The Militant (logo)  

Vol. 74/No. 43      November 15, 2010

Many costs rise, but
not Social Security
(front page)
Although the costs of food, fuel, and medical care continue to rise, there will be no cost-of-living increase in Social Security checks in 2011. For the second year in a row the government has decided to freeze benefits. This is the first time since the cost-of-living allowance (COLA) was added to Social Security that monthly checks remained flat for two consecutive years. Recipients last got a cost-of-living increase in 2008, when they received an insulting $24 per month.

Further attacks on Social Security can be expected in December when the Bipartisan National Commission on Fiscal Responsibility and Reform issues its report. That body was set up in February by President Barack Obama to make proposals on how to cut the federal budget. “For far too long, Washington has avoided the tough choices necessary to solve our fiscal problems,” the president said at the time.

One proposal being considered by the commission is raising further the age at which workers can start collecting Social Security benefits. House Republican Leader John Boehner and Democratic Majority Leader Steny Hoyer both favor this, as does Democrat Erskine Bowles and Republican Alan Simpson, cochairs of the fiscal commission.

Currently workers can begin collecting benefits at age 62, but they get only 75 percent of what they would receive if they waited until age 66. Despite this penalty more than three-fourths of all those filing for Social Security last year took early benefits, a measure of the severity of the capitalist economic crisis. At the same time the number of people remaining in the workforce even though they are over 65 rose in 2008 to 16.8 percent of that age bracket, up from 11.9 percent a decade ago.

Raising the age at which workers can receive full Social Security benefits is just a way of cutting payments overall. The Economic Policy Institute estimates that increasing the eligibility age from 65, which was set in 1935, to 67, which will take effect in 2022, reduces lifetime benefits for a retiree by $28,000. If the age gets pushed to 70, the government will be stealing another $63,573.

Refusing to pay a cost-of-living increase is another way of cutting benefits. When Social Security was first won in the 1930s, there was no cost-of-living clause. That was won as a by-product of the Black rights struggle in the 1960s and 1970s, which also led to establishing Medicare, Medicaid, and benefits for those with disabilities regardless of age.

The Bureau of Labor Statistics justifies the denial of COLA by claiming that prices only went up 1.1 percent in the last year, not enough to qualify for an increase in Social Security checks. But COLA figures are rigged in several ways.

The government no longer includes the cost of food or fuel in determining the Consumer Price Index. Over the past year food prices rose 1.4 percent; the energy index increased 3.8 percent, with gasoline up 5.1 percent.

The figures used to decide if Social Security should go up are also not based on the expenses of older retirees, but on those of younger people who are still working, whose medical expenses are far lower. According to the Wall Street Journal, people over 65 spent 5 percent more on health care in 2009 than they did in 2007.  
Front page (for this issue) | Home | Text-version home