Posted on 06/13/2022 12:58:37 PM PDT by Red Badger
Hot government inflation data points to an 8.6% cost-of-living adjustment for 2023, The Senior Citizens League said Friday.
That would top a 5.9% boost to benefits that went into effect this year, the highest in about 40 years.
Some advocacy groups and lawmakers want to change the way those annual adjustments to benefits are calculated.
Image Source | Getty Images New government inflation data came in hotter than expected last week.
If record-high prices don’t subside, that will lead to a higher Social Security cost-of-living adjustment in 2023.
Yet even with a more generous boost to benefits next year, there’s a growing campaign to change the way those annual benefit adjustments are measured.
New consumer price index data for May released on Friday shows inflation rose 8.6% over the last 12 months, marking the fastest increase since 1981.
That data is focused on urban consumers. A subset of that data, called the Consumer Price Index for Urban Wage Earners and Clerical Workers, or CPI-W, that is used to calculate the Social Security cost-of-living adjustment each year, climbed 9.3% over the last 12 months.
As a result, the COLA for 2023 could be 8.6%, according to a new estimate from The Senior Citizens League, a nonpartisan senior group. That is unchanged from the group’s forecast last month.
The Social Security Administration’s chief actuary, Stephen Goss, said recently that next year’s COLA could be “closer to 8%,” more than twice the 3.8% estimate in the agency’s annual trustees report, which was based on data through mid-February.
Much of whether a record high increase will be implemented next year depends on how inflation fares in the coming months.
Four experts react to May’s hotter-than-expected inflation report The annual COLA is calculated by comparing third-quarter data over the same three months for the previous year. Therefore, the increase for next year will depend on CPI-W data for July, August and September.
Social Security recipients saw a 5.9% boost to their benefits this year, the highest in about 40 years. A higher COLA for next year would also break records. It is possible such an increase could impact the projected insolvency dates for Social Security’s trust funds, according to the Committee for a Responsible Federal Budget.
Calls for change
Drazen_ | E+ | Getty Images There are increasing calls to change the measure for the annual increases to the Consumer Price Index for the Elderly, or CPI-E, which some argue better measures the prices retirees pay.
That includes Sens. Bernie Sanders, I-Vt., and Elizabeth Warren, D-Mass., who on Thursday proposed a new bill to fix Social Security alongside a group of Democratic lawmakers. In that bill, called the Social Security Expansion Act, is a proposal to change the COLA measurement to the CPI-E.
Another bill proposed by Rep. John Larson, D-Conn., the Social Security 2100 Act, also proposes a switch to the CPI-E. President Joe Biden advocated for this change, along with other Social Security reforms, during his campaign.
Social Security and senior advocacy groups like The Senior Citizens League have also called for changing over to the CPI-E, which was created in 1987 by the U.S. Bureau of Labor Statistics at Congress’ instruction.
The switch would not represent a benefit increase, noted Nancy Altman, president of the advocacy group Social Security Works, in written testimony submitted for a December congressional hearing.
“It simply ensures that benefits will not erode, but will maintain their purchasing power over time,” Altman wrote.
Had that measure been used for this year’s COLA, the increase would have been just 4.8%, rather than the 5.9% hike that has been implemented, according to research from the Center for Retirement Research at Boston College.
Moreover, while the CPI-E has historically risen faster than the CPI-W, that difference has narrowed.
To best measure the changing costs Social Security beneficiaries face, it may make more sense to use a different measure than the CPI-E, which just reweights data collected for the population as a whole, according to the Center for Retirement Research.
“If we were setting up a perfect world, then it might be worthwhile having a separate CPI for older people or people who are receiving Social Security benefits, than for the rest of the population, because their spending patterns do differ somewhat,” said Alicia Munnell, director of the Center for Retirement Research.
Inflationary spending loop to accelerate the collapse of Social Security. All feels by design.
It’s like fighting a fire with gasoline....................
I’d prefer lower gas and food prices and a very small and extremely fiscal conservative government.
That happens I’ll give up half my SS.
That will eventually work...it will just help the fire burn faster. Which is probably what the haters of America want.
some of them, won’t make till then...
I’d prefer lower gas and food prices and a very small and extremely fiscal conservative government.
That happens I’ll give up half my SS.
—
I’d settle for no Soc Sec payment if they give me back all the money I’ve put in over a working lifetime.
I laugh heartily at all mentions of Social Security Collapse. We just added $25 trillion to the national debt in 25 years time. A third of that would have covered the Social Security shortfall for over a generation, if not 2 generations.
It is not about reality. They don’t care. They WANT a crash.
Of course they do. Screwing the retirees is the name of the game.
They figure we’ll be dead in a few years, and then they will have nothing but morons to govern.
“Idiocracy” is a prophecy...............
Obviously, the 5.9 we received in January is insufficient measured against the present inflation rate. Groceries and gas prices are killing us seniors.
Don’t forget they also took a huge portion of it back for Medicare!! So all in all seniors are really struggling with this inflation, IF they raise SS again for inflation they will just take a LARGER portion back for Medicare AGAIN!!
Wonderful. 8.6% will buy two tanks of gas each month for us. When Congress passed the stuff that put SS in trouble, they should have increased the rate to 8% from 7.65%.
I think 'killing you seniors' is the whole point.
Covid wasn't as effective as they'd have liked.
“Groceries and gas prices are killing us seniors.”
..and federal, state, and local taxes.
Boost SS under CPI-E and they’ll likely come after IRAs to pay for it. Fiscal slight of hand, and the we oldies die off and nothing more to fret over.
stripping out the rhetoric, what effect would this have on the increase?
“Obviously, the 5.9 we received in January is insufficient measured against the present inflation rate. Groceries and gas prices are killing us seniors.”
Don’t forget the 14.5% increase in Medicare Part B that they automatically deducted from the SSA at the same time.
“Groceries and gas prices are killing us seniors.”
..and federal, state, and local taxes.
When l think of where we would be if the rats were prevented from stealing the election….
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