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Shutdown Postpones Social Security Cost-of-Living Increase Announcement

The ongoing government shutdown in the United States has resulted in the postponement of the annual Social Security cost-of-living adjustment (COLA) announcement. Initially set for October 18, 2023, this announcement will now take place on October 24, 2023. The delay affects approximately 70.6 million beneficiaries, including retirees, disabled individuals, and children, as the COLA is based on the Consumer Price Index (CPI) for September, which has yet to be released.

Impact of Government Shutdown on Social Security

This shutdown, now entering its third week, has made financial planning more challenging for many citizens. The Senior Citizens League and AARP estimate a COLA increase of around 2.7%. However, many beneficiaries are concerned this adjustment will not sufficiently offset rising living costs.

Voices of Concern

  • Sue Conard, a retired nurse from La Crosse, Wisconsin, emphasizes that current CPI does not adequately reflect the costs faced by older Americans, particularly in healthcare.
  • Conard, along with other retirees, recently advocated for changes to Social Security benefits and healthcare protections at the U.S. Capitol.
  • She criticizes the current COLA calculation methods, stating, “Health care is not factored into the CPI.”

Some lawmakers have responded by proposing legislation to utilize the Consumer Price Index for the Elderly (CPI-E) instead. This alternative index accounts for spending patterns specific to older adults, including essential costs like healthcare, food, and medicine.

Legislative Proposals and Challenges

Democratic lawmakers have introduced bills aimed at revising the COLA calculation based on the CPI-E. In the last legislative session, Senator Bob Casey (D-Pa.) suggested similar changes, but they did not advance in the Senate Finance Committee.

The Importance of COLA Adjustments

AARP CEO Myechia Minter-Jordan stated that the COLA is crucial for the independence and dignity of millions of older Americans. Despite any adjustments, many still face difficulties meeting their basic expenses.

  • Vanessa Fields, a 70-year-old former social worker from Philadelphia, shared her experience of spending about $1,000 monthly on groceries.
  • She noted that the COLA fails to keep pace with rising costs, emphasizing the potential consequences if lawmakers do not take action.

What Lies Ahead

The Social Security Administration plans to notify recipients of their new benefit amounts starting in early December 2023. Despite the ongoing shutdown, retirement and Supplemental Security Income benefits will adjust as scheduled on January 1, 2024.

However, the agency faces significant financial challenges. A recent trustees’ report indicated that the Social Security trust fund could be unable to provide full benefits by 2034—one year earlier than previously estimated. If the trust fund is depleted, beneficiaries may receive only 81% of their scheduled payments.

Adding to these concerns, the Social Security Administration has already laid off over 7,000 employees from its workforce. This reduction has placed increased pressure on the remaining staff to manage claims and address inquiries from a growing number of recipients.

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