For second year, Social Security recipients won’t see rate increase

President Obama will press Congress to send a one-time payment of $250 to senior citizens to help them get through another year without an increase in their Social Security benefits, White House officials said Friday.

The renewed call for those payments came shortly after the Social Security Administration announced that millions of retirees and disabled workers would see no cost-of-living adjustments for the second year in a row, a result of the low U.S. inflation rate.

Yet seniors are struggling through the current economic downturn, White House Press Secretary Robert Gibbs said Friday, and they can’t rely on their savings because of poor investment earnings.


The $250 Economic Recovery Payment would be akin to a similar benefit paid out by the federal government last year. That payment helped offset last year’s static Social Security rate for about 50 million recipients, according to the White House.

The idea met with support from House Speaker Nancy Pelosi, who says the House will vote in November on a measure to provide the payments to Social Security recipients. News about the Social Security rate is just the latest piece of bad economic news — not just for seniors but for Democrats trying to keep their majorities in next month’s midterm election.

But the plan faces opposition in the Senate, which defeated a similar measure last year, and among Republicans concerned about long-term funding of the Social Security system.

“It will be difficult for many seniors to deal with the lack of a COLA [cost of living adjustment] for a second year in a row, but that will pale in comparison to the actual hardships future Social Security recipients will experience if Congress continues to ignore the program’s underlying financial problems,” said Rep. Dave Camp of Michigan, the ranking Republican on the House Ways and Means Committee. “We must put Social Security on a path to long-term solvency, and the sooner we do so, the better it will be for both taxpayers and beneficiaries alike.”

Every year, the government automatically adjusts Social Security payments based on the nation’s inflation rate. For an increase in payments to occur, consumer prices must be higher than when the last increase was awarded, according to the Social Security Administration.

On average, retired workers receive nearly $1,200 a month. More than 58 million Americans receive monthly Social Security payments.

This is the second consecutive year an adjustment has not been awarded, which is unprecedented in the 35-year history of automatically adjusted payments.

Shortly before the Social Security Administration made its announcement Friday morning, the Labor Department released its most recent figures for the consumer price index. The figures showed that consumer prices were up 1.1% compared from last year but remained below what they were in 2008.

As Obama made his way to Delaware to campaign for Democratic candidates, aides said he would push for the recovery payments when Congress returns to town.

“We’re grateful that Speaker Pelosi has indicated she will bring the new Economic Recovery Payment to a vote,” said Gibbs, “and we urge members of Congress on both sides of the aisle to support our seniors, veterans and others with disabilities who depend on these benefits.”