Social Security COLA: President Obama`s Call for $250 Payment a Distraction

The Real Story: Today`s Zero COLA Announcement for 2010 Could Cost Average
Senior $10,134
WASHINGTON--(Business Wire)--
Earlier this morning, the Social Security Administration announced that seniors
will receive no Cost of Living Adjustment (COLA) in their Social Security checks
next year.

President Obama`s call late yesterday for Congress to pass a one-time payment of
$250 for seniors would make up just a tiny fraction of the amount seniors will
lose throughout their retirement.

A senior retiring in 2009 with average benefits would lose $10,134 over the
course of a 20-year retirement, due to the loss of the compounding effect of an
average annual benefit increase of three percent, according to a recent analysis
by The Senior Citizens League (TSCL).

PROBLEM

* The Congressional Budget Office (CBO) also forecasts a zero COLA for 2011. If
there is no COLA for both years, a senior retiring in 2009 with average benefits
would lose $20,144.
* Although the COLA is intended to help seniors keep up with inflation, a recent
study by TSCL that analyzed 20 key expenditures found that people 65 and over
have lost 20 percent of their buying power since 2000.
* Common senior expenses have soared since the beginning of the decade, such as
Medicare Part B premiums (up 112 percent), heating oil (up 96 percent), and a
dozen eggs (up 99 percent).
* Almost 70 percent of beneficiaries depend on Social Security for 50 percent or
more of their income. Social Security is the sole source of income for 15
percent of beneficiaries.

SOLUTION

* The Emergency COLA Bill (H.R. 3557), introduced last month by Congressman
Walter Jones (NC) and encouraged and promoted by TSCL from the beginning, would
provide a COLA for 2010 equal to the average of the COLA over the past ten
years. That average is roughly three percent.
* The bill would give the average beneficiary an additional $415.20 in Social
Security payments in 2010, a boost of $34.60 per month.
* More importantly, the bill prevents seniors from losing the compounding effect
of a COLA increase, which could result in thousands of dollars more throughout
retirement for millions of seniors.
* In June, The Senior Citizens League (TSCL) became the first national group to
call for an Emergency COLA for 2010.

QUOTES

Shannon Benton, Executive Director, The Senior Citizens League
"Although President Obama`s call for a one-time payment of $250 will help
seniors, it is a distraction, since the zero COLA will cost retirees thousands
in lost compounding throughout their retirement. Today, a senior can buy just 80
percent of what they could have afforded at the beginning of the decade - and
$250 does not address that terrible trend in an effective manner."

With 1.2 million supporters, The Senior Citizens League (www.SeniorsLeague.org)
is one of the nation`s largest nonpartisan seniors groups. The Senior Citizens
League is a proud affiliate of The Retired Enlisted Association.

For The Senior Citizens League
Press:
Brad Phillips
212-376-5070 (w)
202-446-4060 (c)
Brad@PhillipsMediaRelations.com

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