The annual Cost of Living Adjustment (COLA) is one of the most vital elements of living on a fixed income. If things are moving smoothly, the recipient of benefits, be it their retirement plan or Social Security disability insurance, is given a COLA that compensates for inflation or the rise of costs for things like heating fuel and food.
But imagine if, after putting in years of hard work at an honest job, the administrators of your retirement plan told you to go blow, that you were a selfish leech who should have known better than take a public sector job, and that there would be no more COLAs for you?
Welcome to the plight of the retired public sector worker in Rhode Island!
The Rhode Island Retirement Security Act of 2011, a law loaded with more hyperbole than honesty, forbade any future COLAs from being given to retired teachers, janitors, and thousands more people who had done an honest day’s work for decades only to be screwed over by a legislature full of ne’er do well legislators and a Treasurer, now Governor, who used confusing polysyllabic verbiage to occlude the building of a pipeline from the Rhode Island pension fund into the coffers of former Enron traders and a host of other dubious figures on Wall Street who have never done a day’s honest work.
It is time to talk seriously not just about the case of the missing COLAs but what is going to happen when people cannot dip into their savings anymore to make up the difference in their monthly budgets.
Are we supposed to be mum when droves of retired public employees are lining up at the Food Stamps office? Should we be impressed when the Baby Boomers are spending their final years in destitution? Is part of Raimondo’s plan having these seniors taking out loans from her friends on Wall Street that they might not be able to pay back?
The systemic ripple effect caused by this 2011 law is going to impact this state in a negative fashion for years to come and we will all be paying for it.
Perhaps one of the doors to begin asking questions at would be that of Rep. Joe McNamara, the Chair of the Democratic Party. McNamara spent his career in the Pawtucket school system and yet we hear nothing yet from him about restoring the COLAs that would be going to his mailbox. Why is beyond me, but I do know that Mao Zedong would call that a contradiction.
Regardless of one’s political orientation, repealing this law should be made an election year issue. If you are a self-described fiscal conservative, it makes perfect sense to want to reduce the need for social safety net public benefits. If you are a liberal, it is about restoring the social contract and upholding the state’s side of a bargain it made with honest working class people. If you are someone who is opposed to corruption, it would clean the clocks of several dirty politicians that might be benefiting from the pension heist. The only person who might not benefit is myself, who would have less muck to rake, and Gina Raimondo, who might see her dubious blind trust stop sending her fat checks every month.
It’s been some time
With The Cost of living Adjustment (COLA), retired Americans can expect an increase in their income. In 2012, there will be a $42.57 increase every month in pay. The average payment for Social Security right now is very high. It is around $1,182.40 right now. Last year and 2011, there was not an adjustment to COLA because of the low inflation.
Changes to Medicare
Social Security benefits are also connected to Medicare premiums. The boost in Social Security income will also allow for the very first increase in Medicare Part B rates since 2009. Doctor’s visits and outpatient services are all covered with Medicare Part B. A Centers on Medicare & Medicaid Services spokesperson declared that by the end of Oct, all Medicare Part B rates for 2012 will be explained.
Social Security COLA increases means the ceiling for payroll taxes also increased. There has been a fairly low ceiling. Since 2009, it has been around $106,800. It will go to $110,100 by 2012. Social Security payments will not decrease from year to year with the “hold harmless” clause. Since there was no COLA boost for 2010 and 2011, no boost was allowed in the Part B Medicare rates for existing beneficiaries. A lot of people pay the $94.60 monthly premium. That is the suit for about 75 percent of beneficiaries.
Paid by wealthier beneficiaries
The law for Social Security says that Medicare Part B Premiums have to pay 25 percent of every little thing. All covered services have to have these rates on them. To be able to provide that 25 percent, high-earning beneficiaries are going to have to pick up some of the slack since costs for health care are going up and most beneficiaries have had their rates frozen. The wealthiest of the brand new beneficiaries might be paying close to 80 percent of provider costs.
Information from