By Mary Johnson, editor
What would you do with a 0.9% cost-of-living adjustment (COLA)? That’s right, a COLA of less than 1%. If you receive an average Social Security benefit of $1,240 per month, your benefit would grow $11.20. While it’s better than nothing, like this year, it’s hardly enough to cover the higher cost of eggs, and fresh produce, let alone everything else. Yet the prospect for growth in Social Security and other COLA - adjusted benefits next year is pretty grim.
The Congressional Budget Office (CBO) recently forecast that the 2017 COLA would be just 0.9%. Should the CBO be correct, that would set a new record low for years in which a COLA was paid, at least. While you’re fuming over how much your real costs have escalated over the past twelve months, consider this — latest consumer price data as measured by the federal government indicate that 0.9% estimate may be overly optimistic. According to the actual data trends, there’s currently a very high risk that there won’t be any COLA payable at all in 2017.
That’s due to a quirk in Social Security law, a situation that can occur even when inflation is modestly higher than one year ago. The COLA is determined when the average rise in inflation during the third quarter (July, August and September) is higher than the average rise in the third quarter of the last year in which a COLA was payable. That year was 2014, not 2015.
An emergency COLA is more important than ever, and there’s still time to enact one into law. TSCL is working to pass the Seniors and Veterans Emergency (SAVE) Benefits Act, (S. 2251 and H.R. 4144) introduced by Senator Elizabeth Warren (MA) and Representative Tammy Duckworth (IL-8). The legislation would provide about 70 million older Americans, veterans and people with disabilities with an emergency supplemental payment of about $580. That payment is equal to 3.9% of the average Social Security benefit. That 3.9% raise is what CEOs at the top 350 companies received last year. Closing a tax loophole that allows corporations to write off these executive bonuses as a business expense for “performance pay” would cover the cost of the bill.
How are you impacted by rising costs? I’m looking for people who are willing to share their experience in stories for this newsletter, to participate in TSCL surveys about rising retiree costs, and who would be willing to speak with journalists. If you are interested, share your story with us here.