House rejects bill for $250 payment to Social Security recipients

no social security cola next year

A bill authorizing a $250 check for Social Security recipients was intended to compensate for the lack of a 2011 cost-of-living increase. Image: ChiBart/Flickr

A House bill that would have authorized a one-time $250 check to seniors, veterans and the disabled who collect Social Security was defeated in the House Wednesday. The bill was proposed to give citizens on the dole a boost because no cost-of-living increase, or Social Security COLA, was enacted for 2011. Republicans argued that the $14 billion in deficit spending required was out of the question.

Lack of COLA increase prompts legislation

A Democratic bill to write $250 checks for 58 million Social Security recipients was intended to compensate for a second straight year without a cost-of-living increase, otherwise known as a COLA. The Social Security bill was submitted to a vote under “fast-track” procedure. Bills that are fast-tracked in the House require a two-thirds vote to pass. The tally fell short at 254-153. Twenty-six Republicans said “aye.” Twelve Democrats said “nay.” The Obama administration supported the one-time payment, claiming that Social Security recipients faced hard times without a COLA increase.

Why Social Security gets no COLA

Social Security COLAs are supposed to rise automatically with inflation. Social Security last had a COLA increase in 2009 that was set in motion by a jump in gas prices to more than $4 a gallon in the summer of 2008. At 5.8 percent, it was the largest COLA increase in 27 years. Law requires that COLAs don’t kick in unless consumer prices rise above what they were the year before. Virtually non-existent inflation in the past two years has suppressed consumer prices and  any subsequent Social Security COLAs. On average, Social Security recipients collect $1,072 a month.

Efficacy of COLAs questioned

Supporters of the Social Security bill said that linking COLAs to consumer prices doesn’t adequately adjust Social Security benefits to match the needs of seniors, veterans and the disabled. A greater portion of their incomes goes toward expenses such as medications, which are rising in cost at a much higher rate than inflation. Republicans figured that seniors got a big enough Social Security COLA increase in 2009 to tide them over for a few years. A spokesman for Rep. David Camp, R-Mich., who becomes the chairman of the House Ways and Means Committee in January, said “There is a responsible way to protect seniors without increasing the deficit.” He didn’t say how.




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