Planet Gore

The Big Winners from Last Year’s Gas-Price Spike?

America’s seniors. Forbes:

While a new Congress and a new White House debate details of an economic stimulus plan, Social Security recipients are already reaping a $38 billion windfall.

The extra money comes thanks to a quirk in the Social Security Administration’s regularly scheduled cost of living adjustment.

Every year, Social Security payments increase along with the Consumer Price Index for Urban Wage Earners and Clerical Workers. The increase is set at whatever the change in inflation was between July and September from one year to the next.

Last year, soaring gas prices sent the Consumer Price Index skyward, and in October the Social Security Administration set the cost of living increase at 5.8% for 2009.

That’s the largest adjustment since 1982, amounting to an extra $35.8 billion, says SSA spokeswoman Kia Green. The increase for Supplemental Security Income is an additional $2.5 billion.

Since then, prices have collapsed. In November, the most recent month the figure is available, the index used to calculate Social Security benefits decreased 2.3%. In December, it’s likely to have fallen further, increasing the economic impact of the checks for recipients and potentially helping to stoke consumer spending.

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