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.
And we thought Medicare would free us from doctor/hospital bills.
Who could have predicted this?
funny video:
https://tv.gab.com/channel/schlista/view/joe-biden-predictions-62a792baa4432ab5c2479a5d
Any cost of living adjustment is usually eaten by medicare increase, who are they trying to kid with the fake cost of living calculation anyway. Most people don’t seem to notice that they excluded food and energy cost from the cola calculation long ago. Beef in my store is up about 100% and so is gasoline, less than #2.00 under Trump, nearly $6.00 now, 8% indeed.
Neither of those items are included in the COLA calculation else COLA would be off the charts.
Hey, they just want to save as much money as possible in case Congre$$ needs an emergency raise to pay for their electric Teslas.
Raise your hand if you trust the government to care for you, like it cares for the lawmakers and ruling class.
My grandparents went back to work during the carter years and worked to the end. Mind you. It got down to a couple of days a week once they were late 70s.. awesome examples vs the monthly mailbox monitors waiting on their checks.
We must be close to 72% of all those over 18 receiving some check, subsidy or directly drink from the public trough with their “public service” employment. A wise founder spoke on the largesse voting just like he knew they would.
Yeah they didn’t think twice about giving themselves a 21% increase WITH OUR MONEY!!!
If you can’t change the result, change the process.
I know full well I an very likely to outlive the system (assuming no nukes in our future).
A good book to read is The Emperor's Tomb by Joseph Roth. An Austrian soldier in the First World War outlives his country after the war.
When I read it, it was an interesting historical sidelight, but on a recent re-reading it really hits home.
When we reach the hyperinflation phase, soon, two things:
1. Social Security recipients will get hammered first, because their raise can only happen once a year while prices are doubling by the month or worse.
2. What remains of the Social Security imaginary fund will be wiped out within a year or two by the COLAs when they do come around.
Unless something changes.
The true inflation rate.
I want them to go back and take a basket of goods that’s important to Seniors for the last 20 years and Raise SS to adjust for all the games they’ve played through the years.
DUH!..there is no trust fund!!.........Its more like a Ponzi scheme ..if that money we paid in had been put into a trust fund....we'd all be millionaires...
That won’t be enough to top gas, milk, rising copays, and dropped procedures especially after you pay Fed Income Tax on it, as yours is coupled with his, and his 40 year old USN mini pension.
We were promised back in 1964!
https://www.ssa.gov/history/ssa/usa1964-2.html
Self-Supporting
“The program is designed so that contributions plus interest on the investments of the social security trust funds will be sufficient to meet all of the costs of benefits and administration, now and into the indefinite future—without any subsidy from the general funds of the Government.
Both the Congress and the Executive Branch, regardless of political party in power, have scrupulously provided in advance for full financing of all liberalizations in the program.”
And here is were your money went. Read and weep!
https://www.ssa.gov/OACT/ProgData/fundFAQ.html#n4
“increase could impact the projected insolvency dates for Social Security’s trust funds”
Insolvent file cabinets—it is a crisis—lol:
The only known ways to get them to stop lying about this stuff is pre-frontal lobotomies or guillotines.
Back around 2004 or so AARP magazine had an article on how the SS system was not a Ponzi scheme.
Ponzi schemes collapse. Social Security had not collapsed, therefore SS was not a Ponzi scheme.
A few pages on Jane Bryant Quinn had an article on how the SS system was set up. Without saying it, she described the SS system is set up just like a Ponzi scheme.
AARP is an insurance broker ... and they lean hard left ...
AMAC is their right wing competitor ... I use them ...
AARP is a 100% socialist advocacy organization. I want nothing to do with it.
Are we still drinking every time something "unexpected" smacks an "expert" with reality a five year old could've predicted? My liver is starting to hurt.
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