SUMMARY AS OF:
2/17/2011–Introduced.
Guaranteed 3% COLA for Seniors Act of 2011 – Directs the Bureau of Labor Statistics of the Department of Labor to prepare and publish a monthly Consumer Price Index for Elderly Consumers that indicates changes over time in expenditures for consumption which are typical for individuals in the United States who are age 62 or older.
Amends title II (Old Age, Survivors and Disability Insurance) (OASDI) of the Social Security Act to: (1) require the use of such index to compute cost-of-living increases for Social Security benefits; and (2) provide, in the case of individuals who have attained age 62, for an annual cost-of-living increase of at least 3%.
The CBO has projected that there will be no COLA on Social Security benefits until 2013. This will affect most seniors, people who are retired, and many who are disabled. The good news according to our government is there is no inflation. The bad news for seniors (and others) is there is. Many pensions use the same index, and benefits may be frozen until 2013 for those who are not seniors but who are retired. Medical and food costs for people in this group are likely to inflate over the years even as they get no COLA. This will be an interesting time for those who are on fixed incomes. The report is here – »cboblog.cbo.gov/?p=235 Why CBO Projects No Social Security COLA for 2010 to 2012 Under Current Law The Social Security Administration (SSA) generally adjusts benefits payable each January based on the annual change in the consumer price index for urban wage earners (CPI-W) through the third quarter of the previous calendar year. (More information about the CPI is available from the Bureau of Labor Statistics .) The index is based on a starting point of 100 for the 1982-1984 period. In January 2009, Social Security beneficiaries received a benefit increase (often referred to as a cost-of-living adjustment or COLA) of 5.8 percent. That COLA reflected the increase in the CPI-W from 203.4 in the third quarter of 2007 to 215.2 in the third quarter of 2008 (215.2 divided by 203.4 equals 1.058, or a 5.8 percent change for that year-over-year comparison). From the third quarter of 2008 to the first quarter of 2009, the CPI-W has fallen (by about 4 percent) to 206.5 largely reflecting the decline in energy prices from their historically high levels in 2008. Even though CBO anticipates that the CPI-W will rise a bit over the next several months, we project that it will be 209.5 for the third quarter of 2009, lower than the 215.2 CPI-W for the third quarter of 2008. By law, Social Security benefits are unchanged in years in which the change in CPI-W since the previous adjustment to benefits is zero or less than zero. Thus, CBO anticipates no COLA in January 2010. Moreover, CBO projects that inflationary pressures will be very low over the next few years—in particular, our March 2009 economic forecast says that the CPI-W will not reach the level it attained in the third quarter of 2008 until late in 2011. (Under current laws and policies, CBO anticipates third-quarter-over-third-quarter increases in the CPI-W of 1.1 percent each year from 2010 to 2012.) As noted, a Social Security COLA will not be triggered until the CPI-W for the third quarter of a year exceeds its level in the third quarter of 2008. We project that the CPI-W will reach 217.0 in the third quarter of 2012, triggering a 0.8 percent COLA payable in January 2013. Thus, even though CBO is projecting price increases in fiscal years 2010 and 2011, those annual price increases would not be large enough to offset the price declines that have already taken place in recent months. Beneficiaries in other federal programs, including civil service and military retirement, and those drawing veterans’ compensation and pensions, also will not receive COLAs in 2010, 2011, or 2012, by CBO’s projections, because their COLAs are tied to Social Security’s under current law. The absence of COLAs will affect payments of Social Security taxes and the base for calculating benefits for new beneficiaries because it will affect the maximum amount of wages that are subject to Social Security, known as the taxable maximum. The Social Security Act specifies that the taxable maximum increases only in years in which a COLA occurs. Thus, under CBO’s forecast, that maximum will be frozen until 2013. At that time, the contribution and benefit base will increases by the change in the national wage index since the last time a COLA was triggered. Following those current-law rules, CBO anticipates the base will hold steady at $106,800 for 2009 through 2012, and then jump to $118,200 in 2013, reflecting the cumulative change in the national wage index during the period of no COLAs. In contrast, CBO projects that the initial benefits for newly eligible beneficiaries will continue to rise each year because those benefit calculations are linked to the annual growth in earnings and not tied to COLAs. Wage-indexing is applied to a person’s earnings history, and the dollar values in the three-bracket benefit formula are adjusted by the annual percentage change in average earnings. (The adjustments to the national wage index are permitted to be negative if wages were to decline.) Tomorrow’s blog will discuss the implications of the projected zero COLAs for the premiums charged to enrollees in Medicare Part B. — “People demand freedom of speech as a compensation for the freedom of thought which they seldom use.” to forum · permalink · 2009-05-05 11:21:52
March 16, 2011 4:00 A.M.
For the second time this month, Congress has passed a short-term continuing resolution and avoid a government shutdown. And for the second time, this was accomplished at the cost of dropping a provision that would have prevented the use of government funds to implement Obamacare. It raises the question, then, of just how committed the Republican leadership really is to killing Obamacare.
It is worth remembering that House Republicans did not include the cutoff in health-care funding as part of their original CR proposal. It was added as an amendment after a mini-rebellion by House conservatives. And the leadership was quick to jettison it at the first sign of Democratic objection. Now it appears that House Republican leaders have blinked yet again.
Apparently it is more important to keep the government open than to stand up against the most massive threat to limited government and individual liberty in recent history.
In fact, one wonders what the Republican leadership is doing to stop Obamacare. Sure, they took a vote to repeal it. But since there was no chance that a repeal bill could get through the Senate and past a presidential veto, the vote was mostly symbolic. Since then, what have Republicans done? There was another vote calling for various committees to propose an alternative health-care reform. Where is it? Where are the votes on proposals to kill some of the more unpopular aspects of the health-care law? What about the individual mandate? The employer mandate? The new taxes? What about CLASS Act, the long-term care program? Even Secretary Sebelius says that it won’t work as currently structured. Why has there been no vote to repeal that?
Cutting off funding for Obamacare now is all the more important because the administration is pushing full speed ahead on implementation. And the sad fact is that Obama is all too often being aided by Republicans.
Every Republican governor except Alaska’s Sean Parnell and Florida’s Rick Scott have accepted federal grant money to begin implementing the program. This includes rumored presidential candidates Haley Barbour and Mitch Daniels, and even conservative icon Chris Christie. Former Minnesota governor Tim Pawlenty also accepted Obamacare funding before he left office. Given a choice between “free” federal money and standing up against big government, the money wins every time.
Republican governors and Republican state legislators are also moving ahead to set up state insurance exchanges, as required under the new law. Admittedly, the states face a Hobson’s choice on the issue: If they fail to act, the federal government will set up an exchange for them, anyway, one that will likely be more costly and bureaucratic than the one they would design for themselves.
But what the Obama administration realizes is that the faster implementation goes forward, and the more the program snakes its tentacles throughout the health-care system, the harder it will be to repeal. And, for all those hoping that the Supreme Court might strike down the law, or at least its individual mandate, the justices (especially Justice Kennedy, who will likely be the pivotal vote) will also take note of whether structures and reliance have been built up around it.
In fact, in granting the government a stay of his ruling holding Obamacare unconstitutional, Judge Vinson pointed out that the plaintiff’s motion to deny the stay “is undercut by the fact that at least eight of the plaintiff states . . . have represented that they will continue to implement and fully comply with the Act’s requirements . . . irrespective of my ruling.”
This is why the Obama administration has opposed expedited review of the court rulings on the bill’s constitutionality. Time is on Obamacare’s side.
The Republican leadership will undoubtedly claim that the CR is a good deal, because it cuts another $6 billion in spending in exchange for keeping the government open for another three weeks. This keeps Republicans on track toward their goal of trimming this year’s $3.46 trillion federal budget by $61 billion. It boldly defunds the Abraham Lincoln Bicentennial Commission and the Labor Department’s Career Pathways Innovation Fund.
But Obamacare is not just another bill. It fundamentally alters not just the U.S. health-care system but the entire relationship between the government and the American people. Should we really celebrate a Congress that kills the Lincoln Bicentennial but preserves Obamacare?
If Republicans don’t stand up this time, when will they?
— Michael Tanner is a senior fellow at the Cato Institute and author of Leviathan on the Right: How Big-Government Conservatism Brought Down the Republican Revolution.