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Let me guess: you received an e-mail in your inbox that had been fw:fw:fw:fw ad nauseum advising you of this "fact."
Wait...wait... you read it on the Internet so it must be true, right?
Do you always get ticked off by baseless urban legends?
Here's some advice for you: next time you read or hear about something completely ridiculous and idiotic, do some research before posting it so you don't make yourself look silly.
This thread has kind of wandered around, but in kind of an interesting manner.
I'll see if I can tie this up with some brief comments.
MMoB, you are right about those e-mails, my conservative friends forward them to me and they mention stuff like free phones, big pensions for Congress and taxing all health insurance benefits paid by employers. Lots of very inaccurate stuff out there to excite the masses and raise their anger. I don't mind resentment, but it is a shame when these messages spread ignorance.
The comments about federal employee pay and social security were accurately summarized in that they are based on two different measures. I'd like to add that for anyone who'd like to do some minimal google searching, the total SS increases have been far greater than federal pay raises, going all the way back to 1970. It isn't even close.
However...there have been a lot of giveaway programs at both the state and federal levels. Many folks resent these programs, such as mortgage forgiveness, cash for clunkers, housing purchase credits or extending benefits, and though some may disagree they do have valid reasons for resentment and concerns.
To bring this altogether, and back on topic, this proposed $250 payout could be viewed as yet another giveaway. Seniors have inflation protection not available to the vast majority of the public, and this payout is above and beyond that protection.
I can't blame folks for being resentful about this proposal. It also feeds into the sentiments that result in those e-mails claiming massive gov't giveaways.
Factually incorrect. Social Security is financially sound, has always been sound, will remain sound for at least 40 years, and need only minor tweaking beyond that.
Republicans and the Wall Street fraudsters peddle this nonsense to trick the public into accepting privatization.
If Wall Street, "Helicopter" Ben Bernanke, Timothy Geitner, Larry Summers, and Goldman Sachs ever get their dirty hands on the Social Security trust fund that money will disappear into the black hole of multi-million dollar bonuses, bogus derivatives, corporate fraud, and insider crooked dealing in the blinking of an eye.
Thank God for Social Security. It's all that sustains many of our seniors and disabled after their lifetime of hard work and sacrifice for the country and their families.
No socia security is not finaancial sounds. True it isn't runnig out of money yet;but its ptetty much pay-go. That emans that people putting i now will not have enough paying in tot eh system. That is why amoung the threee programs of SS. medeicare and medicaid they are going to make changes to SS first as its the easiest. Its called legacy cost meaning others have paid and been promised but there is not enough in future eyars to apy them.2040 was a figure th last tije they dd the so called fix but now its been pushed to 2020.You would not have to watch the news to not know that SS and the other three programs are in deep trouble in legacy cost.They are the fastest growihng legacy cost in governamnt and projected to consume 16% of the 18% of all revenue of the federal governmnt in future years if not fixed. That would leave 2% for the reast of governamnt. That is why its said to be unsustainable.SS is only a supplement to retirement not even a equal one as setup.
...this proposed $250 payout could be viewed as yet another giveaway. Seniors have inflation protection not available to the vast majority of the public, and this payout is above and beyond that protection.
It also feeds into the sentiments ... claiming massive gov't giveaways.
I'm a senior and I'd like to know where I have any protection against inflation (hint: doesn't exist).
The massive gov't giveaways are $ trillions to Wall Street and the military industrial complex (that President Eisenhower warned us about a half a century ago).
Seniors, children, the poor, disabled workers, single moms, public schools, the unemployed - in other words, average Americans - get scraps and a stern lecture about pulling themselves up by their boot straps.
Social security has the same COLA as most pessions do.It alos was not originally part of teh trust and even some or most pension have no COLA guarantee.Social security is a SUPPLEMENT to retire ;not a retirement plan.Just as reward for service to the couhntry is not connected to it;that is veterans benefits;nothing to do with social security. It is a trust that must be paid for by the trust fund and thre are still gneration paying into it that deserve to have soemthing left to collect. There more than us that are collecting now.Too mnay greedy people wanting to drain the fund leaving nothing for future generations that are paying into it:IMO.
To bring this altogether, and back on topic, this proposed $250 payout could be viewed as yet another giveaway.
True, it could be viewed that way.
Quote:
Originally Posted by NewToCA
Seniors have inflation protection not available to the vast majority of the public, and this payout is above and beyond that protection.
Not exactly, and that's part of the reason for this thread. As stated in the article (see OP):
A new bill in Congress would provide a one-time $250 payment to senior citizens, veterans and the disabled in the event that no Social Security cost-of-living adjustment is payable in 2011.
The limited inflation protection that seniors on Social Security have is the annual Cost of Living Adjustment (COLA). There was no COLA last year, and Congress approved a $250 payment (there was a corresponding $250 tax credit for CSRS federal employees, since [1] these retirees do not receive SS, and [2] they also did not receive a COLA).
It is increasingly likely that there will be no COLA again this year - for either SS or CSRS - and so Congress is once again considering to make up for at least part of it with a $250 payment to SS retirees.
The method used in determining whether or not an SS COLA will happen, and what the size of the COLA should be, is based on percentage increase in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) from the third quarter of one year to the third quarter of the next. Last year, there was no increase, and therefore, no COLA ... and so far this year, there has been no increase, so likely no COLA once again.
Unfortunately (at least to my mind), the CPI-W does not appear to give sufficient weight to the increases in health care and health insurance costs from one year to the next. This especially impacts retirees who are likely to have increased health care costs as they get older, and this impact is all the more pronounced when there is no COLA.
Federal employees do not receive raises based on the cost of living and haven't in decades. Their raises are based on the Emplyment Cost Index (ECI) which measures how much wages in the private sector have risen in the past year, not the Consumer Price Index (CPI) which measures inflation.
In the private sector there are usually two different types of raises,
individual based on merit and across the board cost of living.
The method used in determining whether or not an SS COLA will happen, and what the size of the COLA should be, is based on percentage increase in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) from the third quarter of one year to the third quarter of the next. Last year, there was no increase, and therefore, no COLA ... and so far this year, there has been no increase, so likely no COLA once again.
While that's all true, what's being conveniently overlooked by many seniors is that they received an abnormally high COLA two years ago because although the CPI-W showed a high rate of inflation as of September 30, 2008, the economy immediately went into a nosedrive and the recessionary drop in the cost of living over the last three months of 2008 was not reflected in the January 2009 COLA. That's why Social Security recipients received a 5.8% increase even though the economy was in a free-fall. The CPI still hasn't caught up to where it was on September 30, 2008, and that is why there hasn't been a COLA since then.
If it was possible to measure the CPI on a calendar-year basis and then give SS recipients COLAs in January based on the previous 12-months rise in the cost-of-living, then the January 2009 SS COLA would have been smaller than 5.8%, but a small COLA would have been given in January 2010 and another small COLA would be given in January 2011.
To put it simply, seniors effectively received their January 2010 & January 2011 raises in January 2009. In effect, they received three-years worth of COLAs at once, but they don't wan't to look at it that way. Instead, we get gnashing of teeth that there will be no COLA for a second year in a row without any mention of the 5.8% COLA in 2009 when we were already three-months into a deflationary cycle and the 5.8% COLA was not warranted.
It's very simple. Federal employees do not receive raises based on the cost of living and haven't in decades. Their raises are based on the Emplyment Cost Index (ECI) which measures how much wages in the private sector have risen in the past year, not the Consumer Price Index (CPI) which measures inflation. And in fact, Congress and the President usually reduce it to less than the ECI.
Quote:
Originally Posted by king's highway
In the private sector there are usually two different types of raises,
individual based on merit and across the board cost of living.
And your point is.....?
I'll try this once again: The ECI measures how much wages in the private sector have risen in the past year. This includes any and all raises in private sector wages.
While that's all true, what's being conveniently overlooked by many seniors is that they received an abnormally high COLA two years ago because although the CPI-W showed a high rate of inflation as of September 30, 2008, the economy immediately went into a nosedrive and the recessionary drop in the cost of living over the last three months of 2008 was not reflected in the January 2009 COLA. That's why Social Security recipients received a 5.8% increase even though the economy was in a free-fall. The CPI still hasn't caught up to where it was on September 30, 2008, and that is why there hasn't been a COLA since then.
Excellent post, and you're right. The 2008 COLA was the 7th largest since they began figuring COLAs this way in 1975.
In their defense, seniors looking at the chart linked to above would see that 2009 was the very first time the COLA was 0.0, and it's likely to be 0.0 this year as well. Meanwhile, health care costs keep going up.
Sometimes, even knowing the reasons why - and you explained it very clearly - doesn't make it any easier to accept.
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