From Tara Siegel Bernard's blog at the New York Times:
You could almost hear the collective groan from Social Security recipients after they learned that their benefits would not increase in 2011 because of the low rate of inflation. ...
But what retirees may find even more irksome is the fact that the measure that determines whether they’ll get a raise isn’t even based on the spending patterns of retirees — it’s based on the buying habits of working people. ...
So isn’t it only fair that cost-of-living adjustments for retirees be based on figures that are actually relevant to retirees? ...
Such an index already exists. Created by the Bureau of Labor Statistics, the experimental index tracks the spending habits of households headed by individuals 62 or older ...
Called the CPI-E, it reflects the fact that older people spend a greater percentage of their budget on medical care (about 11 percent, compared with the 5 to 6 percent spent by everyone else) and housing, but less on categories like apparel or education. ...How do they compare? The cost of living for the elderly has increased at a faster pace than the other indexes, but perhaps not quite as fast as you might think. Prices increased 36.1 percent for the elderly from December 1997 to December 2009, compared with 33.8 for the CPI-W and 33.9 percent for the index that includes some retired people, according to the paper. So, on average, the costs for the elderly grew about 0.1 percentage points more each year than the other indexes, Mr. Penner said.
Even if Social Security were pegged to the experimental index, however, it would not have resulted in a cost of living adjustment for the past two years, he added. ...
4 comments:
Why isn't the cost of paying local taxes taken into account?
Because the cost of local taxes is inherently - local. How would it work if the COLA depended on where you live?
No one had a problem with it when benefits were going up each year. Now that benefits haven't gone up in two years, the formula must be wrong.
Sounds like schools and test scores, certain groups don't pass the test, so there must be something wrong with the test.
America has become a nation of whiners.
So if there was a 1% bone sent to SS beneficiaries, what big difference would it make?
EVERYONE's going to have to sacrifice a bit to get things back into balance. I'd start with the high end tax beneficiaries, then the Federal employees (pay freeze) and go from there. Keep the middle class tax break and cut all spending (even Defense) by 10%. The develop a coherent tax structure a la the Eisenhower rates.
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