Social Security Raise Only 1.5% Next Year

According to the Associated Press, the cost-of-living-adjustment (COLA) for Social Security recipients will only be about 1.5% when it is raised next January. Since the average Social Security payment is about $1162.00 a month, the average raise seen by recipients will be only $17 a month. Historically, this is a very small COLA raise, and will no doubt be a disappointment for many receiving Social Security.

This will be only the seventh time since 1975 (about 38 years) that the raise will be less than 2%. The other raises of less than 2% were in 1986, 1998, 2002, and 2012 -- while no raises were granted in 2009 and 2010.

The 1.5% figure is not official yet, since the government shutdown has prevented the release of the official inflation figures for September by the Labor Department (on which the COLA is based). Official inflation for the year so far is around 1.4%, and most economists expected the September numbers to raise it to about 1.5%.

While the pitiful 1.5% raise is bad enough news for Social Security recipients, the congressional Republicans have once again raised their idea of changing the COLA to a "chained consumer price index" (which is lower than the official inflation rate). That would mean even lower raises for Social Security (and other government programs like veterans benefits). And unfortunately, President Obama has indicated his willingness to consider the change, which would amount to a cut in benefits for many of the most vulnerable Americans.

Here is what a change to the chained CPI would mean:

Enacting a chained CPI would cut Social Security benefits by over $120 billion over 10 years. The average Social Security recipient who retires at age 65 would get $658 less a year at age 75 and would get more than $1,000 less a year at age 85 than under current law.

A chained CPI also would make substantial cuts to benefits of more than 3 million disabled veterans.  The largest cuts would impact young, permanently disabled veterans who were seriously wounded in combat. It would also impact more than 350,000 survivors who receive service-connected death benefits.     Veterans who started receiving VA disability benefits at age 30 would have their benefits reduced by $1,425 at age 45, $2,341 at age 55 and $3,231 at age 65.

Under a chained CPI, the average retired federal employee over the next 25 years would lose $48,000; the average Social Security recipient would lose $23,000; and, the military retiree would lose $42,000.

This is nothing more than a backdoor effort to cut Social Security benefits, and cutting those benefits is opposed by a clear majority of Americans. Democrats need to stand firm, and let the Republicans (and the president) know they will not allow any kind of benefit cut to Social Security (or to veterans benefits).