Social Security checks for nearly 49 million Americans are going up by 3.3 percent in 2007, a smaller percentage gain than this year, the government announced Wednesday.

The cost of living adjustment will translate into an average monthly increase of $33 for the typical retired worker, pushing the average monthly benefit from $1,011 currently to $1,044.

The cost of living adjustment announced Wednesday by the Social Security Administration will go to more than 53 million people. Nearly 49 million receive Social Security benefits and the rest Supplemental Security Income payments aimed at the poor.

The 3.3 percent increase compares to a 4.1 percent rise in monthly benefits for 2006, which had been the biggest increase in 15 years. Starting in 1975, the benefit payments have been adjusted each year to keep up with inflation.

The COLA amount is based on the rise in the Consumer Price Index in the July-September quarter of this year compared to the same quarter in 2005. The Labor Department announced Wednesday that consumer prices actually fell by 0.5 percent in September, reflecting a big drop in energy prices.

While energy prices jumped sharply at the beginning of the year, reflecting rising Mideast tensions, they have recently retreated to a level where they are little changed from this time a year ago, when prices surged after Hurricane Katrina knocked out oil production facilities along the Gulf Coast.

The average retired couple, both receiving Social Security benefits, will see their monthly check go from $1,658 to $1,713.

The standard SSI payment will go from $603 per month for an individual to $623, and from $904 to $934 for a couple.

The average monthly check for a disabled worker will go from $947 to $979.

The government also announced Wednesday that 11 million taxpayers will pay higher taxes next year because the maximum amount of Social Security earnings subject to the payroll tax will rise from $94,200 to $97,500. In all, an estimated 163 million workers will pay Social Security taxes in 2007.

The $33 per month average monthly increase for Social Security retirees in 2007 compares to a $39 rise for 2006.

However, much of the 2006 gain was eaten up by a $10.30 monthly increase in the payments retirees had to make for Medicare Part B insurance that pays for their doctors' visits and outpatient hospital care. This year, that premium increase is a smaller $5, driving the total premium to $93.50.

The wealthiest Medicare recipients will see much larger increases as part of changes to the law passed in 2003 when the drug care benefit was adopted.

The higher payments will apply to about 1.5 million beneficiaries with incomes of more than $80,000 annually. Many in this group will see their monthly premiums for doctors' visits rise to $106. The premium could go as high as $162 for the very wealthiest.

The administration has said the monthly premium for prescription drug coverage, known as Part D, should average $24 next year, the same as this year. But Democrats dispute that estimate, saying they expect the average premium for drug coverage to rise by about $5 next year.

Analysts said the less wealthy seniors are still getting a break compared to last year.

"Seniors should be helped by the drop in energy costs, which will make their heating bills more tolerable, and the lower increase in health premiums," said David Wyss, chief economist at Standard & Poor's in New York.

Advocates for the elderly said that the cost of living adjustment was a critical safety net for the nearly one-third of retirees who rely on Social Security for 90 percent or more of their income.

"The COLA is more than helpful. It is crucial," said David Certner, legislative policy director for AARP, which represents people 50 and older. "Without the COLA, you would see the purchasing power of retirees cut in half in a 15-year time period."

President Bush, who pledged to make overhaul of Social Security and Medicare top priorities in his second term, has seen his plan to partially privatize Social Security run into stiff opposition in Congress.

He and Treasury Secretary Henry Paulson have pledged to continue searching in Bush's final two years in office for a solution to the funding problems both programs face with the looming retirement of 78 million baby boomers.