Wednesday, September 30, 2009
So every year you've gotten a little bump in your Social Security check due to inflation. Maybe you've come to consider it an annual raise from Uncle Sam.
Well, this January, you might not get one.
And a chain e-mail making the rounds tells you to blame Democrats in Congress.
"For the first time in history, the Democratic Congress will not allow an increase in the social security COLA (cost of living adjustment)," the e-mail states.
There are actually two versions of this e-mail floating around. One pins the blame generically on "Congress," while the other says "the Democratic Congress." The second version seems to have gotten more traction on the Web, so we focused on the latter version.
Up until 1975, it took an act of Congress to adjust Social Security payments for inflation. But a law enacted in 1972 -- and signed by President Richard Nixon, a Republican -- created a formula to automatically calculate the COLA every year. The Social Security cost of living adjustment was tied to the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W).
The government compares that index in the third quarter (July, August and September) of the current year to the third quarter of the previous year. Every year since the formula was put into effect (1975), it has resulted in a cost-of-living increase. High oil prices last summer contributed in large part to a sizable COLA increase in January of 5.8 percent, the highest increase in more than 25 years....(Remainder.)