Social Security announced that they will not grant a cost of living increase for the year 2010. Based on the statuses governing Cost of Living Adjustments (COLA) for CTRB members, members who retired on or after September 1, 1992, shall be eligible for an annual cost of living allowance.

By law, Social Security and Supplemental Security income benefits increase automatically if there is an increase in the Bureau of Labor Statistics' Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W), from the third quarter of the year in which a COLA was last determined to the third quarter of the current year. This year there is no increase in the CPI-W from the third quarter of the year. This year there is no increase in the CPI-W from the third quarter of 2008 to the third quarter of 2008 to the third quarter of 2008 to the third quarter of 2010.

If there is no increase, there can be no COLA.

The law contains a "hold harmless" provision that protects more than 70 percent of Social Security beneficiaries from paying a higher Part B premium, in order to aviod reducing their net Social Security benefit. Those not protected include higher income beneficiaries subject to an income-adjusted Part B premium and beneficiaries newly entitled to Part B in 2011. Almost 20 percent of beneficiaries have their Medicare Part B premiums paid by state medical assistance programs so they will see no change in their Social Security benefit. The State will be required to pay any Medicare Part B premium increase.

If a beneficiary subject to IRMAA in the current year will not be subject to IRMAA in the next year, the "hold harmless" provisions can apply.

There is no "hold harmless" provisions for Medicare Part C and D, meaning that beneficiaries must pay any higher premiums.

Congress enacted the COLA provision as part of the 1972 Social Security Ammendments, and automatic annual COLAs began in 1975. Before that, benefits were increased only when Congress enacted special legislation.

The silver lining is that benefits are guaranteed even if living cost continue to drop. Congress wrote the law so that the retirees would catch-up with inflation adjustments when appropriate but that nobody's benefits will be cut if there is no inflation.

Many American communities are being hammered by the recession, layoffs and foreclosures. But because of the huge federal presence here-including civilian, military and contractors – Washington is a relative land of milk & honey. And as things get tougher beyond the Beltway, they could get better here.