Monday, October 11, 2010
The Obama administration seems to enjoy seeing how far he can push voters as news comes the Fed is expected to announce this Friday that more than 58 million Social Security recipients will go another year without an increase in their monthly benefits.
This marks only the second year without an automatic cost-of-living increase since 1975. The first time without an increase was this year, or 2010.
With voters livid at the Federal government, the U.S. Congress, the president, vice president, the wars in Iraq and Afghanistan, and the protected classes of wealthy bankers and rich Wall Street investors, not providing a COLA for Social Security for a second year will undoubtedly be akin to throwing gas on a burning fire.
According to Andrew Biggs, a former deputy commissioner at the Social Security Administration, “If you’re the ruling party, this is not the sort of thing you want to have happening two weeks before an election.”
The cost-of-living adjustments, or COLAs, which are automatically set each year by an inflation measure, was adopted by Congress back in the 1970s. Based on inflation so far this year, the trustees who oversee Social Security project there is low inflation so there will be no COLA for 2011.
Democrats have been working 24/7 to make Social Security an election-year issue, running political ads and holding press conferences to accuse Republicans of plotting to privatize the national retirement program. But following the news there will be no cost-of-living increase for Social Security benefits for a second year, my guess is the Democrats will have absolutely zero credibility on the topic.
Social Security is the primary source of income for 64% of retirees who received benefits in 2008. A third relied on Social Security for at least 90 percent of their income and as retired voters go to the polls 3-fold over younger voters, the Obama administration should expect a huge blow back from older Americans struggling to make ends meet.