A critical delay in the Social Security cost-of-living announcement has been caused by the ongoing government shutdown, impacting millions of beneficiaries. This delay is more than just a bureaucratic hiccup; it's a real-life issue that affects the financial planning of tens of millions of people.
Originally set for Wednesday, the 2024 Social Security COLA announcement is now scheduled for October 24th. This delay is linked to the September Consumer Price Index, which also remains unreleased.
The Social Security Administration (SSA) adjusts its benefits annually based on inflation. The postponement of this announcement is a stark reminder of the challenges people face when trying to manage their finances during a government shutdown.
But here's where it gets controversial... Projections by advocacy groups like the Senior Citizens League and the AARP suggest a COLA increase of around 2.7%. While this may seem like a welcome boost, many beneficiaries, including retirees, the disabled, and children, are concerned that this increase won't be enough to keep up with rising costs.
Sue Conard, a 75-year-old retired nurse and SSA recipient from Wisconsin, has a powerful message. She, along with other retiree members of the American Federation of State, County and Municipal Employees union, recently visited the U.S. Capitol to advocate for progress on healthcare protections and changes to Social Security benefits.
"The issue of how the COLA is determined is fundamentally flawed," Conard says. "Health care costs, a significant expense for older Americans, are not adequately considered in the standard CPI gauge."
Some lawmakers have proposed using a different index, the Consumer Price Index for the Elderly (CPI-E), which takes into account the spending patterns of older people on essential items like healthcare, food, and medicine. This proposal aims to provide a more accurate reflection of the cost-of-living increase for seniors.
And this is the part most people miss... A collection of Democratic lawmakers has introduced legislation to adopt the CPI-E for COLA benefits. However, similar proposals in the past, like Sen. Bob Casey's law, have failed to gain traction in the Senate Finance committee.
Myechia Minter-Jordan, CEO of AARP, emphasizes the importance of the COLA, describing it as "a lifeline of independence and dignity" for millions of older Americans. Yet, even with an adjusted COLA, many Americans still struggle to cover basic expenses.
Vanessa Fields, a 70-year-old former social worker and AFSCME member from Philadelphia, shares her concerns. She highlights how the COLA doesn't keep pace with her rising grocery costs, which now exceed $1,000 per month. "If lawmakers don't act, we're heading towards a crisis," she warns.
The SSA plans to notify recipients about their new benefit amounts starting in early December. Despite the current government funding lapse, a spokesperson for Social Security, speaking anonymously, confirmed that retirement and Supplemental Security Income benefits will be adjusted as scheduled on January 1, 2026.
This delayed COLA announcement comes at a critical time for the national social insurance plan, which faces a severe financial shortfall in the coming years. The agency has also experienced substantial workforce cuts, with at least 7,000 employees laid off earlier this year, adding to the strain on remaining staff.
The annual Social Security and Medicare trustees report, released in June, paints a concerning picture. It states that the program's trust fund will be unable to pay full benefits starting in 2034, a year earlier than previously estimated. If the trust fund is depleted, the government may only be able to pay out 81% of scheduled benefits.
This situation underscores the urgent need for a resolution to the government shutdown and a comprehensive review of the Social Security program's financial sustainability.
