Zero Social Security COLA Increase Until 2013 For 37 Million Senior Citizens

Congressional Budget Office Issues Unprecedented Projection For No COLA Increases from 2010 - 2012

April 6, 2009,

WASHINGTON--(BUSINESS WIRE)--The 37 million Americans aged 65 and over who receive a Social Security check each month are forecast to receive no increase in their Social Security checks until 2013.

Seniors have never failed to receive an annual increase of less than 1.3 percent since automatic Cost of Living Adjustments (COLA) went into effect in 1975, and have never received less than 5.9 percent over a three-year period.

The Congressional Budget Office (CBO) issued the forecast in its March 2009 publication, A Preliminary Analysis of the President's Budget and an Update of CBO's Budget and Economic Outlook.

The analysis reads, "No COLAs are currently projected for [Social Security] from 2010 through 2012; the COLA would amount to less than 2 percent in all future years."

"If a nation can be judged on how well it treats its most vulnerable citizens, I'm afraid we're slipping badly behind," said Daniel O'Connell, chairman of The Senior Citizens League. "Too many of us seniors are being forced to choose between prescription drugs, nutritious food, and heat during winter, and we must do a better job of protecting the nation's elderly."

A recently released survey returned by 808 members of The Senior Citizens League found that while 56 percent of respondents said their costs increased more than $119 per month last year, just one percent said they received a COLA of $119 or more this year.

Supporters of a zero COLA increase will likely argue that a zero COLA during deflationary times is fair. However, they do not mention that the way the COLA is calculated fails to accurately track senior costs, since it is based on the spending habits of young, urban workers. As a result, senior costs may go up during periods of deflation, reducing their buying power even further.

With 1.2 million supporters, The Senior Citizens League is one of the nation's largest nonpartisan seniors groups. The Senior Citizens League is a proud affiliate of The Retired Enlisted Association. For full press release, please visit www.SeniorsLeague.org.

http://finance.yahoo.com/news/Zero-Social-Security-COLA-bw-14859911.html