Was the Social Security COLA automatically frozen or was legislation passed? Did I read this right?

[madfloridian]

Yesterday someone posted here that they had frozen the Social Security Cost of Living raise so they would not have to make seniors pay back the higher COLA for 2008. First I had heard that. There was a 5.8% COLA in that year. So now I hear that they could have made seniors pay that back? Instead they are kindly just freezing it, and perhaps will even in 2012?

Here is the chart that was posted. Take a look at the last 4 years. The only 0 COLA years are under this Democratic administration. To the so-called "uninformed" (like me) it does look odd.

Social Security Cost-Of-Living Adjustments

Here are the last 6 years.

2005 4.1
2006 3.3
2007 2.3
2008 5.8
2009 0.0
2010 0.0

The chart goes back to 1975. I see not a single other year with a zero. None.

Then I read this article today when I did a search on Social Security Cost of Living increase, freeze.

It is from the San Francisco Chronicle, and it sounds suspiciously like they are passing legislation to do away with the COLA altogether.

Surviving Without the Social Security COLA

For decades, Social Security recipients have been able to count on receiving their government benefits like clockwork each month. And for most of that time, a small cost of living increase has been factored into their Social Security benefits each year to offset the effect of inflation. Unfortunately, that trend is going to end in 2011. Recent legislation has mandated that Social Security benefits are going to stay at the same level as they were in 2010, thus eliminating the COLA (cost of living adjustment) increase for the year. Furthermore, the "do over" option that existed in the past has also been eliminated, thus preventing retirees from having their benefits recalculated at a current higher rate in return for repaying all past benefits received. Retirees who were counting on this increase may find their budgets a bit harder to manage than expected. Fortunately, there are several ways to make up for this shortfall.

I would like to know what recent legislation that was? I know that President Obama's deal on tax cuts included cutting the payroll tax back on Social Security by 2% for a year....which in itself is going to have an effect on present retirees.

I don't fully understand the part about "repaying past benefits." But I do see that they are tampering with the COLA at the same time a deal has been made to give the very richest in America their tax cuts.

Here is more. They have the nerve to suggest tightening belts after 2 years with no cost of living raise. They want seniors to tighten their belts while the very rich get richer?

Tighten Your Belt

Find something in your budget that you can eliminate for a year. This might be a good year to cancel your cable subscription, or at least the movie or premium channels. Use your Christmas money to get a discount club membership and buy staple necessities in bulk. Dust off your library card and that weight set that's been collecting dust in your basement. Let your gym membership go for a year and pump some iron at home. Chances are you'll save more than the COLA difference for the year.

Alan Simpson called seniors the "greediest generation." Maybe he read this article.

This paragraph is pretty telling, and it frankly worries me it is happening when the economy is so bad.

The Bottom Line

These are just some of the ways that Social Security recipients can make up for the shortfall created by the COLA freeze. Current legislation suggests that these suggestions may be relevant in 2012 as well. But the long-term uncertainty surrounding Social Security in America will remain a key issue for politicians and retirees for the next several decades.

Every time some of us here have questioned the lack of the COLA the last two years, we were told that the economy did not meet the criteria. But now it seems to me that that is not true.

It seems to me it was frozen on purpose while the billionaires are getting their tax cuts extended.

On Edit:

This was posted to me in a thread yesterday. One reason I looked this up.

"The CPI-W has increased, but it hasn't caught up with past increases in payments....

http://www.ssa.gov/oact/STATS/cpiw.html
http://www.ssa.gov/oact/COLA/colaseries.html

Rather than back-charge people on Social Security for getting too much in 2008, it's been frozen until inflation catches up with prior increases."

Had they planned on back-charging people? It's a good point. Was it a conscious decision to freeze the COLA instead of back-charging? Good question.

Good thing the very rich don't have to worry about such stuff.

[liberal N proud]

1. Who in the hell unrecs a message like this?

I will be glad this feature is going away.

Rant off!

Welcome to the new America, where the rich and their legislators bleed the rest of the country into poverty.

[Statistical]

3. Likely someone who noticed that there is nothing true about the OP.

It is an amalgamation of false statements, half truths, and emotional rants.

Why should it be recced?

[walldude]

134. Really? then explain to me the letter my wife just got from SS

stating that her payment this year will be 602.00. DOWN from 617.00 last year.

[msanthrope]

136. What was the explanation given? Did your Medicare Part B premium

go up?

If that happened, you can contest it.

[Dappleganger]

7. mf has a "fan" club.

Another reason why it's good that unrecc's are being eliminated.

[msanthrope]

52. I did--because when Madfloridian pushed this meme yesterday, it was carefully explained to her

that she was wrong. It was carefully explained to her HOW she was wrong.

That the OP has chosen not to educate herself is worthy of an unrec, IMHO.

[Statistical]

2. No COLA is set by CPI-W.

When CPI-W increases relative to the prior year there is a COLA increase. When CPI-W declines technically SS checks should also decline however they are protected from declines. SS checks can only increase never decline.

CPI-W increased in 2008 and COLA increased in essence SS checks reflect 2008 prices.
CPI-W declined in 2009 however SS checks remained flat.
CPI-W increased in 2010 however it wasn't above the 2008 peak hence no COLA increase.

If/when CPI-W increases past 2008 peak there will be COLA.

None of this required any legislation. COLA increases are automatic and have happened this way since 1976.

[madfloridian]

5. "Recent legislation has mandated"

What legislation?

[Statistical]

6. None. It is a false statement. SS checks have been based on CPI-W

since 1976. Unless someone is claiming 1976 is "recent legislation". I guess if one considers the age of the universe 1976 is rather recent.

[madfloridian]

11. Then you tell that author that his article is wrong.

I am just curious and trying to learn stuff. I just keep getting the same old words, and if legislation was passed I want to know about it.

[Sheepshank]

13. why did you choose to post a false article?

There is contrary stuff and false stuff on the web, just as there are positive and truths. Yet you chose something negative....why?

[madfloridian]

14. Here is the author. I don't know him.

http://www.investopedia.com/contributors/default.aspx?id=186

[Sheepshank]

96. Again the question, why do you choose to forward and promote

articles negative to Obama instead of positive? There is a reason you went to all the work to find all of these snippets to support a false assumption.

It just makes it that much worse that it's a consortium of half truths to make a final false statement.

[Codeine]

110. At this point it's not a question, it's obviously an agenda. nt

[jtown1123]

28. I read the article, It's not wrong, you just misunderstood it.

[Cleita]

9. So from a personal POV my rent has gone up

$100 a month in the past two years. Gas has gone up to over $4 a gallon in the last year. Electricity cost has doubled. Health insurance has risen $20 a year for what Medicare doesn't cover. I haven't really checked food but I believe I spend more at the supermarket than before and yet I have received no COLA in the past two years. I believe if you poll most seniors especially widows like myself who rely more on Social Security than most, you will find a similar story. So whatever chicanery they are using to deny us benefits by saying there is no raise in cost of living is bunk IMHO.

[Statistical]

15. Gas isn't higher than the peak of 2008, Electricity isn't higher than peak of 2008.

Food prices have increased but average price of goods & services isn't higher than the peak of 2008.

In essence SS checks reflect peak 2008 prices. When prices exceed 2008 peaks then SS will see COLA increase.

"So whatever chicanery they are using to deny us benefits by saying there is no raise in cost of living is bunk IMHO."
Nobody is saying prices haven't gone up just that they haven't exceeded 2008 peaks.

I will provide a more detailed response in an OP since this is common myth.

[Cleita]

20. Really?

You do know that electricity costs varies according to the company delivering it and ours has doubled. Yes, I checked with neighbors to see if it was just me and a faulty meter but it wasn't. My electric company is PG & E. I filled my auto gas tank this week and it cost me $55.00. A year ago I could fill my car it for $40. My propane bill went up $100 from last year. Get your nose out of your ivory tower and your spread sheets and look at reality.

And please, I love myth, but I don't spread it when my checkbook tells a different story. Do not call me a liar.

[BzaDem]

21. Do you understand the difference between 2009 and 2008? You keep posting evidence that prices have

increased since last year, even though an increase of prices since last year is IRRELEVANT to whether there has been an increase in prices since 2008.

If SS tracked the CPI-W perfectly, 2009 payments would have been way BELOW 2008 payments, and 2010 payments would be higher than 2009 payments but still below 2008 payments.

Instead, fortunately, they keep giving the 2008-level checks and don't lower the checks at all (even though costs right now are still lower than they were during the peak of 2008).

[Cleita]

29. I guess I don't know what I'm talking about and I

suppose none of you will mind writing a check to me to cover the difference so that I can truthfully say, my cost of living hasn't gone up.

[BzaDem]

31. Would you rather have had a large decrease in 2009, and a small increase in 2010 that doesn't make

up for it? That would prevent you from truthfully saying "we haven't had an increase," since, well, 2010 would have been higher than 2009.

You have yet to provide any evidence that the cost of living has gone up from the peak of 2008 (for which benefits today are being calculated).

[Cleita]

41. I haven't had an increase in the last two years and that's

from 2009. Even then the $15 or $20 back then barely kept up with the raises in my health insurance. Those have still kept coming though. $20 this year. It's criminal for old people, but just go ahead and bury your nose in your Excel sheets instead of looking for better studies to base your conclusions on if there are any. Or, here's an idea? Conduct your own studies and see what you come up with?

[Statistical]

43. Prices are lower than 2008. Your SS check was increased in 2008.

When prices fell in 2009 the check wasn't decreased. Your SS check reflects prices as of 2008. Overall prices are not higher today than in 2008.

Everyone situation might be different but looking at only prices of 2009 vs 2010 is disingenuous. Your SS check doesn't reflect 2009 prices (it would if it had been cut in 2009) it reflects 2008 prices.

[Cleita]

46. Prices? Oh, you mean all the cheap Chinese goods

I can go buy with my discretionary income? Sorry, buddy, I don't have discretionary income to buy baubles. My hardcore needs, shelter, transportation, food and health care are going up.

[Statistical]

51. Which are reflected in CPI-W.

Take a look at a gasoline chart.



Prices rose to a peak in 2008. Then gas prices plummeted in 2009 before rising in 2010.
For some reason my work blocks gas buddy otherwise I would post it.

Although gasoline prices ROSE in 2010 (and nobody is saying they haven't even CPI-W numbers show that) they still aren't higher than 2008. SS checks reflect peak pricing as of 2008. When prices are higher than 2008 there will be a COLA increase.

[jtown1123]

57. CPI-W is also calculted comparing the third quarter from year to year.

Which is the reason for the huge drop. Gas prices were sky high in the third quarter of 08. Compare that to 09 and there was no increase in inflation.

[Statistical]

63. However the reverse is also true. The huge increase in COLA for 2008 - 5.8%

is a reflection of the run up in prices (namely energy & food) in 2008.

In essence COLA and SS checks reflect peak prices as of 2008. If prices are rising (which govt says they are) is irrelevant. What matters is are prices (in aggregate) higher than 2008, the prices including in current SS checks.

As of Q3-2010 they aren't. Likely prices in 2011 WILL rise above 2008 levels and then there will be a COLA increase for next year.

[Cleita]

67. Well, I guess it makes it okay, all nice and tidy

on nice white sheets with those little black numbers on it.

[Cleita]

58. Sorry, for years I was able to fill my gas tank with

the cheapest gas in town for $40. Last week it cost me $55 and it had been rising from that $40 over a period of time. So there was a short burst of high gas prices in 2008, but if you average it out, I think you will find out they are much higher now. You are the mathematician, try looking at your own graph with new eyes. All the nice clean statistics in the world make no difference when I look into my empty wallet and I seldom buy anything for myself that is not an absolute necessity. I could live nicely on my income though if I didn't have to pay for insurance.

[jtown1123]

59. This is why the formula should be changed to CPI-E. No one doubts your

personal expenses have changed but what we are looking at is the CPI-W formula. This formula doesn't accurately reflect the expenses of seniors and others on SS since the majority of spending goes to health care, which as increased, which is why on your end you see that expenses have gone up. The argument is not that the CPI-W is wrong, just that it's not the best formula to track your expenses. This is the formula we use, so until it changes, it's what we're stuck with.

[Cleita]

64. Okay, now we are getting someplace.

The CPI-W is what is preventing us from getting COLA, but you admit it's not a good formula for seniors. I think it's time for it to be changed to something that reflects reality. If no one pushes for this, and who better than the people who use this formula, all the millionaire elected officials will go on their merry way believing nothing is wrong.

[jtown1123]

72. Write to your Reps. and to the President. Many seniors groups like NCPSSM

have advocated that the law be changed to a CPI-E, so that seniors can get COLAs that accurately reflects their spending.

[Cleita]

88. I will do that, but I never had the words to be specific

until you pointed out what the formula is. Now I have something specific to address other than what seems to be a whine. Thank you.

[jtown1123]

102. You're very welcome. Here's some info on CPI-E for you

Current Law: The Social Security Act provides for an automatic increase in Social Security benefits each year if the Consumer Price Index for Urban Wage Earners and Clerical Workers (known as the CPI-W) increases. This Cost-of-Living Adjustment (or COLA) is calculated by comparing costs from the third quarter of the last year to the third quarter of the current year. The purpose of this adjustment is to protect beneficiaries from the effects of rising prices due to inflation, enabling them to maintain a constant standard of living from one year to the next.

Some analysts believe the CPI–W overstates increases in costs because it relies on a standard “market basket” of goods and services to measure average consumer spending and does not fully account for adjustments to spending patterns as prices increase. For example, if the price of apples increases while the price of bananas remains constant, and consumers respond by buying fewer apples and more bananas, some economists argue the index does not fully account for the effects of the substitution.

Other analysts believe that the CPI-W may understate the growth in the cost of living for some groups, such as the elderly, because the elderly spend a higher percentage of their income on health care. In 1982, the Bureau of Labor Statistics created an experimental index to determine whether the difference in spending patterns by the elderly would impact the calculation of their COLA. This CPI-E attempts to quantify the purchasing pattern of Americans 62 years of age and older. Since 1982 annual inflation as measured by the CPI-E has been 0.3 percentage points higher than inflation as measured by the CPI-W. Using this index to calculate COLAs would result in significant increases in Social Security benefits over time, as the impact compounds each year. A challenge utilizing this index presents is the difficulty in accounting for changes in the quality of health care. Consequently, more uncertainty exists about measures of price growth for health care than for other good and services.

[Cleita]

132. Thanks again.

I printed out your replies so I can write those letters.

[bobbolink]

87. No, I think doing it this way is great.... making more and more elders homeless.

We thank "progressives" for supporting that "change we now believe in".

[madamesilverspurs]

97. What about Medicare D?

My premiums went up for two years, and the costs of medications under the program continue to rise as well. Apparently this isn't factored in to the calculations for COLA. It's more than a little daunting.

-

[Statistical]

24. Please read before you accuse someone of calling you a lair.

GAS HASN'T INCREASE COMPARED TO THE PEAK OF 2008.
SS CHECKS REFLECT PEAK PRICING IN 2008.
PRICES FELL IN 2009.
PRICES HAVE RISEN IN 2010 COMPARED TO 2009 BUT STILL HAVEN'T EXCEEDED THE PEAK RELATIVE TO 2008.

[Cleita]

30. I suppose saying that I'm spreading myths isn't

calling me a liar. Sorry, I guess I haven't caught up with the latest version of newspeak.

[jtown1123]

62. There is no chicanery, it's just a flawed formula for calculating expenses of seniors.

There have been some proposals to change it to CPI-E (elderly index which calculates rising health costs) but it's never been looked at seriously. Nothing was done on purpose to deny you a COLA, unfortunately that's the same formula they've been using for three decades. It's awful that is doesn't reflect your spending, must you must know noone did this on purpose or changed the law just to short change seniors.

[Cleita]

70. Okay, a flawed formula it is if you insist.

So it needs to be brought out and corrected, doesn't it, the flawed formula?

[jtown1123]

85. Certainly. But Republicans are in no hurry to do this.

[Cleita]

90. Of course not but I don't see many of them

returning their social security checks to the fund to help out either. Some rich people do, but not many.

[jtown1123]

101. You're right. Very few rich people give back their SS checks.

Sadly, the Dems lost a lot of champions for SS and seniors issues in last election like Earl Pomeroy. Here is some reading on the CPI-E if you're curious:

http://www.ncpssm.org/news/archive/vp_cola/

Current Law: The Social Security Act provides for an automatic increase in Social Security benefits each year if the Consumer Price Index for Urban Wage Earners and Clerical Workers (known as the CPI-W) increases. This Cost-of-Living Adjustment (or COLA) is calculated by comparing costs from the third quarter of the last year to the third quarter of the current year. The purpose of this adjustment is to protect beneficiaries from the effects of rising prices due to inflation, enabling them to maintain a constant standard of living from one year to the next.

Some analysts believe the CPI–W overstates increases in costs because it relies on a standard “market basket” of goods and services to measure average consumer spending and does not fully account for adjustments to spending patterns as prices increase. For example, if the price of apples increases while the price of bananas remains constant, and consumers respond by buying fewer apples and more bananas, some economists argue the index does not fully account for the effects of the substitution.

Other analysts believe that the CPI-W may understate the growth in the cost of living for some groups, such as the elderly, because the elderly spend a higher percentage of their income on health care. In 1982, the Bureau of Labor Statistics created an experimental index to determine whether the difference in spending patterns by the elderly would impact the calculation of their COLA. This CPI-E attempts to quantify the purchasing pattern of Americans 62 years of age and older. Since 1982 annual inflation as measured by the CPI-E has been 0.3 percentage points higher than inflation as measured by the CPI-W. Using this index to calculate COLAs would result in significant increases in Social Security benefits over time, as the impact compounds each year. A challenge utilizing this index presents is the difficulty in accounting for changes in the quality of health care. Consequently, more uncertainty exists about measures of price growth for health care than for other good and services.

[jbnow]

127. Just want to say you are tremendously helpful here. Thanks nt

[jtown1123]

128. Anytime! Thanks.

[WinkyDink]

How very conveeeenient for Obama, then.

[dionysus]

115. yes, he's got a plot to starve seniors!!!11!1!

jesus christ...


:eyes:

[BzaDem]

4. It is an absolute false statement to say that the payroll tax holiday affects a single retiree.

As for the 0-COLA years being under a Democratic administration, perhaps this is because a Democratic administration followed the greatest financial crisis since the great depression, which resulted in a huge pullback of consumer demand and thus inflation?

[bluestateguy]

8. No. The COLA is automatically set by the inflation rate

As the inflation rate is non-existent, the COLA was accordingly zero. An effort, supported by the Obama Administration and most Democrats in Congress, to give seniors a $250 increase in Social Security benefits did not get the votes in Congress needed to pass.

[ThomCat]

23. So, costs go way up, but interest rates are close to 0%. Here is the problem!

We, as poor people, care about costs. Costs of real things are going up very quickly. Rent, food, utilities, medical bills, etc.


Interest rates are at 0%. Yay for banks and investors. They get to make a lot of money, basically borrowing money for free.

So there is no COLA because of this, and the government insists that if there is 0% interest then there is 0% increase in costs. That obviously is not true. Our costs go up, but income does not.

It is a wonderful little situation when the government bases the COLA on an ASSUMPTION that just is not true (that expenses will always change proportionally to changes in interest rates).

[Statistical]

25. No. Interest rates have nothing to do with COLA.

COLA is based on price changes.

Prices rose in 2010 but they also fell in 2009.
Prices (in aggregate) are still lower than the peak of 2008.

[ThomCat]

53. What costs are you talking about?

Insurance and health care costs have risen, dramatically.

I know here in NYC public transportation costs have increased quite a bit.

If you have anyone in your family in school, education costs are through the roof.

Over this past summer electricity costs were the highest I have ever seen, and they have only come down slightly for the winter season, so this was the most expensive year so far.

I've noticed some items in the grocery store changing in price pretty dramatically too. Not all, but definitely some.

So what are these prices that supposedly fell in 2008 and then didn't rise in 2009? I certainly have not seen that at all. Unless I am seeing entirely different prices from the entire rest of the nation, I am seeing nothing but rapidly increasing prices on a whole lot of basic goods, services and commodities.

[Statistical]

60. No prices fell in 2009 and DID rise in 2010.

They simply aren't higher than the peak of 2008.

One example is gasoline:


SS checks reflect prices at Q3-2008 in essence reflecting $3.60 to $4.12 gasoline.
While gasoline prices HAVE risen (and govt inflation data shows that) they haven't rise PAST the peak of 2008.

[ThomCat]

99. One price, gas, has remained mostly stable.

That doesn't negate or disprove any of what I said.

That's a nice chart, but I've got bills, and pay them, to back up what I say. I know for a fact that my costs have been going up. Just because you can show a charge that shows that one commodity hasn't changed much doesn't mean that, in general, the costs people pay haven't been going up.

It only means that you can cherry-pick a chart for one commodity to try to make a point.

People have been complaining publicly for several decades that the costs of health care keeps continually going up and has never stopped. And, since Obama negotiated his supposed health care reform the rate at which insurance premiums have increased has only skyrocketed.

People have been openly complaining for decades that the costs of tuition has been increasing faster than inflation, and that hasn't stopped.

And, even though the prices for houses supposedly dropped (or was supposed to), the costs for rents actually went UP because so many people lost their homes that there are now more people competing for apartments. There were already well known shortages of low income rental housing, but now, with rents getting pushed up, it is becoming nearly impossible to find really low cost rents units. And even if you are willing and able to pay more for rent, apartments are scarce because of demand is greater than supply.

If you truly believe that costs haven't been increasing then either you haven't been paying attention, or you are one of those economist who only pays attention to the indicators that agree with whatever you have already decided. Out here in the real world it looks very different.

[Statistical]

105. I never said prices aren't increase and neither does the government (CPI-W). n/t

[ThomCat]

112. You said they aren't higher than 2008. That is total nonsense.

Many costs have risen continually without any break for years, some for decades. So it would be impossible for them to be the same now as in 2008.

[Statistical]

113. Some costs are higher, some costs are lower.

The aggregate is roughly the same.

Q3 20008 average (reflected in SS check) - 215.495
Dec 2010 (latest figure) - 215.228

[ThomCat]

120. The formula used for SS checks doesn't reflect reality.

It uses 1950s spending patterns, that expects that people spend most of their income on groceries and rent, and very little on health care, for example. It hasn't been updated, and deliberately so.

Throwing those numbers at us is basically saying "Your costs haven't gone up because the government says it shouldn't have gone up because they don't want to give you any more money because companies are recovering nicely."

But in the real world, costs really are going up. That was the whole point of this thread.

You can find a bunch more ways to put your fingers in your ears and say "la la la la la I don't want to hear you." But the truth is that costs have gone up and are continuing to go up.

[dionysus]

116. i think you're confusing inflation rate vs interest rates.

[ThomCat]

123. Yes, very likely.

[WinkyDink]

77. "As the inflation rate is non-existent"--Bwahahahahahah! Shop much?

It's called "cookin' the books by ignoring major items."

[Statistical]

93. Nope. CPI-W includes energy costs, food costs, health care costs, transportation, and rent.

What "major items" are excluded?

[jtown1123]

104. CPI-W doesn't take into account health care spending of seniors, which is much higher

An excerpt from a NCPSSM Policy paper:

Other analysts believe that the CPI-W may understate the growth in the cost of living for some groups, such as the elderly, because the elderly spend a higher percentage of their income on health care. In 1982, the Bureau of Labor Statistics created an experimental index to determine whether the difference in spending patterns by the elderly would impact the calculation of their COLA. This CPI-E attempts to quantify the purchasing pattern of Americans 62 years of age and older. Since 1982 annual inflation as measured by the CPI-E has been 0.3 percentage points higher than inflation as measured by the CPI-W. Using this index to calculate COLAs would result in significant increases in Social Security benefits over time, as the impact compounds each year. A challenge utilizing this index presents is the difficulty in accounting for changes in the quality of health care. Consequently, more uncertainty exists about measures of price growth for health care than for other good and services.

From: http://www.ncpssm.org/news/archive/ss_toolbox/

[Statistical]

106. I agree however that is far from the claim that CPI-W doesn't include Health Care.

This is a common theme.

Prior "items" include:
* gasoline
* energy
* rent
* food

[ThomCat]

109. In what world have health care costs transportation costs

or rent had not inflation growth?

Every provider of health insurance has been increasing the costs of their insurance plans by double digit rates.

Here in NYC the MTA (transit) had to increase all the bridge and tunnel tolls, and the subway fares, again recently to keep up with costs, supposedly to keep up with inflation.

Rents are going up because so many people have lost their homes and now need to rent, and more people are still losing their homes, so there are more people searching for places to rent but the number of available rental properties has gone DOWN because of forecloses. (Many of those foreclosed homes used to be rental properties that are now unavailable.)

More people needing places to rent, but fewer places available, means pressure driving up rents.

As for what "major items" are excluded? Education. That is a glaring omission.

[Statistical]

111. Nobody has said they have no inflation growth. Nobody.

Not me, not anyone on this thread, not anyone in the govt, and certainly not the CPI-W.

[ThomCat]

117. You said that prices peaked in 2008.

Several times, in fact.

That would mean that prices have been lower since then. That simply is not true. Prices that have risen constantly without break cannot be lower now than at some time in the past.

Tuition costs, for example, have never fallen.
Medical Insurance costs, for example, have never fallen.

To claim that their costs peaked in 2008 is ridiculous.

I don't know if rents have been fluctuating, but they sure as hell are not lower now than they were at any point in the past several years. They are going up and only getting worse.

[Codeine]

10. Straight-up misinformation.

Unrecced. COLA is based on a mathematical formula. It goes up based on wider economic factors or it does not.

[Sheepshank]

12. Unrec - go do some real homework

false statement for sure. And already discussed some weeks ago. It's just dumb to revive something that has already been clarified and twist and contort the truth to find something to put about.

[jtown1123]

16. NO! You did not hear correctly. COLA is based off of CPI-W

[madfloridian]

17. Someone yesterday said this here in a thread I posted.

"The CPI-W has increased, but it hasn't caught up with past increases in payments....

http://www.ssa.gov/oact/STATS/cpiw.html
http://www.ssa.gov/oact/COLA/colaseries.html

Rather than back-charge people on Social Security for getting too much in 2008, it's been frozen until inflation catches up with prior increases."

So I looked it up and found this since I got no answer on it yesterday.

[Still a Democrat]

19. I don't think your intentions were bad

But you might want to edit your OP to indicate it's false and ask folks to unrec if the time period hasn't expired.

[msanthrope]

50. Madfloridian posted the same meme yesterday--and refused to

believe it then....

So I will not speculate on her intentions, but will merely note that this was asked and answered, yesterday.

[Still a Democrat]

18. Can we Unrec this BS off the Greatest Page?

Thanks.

[madfloridian]

22. Feel free. I just wanted to know which "legislation" was passed recently.

[jtown1123]

26. Nothing was passed. There was Zero COLA this year, which means no raise

If you read the article, it is giving tips for seniors who didn't get a COLA. Nothing was passed but it happened because there was zero inflation in the third quarter based on the CPI-W for the past 2 years. Hope that made sense.

[jbnow]

27. By now you know you were wrong but seniors blame Obama

for not giving them an increase and for reneging on promise of 2nd $250 payment, the one promised for 2010. Some know it was brought up in Congress but 'voted down' by the Democratic congress. (It couldn't get those 60 votes)

I found that out when I was looking up something related and happened to read comments after an article. I then started looking for articles about the no increase...and at some senior type sites... and they are angry.

The administration had no control, none of them do. However they make a mistake not clearly explaining this, assuming people understand.

[madfloridian]

33. Did the author of that article give the wrong info?

If not, then my question is very fair.

[BzaDem]

36. I think many people have already answered this question in this thread. n/t

[BzaDem]

35. It was actually voted down by Republicans in the Senate. But Republicans want people to

think that this is somehow the Democrats' fault, so your post plays directly into their hands.

[jbnow]

122. Many people really don't get how the Senate works, especially how it works now.

These republicans have set new records of how many things need 60 votes.

I've heard pundits put votes wrong too. That Dylan Ratigan guy would sometimes announce angrily how the Senate voted down this or that and give the correct vote total... but it would be for the cloture vote and the bigger number was always for the good thing, just majority doesn't rule. If he didn't know that not surprising the public doesn't. (Unless he did but that is another story)

I sort of blame Dems for the public ignorance, not just on SS issue but the filibuster abuse by these republicans.

[madfloridian]

45. That is what I have been saying....seniors do blame our party.

Because we are not speaking up on the issue.

Wait until they see that the 2% cut in payroll taxes will be continued because the GOP will call raising it back a tax hike.

And then where will the money come from for present seniors.

It is not my fault seniors blame our party.

[jtown1123]

32. COLA is kind of tricky to understand but I'll give it a shot.

COLA is calculated by the CPI-W every third quarter of the year. If there is an increase, the increase has to be more than the previous year. In 08, there was a huge jump because of oil prices so seniors got a huge jump in COLA. In 09 and 10, there was some inflation but not enough to top the big jump the previous year so ZERO cola. There should be one next year. Actuaries are predicting about 1%.

As far as I can tell from the articles, they aren't wrong. Yes, they throw in some bs about the "uncertainty" of SS, but that has nothing to do with the COLA legislation you thought had been passed.

Hope that clears things up!

[madfloridian]

34. Have they ever "back-charged" seniors?

Could that be what is happening, that they had to pass something to keep from making seniors pay back what they got in 2008?

[BzaDem]

38. Seniors aren't paying what they got back in 2008. They are simply not getting a higher benefit level

now than they got in 2008.

[Statistical]

40. Nope. They didn't pass anything.

The method for calculating COLA was implemented in 1976.

No new legilsation passed. Period.

When CPI-W declines there is no decrease however SS checks reflect that CPI-W thus CPI-W needs to rise higher than the year reflected to increase.

In 2008 CPI-W reflected a 5.8% increase hence COLA was increased 5.8%
In 2009 CPI-W reflected falling prices (2.1%) however checks remained flat (reflect 2008 prices)
In 2010 CPI-W reflected a 1.1% increase however it still isn't higher than 2008 hence no increase.

In 2011 if CPI-W is greater than 2008 (215.495) then there will be COLA. If it isn't (unlikely but possible) then there won't be.

[Statistical]

37. An explanation of how SS checks increase (COLA calculated) and why there is no "scam"

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=439x261678

There is no "new" legislation. COLA increases have been based on CPI-W since 1976. 2009 & 2010 are no different.

[madfloridian]

39. Here are the COLAs since 1975

"Since 1975, Social Security general benefit increases have been cost-of-living adjustments or COLAs. The 1975-82 COLAs were effective with Social Security benefits payable for June in each of those years; thereafter COLAs have been effective with benefits payable for December.

Prior to 1975, Social Security benefit increases were set by legislation."

1975 8.0
1976 6.4
1977 5.9
1978 6.5
1979 9.9
1980 14.3
1981 11.2
1982 7.4
1983 3.5
1984 3.5
1985 3.1
1986 1.3
1987 4.2
1988 4.0
1989 4.7
1990 5.4
1991 3.7
1992 3.0
1993 2.6
1994 2.8
1995 2.6
1996 2.9
1997 2.1
1998 1.3
1999 2.5
2000 3.5
2001 2.6
2002 1.4
2003 2.1
2004 2.7
2005 4.1
2006 3.3
2007 2.3
2008 5.8
2009 0.0
2010 0.0
http://www.ssa.gov/oact/COLA/colaseries.html

[madfloridian]

42. Not a single other zero year in all that time.

[Statistical]

44. We haven't had deflation since 1975 either.

[msanthrope]

49. Please don't bring economic facts into a perfectly good anti-Obama rant. n/t

[MineralMan]

48. And, in any other year was there a decreased or flat cost of living?

You have to do the calculations to figure it out. It's that simple. The fact that there hasn't been an increase of the costs used for the measurement means that there is no COLA. It's working as it must, under the law. If the law is changed, then the calculations will change. The law has not been changed.

It's pretty simple, really.

Note: I receive SS payments.

[jtown1123]

55. You make an excellent point that COLA never goes down.

Is there a better way to calculate COLA for seniors? Yes. The CPI-E (Elderly index). However, a law must be passed to change the formula we use. Until then, we rely on CPI-W. This isn't that hard to understand. I am curious what the OP thinks happened...?

[MineralMan]

61. I have no idea what the OP thinks.

The formula is set by law. It can be changed by law, but that appears unlikely to happen. COLA is what it is. We did have those one-time payments, and they represented an increase in SS that was outside the boundaries of COLA. We're apparently not getting another one of those. There it is.

If we can get the law changed, that's OK, I guess. But, the law can be changed in other ways - ways that do not benefit SS recipients at all. That worries me. SS recipients need to stay informed and act as individual lobbyists with their congressional representatives. That is a fact. Seniors vote, and every congressperson is more than aware of that.

It's important, though, to have correct information. Communications with representatives that are based on false information go to the round file.

[jtown1123]

65. I'm just as baffled as you are I guess. You're right, We need to know

the facts when we contact our reps so we don't go into the loony bin files. Dems tried to pass a $250 one time payment but the Senate didn't pass it. Blame the Republicans, not the Dems.

[madfloridian]

66. The OP just wants to understand what the author meant by "recent legislation"

And I still don't know.

I just find it disturbing that these are the first two years with zero cola since it went automatic in 1975.

[Statistical]

71. There is no recent legislation.

There are articles on the internet claiming Obama is a Kenyan socialist.
Do you want proof on what the author means for those claims also.

COLA has been set by CPI-W since 1975. Period. There is no recent legislation that changes that. There is nothing Obama or Congress did that resulted in 0% COLA for 2009/2010. It was a combination of huge COLA increase in 2008 combined with deflation in 2009.

Prices *likely* will be higher in 2011 than 2008 thus we will see a COLA increase in 2011. It might even be a large COLA but if it is Obama doesn't deserve praise or credit for that either. It is simply automatic inflation increases based on legislation from 1975.

[madfloridian]

74. So the author I quoted made a mistake?

[MineralMan]

79. Yes, or you misunderstood the article.

In either case, you have the correct information now.

[Statistical]

84. Either a mistake, or was imprecise, or was intentionally misleading.

I don't know the reason for the fallacy. It still doesn't make it any less false.

Since 1975 COLA has been based on change in CPI-W from prior year to current year.

In 2008 that same metric resulted in the largest COLA increase (5.8%) in 30 years.



When CPI-W exceeds 2008 peak there will be a COLA increase. It will happen automatically.

[MineralMan]

78. As far as I know, there has been NO recent legislation regarding

COLA. The $250 one-time payment didn't make it through Congress. Blame the Republicans for that one.

Other than that, the formula is the same as it has always been. No increase, no COLA. It's that simple. Be careful about asking for changes. The ones you get may not be the ones you want. That's certainly been proven often enough.

[jtown1123]

81. It's not that surprising considering the severe economic slump we're in.

This is the worst economic downturn since the great depression. It makes sense things have stagnated. It's unfortunate for seniors because health care costs keep rising, but CPI-W doesn't factor in health care spending, which is why it's not the best measure.

[Statistical]

92. Well CPI-W does include health care spending.

The issue is that health care makes up a larger portion of expenses for Seniors than the general population. So while CPI-W does show inflation in health care it is "underweighted" relative to what Seniors actually spend. Likewise some other factors like vehicle purchases are "overweighted" because seniors buy/lease them at a lower rate than the general population.

[jtown1123]

107. That is correct.

[pinqy]

126. There are too many problems with the CPI-E, though.

In the Apr 2008 Monthly Labor Review article http://www.bls.gov/opub/mlr/2008/04/art2full.pdf">The experimental consumer price index for elderly Americans (CPI-E): 1982–2007 some of the methodological issues are discussed.

Briefly, the elderly make up approx 16.1% of households used for the CPI, so sampling error is large.
Outlets and items used in the CPI-E are the same for all Urban consumers and probably don't reflect elderly buying patterns.
Prices collected are the same for the CPI-U/W and only reflect senior discounts as their proportion to the population.

It's just not feasible (read "too damn expensive") to do a complete survey solely for the elderly, even piggy-backing off of the main CPI indexes as much as possible. So while hardly ideal, it's probably better to use the CPI-W as the best approximation than to deal with the large increase in sampling and non-sampling error.

[jtown1123]

54. Do you have proof there was never another zero COLA? I find that hard to believe

[madfloridian]

56. Here are the COLAs since 1975

Since 1975, Social Security general benefit increases have been cost-of-living adjustments or COLAs. The 1975-82 COLAs were effective with Social Security benefits payable for June in each of those years; thereafter COLAs have been effective with benefits payable for December.

Prior to 1975, Social Security benefit increases were set by legislation.

1975 8.0
1976 6.4
1977 5.9
1978 6.5
1979 9.9
1980 14.3
1981 11.2
1982 7.4
1983 3.5
1984 3.5
1985 3.1
1986 1.3
1987 4.2
1988 4.0
1989 4.7
1990 5.4
1991 3.7
1992 3.0
1993 2.6
1994 2.8
1995 2.6
1996 2.9
1997 2.1
1998 1.3
1999 2.5
2000 3.5
2001 2.6
2002 1.4
2003 2.1
2004 2.7
2005 4.1
2006 3.3
2007 2.3
2008 5.8
2009 0.0
2010 0.0
http://www.ssa.gov/oact/COLA/colaseries.html

[jtown1123]

69. Thanks. Are you then suggesting this was somehow done on purpose?

I know people are upset about the zero COLA but unfortunately, it's based off of CPI-W in the third quarter. If prices don't rise above inflation in that quarter, COLA doesn't go up. CPI-W is flawed in that it doesn't accurately represent the spending of seniors (health care) so I think what you should focus your efforts on is asking your reps. to introduce a bill that would change the formula to the CPI-E (elderly index) which would better reflect your spending. The law is the law at this point. No one did this on purpose to deny seniors a COLA. However, the Republicans Senators did block a one time $250 COLA payment that the Dems introduced because they knew seniors were struggling. Your beef should be with the Repukes who blocked a small remedy, not with the Dems who have no control over the formula.

[madfloridian]

76. I am wondering what the author meant by "recent legislation."

[MilesColtrane]

98. I suggest you email the author of that article with your question.

http://www.investopedia.com/contact.aspx?WriterID=186&Subject=Investopedia%20Contact%20Form

I think we'd all be interested in his reply. So feel free to share if he does.

[msanthrope]

47. This was carefully explained to you yesterday in a thread you started that attempted to smear

President Obama regarding Social Security....

Now, I thought bluestate10 did a great job informing you, and I think you should have listened to him.

Personally, I think this thread is Exhibit 'A' as to why the unrec function should not go away, and why journals need not be on the front page--I simply do not think it reflects well on this site to have such poorly-researched OPs.

[NNN0LHI]

73. This is the second thread by the OP spreading this BS propaganda?

Thanks for that update. Much appreciated.

Don

[madfloridian]

83. Really? Here is the other thread. Not the same thing at all.

http://journals.democraticunderground.com/madfloridian/7253

But you can find the poster who got me wondering.

[msanthrope]

94. Did you forget your own post? Try # 63 and the replies, and

there it is--you brought up the same meme yesterday.

It was explained to you, yesterday.

[msanthrope]

89. Yes. Debunked yesterday, too. n/t

[madfloridian]

68. Apparently no raise for 2011 either?

That's how it reads to me.

"These are just some of the ways that Social Security recipients can make up for the shortfall created by the COLA freeze. Current legislation suggests that these suggestions may be relevant in 2012 as well. But the long-term uncertainty surrounding Social Security in America will remain a key issue for politicians and retirees for the next several decades."

Why does this author keep referring to current or recent legislation?

[SidDithers]

75. Depends on what happens to the CPI-W...

all this has been very clearly explained upthread.

Or, see Statistical's excellent thread here: http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=439x261678

Sid

[Statistical]

80. Another false claim.

CPI-W reflected in checks is 215.495 (Q3 from 2008)

CPI-W as of December 2010 is 215.262.

If the average CPI-W for Q3 2011 is HIGHER than 215.495 then there will be an increase.
If not then there won't be.

IF there is an increase the amount of the increase is the difference.

Say CPI-W for Q3 2011 is 217.00 what would the COLA increase this year be?
217.00 / 215.495 = 0.7% gain. COLA would be 0.7% increase.

Say CPI-W for Q3 2011 is 220.00 what would the COLA increase this year be?
220.00 / 215.495 = 4.3% gain. COLA would be 4.3% increase.

[jtown1123]

82. It is predicted there will be a COLA this year.

[bobbolink]

86. It takes a Democrat to do what Republicans couldn't get away with.

[Codeine]

91. He didn't do anything.

Read the thread.

[msanthrope]

95. Yes. He used the time warp machine to go back to 1975, enact the

legislation that controls how COLA is calculated, and now laughs at the screwing people on SS in 2011 are getting....

This is the same time-machine he used to plant his birth-certificate, too...

[bobbolink]

100. Laughing at the pain of others is sooooo "progressive"

Read your words back to yourself, then ask youself, "If *I* was the one affected so disastrously, would *I* be more inclined to vote for a candidate whose supporters talk to me this way?"

[msanthrope]

114. Yes. Pointing out that you are holding Obama accountable for

legislation passed in 1975 is 'laughing at the pain of others.'

Facts are mean, I guess.

[bobbolink]

129. I get that in your book, holding Obama responsible for the actions of his administration is treason.

There is a distinct division in what we believe and value, and there is no point in rehashing that.

I am simply pointing out that bashing poor people who don't like having to "sacrifice" even more the the muddleclass is NOT winning you support. Please try to remember that in 2012, when you may not like the results of your harsh words.

[tammywammy]

131. His administration didn't pass the law that COLA's based on CPI-W

And his administration WANTED to give another $250 check to seniors this year (like last year) but it was stopped by the republicans in Congress.

[msanthrope]

133. When you can explain to me how Obama managed to pass a law in 1975, I'll hold him accountable for it

In the meantime, I'll try to remember that you are basing who to vote for on the tone of their internet supporters and act accordingly....

[earth mom]

103. K & R & Bookmarked. nt

[girl gone mad]

108. k & r

getting harder to defend the games they're playing.

[dionysus]

118. even though the OP was debunked already in this very thread?

:rofl::rofl::rofl::rofl::rofl::rofl::rofl::rofl::rofl:

[madfloridian]

119. It was denied, it was not debunked.

There's a big difference.

[dionysus]

124. it's been explained to you many, many, many times already, yet you keep posting it.

[madfloridian]

125. I only posted this article one time. Never before.

[Sheepshank]

121. As someone has already pointed out....

...reality isn't the point here...promoting an agenda is.

Wow K&R...really? Do they even digest anything that isn't directly spoon fed?

[madfloridian]

130. Well, I do have a thing about Social Security....

But I think my post was credible, asking a real question.

[Name removed]

135. Deleted message

Message removed by moderator. Click here to review the message board rules.

[Obamanaut]

137. This thread is an example of why 'unrec' is good. There is misinformation here,

but because of the poster (whose OPs are usually outstanding) many will 'rec' and sometimes post "Off to the greatest page with thee" without reading anything other than the screen name.


Oh, and 'unrec'

Edited to add this paste from another thread as an example "K&R! Off to The Greatest Page..."

But my unrec for this thread still stands