Thank you for your comment. I respect your opinion and understand your frustration. The problem is that many of the individuals that are receiving Social Security payments are on fixed incomes. They forecast their budgets based on the expectation of a certain monthly income. Although using Social Security’s formula, you are correct there would be a decrease in Social Security Payments this year if there was not a “hold harmless” provision, the formula was disproportionately impacted by the cost of fuel in 2008. Punishing Social Security recipients for this flaw in the Social Security COLA formula would cause unfair harm to the beneficiaries.

Among considerations when deciding whether to support President Obama’s Economic Recovery Payment of $250 for 2010, is other fixed expenses that have increased despite having no COLA this year. Chief among those expenses are increased costs of Medicare. Medicare deductibles will be increased this year for both Medicare Part A and Part B. Medicare Premiums will increase for Part D. These additional costs will incur for millions of Americans despite having the same fixed monthly income.

For my current and past clients, this is a definite issue. I recommend that these individuals consider your thoughts, but also consider the impact that no COLA has on their ability to manage their monthly expenses when deciding whether to support the President’s request for an additional Economic Recovery Payment.

Steven Butler