Today’s the day Americans receiving Social Security benefits find out how much their monthly income will increase starting in January. Due to this year’s high inflation rates, that Cost of Living Adjustment (COLA) will be the largest in 40 years: payments will go up by 8.7 percent, for an average increase in monthly checks around $144.
The higher benefits will be combined with a three percent drop in premiums for Medicare Part B, meaning millions of seniors’ income will increase, while one of their monthly expenses will be lower. in a statement yesterday, White House Press Secretary Karine Jean-Pierre said the combination means that folks
will have a chance to get ahead of inflation, due to the rare combination of rising benefits and falling premiums. We will put more money in their pockets and provide them with a little extra breathing room.
Jean-Pierre also noted that if Republicans had their way, Social Security and Medicaid could be put up to a vote every five years, or even annually, depending on which MAGA loonypants is talking. Or maybe the programs might be privatized. It’s a long-running obsession with those guys.
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Roughly 70 million Americans receive Social Security, including not just retirees, but also people with disabilities and children receiving survivors’ benefits. (When I was in college, I was one of the latter, so when I retire — HAH! — it’ll be my second time on Social Security.) The AP points out that this year’s increase will be the biggest monthly benefits increase that Boomers have ever seen.
NPR offers this little reminder that even though the benefits will be increasing, Social Security isn’t exactly a bunch of old people whooping it up on the government teat, which would be unseemly anyway:
Social Security benefits still aren’t all that generous. The average retiree currently receives around $1625 a month. About 1 in 5 seniors rely on Social Security for at least 90% of their income, so adjusting payments to keep pace with inflation is critical.
“This is one way we can be sure that they can afford their housing costs and their food costs and other important necessities in their lives,” said Kathleen Romig, director of Social Security and disability policy at the Center on Budget and Policy Priorities.
The story notes that since retirees don’t generally need to commute, many have been somewhat insulated from the last year’s increases in gas prices, at least if they’re not towing an Airstream around with an F-350. But grocery prices have pinched a lot of budgets, so the COLA starting in January should be very welcome.
2022 has also been a fairly rough year for those who depend on Social Security, since last year’s adjustment of 5.9 percent was well short of the inflation that hit this year.
And yes, the higher benefits are also likely to increase GOP calls to raise the retirement age or otherwise cut benefits, because oh my goodness look at how Social Security and Medicare are going to run out of money any minute now. The AP notes that the Social Security trust fund will be able to pay out full benefits until 2035.
But don’t fall for GOP claims that the system is on the verge of financial ruin.
Should the trust fund be depleted, that doesn’t mean either program would vanish. Rather, Social Security would continue paying 80 percent of scheduled benefits, and Medicare would cover 90 percent of scheduled benefits. That’s not what anyone would want to see, and it can definitely be prevented — for instance, Sens. Elizabeth Warren (D-Massachusetts) and Bernie Sanders (I-Vermont) have introduced legislation that would both increase benefits by $200 a month and extend the programs’ solvency by 75 years, by applying payroll taxes to sources of income mostly received by the very wealthy — like capital gains — that currently aren’t subject to Social Security taxes.
Oh, but that might make some billionaires too sad to keep making money, so how dare we think it.
[CNBC / White House / AP / NPR / Elizabeth Warren]
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