Seniors have been hit hard by inflation, which is the highest in 30 years, eating into fixed incomes and creating hardships for many. The situation has led to calls from the Senior Citizens League for a remedy in the form of: a one-time $1,400 incentive check for those receiving Social Security benefits.
On an annual basis, the Social Security Administration increases monthly payments to account for any increases in the cost of living. While this year’s cost of living adjustment was the highest in 40 years, higher Medicare premiums will offset many of those gains. In addition, the record increase may also place some beneficiaries in a higher tax bracket further erode the annual duty increase.
Inflation Takes Its Toll on Social Security Recipients
Although benefits are indexed so beneficiaries not lose purchasing power because inflation drives up the cost of everyday items, the increase for 2021 was just 1.3 percent, or an additional $20 per month on average. However, as the US emerges from the economic crisis caused by the pandemic, which has also disrupted supply chains worldwide, there was unprecedented inflation in 2021. About 86 percent of Social Security recipients surveyed told the Senior Citizens League (TSCL) that: their expenses increased by much more than that amount.
This has forced some to take drastic measures after they used up their retirement savings. Thousands have written to TSCL about the hardships they experience, such as: “eating only one meal a day,” or “cutting their pills in half because they can’t afford their prescription drugs.” Many have expressed a sense of abandonment by the federal government.
The Senior Citizens League, a nonpartisan advocacy group, called the decades-long rise “welcome,” but warned that years of modest COLA increases had made it “near impossible to cope with the rampant inflation of 2021.”https://t.co/g0NpoVIndA
— Senior League (@Seniors_League) October 13, 2021
Hopes for $1,400 stimulus check in 2022
TSCL started a petition earlier this year to bring a collective vote to members of Congress. The goal is to build sufficient support from seniors and the public to urge Congress to issue $1,400.00 stimulus check to help Social Security recipients. This would be a form of non-taxable income so seniors don’t have to worry about increasing their tax burden by moving into a higher tax bracket. In addition to higher taxes, the hike could also see an increase in surcharges on their Medicare Part B premiums, both of which would fully offset any gains.
TSCL acknowledges that such a proposal is unlikely to pass Congress before the end of the year. But through the petition TSCL hopes it will become a major problem in 2022 by putting pressure on lawmakers and getting support from Congress.
Probability of a $1,400 Incentive Check in 2022
In the spring there were calls for recurring stimulus checks, but these have all but disappeared. Currently the idea of sending a stimulus check specific to Social Security recipients has not been suggested by any legislator. A one-time check for more than 64 million Social Security beneficiaries would come with a hefty price tag of nearly $90 billion. Though that would be much lower than sending checks to every American, which seems less likely every day as the economy improves.
However, other measures are underway that can help seniors. Democratic Representative John Larson, chairman of the House Ways and Means Subcommittee on Social Security, has submitted another bill called the Social Security 2100 Act: A Sacred Trust. If this would pass Social Security benefits would get a boost and implement a new indexation system to explain inflation more accurately. The proposal would also raise the thresholds above which recipients’ income, including social security, is taxed.
In every congressional district, there are thousands of people dependent on Social Security
It is the duty of every member of Congress to protect this program.
That’s why I introduced my new Social Security Act 2100 – to strengthen social security for future generations.
— John Larson (@JohnLarsonCT) Nov 9, 2021
Why There Won’t Be a $1,400 Incentive Check This Year?
TSCL acknowledges that there will be no $1,400 incentive check for Social Security recipients in 2021 because: Democratic lawmakers are consumed with getting President Biden’s agenda through Congress. A part that had been held up in the House for the past three months, the bipartisan infrastructure bill, was finally passed.
Now they will turn their attention to the Build Back Better account which was slated to get through Congress along with the others, but moderate Democrats wouldn’t vote for it without a Congressional Budget Office (CBO) score. Legislators have a week’s break, if the CBO score is ready on their return, it could clear the lower room next week. However, it would then go to the Senate, where Joe Manchin and Kyrsten Sinema are likely to try to lower the bill further.
It is currently about half of the original $3.5 trillion agreed upon when Democrats began the reconciliation process, which will allow them to pass the bill by a simple majority. Legislators in the House had to settle for reducing or scrapping programs. But that has led to the idea of passing another Democrat-only reconciliation bill next year to recoup proposals that were rejected or even implement new policies.
Representative John Yarmuth, Chairman of the House Budget Committee, told Insider, “I’ve broached the subject with a number of people in leadership positions on the caucus, and there’s certainly a willingness to pursue that idea if it makes sense at the time.”