During a town hall meeting in Atlantic, Congressman Steve King was quizzed about the prediction that there will be no "cost-of-living" increases in Social Security payments for at least two years.
Starting in 1975, Social Security benefits were increased annually through a "cost-of-living" adjustment that’s tied to inflation — but there’s no inflation right now. King, a Republican from Kiron, told the crowd in Atlantic he’s heard rumblings about the freeze in Social Security payments, but doesn’t yet know all the details.
"Somebody has to pay later and we’ve seen a decline in payments into the Social Security Trust Fund because of the economic decline," King said.
According to King, Social Security was going to "break even" in 2016 which means that the amount Americans who’re still working pay into the system will equal the amount that is paid out to retired and disabled Americans.
"Now it looks like it goes even about 2012," King said. "It was going to go broke by 2042. I’m sure that’s accelerated, too." By saying it will "go broke," King means the Social Security Trust Fund will be emptied, too, by 2042.
The trustees who oversee the Social Security system this week said it’s likely there will be no "cost-of-living" adjustments in 2010 or 2011 because the American economy is seeing deflation since energy prices are down significantly from last year. By law, Social Security benefits cannot be cut. But many seniors would see a reduction in their monthly Social Security checks because the government deducts the premiums they pay for the Medicare Prescription Drug Program from their Social Security payments and in January the premiums for the prescription drug premiums will go up slightly. In October, the Social Security Administration will make its final announcement on 2010 Social Security payments.
Congressman King is holding town hall meetings today in Harlan from 10 to 11 a.m. and from 12:30 to 1:30 in Carroll.
(Additional reporting by Radio Iowa’s O. Kay Henderson.)