Opinion: no COLA in 2011 makes sense

Thursday - 10/21/2010, 10:31am EDT

Jason Fitchner, senior research fellow, Mercatus Center, George Mason University

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By Suzanne Kubota
Senior Internet Editor
Federal News Radio

While some federal retirees have voiced their displeasure with the fact there will be no cost of living adjustment in 2011, others say that's a good thing.

Jason Fitchner, a former deputy commissioner at the Social Security Administration and now a senior research fellow at the Mercatus Center at George Mason University told Federal News Radio that's exactly what should happen.

Since 1975, said Fitchner, COLAs have been tied to the consumer price index (CPI) in order "to keep politics out of deciding when, or when not, to have a COLA."

Fitchner points to a big increase in the cost of living in 2008. That led to a 5.8 percent COLA for 2009.

"Since then," said Fitchner, "prices have dropped significantly," with no decrease in monthly Social Security payments.

"The good news is Social Security benefits never go down," said Fitchner. That's why, in 2009, no one lost money in the payments.

"Social Security benefits were basically designed to keep people out of poverty," said Fitchner, "and they do a fantastic job of doing that. In fact, actually, for poverty rates, seniors saw a reduction last year."

In light of all this, Fitchner said any notion of an extra $250 payment to Social Security recipients would be wrong. If the idea is to keep politics out of determining Social Security payments, the bonus check would be "just injecting it back in again."

Plus, he says, "If you're giving one group of people a check, why not give it to everybody else? And I think that's one of the problems that people would see this as."