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Bill Would Give Social Security Recipients $250 In Place Of COLA

Last week, many seniors, veterans, and individuals with disabilities were stunned when the Social Security Administration announced that for the second year in a row, Social Security recipients would see no automatic cost of living adjustment for 2011. Historically, the cost of living adjustment is a benefit increase, calculated automatically using data on inflation published by the U.S. Bureau of Labor Statistics.

This announcement comes on the heels of two very different years. In 2009, Social Security benefits were increased by almost 6 percent, which is the largest increase of its kind since 1982. In stark comparison, 2010 had no cost of living adjustment. This means that, for the first time in U.S. history, 2011 will be the second consecutive year with no increase, leaving many Social Security recipients worried about how they are going to make ends meet.

In response, U.S. Representative Earl Pomeroy has sponsored a bill which aims to make up the gap left by the cost of living adjustment. The Seniors Protection Act would provide all Social Security recipients with a one-time payment of $250. According to Representative Pomeroy, this payment will help those recipients to meet budgets and protect themselves from financial ruin.

"Our seniors have everyday expenses for drugs, utilities, housing and food that have increased, regardless of the government's Consumer Price Index formula," he said. "Social Security benefits are very modest - amounting to only $14,000 annually - and seniors are already stretching their income as thinly as possible to make ends meet."

The bill has the support of many Democrats, including Speaker of the House Nancy Pelosi, who encourages all senators to support the bill. "All members of Congress should join us in supporting this legislation which will be fiscally responsible and upholds our bedrock promise of economic security for our nation's seniors," she said.

Earlier this year, President Barack Obama expressed his support for such a payment to those that depend on Social Security if there were no cost of living increase for 2011. We will continue to follow this legislation as it moves through Congress and keep you apprised of any developments.

Source: SeniorJournal.com, "Speaker Pelosi Backs $250 Payment to Senior Citizens, Veterans if no COLA for 2011", 15 October 2010

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