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Bill Radke: In about 40 minutes, we’re going to get another number, the latest Consumer Price Index. And analysts expect it to show prices are on the way up again. But don’t look for Social Security checks to match. A cost-of-living increase next year is being taken off the table for seniors. But President Obama plans to remedy that. He’s asking Congress for a one-time, $250 dollar payment to help the elderly make ends meet. Marketplace’s Steve Henn reports.
Steve Henn: The one-time payments would cost the federal government roughly $13 billion. For most seniors the $250 payment’s the equivalent of a 2 percent cost-of-living increases. Normally cost-of-living adjustments are pegged to overall consumer prices, but…
PETER MORICI: Seniors will not receive a cost-of-living increase this year largely because the price of oil went down and with it gasoline, fuel oil and so forth, while the cost of everything else went up.
Peter Morici is an economist at the University of Maryland. He says the Consumer Price index doesn’t accurately track costs for seniors.
Morici: It’s a basket of good bought by the general public. But seniors tend to buy more health services and other services — and these would be more represented in the basket if it was a basket just for seniors alone.
Seniors already received a similar payment this year as well to help cover rising health costs. The president reportedly doesn’t want to fund next year’s payment directly from the Social Security trust fund. Instead he’s expected to ask Congress to borrow additional billions.
In Washington I’m Steve Henn for Marketplace.