brought up earlier.. that the COLA calculation is based on the national Consumer Price index (CPI) which may not rise to 2008 levels for several more years. Logic would dictate that if the Consumer Price index falls, then the SS payment should also fall. But we all know no one is going to propose cutting SS payments. So the COLA adjustment remains zero until the the CPI climbs back up to new highs.

The only reason the CPI will climb to new highs is inflation. I have heard both sides of the argument of why inflation may, or may not, rise (some predict rapidly). In theory, Social Security payments do not need a COLA adjustment, providing the right "basket of goods" used to calculate inflation is properly adjusted to reflect items that SS recipients would typically buy. This is where the Consumer Price Index Is Controversial

The basket of goods for SS recipients is likely to be quite different than a young family. College tuition, money spent on apparel and new car purchases are likely to be less a factor for seniors. Conversely, medical care costs are likely to be higher. Previous posts have highlighted several areas where items like heating oil, gasoline or electricity may be a larger part of a SS recipient's budget.

Calculating CPI is an inexact business to start with. Making matters even worse is tying the SS COLA to the same Consumer Price Index that may be accurate for middle class, middle age Americans. Clearly both the types of items purchased and the percentage of each item in a typical basket of goods is different for different age groups.

It seems logical to have the Bureau of Labor Statistics calculate a special CPI that reflects spending patterns of older, less affluent SS recipients simply because they are the ones most impacted by any even minor price changes. Using the CPI for the population at large clearly opens the door for conditions where people who rely heavily on SS could suffer a real drop in standard of living - simply because the wrong basket of goods (and thus the wrong CPI) was used to calculate their annual SS COLA adjustment.

Here is another important link to Understanding the CPI
 
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