For the first time since Social Security automatic increases were adopted in 1975, millions of American seniors and others will see no increase in their Social Security checks next year.
For the first time in a generation, the trustees who oversee Social Security are projecting there won't be a cost of living adjustment (COLA) for the next two years.
Because the cost of living adjustments are pegged to inflation, which has been negative this year partly due to energy prices remaining below 2008 levels, seniors will need to stretch their existing SS dollars to make ends meet.
The news is troubling for many millions of older Americans who depend on Social Security to subsidize the rising cost of commodities. Because the negative inflation numbers are tied to fuel costs and retired seniors do not use as much fuel as younger Americans, many recipients feel the cut back is discriminatory and punitive.
"For many elderly, they don't feel that inflation is low because their expenses are still going up," said David Certner, legislative policy director for AARP. "Anyone who has savings and investments has seen some serious losses."
In addition to the punitive cost of living index, many seniors are complaining that new health care proposals are too costly and may result in their health care being rationed. Congress and the Obama Administration continue to be deluged with complaints from angry seniors since they proposed cutting Medicare by the billions over the next decade to pay for their health care reform. Analysts say lawmakers should have suspected that seniors would rise up to protest.
Congress and the Obama Administration are preoccupied by health care, making it difficult to address other tough issues. Representatives and advocates for older people hope their protests will attract more attention in October, when the Social Security Administration officially announces that there will not be an increase in benefits next year.
"I think a lot of seniors do not know what's coming down the pike, and I believe that when they hear that, they're going to be upset," said Sen. Bernie Sanders, an independent from Vermont who is working on a proposal for one-time payments for Social Security recipients.
Meanwhile, the administration, and its powerful ally AARP, point out that health-care providers will see the impact of Medicare cuts more than seniors themselves. Most national polls indicate the majority of seniors and the American people generally disagree, particularly if lawmakers attempt to create a costly government option to compete with insurance companies.
Social Security also faces long-term financial woes. The retirement program is projected to start paying out more money than it receives in 2016. Without changes, the retirement fund will be depleted in 2037, according to the Social Security trustees' annual report this year.
President Barack Obama has said he would like to tackle Social Security next year, after Congress finishes work on health care, climate change and new financial regulations.