It would mark only the second year without an increase since
automatic adjustments 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. Based on inflation so far this year, the trustees
who oversee Social Security project there will be no COLA for 2011.
The projection will be made official Friday, when the Bureau of
Labor Statistics releases inflation estimates for September.
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This past Friday, the same bureau delivered another painful blow:
The U.S. lost 95,000 jobs in September and unemployment remained
stubbornly stuck at 9.6 percent.
This week's announcement about Social Security benefits raises
more immediate concerns for older Americans whose savings and home
values still haven't recovered from the financial collapse: Many
haven't had a raise since January 2009, and they won't get one until
at least January 2012.
"While people aren't getting COLAs, they certainly feel like
they're falling further and further behind, particularly in this
economy," said David Certner, AARP's legislative policy director.
"People are very reliant on Social Security as a major portion of
their income and, quite frankly, they have counted on the COLA over
the years."
Social Security was the primary source of income for 64 percent
of retirees who got benefits in 2008, according to the Social
Security Administration. A third relied on Social Security for at
least 90 percent of their income.
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Federal law requires the Social Security Administration to base
annual payment increases on the Consumer Price Index for Urban Wage
Earners and Clerical Workers, which measures inflation.
Officials compare inflation in the third quarter of each year --
the months of July, August and September -- with the same months in
the previous year.
If inflation increases from year to year, Social Security
recipients automatically get higher payments, starting in January.
If inflation is negative, the payments stay unchanged.
[Associated Press;
By STEPHEN OHLEMACHER]
Copyright 2010 The Associated Press. All rights reserved. This
material may not be published, broadcast, rewritten or
redistributed.
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