Social Security Payments Unlikely to Rise in 2011

This week the government is expected to announce that over 58 million Social Security recipients will go through yet another year without an increase in their monthly benefits.

2010 and 2011 are and will be the first two years without an automatic adjustment for inflation since the policy was adopted in 1975.

Unfortunately for the Democrats, this is yet another blow to the Democratic political part, and is also really unfortunate timing considering it is two weeks before election.

Former deputy commissioner at the Social Security Administration, Andrew Biggs, said, "It's not the congressional Democrats' fault, but that's the way politics works."

The cost-of-living adjustments, aka COLAs, are typically automatically set by an inflation measure passed by Congress in 1975. The projection of the COLA for 2011 will be made official this Friday when the Bureau of Labor Statistics releases the inflation estimates for September.

Despite Democrats running political ads/press conferences that accuse Republicans of planning on privatizing the national retirement program, the announcement about the lack of Social Security benefits is of more immediate concern to elderly Americans. Many haven't had a raise since 2009 and will probably not be getting another one until 2012. I predict Republicans will take this story and run with it as another "piece of evidence" that the Democrats are not doing a good job in Congress. But really, no matter what party is in power of the House and the Senate in the midst of this country's economic status, they can never win.

President Obama did lobby for another one-time bonus payment, similar to the $250 bonus in 2009, when it became clear that there would be no increase in monthly benefit payments for 2010. Congress, however, shot the idea down when 12 Democrats and 1 Independent sided with the Republicans in the Senate.

Congress is in a sticky situation. I think everyone is. The country is in a recession and the federal government is broke. Should Congress spend money they don't have on Social Security to help stimulate the economy? From the looks of it, they aren't going to do that, but what's your point of view? Do you disagree? Do the costs outweigh the benefits?