Monday, Oct. 18, 2010 | 4:17 p.m.
When Congress reconvenes after the election, lawmakers will vote on a measure to give an extra $250 to Social Security recipients, Senate Majority Leader Harry Reid promised Monday.
Democrats are billing the measure as a necessary helping hand for seniors in a year when they won’t be seeing any incremental increase in their benefit checks, as usually happens from year to year.
Since 1975, those annual increases have been tied to inflation – but according to the Labor Department, there hasn’t been much of that this year.
The trustees who oversee the Social Security program decided last week there would be no annual cost-of-living adjustment – or COLA – for 2011, based on the Labor Department's Consumer Price Index measure of inflation. According to that calculation, September prices were 1.1 percent higher than they were in the same month last year, and 0.3 percent higher than they were six months ago.
Reid’s announcement comes on the tail of a similar announcement last week, by Rep. Dina Titus, that the House would be taking up standalone legislation (H.R. 5987) to provide Social Security recipients a $250 check.
“The overall cost of living may not have increased, but it is clear that costs that disproportionately affect seniors, including health care, have continued to rise,” Titus said in a statement. “At a time when every dollar counts, this critical legislation will provide seniors with much-needed assistance.”
Many lawmakers who support the $250 extension say the Consumer Price Index, as a general measure of consumption, doesn’t reflect the inflationary pressures being specifically felt by seniors, who consume more of certain products and services – like health care – than those who aren’t yet eligible for Social Security.
Plus, they say, it’s good for the economy, because seniors are likely to spend whatever extra benefits they receive on essential goods and services.
“This money will go right back into the economy, and stimulate the economy,” Reid said Monday.
But the question of COLA payments isn’t just a measure unto itself. It also speaks to what has become one of the most divisive issues surrounding Reid’s Senate campaign.
The fate of Social Security has emerged as a flashpoint in the race between Reid and his challenger, Republican Sharron Angle.
Angle wants to privatize the program in a manner much like that which then-President George W. Bush pressed for in 2005 – a proposal that failed to advance in a Republican-controlled Senate under pressure not to dismantle the program.
But since then, Social Security has remained a fund that is in financial straits. According to Treasury Secretary Tim Geithner, the Social Security Adminsitration will pay out more than it takes in from payroll taxes for the first time this year – six years earlier than was predicted.
About 53 million Americans get Social Security checks, and if the fund isn’t somehow replenished, it is expected to run out of money by 2037.
Angle hit Reid with those figures at last week’s debate, arguing for privatizating the program with her now-infamous line: “Man up, Harry Reid, you need to understand that we have a problem with Social Security.”
Reid holds that bleak, doomsday-scenario thinking is premature, and that whatever the outlook, dismantling the program is not a solution.
“Social Security will pay out 100 percent of its benefits for the next 35 to 40 years. That’s important. And also understand, that even after that, there would be a shortfall of 15 to 20 percent,” he said. “Don’t frighten people about Social Security.”
Reid said he will bring up the one-time, $250 COLA supplement as a standalone measure during Congress’ lame duck period, and expects to get the full backing of the Democratic caucus.