Taxpayers can expect an announcement regarding a lack of Social Security increase for 2011 from government officials with the COLA remaining flat. This announcement comes for the second consecutive year since automated adjustments began in 1975.
In 1975, Congress approved cost-of-living adjustments (COLA) for social security based on inflation. Each year an inflation measure calculates the amount of the increase. However, because of the rate of inflation for 2010, trustees who oversee COLAs expect no adjustments.
The Bureau of Labor Statistics has scheduled the release of inflation estimates for the month of September. If the actual numbers reflect the projection of COLA trustees, social security recipients can expect an official announcement to follow soon.
An announcement declaring no COLAs for 2011 comes at a bad time for Democratic candidates. With only two weeks before elections, the timing could play a part in voter decisions at the polls.
Former Deputy Commissioner at the Social Security Administration Andrew Biggs explained, “If you’re the ruling party, this is not the sort of thing you want to have happening two weeks before an election. It’s not the congressional Democrats’ fault, but that’s the way politics works, a lot of people will feel hostile about it.”
A report released by the SSA in 2008 stated that 64 percent of retirees receiving benefits rely on their social security as their primary source of income. Of that 64 percent, about one third reports social security as 90 percent of their income.
Currently in the United States, more than 58 million people receive either Supplemental Security Income (SSI) or Social Security benefits. The average benefit for recipients is a little over $1,000 per month.