Do you have a source for that assertion. I receive a federal pension and received notification over two months ago that there would be no COLA increase. Federal COLAs use the CPI-W for increases. I can't imagine that Congress would vote for an increase, which isn't supported by the formula. They would have to change the law to do that and it would set a terrible precedent.
However, the baby boom generation will be robbed of the large amount of contributions because excess payroll taxes have already been spent.
SS is a pay as you go system. Those contributions have been spent along time ago and any surplus turned into non-market T-bills, i.e., IOUs and deposited into the SS Trust Fund, which is part of the national debt under "Intragovernmental Holdings." The SS Trust Fund will use up the "surplus" by 2036. However, the reality is that the General Fund will have to come up with the money to redeem the T-bills.
I believe it is H.R.3536 - Social Security COLA Fix for 2010 Act. The legislation will provide $150 increase in benefits. Setting a bad precedent has never stopped Congress especially a rat Congress.
It is ironic that wage indexing is now responsible for benefit freezes. No one ever thought that wages would decline. Welcome to the new Amerika!
A very positive benefit about the fall in the wage index is that Social Security taxes will not increase. The wage index was used as an underhanded way to increase taxes. Payroll taxes increased automatically without Congress taking a vote. However, rats have threatened to increase the maximum wage subject to Social Security. The benefit freeze will give the rats more reason to increase the maximum amount subject to tax.
I agree with your assessment of Social Security. It is an unfunded plan with excess taxes spent in the General Fund.