Providing a Social Security Cost of Living Adjustment (COLA)
Today Social Security recipients—seniors, the disabled, survivors, and children—across the country are being notified that they will not be receiving a cost of living adjustment (COLA) to their Social Security benefits for the second year in a row.
To help ensure seniors can stay afloat, House Democrats are working to pass legislation to provide a fully paid for one-time payment to make it easier for Social Security recipients to make ends meet in these tough economic times.
The Seniors Protection Act would provide a one-time payment of $250 to the 54 million American seniors, veterans, survivors, children, and disabled individuals in lieu of a Social Security COLA for 2011. While Congress doesn't have control over these inflation-based adjustments, Democrats know that millions of seniors rely on Social Security to pay bills and put food on the table.
In an economy that is beginning to regain strength, Social Security is keeping nearly 20 million people out of poverty—including over 13 million elderly Americans. Indeed, without Social Security benefits, over 45% of our nation's seniors would be plunged into destitution. With so many this close to the poverty line, you can be sure that a COLA—while small—has a significant impact on the economic security of millions.
Moreover, a recent study by the Economic Policy Institute shows that similar payments to Social Security recipients have proven to be an effective economic stimulus. As part of the American Recovery and Reinvestment Act (ARRA), Social Security and SSI recipients received $250 lump-sum payments from the Federal Government in 2009. These payments alone increased GDP by 0.5% in the second quarter of 2009, which translates to approximately 125,000 jobs created or saved.
There are several false rumors circulating among seniors on the Internet about Social Security and the reasons for the lack of a COLA. You may find the following links useful:
- Is it Democrats' fault that there won't be a COLA? (FactCheck.org)
- Is SSA spending COLA money on electronic medical records, instead? (FactCheck.org)
- Debunking myths about the history of Social Security (Social Security Administration)