A Wall Street Journal editorial on Friday contained a clever headline --- The Diet COLA Myth --- but puzzling text didn’t make many senior readers happy, observes Grumpy Editor. Some even scratched their heads after getting to the bottom of the editorial.
“Like most Americans in this recession, seniors are struggling to maintain their standard of living,” started the editorial’s last paragraph. “Their retirement savings have been hit especially hard by the stock market plunge, and they’ve lost income on their savings accounts and Treasury bills from the plunge in interest rates.”
The text above the last paragraph covered news out of Washington that Social Security recipients “won’t be getting a cost of living increase in their monthly checks” (in 2010) and the moaning it is bringing, adding, “The recent fall in prices has served up a windfall for seniors and a real $600 average increase in their Social Security payments this year.”
That will be fresh, revealing news for the 50 million retired and disabled Americans receiving S.S. benefits.
The editorial writer should have checked with an elder family member about that “windfall” and phantom $600.
The WSJ editorial writer explained, “There will be no COLA increase this year [actually starting January, 2010 and likely continuing to 2012] because consumer prices have been level or even falling”…and “the real purchasing power of a Social Security check has risen.” The writer later worked in “the Social Security windfall over the past 12 [actually the year’s eight] months that resulted from a 5.8 percent COLA increase awarded for 2009.”
The annual adjustment for seniors is based on a long-used formula. It was adopted 34 years ago. So 5.8 percent came out of the chute last fall for 2009.
As for the “windfall” and “real $600 average increase,” perhaps the editorial writer had been watching too much of the SyFy channel.
How can seniors possibly have more bucks in their pockets when, despite “low inflation,” they have been clipped by rising costs this year in health care, utilities, car/home insurance, higher property tax (despite sinking home values), car registration fees and everyday price tags of products and services.
In addition to much lower home values, many seniors have been smacked hard as their investments have plunged 40 to 50 percent. What’s more, some of their dividend-paying stocks, used to supplement Social Security funds in paying bills, have been cut or eliminated.
The WSJ editorial also mentioned that “members of Congress are calling for an investigation into the way COLAs are calculated.”
Rather than zeroing on S.S. recipients and COLA, the WSJ would make more seniors happy --- and less likely to cancel subscriptions --- by penning an editorial on mature folks being throttled while members of Congress roll merrily along with their own automatic tasty, bubbly COLA (relished more than the diet COLA, as noted in the WSJ headline) stemming from an amendment they passed in 1989 giving themselves a hassle-free annual pay boost ($4,700 for 2009) unless they specifically pass legislation rejecting or reducing it.
Squeezed seniors, long-time taxpayers, certainly would welcome an automatic hassle-free annual pay increase, too.