Friday May 29th, 2020 2:20AM

Retiree checks to rise modestly amid push to expand benefits

By The Associated Press
Related Articles
  Contact Editor

WASHINGTON (AP) — Millions of retirees will get a modest 1.6% cost-of-living increase from Social Security in 2020, an uptick with potential political consequences in an election year when Democrats are pushing more generous inflation protection.

The increase amounts to $24 a month for the average retired worker, according to estimates released Thursday by the Social Security Administration. Following a significant boost this year, the cost-of-living adjustment, or COLA, for 2020 reverts to its pattern of moderate gains.

But seniors and advocates complain that the inflation yardstick used to determine the annual adjustment doesn't adequately reflect their costs, mainly for health care.

The COLA affects household budgets for about 1 in 5 Americans, nearly 70 million people, and that includes Social Security recipients, disabled veterans and federal retirees.

Criticism of the COLA formula has been amplified by Democratic presidential candidates and congressional Democrats. That's helped to shift the Social Security debate from a near-exclusive concern with the program's solvency to a focus on expanding benefits, including but not limited to the cost-of-living adjustment.

"Most of the discussion about Social Security is about how can we promise more rather than how can we keep the promises we're already making," said conservative retirement policy expert Charles Blahous, who as a former public trustee of Social Security once helped oversee its finances.

With the COLA, the estimated average monthly Social Security payment for a retired worker will be $1,503 a month starting in January.

Joe Schiavone, who retired from flooring sales and lives on Florida's Space Coast, says it feels like he's not keeping up.

"My biggest concern is that your money is buying less and less," said Schiavone, who's in his early 80s. "The figure that they use for the rise in the cost of living to me is very erroneous."

Schiavone points to increased health care premiums and copays, along with other kinds of insurance, as the main culprits. He expects that part of his COLA will be eaten up by an increase in Medicare's "Part B" premium for outpatient care, which hasn't been announced yet.

Roughly 1 in 2 seniors live in households where Social Security benefits provide at least half the total income. "None of the jobs I worked on in my life had any sort of pension or 401(k) plans," said Schiavone.

He's wary of politicians' promises about Social Security. "I very rarely believe what anybody says in a campaign," said Schiavone. "I really don't know what to believe."

Democrats are working to convince older people they have their backs on Social Security. Voters age 65 and older went 53% for Donald Trump and 44% for Hillary Clinton in 2016, according to a Pew Research Center analysis of people who participated in its surveys and were confirmed to have cast a ballot. Now, Democrats are aiming to recapture older voters.

On the COLA, Democratic presidential candidates Elizabeth Warren and Bernie Sanders are proposing to use a measure of inflation that reflects expenses for households headed by a person 62 or older. It usually outpaces the index currently used.

Their Social Security plans would also bolster benefits and raise taxes to keep the program afloat. In Congress, a major Social Security overhaul from Rep. John Larson, D-Conn., would also switch to a new inflation measure.

The White House had no comment on the COLA debate. Trump ran on a promise not to cut Social Security benefits. Republicans have resisted expanding Social Security, pointing out it won't have enough money to pay full benefits starting in 2035.

Economists debate how to best account for inflation's impact.

Richard Johnson of the Urban Institute think tank said the measure Social Security now uses reflects workers, not retirees. "If the goal is to maintain seniors' living standards, then the cost-of-living adjustment is going to fall short if it doesn't measure seniors' spending," he said.

But former program trustee Blahous says even the current inflation measure is too generous, because it doesn't take into account that when prices go up, many people look for cheaper goods. "You would be overpaying COLAs," he said.

Larson, whose bill has more than 200 co-sponsors, says he believes the politics of Social Security are changing because "reality has set in."

"Many Americans have not recovered their wealth and assets from the great crash of 2008," Larson said. "During that time, Social Security did not miss a payment. These benefits are essential for their survival."

In addition to greater inflation protection, his legislation would improve the underlying benefit, particularly for low-income workers. It would extend Social Security's solvency by slowly raising the payroll tax rate from 12.4% to 14.8% and increasing the amount of earnings subject to the tax. Current law sets a maximum level of earnings that can be taxed — $137,700 for next year.

Polling shows Americans have doubts about the future of Social Security. An Associated Press-NORC Center for Public Affairs Research survey from February found that 39% of Americans had little or no confidence the program will offer the current level of benefits in five years. Just 24% said they were very confident it would, with another 36% saying they were somewhat confident.


Associated Press writers Martin Crutsinger and Hannah Fingerhut contributed to this report.

  • Associated Categories: Homepage, U.S. News, Associated Press (AP), AP National News, AP Online National News, Top U.S. News short headlines, Top General short headlines, AP Online Headlines - Washington, AP Online Congress News, AP Elections, General Election News, General Presidential Election News, AP Business, AP Business - Economy
© Copyright 2020
All rights reserved. This material may not be published, broadcast, rewritten, or redistributed without permission.
Retiree checks to rise modestly amid push to expand benefits
Social Security says millions of retirees will get a modest 1.6% cost-of-living increase in 2020 _ and that comes to about $24 more a month more the average retired worker
8:48AM ( 3 minutes ago )
Turkey makes small advances in 2nd day of Syria invasion
Turkey's Defense Ministry says Turkish ground troops continuing advance against Kurdish fighters in northern Syria
8:48AM ( 4 minutes ago )
Trump's Syria announcement blindsided many GOP supporters
When it came to Trump's announcement that US forces would no longer protect Syrian Kurds from a Turkish invasion, his supporters knew as little as his critics
8:46AM ( 6 minutes ago )
Associated Press (AP)
Olga Tokarczuk, Peter Handke win Nobel literature prizes
Polish novelist Olga Tokarczuk and Austrian writer Peter Handke have won the 2018 and b2019 Nobel Prizes for literature, a rare double announcement that came after no prize was announced last year
8:02AM ( 49 minutes ago )
The Latest: Two-step process for literature prize selection
The chair of the Nobel Committee of the Swedish Academy says the 18-member Academy picked four members from own its ranks and five "externals" to select the shortlist for the 2018 and 2019 literature prizes
8:01AM ( 51 minutes ago )
Germany seeks to reassure rattled Jews after holy day attack
Germany's president has called on people to stand up for their Jewish compatriots as he visits the scene of an attack on a synagogue in the city of Halle
7:46AM ( 1 hour ago )
AP National News
'Flash drought' brings dust and dread to southern farmers
In a vast expanse of the South that spans from Texas to Maryland, there are growing concerns for the cattle, cotton and corn amid a worsening drought that was fueled this summer by record hot temperatures
6:31AM ( 2 hours ago )
Police: Indonesia's security minister wounded in stabbing
A knife-wielding man has wounded Indonesia's security minister, a local police chief and another person in a western province
6:14AM ( 2 hours ago )
Polls show close divide over impeachment and removal
Polls find support for impeachment has shifted significantly from earlier this year
6:06AM ( 2 hours ago )
AP Online National News
The Latest: Ukraine to probe alleged 2016 US interference
Ukrainian President Volodymyr Zelenskiy says his country will 'happily' investigate whether Ukrainians interfered in the 2016 U.S. elections
7:31AM ( 1 hour ago )
GOP taking impeachment fight from Washington to the states
While President Donald Trump plays defense on impeachment in Washington, Republicans are taking the fight to Democrats in state races
12:07AM ( 8 hours ago )
The Latest: Australian PM worried IS may regroup in Syria
Australian PM says he's worried Turkey's campaign in Syria will lead to the resurgence of Islamic State group
11:15PM ( 9 hours ago )
AP Elections
Trump confronts liberal Minneapolis ahead of key rally
President Donald Trump is headed to the liberal stronghold of Minneapolis for his first re-election rally since impeachment talk heated up
5:36PM ( 15 hours ago )
For 1st time, Biden declares that Trump must be impeached
Joe Biden is saying for the first time that President Donald Trump must be impeached for abusing the powers of his office to secure his own re-election
4:10PM ( 16 hours ago )
Warren pledges to skip big fundraisers if she's Dem nominee
Democratic presidential candidate Elizabeth Warren says she'll keep shunning large-dollar fundraisers if she wins the nomination, continuing a strategy she's used in the primary
3:25PM ( 17 hours ago )
General Election News
Ukraine's Zelenskiy plays hot and cold with Trump team
Ukraine's president appears to be playing to both sides of the U.S. political divide
2:07PM ( 18 hours ago )
Senators warn of foreign social media meddling in US vote
A bipartisan group of U.S. senators is urging President Donald Trump to warn the public about efforts by foreign governments to interfere in U.S. elections
8:44PM ( 1 day ago )
Recuperating Sanders tells aides he's committed to 2020 race
Vermont senator and Democratic presidential hopeful Bernie Sanders says he was "dumb" not to have listened to the symptoms he was experiencing before he was stricken with a heart attack last week
6:49PM ( 1 day ago )
General Presidential Election News
World shares mostly dip as China, US to resume trade talks
World shares are mostly lower as investors monitor the re-opening of trade talks between the U.S. and China
7:56AM ( 56 minutes ago )
Delta posts strong earnings as fuel prices fall
Falling fuel prices pump up Delta profits during third quarter
7:24AM ( 1 hour ago )
Survey: China's rich got richer in 2019 despite tariff war
Survey: China's richest businesspeople got richer in 2019 despite U.S. tariff war and slowing economic growth
5:14AM ( 3 hours ago )
AP Business
Asian shares mostly higher amid renewed trade deal hopes
Asian shares mixed amid flurry of reports on trade talks prospects
12:09AM ( 8 hours ago )
Ecuador's protesters march; clashes break out in Quito
Thousands of protesters have staged anti-government rallies in Ecuador, seeking to intensify pressure on the president after a week of unrest sparked by fuel price hikes
7:33PM ( 13 hours ago )
US nuclear, uranium mining industries hope for Trump bailout
U.S. uranium mining companies and nuclear power plant operators are hoping for a bailout in the name of national security
5:26PM ( 15 hours ago )
AP Business - Economy
The Latest:
Poland's president and culture minister have congratulated writer Olga Tokarczuk for winning the 2018 Nobel Prize in literature
8:41AM ( 11 minutes ago )
Spain: Olive farmers protest low prices, US tariff plans
Several thousand olive farmers have marched through Spain's capital to protest plunging prices and to demand protection from tariffs the United States plans to levy on European Union on agriculture products
8:38AM ( 14 minutes ago )
Public to get access to Nuremberg trials digital recordings
Audio recordings from the historic Nuremberg trials of Nazi leaders will be made available to the public for the first time in digital form after nearly two years of work conducted in secret
8:36AM ( 16 minutes ago )
Knife-wielding man wounds Indonesia's security minister
A knife-wielding man suspected of belonging to a radical Islamic group has wounded Indonesia's security minister, a local police chief and another person in an attack in western Indonesia
8:31AM ( 21 minutes ago )
The Latest: Handke has courted controversy his whole career
Peter Handke is known as a provocative author who hasn't shied away from courting controversy or, as one of his works is titled, "Offending the Audience," in a career spanning more than five decades
8:18AM ( 34 minutes ago )