Thursday, 15 October 2015 06:56
Seniors Face Year of Increased Hardship as Social Security Benefits Stagnate
MARK KARLIN, EDITOR OF BUZZFLASH AT TRUTHOUT
In a specious move, the federal government will deny Social Security
recipients an adjusted increase in benefits this coming year. (Photo: 401(K)
2012)
According to an October 15 Associated Press article, the federal government
has decided not to increase benefits this year for Social Security
recipients:
The government says there will be no benefit increase next year for millions
of Social Security recipients, disabled veterans and federal retirees.
It's just the third time in 40 years that benefits will remain flat. All
three times have come since 2010....
The announcement will affect benefits for more than 70 million people -
that's more than one-fifth of the nation's population.
The total includes almost 60 million retirees, disabled workers, spouses and
children who get Social Security benefits.
The government asserts that it made the decision based on the recent decline
in the Consumer Price Index (CPI), an inflationary statistic calculated by
the US Department of Labor. In an October 15 news release, the Labor
Department stated:
The Consumer Price Index for All Urban Consumers (CPI-U) decreased 0.2
percent in September on a seasonally adjusted basis, the U.S. Bureau of
Labor Statistics reported today. Over the last 12 months, the all items
index was essentially unchanged before seasonal adjustment. The energy index
fell 4.7 percent in September, with all major component indexes declining.
The gasoline index continued to fall sharply and was again the main cause of
the seasonally adjusted all items decrease.
However, there is a telling qualifier here - given how significantly the
fall in gas prices affected the calculation of the CPI:
In contrast to the energy declines, the indexes for food and for all items
less food and energy both accelerated in September. The food index rose 0.4
percent, its largest increase since May 2014. The index for all items less
food and energy rose 0.2 percent in September. The indexes for shelter,
medical care, household furnishings and operations, and personal care all
increased; the indexes for apparel, used cars and trucks, new vehicles, and
airline fares were among those that declined....
The 18.4 percent decline in the energy index over the past year offset
increases in the indexes for food (up 1.6 percent) and all items less food
and energy (up 1.9 percent).
In short, given a rational assumption that seniors spend less on gas than
younger people and a greater percentage of their income on food, medical
care, and other expenditures such as shelter - particularly if an elderly
person is living on a fixed income such as Social Security - they are
confronting real inflation on most of their expenses. This means that the
government is speciously denying older Americans in financial need an
adjustment in Social Security that reflects their actual purchasing needs.
The needs of seniors are proportioned differently than most Americans - and
the bottom line is that they have experienced reduced spending power on
those items in the last year. They deserve a CPI adjustment based on the
inflationary pressure that they personally experience.
Furthermore - as BuzzFlash at Truthout has repeatedly pointed out - for
years now those persons with small savings accounts have received virtually
no interest from their banks. For example, the Bank of America lists a
"Rewards Money Market Savings Standard Rate" of 0.03 percent on its website.
That is virtually zero in interest that a senior receives on a basic bank
savings account. Adjusted for inflation, seniors with such savings accounts
are actually seeing a decrease in the value of their bank savings when
inflation is factored in. That is because inflation on food, medical care
and rent - for example - far exceeds the pennies "earned" on thousands of
dollars in savings.
The decision by the federal government not to provide an increase in Social
Security benefits this coming year will hurt those elderly most in need.
Not to be reposted without permission of Truthout.
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Thursday, 15 October 2015 06:56
Seniors Face Year of Increased Hardship as Social Security Benefits Stagnate
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MARK KARLIN, EDITOR OF BUZZFLASH AT TRUTHOUT
http://ecowatch.com/2015/10/15/stephen-colbert-democratic-debate/?utm_source
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utm_term=0_49c7d43dc9-d67f9f083b-85955433In a specious move, the federal
government will deny Social Security recipients an adjusted increase in
benefits this coming year. (Photo: 401(K) 2012)
According to an October 15 Associated Press article, the federal government
has decided not to increase benefits this year for Social Security
recipients:
The government says there will be no benefit increase next year for millions
of Social Security recipients, disabled veterans and federal retirees.
It's just the third time in 40 years that benefits will remain flat. All
three times have come since 2010....
The announcement will affect benefits for more than 70 million people -
that's more than one-fifth of the nation's population.
The total includes almost 60 million retirees, disabled workers, spouses and
children who get Social Security benefits.
The government asserts that it made the decision based on the recent decline
in the Consumer Price Index (CPI), an inflationary statistic calculated by
the US Department of Labor. In an October 15 news release, the Labor
Department stated:
The Consumer Price Index for All Urban Consumers (CPI-U) decreased 0.2
percent in September on a seasonally adjusted basis, the U.S. Bureau of
Labor Statistics reported today. Over the last 12 months, the all items
index was essentially unchanged before seasonal adjustment. The energy index
fell 4.7 percent in September, with all major component indexes declining.
The gasoline index continued to fall sharply and was again the main cause of
the seasonally adjusted all items decrease.
However, there is a telling qualifier here - given how significantly the
fall in gas prices affected the calculation of the CPI:
In contrast to the energy declines, the indexes for food and for all items
less food and energy both accelerated in September. The food index rose 0.4
percent, its largest increase since May 2014. The index for all items less
food and energy rose 0.2 percent in September. The indexes for shelter,
medical care, household furnishings and operations, and personal care all
increased; the indexes for apparel, used cars and trucks, new vehicles, and
airline fares were among those that declined....
The 18.4 percent decline in the energy index over the past year offset
increases in the indexes for food (up 1.6 percent) and all items less food
and energy (up 1.9 percent).
In short, given a rational assumption that seniors spend less on gas than
younger people and a greater percentage of their income on food, medical
care, and other expenditures such as shelter - particularly if an elderly
person is living on a fixed income such as Social Security - they are
confronting real inflation on most of their expenses. This means that the
government is speciously denying older Americans in financial need an
adjustment in Social Security that reflects their actual purchasing needs.
The needs of seniors are proportioned differently than most Americans - and
the bottom line is that they have experienced reduced spending power on
those items in the last year. They deserve a CPI adjustment based on the
inflationary pressure that they personally experience.
Furthermore - as BuzzFlash at Truthout has repeatedly pointed out - for
years now those persons with small savings accounts have received virtually
no interest from their banks. For example, the Bank of America lists a
"Rewards Money Market Savings Standard Rate" of 0.03 percent on its website.
That is virtually zero in interest that a senior receives on a basic bank
savings account. Adjusted for inflation, seniors with such savings accounts
are actually seeing a decrease in the value of their bank savings when
inflation is factored in. That is because inflation on food, medical care
and rent - for example - far exceeds the pennies "earned" on thousands of
dollars in savings.
The decision by the federal government not to provide an increase in Social
Security benefits this coming year will hurt those elderly most in need.
Not to be reposted without permission of Truthout.
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