If all goes well in Washington, it looks like seniors getting social security will get a check for $250 next year instead of a cost of living increase.
Whether or not this will truly come to pass depends a great deal on what happens in Congress over the remainder of the year and into the first part of 2010. However, having said that, the Social Security Administration has already served notice that is won’t be giving recipients a cost of living adjustment in 2010.
For the first time in 35 years there will be no cost of living adjustment, simply because there has been no inflation; a shocking bit of information by itself, but when combined with the news that seniors will not get the adjustment, the news becomes dismaying and financially upsetting for seniors. This is one of the reasons why Washington may step in and try and make a difference.
The truth here is that any extra money that seniors may have is going to buy prescription drugs and pay for Medicare and Medicare supplements, both of which have increased in cost quite substantially. In light of that particular revelation, politicians have seen a chance to make a difference and are lobbying for extra funds to be given to seniors in 2010.
This “supplement” of sorts won’t come without a cost of roughly $14 billion, which makes one wonder where on Earth the money will come from during this recession. Apparently it will be gleaned from slapping Social Security payroll taxes on earnings between $250,000 and $359,000 a year. Currently workers only pay Social Security taxes on the first $106,800 of their incomes.
While it’s obvious that this tax will not go over well with the people who have to pay it, it’s equally as obvious that something needs to be done to assist seniors in 2010, thanks to the absence of the cost of living adjustment. The theory behind the supplement payment is that seniors will spend it and help stimulate the economy.
There is no doubt seniors will spend it, and likely spend it on health care needs that would include medications and topping off their Medicare supplements for better health coverage. If you follow the news, you’ll likely appreciate that this kind of an economic boost for seniors will be a welcome relief as Medicare Part B costs are slated to increase as much as 9% in 2010 with Part D costs following along with an increase of about 11.1% for next year.
This extra help for seniors is timely and in light of bailouts for banks and other businesses, it only seems fair to provide funds for those most in need of decent health coverage.