Last week, the Social Security Administration (SSA) announced that the Cost-of-Living Adjustment (COLA) for Social Security beneficiaries and military retirees will not increase in 2011.
"While the perception is that Social Security benefits are being cut, people need to understand that this is not at all the reality," Linder said. "In 2009, when middle-class Americans were beginning to feel the effects of the recession and were dealing with unemployment and an uncertain future, America's seniors were enjoying the immense purchasing power of the largest increase in Social Security benefits since 1982. This was in addition to the $250 check that all Social Security beneficiaries received in early 2009 from the massive Stimulus bill."
In February, 2009, President Obama signed into law the "American Recovery and Reinvestment Act," which provided for the one-time payment of $250 to the nearly 53 million Social Security benefit recipients.
"The same law that so many seniors are upset with because it has denied them a COLA increase in 2011, also protects them from having their benefits cut," Linder continued.
Changes in the COLA are formula-based and tied directly to changes in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W), which is a seasonal measurement of the price of goods and services purchased by households. According to the law, even if the CPI-W decreases, seniors will never have their benefits cut.
Most American workers are facing ever greater financial hardships. According to CBS Moneywatch, working families have seen their wages drop by 2.8 percent since the start of the recession. Thanks to the law's protections, seniors benefitted from a large 5.8 percent benefit increase while the people who pay Social Security payroll taxes were seeing their wages cut.
"This should provide every senior with a tremendous sense of security, that at the very least, they will be as protected financially this year as they were last year," Linder said.
Linder continued, "What is more disconcerting than the lack of a Social Security COLA is the continued unemployment situation currently facing our economy. National employment is nearly 10 percent, foreclosures are rampant and significant inflation could be just around the corner if we do not rein in our spending and regain control of our financial house."
"In order to preserve the greatness of America, we need to get our economy back on track and the American people back to work. The sooner the current Administration realizes the detrimental effects of their job-killing policies on the American people, the sooner we can change course, get Americans back to work, and create the flourishing economy once again."