Social Security Benefits to Increase

More than 47 million elderly and disabled people will receive a 2.7% cost-of-living increase -- an average of about $25 a month -- in their Social Security benefits starting in January, the government announced Tuesday.

But for many of those who participate in Part B of Medicare, which covers visits to doctors’ offices, among other services, almost half of the benefit increase will disappear before they ever see it. The government announced last week that the Medicare premium, which typically is deducted from Social Security checks, would rise by $11.60 a month to $78.20 next year.

“Far too many Social Security beneficiaries will see [the benefits increase] partially or completely eroded by the Medicare Part B premium increase,” said William D. Novelli, chief executive of AARP, a senior citizens’ lobby.

At the same time, David Certner, AARP’s director of federal affairs, said the cost-of-living adjustment is “always welcome news. Those 2% to 3% a year make a huge difference.”

The Social Security adjustment, which was calculated to equal the increase in the consumer price index from the July-to-September period in 2003 to the same three months in 2004, will be the largest since benefits rose by 3.5% in January 2001.

On the campaign trail Tuesday, Sen. John F. Kerry, President Bush’s Democratic challenger, used the news to go on the offensive.

“For a typical senior, nearly half of this year’s Social Security cost-of-living adjustment is going to be eaten away by the record rise in Medicare premiums,” Kerry said at a rally in Wilkes-Barre, Pa. “That leaves less money for food, medicine and even an occasional gift for a grandchild.” Calling Social Security a “sacred compact between generations,” Kerry said Bush would have a “January surprise” for Americans by swiftly pushing to privatize Social Security if reelected.

The Bush campaign called Kerry’s comments “false and baseless attacks.”

Leading congressional Democrats in both the House and the Senate echoed Kerry’s sentiments. House Minority Leader Nancy Pelosi of San Francisco blamed the recently enacted Republican bill authorizing the Medicare prescription drug benefit for also providing “billions of dollars ... to the HMOs and the big drug companies” -- payments that resulted in the 17% increase in the monthly Medicare premium.

Senate Minority Leader Tom Daschle of South Dakota, currently embroiled in a close reelection battle, called for a cap on Medicare premium increases of one-quarter of Social Security’s cost-of-living increase.

For America’s 47 million Social Security recipients, including nearly 6 million disabled workers, checks will jump from an average of $930 a month to $955.