No cost of living increase for Social Security beneficiaries next year
The government announced that because inflation was so low this past year. Americans receiving Social Security and federal retirees would not see a cost of living adjustment in their checks.
Washington claims that because of sluggish economic growth and a falling deficit, inflation was less than zero which won't trigger the automatic increase in payments.
The Social Security payments freeze will have the most immediate impact on the largest group of Americans. The government reported that since the price index used to calculate inflation actually dropped last year, the law says there’s no need for a cost-of-living raise because the average senior’s expenses didn’t go up.
It’s just the third time in the last four decades that inflation was too low to earn seniors a raise, and seniors advocacy groups said it will be particularly difficult to swallow because a large number of elderly will still have to pay more in premiums and deductibles for Medicare, the government’s medical insurance for the elderly.
Advocates said Congress should change the formula to make sure the elderly and federal retirees, whose pension payments are also tied to inflation, get more money. Some groups also pleaded with Congress and the White House to find a way to inject more money this year.
“This is unacceptable,” said J. David Cox Sr., president of the American Federation of Government Employees.
But federal finances, while improving, are still tight, making the prospect of a quick infusion unlikely.
Indeed, Republicans on Capitol Hill are looking at bigger spending cuts as they prepare for a showdown over raising the federal debt ceiling.
Mr. Lew had previously said the government wouldn’t run out of maneuvering room until later in November, but in a letter to Congress Thursday he said spending has been running a little higher in recent weeks than he’d predicted, which has moved up the deadline.
He also made clear the administration will blame lawmakers for any problems should Congress refuse to give him more borrowing space.
Anyone who believes inflation was less than zero last year obviously hasn't been to a grocery store recently. The government no longer calculates inflation using food and fuel prices because they are too "volatile." This is nonsense since those two ithings impact our wallets far more than some of the other items in the inflation "shopping basket" like furniture prices, or the cost of recreation.
From my shopping trips, I know that chicken per pound is as expensive as ground beef was 4 years ago, processed food is up from 5-15%, fresh produce - even in season - is through the roof, and my total grocery bill is up 7% in the last 8 months. And we're eating less meat and fewer processed foods. We buy off brands when we can. I can't imagine someone on a fixed income not seeing their standard of living fall because of food inflation.
Ordinary people know the "official" inflation rate is a crock - just like the "official" unemployment rate. But the politicians in Washington don't spend much time at the grocery store, so they largely have no idea what ordinary Americans are going through.