The Congressional Budget Office predicts that there will be no cost-of-living increases for Social Security beneficiaries in 2010 and 2011. The annual benefit boost is tied to the Consumer Price Index under current law. Two new bills were introduced this week proposing to give Social Security recipients a raise next year.
Representative Walter Jones, a North Carolina Republican, introduced a bill that would increase Social Security checks next year based on an average of the past 10 cost-of-living adjustments. Benefit increases over the past decade have ranged from 1.4 percent in 2003 to 5.8 percent in 2009 and average about 3 percent. Jones says if this bill passes the typical monthly Social Security check would grow by an average of approximately $35.
Another bill introduced this week by Senator Bernie Sanders, a Vermont independent, and Representative Peter DeFazio, an Oregon Democrat, would give Social Security recipients an extra one-time payment of $250 next year. To pay for the extra benefit check, Sanders and DeFazio propose applying the Social Security payroll tax to household incomes between $250,000 and $359,000. Under current law, only the first $106,800 of earned income is subject to the payroll tax. Representative Carolyn McCarthy, a New York Democrat, introduced a similar bill last week offering a one-time extra $150 payment.
Social Security recipients received a 5.8 percent cost-of-living adjustment this year, which increased the typical retiree’s check by approximately $63 each month. This was the largest cost-of-living increase in more than 25 years. Beneficiaries also recieved a one-time $250 payment in May 2009, due to a provision in the American Recovery and Reinvestment Act of 2009.
Tell us, do seniors need an extra Social Security payment next year? And, if so, how should we pay for it?