Social Security COLA Announcement Delayed Amid Ongoing Shutdown

The announcement of the annual Social Security cost-of-living adjustment (COLA) has been postponed due to the ongoing government shutdown, affecting millions of beneficiaries across the United States. Initially scheduled for October 18, 2023, the new date for the announcement is now set for October 24, 2023. This adjustment is based on the September Consumer Price Index (CPI), which has yet to be released.

The government shutdown, which has entered its third week with little progress towards a resolution, complicates financial planning for around 70.6 million individuals who rely on Social Security, including retirees, disabled persons, and children. Projections from the Senior Citizens League and the AARP estimate a COLA increase of approximately 2.7%, but many beneficiaries are concerned that this may not be sufficient to keep pace with rising living costs.

Calls for Change in COLA Calculation

Beneficiaries are increasingly vocal about the need for reform in how the COLA is calculated. Sue Conard, a 75-year-old retired nurse from La Crosse, Wisconsin, recently joined other retirees in lobbying at the U.S. Capitol. Conard, a member of the American Federation of State, County and Municipal Employees union, expressed her frustration, stating, “The issue of how the COLA is determined is flat-out wrong because health care is not factored into the CPI.”

Some lawmakers are advocating for a shift to the Consumer Price Index for the Elderly (CPI-E), which accounts for spending patterns typical of older Americans, including health care and medicine. Last session, Senator Bob Casey (D-Pa.) introduced legislation aimed at changing the COLA calculation but did not receive a hearing in the Senate Finance Committee.

According to Myechia Minter-Jordan, CEO of AARP, the COLA adjustment is critical for many seniors, serving as “a lifeline of independence and dignity.” Despite this, she noted that many Americans still struggle to cover basic expenses even with a potential increase in benefits.

Financial Pressures Faced by Beneficiaries

Concerns over financial pressures are echoed by many beneficiaries, including Vanessa Fields, a 70-year-old former social worker from Philadelphia, who reports spending about $1,000 per month on groceries. Fields lamented that the current COLA fails to match the rising costs of living, warning, “We’re going to be in bad shape if lawmakers don’t act.”

The Social Security Administration has indicated that it will begin notifying beneficiaries of their new benefit amounts starting in early December. A spokesperson, speaking on the condition of anonymity, confirmed that retirement and Supplemental Security Income benefits would be adjusted on January 1, 2026, without delay, despite the ongoing government shutdown.

The delayed announcement coincides with alarming financial predictions for the Social Security program. The June 2023 annual report from the Social Security and Medicare trustees indicated that the program’s trust fund may be unable to provide full benefits starting in 2034, a year earlier than previously estimated. Should the trust fund become depleted, beneficiaries could face a reduction in payments, receiving only 81% of scheduled benefits, according to the report.

The ongoing discussions surrounding the COLA calculation and the impact of the government shutdown highlight the urgent need for legislative action to ensure that Social Security benefits adequately meet the financial demands faced by millions of Americans.