As Social Security recipients received official word yesterday that 2010 will be the first year without an automatic cost-of-living adjustment (COLA) since it went into effect in 1975, the other word --- stimulus --- continues to appear on other pages of newspapers, notes Grumpy Editor.
Interestingly, another story in yesterday’s newspapers, close to news of the COLA “freeze” for seniors and retirees, reported President Barack Obama will sign a $7.5 billion aid bill for Pakistan by week’s end.
Coincidentally, on the same day of the COLA freeze announcement, Obama proposed $250 payments to more than 50 million people “to make up for no increase in Social Security next year.”
Perhaps he noted a line in a news release from Michael J. Astrue, Social Security commissioner, who came up with this quote after announcing the COLA freeze: “Social Security is doing its job helping Americans maintain their standard of living.”
Sound confusing?
Enter the word: inflation.
The Social Security Act provides that Social Security and Supplemental Security Income benefits increase automatically each year if there is an increase in the Bureau of Labor Statistics' Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) from the third quarter of the last year to the third quarter of the current year. This year there was no increase in the CPI-W from the third quarter of 2008 to the third quarter of 2009.
Thus, according to Washington, inflation is nil, nowhere to be found.
But how non-existent is the “I” word?
Grumpy Editor did his own sampling, using shaving blades as an inflation measure. The finding: a 10-cartridge package of Gillette Sensor blades that cost $11.38 a year ago at Wal-Mart Stores, Inc. now carried a $15.66 price tag --- a 38 percent increase.
By the way, those blades for Gillette, a division of Procter & Gamble Co., are manufactured in Brazil.
Now eyes will focus on Congress, which in 1989 passed an amendment giving themselves automatic, hassle-free, annual pay raises each year. Congressional salaries this year jumped $4,700 without factoring in the economic climate or performance.
Thus, with “no inflation,” one wonders if inflation-conscious House and Senate members will continue to get their usual automatic pay raise in January.
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