Plumper social security checks are on the way
Social security recipients can count on getting a cost-of-living increase in their December checks. If prices rise so slowly that the increase is not triggered automatically, the administration will ask Congress to vote for one anyway. Congressional leaders say it is likely that such a proposal would be quickly approved.
Under current law, social security beneficiaries receive a cost-of-living raise if one measure of inflation rises 3 percent or more in a year, measured from third quarter to third quarter.
With the deadline approaching, it appears that inflation may not hit this ''trigger.'' The measure at issue - the Consumer Price Index (CPI) for urban wage earners and clerical workers - is hanging right around 3 percent.
So President Reagan, in his Tuesday press conference, let slip that he wants social security beneficiaries to receive a cost-of-living adjustment (COLA) increase no matter what. Health and Human Services Secretary Margaret Heckler briefed reporters Thursday on the details of Mr. Reagan's proposal.
The size of any Reagan-proposed increase ''would depend on the actual increase in the Consumer Price Index,'' Mrs. Heckler said. If the appropriate CPI went up 2.8 percent, for instance, the administration would ask Congress to legislate a 2.8 percent social security hike.
The increase would show up in December checks, which will hit recipients' mailboxes in early January.
While the President seemed to indicate that he was asking only for a one-year waiver of the trigger requirement, Mrs. Heckler said the administration might go even further. Permanent removal of the 3 percent limit ''is an option that will be considered,'' she said.
If inflation falls below 3 percent and Reagan asks for a manual social security rise, the government would be passing up an opportunity to save quite a bit of money, at least in 1985. A 3 percent COLA for social security would cost about $5 billion, a Social Security Administration official estimates.
But since the White House '85 budget assumed the government would have to pay a 3.7 percent social security COLA, deficit projection will actually get better, not worse.
And in any case, says Secretary Heckler, Uncle Sam would have had to pay out the cash eventually. Social security COLA increases are figured on a cumulative rate of inflation. If inflation was 3 percent in 1984, and no COLA was awarded, and 3 percent in 1985, then beneficiaries would get a 6 percent increase in social security at the beginning of 1986.
''We are not spending money that would not have to be spent otherwise,'' she says. ''Under the President's proposal, we would just be making more timely payments.''
Democrats have criticized Reagan's action on the grounds that it is crassly political, aimed at wooing the 37 million US social security recipients in an election year.
''On the merits, regardless of politics, this is a change in the law that is justified,'' Mrs. Heckler insists.
There is little chance that congressional Democrats will battle Reagan over the issue. If they did, they would be in danger of appearing insensitive to the concerns of the elderly. Prominent Democrats, including an aide to House Speaker Thomas P. O'Neill Jr., indicated Wednesday that the President's proposal would have little trouble passing.