Social Security: No Cost of Living Increase

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On Thursday, the Social Security Administration is expected to deliver bad news to millions of senior citizens across the country. 

The message: Don't expect a cost of living adjustment (COLA) next year.
The federal government will not be giving a COLA for the first time in 34 years, thanks to a drop in the inflation rate.
Instead, Uncle Sam will send $250 checks to 50 million seniors, veterans, retired railroad workers and disabled people.  The payment would be roughly equivalent  to a 2 percent increase for the average Social Security recipient and would cost $13 billion.

Click play for more on the recent announcement from the Social Security Administration with Phil Kerpen of Americans for Prosperity.
President Obama says the money is needed to help protect seniors in tough economic times. 

"These payments will provide aid to more than 50 million people in the coming year, relief that will not only make a difference for them, but for our economy as a whole, complementing the tax cuts we've provided working families and small businesses through the Recovery Act," Obama said.
He won't allow the payments to come out of the Social Security trust fund, but he hasn't said where Congress will find the money.
One option would be to borrow it, which would add to the swelling federal deficit.

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