Corsicana Daily Sun, Corsicana, Texas

Latest News

October 14, 2013

Social Security raise to be among lowest in years

WASHINGTON (AP) — For the second straight year, millions of Social Security recipients, disabled veterans and federal retirees can expect historically small increases in their benefits come January.

Preliminary figures suggest a benefit increase of roughly 1.5 percent, which would be among the smallest since automatic increases were adopted in 1975, according to an analysis by The Associated Press.

Next year's raise will be small because consumer prices, as measured by the government, haven't gone up much in the past year.

The exact size of the cost-of-living adjustment, or COLA, won't be known until the Labor Department releases the inflation report for September. That was supposed to happen Wednesday, but the report was delayed indefinitely because of the partial government shutdown.

The COLA is usually announced in October to give Social Security and other benefit programs time to adjust January payments. The Social Security Administration has given no indication that raises would be delayed because of the shutdown, but advocates for seniors said the uncertainty was unwelcome.

Social Security benefits have continued during the shutdown.

More than one-fifth of the country is waiting for the news.

Nearly 58 million retirees, disabled workers, spouses and children get Social Security benefits. The average monthly payment is $1,162. A 1.5 percent raise would increase the typical monthly payment by about $17.

The COLA also affects benefits for more than 3 million disabled veterans, about 2.5 million federal retirees and their survivors, and more than 8 million people who get Supplemental Security Income, the disability program for the poor.

Automatic COLAs were adopted so that benefits for people on fixed incomes would keep up with rising prices. Many seniors, however, complain that the COLA sometimes falls short, leaving them little wiggle room.

David Waugh of Bethesda, Md., said he can handle one small COLA but several in a row make it hard to plan for unexpected expenses.

"I'm not one of those folks that's going to fall into poverty, but it is going to make a difference in my standard of living as time goes by," said Waugh, 83, who retired from the United Nations. "I live in a small apartment and I have an old car, and it's going to break down. And no doubt when it does, I'll have to fix it or get a new one."

Since 1975, annual Social Security raises have averaged 4.1 percent. Only six times have they been less than 2 percent, including this year, when the increase was 1.7 percent. There was no COLA in 2010 or 2011 because inflation was too low.

By law, the cost-of-living adjustment is based on the Consumer Price Index for Urban Wage Earners and Clerical Workers, or CPI-W, a broad measure of consumer prices generated by the Bureau of Labor Statistics. It measures price changes for food, housing, clothing, transportation, energy, medical care, recreation and education.

The COLA is calculated by comparing consumer prices in July, August and September each year to prices in the same three months from the previous year. If prices go up over the course of the year, benefits go up, starting with payments delivered in January.

This year, average prices for July and August were 1.4 percent higher than they were a year ago, according to the CPI-W.

Once the September report, the final piece of the puzzle, is released, the COLA can be announced officially. If prices continued to slowly inch up in September, that would put the COLA at roughly 1.5 percent.

Several economists said there were no dramatic price swings in September to significantly increase or decrease the projected COLA. That means the projection shouldn't change by more than a few tenths of a percentage point, if at all.

Polina Vlasenko, a research fellow at the American Institute for Economic Research, projects the COLA will be between 1.4 percent and 1.6 percent.

Her projection is similar to those done by others, including AARP, which estimates the COLA will be between 1.5 percent and 1.7 percent. The Senior Citizens League estimates it will be about 1.5 percent.

Lower prices for gasoline are helping to fuel low inflation, Vlasenko said.

"In years with high COLA's, a lot of that had to do with fuel prices and in some cases food prices. Neither of those increased much this year," Vlasenko said. "So that kept the lid on the overall increase in prices."

Gasoline prices are down 2.4 percent from a year ago while food prices are up slightly, according to the August inflation report. Housing costs went up 2.3 percent and utilities increased by 3.2 percent.

Advocates for seniors say the government's measure of inflation doesn't accurately reflect price increases older Americans face because they tend to spend more of their income on health care. Medical costs went up less than in previous years but still outpaced other consumer prices, rising 2.5 percent.

"This (COLA) is not enough to keep up with inflation, as it affects seniors," said Max Richtman, who heads the National Committee to Preserve Social Security and Medicare. "There are some things that become cheaper but they are not things that seniors buy. Laptop computers have gone down dramatically but how many people at 70 are buying laptop computers?"

The cost of personal computers dropped by 10.6 percent over the past year, according the CPI-W.

That's a small consolation to Alberta Gaskins of the District of Columbia, who said she is concerned about keeping up with her household bills.

"It is very important to get the COLA because everything else you have in your life is on an upward swing, and if you're on a downward swing, that means your quality of life is going down," said Gaskins, who retired from the Postal Service in 1989.

___

Follow Stephen Ohlemacher on Twitter: http://twitter.com/stephenatap

 

1
Text Only
Latest News
  • 7-31-14 Fire2.jpg Deputies, fire departments have busy weekend

    An attempt to bootleg electricity off a pole using jumper cables is believed to have caused a building fire that took out a former restaurant in Angus Friday morning, one of a series of calls to Navarro County Sheriff’s Office to the southern end of the county over the weekend.

    July 30, 2014 2 Photos

  • 7-31-14 Rice ISD Alex Stough mug.jpg Rice students win UIL scholarships

    Three Rice High School students received UIL scholarships for competing in academic competitions at the state level, according to advisor Alan Lewis.

    July 30, 2014 3 Photos

  • 7-31-14 Collin Main signal.jpg Signal finally fixed

    It took a couple of months to get the parts, but the signal light at Main and Collin streets in downtown Corsicana is finally up and working again.

    July 30, 2014 1 Photo

  • A more vigorous US economy appears to be emerging

    WASHINGTON — The U.S. economy has rebounded with vigor from a grim start to 2014 and should show renewed strength into next year.

    July 30, 2014

  • Poll: Americans cool to border-crossing children

    SAN DIEGO — Americans are wary of granting refugee status to children crossing the U.S. border to flee strife-torn countries in Central America, and most in an Associated Press-GfK poll say the U.S. does not have a moral obligation to accept asylum seekers generally.

    July 30, 2014

  • 7-30-14 4-H robotics.jpg Science made simple

    Hats out of old newspaper and leftover wrapping paper, simple robots out of popsicle sticks, rubber bands and pencil erasers, a microcosm of the aquifer made of root beer and ice cream — with a dollop of chocolate syrup. These were among the fun science projects at Tuesday’s 4-H Discovery Days event at the Navarro County Youth Expo.

    July 29, 2014 3 Photos

  • County: No increase in city subsidies

    As budget talks continue at the Navarro County Courthouse, one consensus that’s been reached will impact budget planning at the Corsicana Government Center.

    July 29, 2014

  • 7-30-14 AthensFire.jpg Senate report finds fault with government inspection of chemical facilities

    WASHINGTON — The government has failed to inspect virtually all of the chemical facilities that it considers to be at a higher risk for a terror attack and has underestimated the threat to densely populated cities, congressional investigators say.

    July 29, 2014 1 Photo

  • 7-30-14 Club-Rotary gov.jpg Club News

    News and announcements submitted by clubs and organizations throughout Navarro County.

    July 29, 2014 1 Photo

  • Local Beat 7/30/14

    A listing of meetings and events of interest from throughout Navarro County.

    July 29, 2014