Putin Orders Pension Hike Amid Protests

President Vladimir Putin (search) promised a moderate increase in pensions Monday and blamed federal and regional officials for failing to properly implement the Kremlin-sponsored social reform, seeking to assuage a growing tide of public anger over welfare benefit cuts.

Putin's first comments on the issue came as lines of police blocked hundreds of protesters from retaking a major intersection in central St. Petersburg, his hometown. Thousands of pensioners occupied the intersection Saturday and Sunday, bringing traffic to a halt.

The protests, which have spread to numerous cities across Russia's 11 time zones, were triggered by a law enacted Jan. 1 that gives retirees, the disabled and war veterans cash stipends instead of benefits such as free public medicine and mass transit. Protesters say new monthly payments of about $10 are worth much less than the benefits, leaving them to make hard choices about food, drugs and transportation.

The benefit cuts sparked the largest outburst of public anger in Putin's five years in power.

"The Cabinet and the regions have failed to fully implement the task we had discussed: not to worsen the position of those who need the state's help," a somber-looking Putin told Cabinet members in a partially televised session.

The Kremlin has described the social reform as a long-overdue effort to streamline and modernize the economy, but many commentators predict now that Putin may respond to the crisis by firing government ministers.

Putin defended the reform, saying its general concept was right because the state cannot afford to maintain the existing unwieldy and inefficient social support system.

Without naming his predecessor, Boris Yeltsin, Putin blamed Yeltsin's government for increasing the number of people eligible for social benefits in the 1990s while lacking the funds to pay for those benefits. Wages and pensions were months and even years overdue, he said.

Putin supported decisions by some local officials to issue subsidized travel passes to allow free travel. He also instructed the government to increase the average pension by at least $7.14 instead of the planned $3.57 and to do it on March 1 instead of April 1.

Health and Social Development Minister Mikhail Zurabov said pensions may be increased by $8.57, the ITAR-Tass news agency reported.

Protesters across Russia have demanded a bigger hike, saying an average monthly pension of about $80 cannot cover their rising living costs.

In St. Petersburg, the mostly elderly demonstrators kept from blocking the intersection remained on the sidewalks, shouting "Shame!" and "Down with Putin!" and beating spoons against saucepans.

Many elderly people, already feeling disenfranchised, considered the change a final insult after they were left struggling to survive on meager pensions in inflationary and capitalist Russia when the state welfare system collapsed with the Soviet Union in 1991.

"They robbed us, and they treat us like dirt," said protester Lyudmila Ivanova, 67. "We are against this government, and we want decent retirement conditions."

The wave of protests has forced concessions from authorities in many regions. Officials in St. Petersburg promised subsidized travel passes, and the Moscow region pledged to fully restore free rides on public transport for all retirees after they repeatedly blocked key highways.

Observers have said the protests likely would intensify when people start receiving January utility bills, which will increase significantly without government subsidies.