No increase for Social Security recipients seen

FILE- In this May 7, 2010 file photo, Sen. Olympia... — FILE- In this May 7, 2010 file photo, Sen. Olympia Snowe, R-Maine, speaks in Portland, Maine. The government is expected to announce this week that more than 58 million Social Security recipients will go through another year without an increase in their monthly benefits. Snowe was the only Republican to support a second Social Security bonus payment, like the one-time $250 in 2009, when it became clear that seniors wouldn't get an increase in monthly benefit payments in 2010; the bill died from lack of support. Credit: AP

By STEPHEN OHLEMACHER. The Associated PressOctober 10, 2010

WASHINGTON - As if voters don't have enough to be angry about this election year, the government is expected to announce this week that more than 58 million Social Security recipients will go through another year without an increase in their monthly benefits.

It would mark only the second year without an increase since automatic adjustments for inflation were adopted in 1975. This was the first year.

"If you're the ruling party, this is not the sort of thing you want to have happening two weeks before an election," said Andrew Biggs, a former deputy commissioner at the Social Security Administration and now a resident scholar at the American Enterprise Institute.

The cost-of-living adjustments, or COLAs, are automatically set each year by an inflation measure that was adopted by Congress back in the 1970s. Based on inflation so far this year, the trustees who oversee Social Security project say that there will be no COLA for 2011.

The projection will be made official on Friday, when the Bureau of Labor Statistics releases inflation estimates for September.

This week's announcement about Social Security benefits raises more immediate concerns for older Americans whose savings and home values still haven't recovered from the financial collapse: Many haven't had a raise since January 2009, and they won't be getting one until at least January 2012.

"While people aren't getting COLAs, they certainly feel like they're falling further and further behind, particularly in this economy," said David Certner, legislative policy director for AARP.

Social Security was the primary source of income for 64 percent of retirees who got benefits in 2008, according to the Social Security Administration. A third relied on Social Security for at least 90 percent of their income. A little more than 58.7 million people receive Social Security or Supplemental Security Income, with the average benefit at $1,072 a month.

Social Security recipients got a one-time bonus payment of $250 in the spring of 2009 as part of the government's massive economic recovery package. President Barack Obama lobbied for another one last fall when it became clear seniors wouldn't get an increase in monthly benefit payments in 2010.

Congress took up the issue, but a proposal by Sen. Bernie Sanders (I-Vt.) died when 12 Democrats and Sen. Joe Lieberman (I-Conn.) joined Senate Republicans to block it. Sanders said he expects older voters to be angry when they learn there will be no increase for the second straight year.

If inflation in the third quarter increases from year to year, Social Security recipients automatically get higher payments, starting in January. If inflation is negative, the payments stay unchanged. Social Security spokesman Mark Lassiter said the agency has no leeway to increase payments if the inflation measurement doesn't call for it.