Anyone who reads this blog undoubtedly knows this already: on Tuesday, the Social Security Administration announced that the annual cost-of-living-adjustment (COLA) for 2017 will be .3%.
That's right, three-tenths of one percent.
If you apply that to the average Social Security benefit of $1,238.00, it amounts to less than four dollars a month. That is on top of no – read: zero – increases for 2015 and 2016.
Are we supposed to be grateful this year, do you think?
I just received a 4.5% increase in my Medigap premium, a more than 10% increase in my Comcast internet bill and a 5.1% increase in my auto insurance premium (and we won't know about the annual increase in the Medicare Part B premium until November.)
No extra services, of course, in any for these increases – just an additional $35 or so a month. You might say that's not much except that increases for other fixed expenses haven't arrived yet and, most important, it happens this way every year.
Here is a chart from USA Today showing the Social Security COLA changes for the past 10 years:
Pathetic compared to actual costs. I can't be the only person who, each year, cuts back a little here, a little there and wonders how long until all of life's little pleasures are gone.
The president and CEO of the National Committee to Preserve Social Security and Medicare (NCPSSM), Max Richtman, sometimes asks attendees at town hall meetings how much they believe the COLA represents the true cost of living:
”...laughter is always the response,” he wrote Tuesday in a news release following the COLA anouncement.
“We should move to a COLA formula that takes a more accurate measure of seniors’ expenses,” he continued, “which is a CPI for the elderly. The CPI-E has been in the experimental phase since 1982. It’s time to finish the job by fully funding the development of a more accurate COLA formula.”
The CPI-E is a much more realistic calculation of elders' expenses compared to working people but recommendations to change to it have been ignored in Washington for more than 30 years.
There are at least two bills to strengthen Social Security that have been sitting in the House and Senate for a year or more with no action from our do-nothing Congress. I cannot imagine that the bills will come to the floor before a new president is sworn in.
Which brings me to that tiny mention of Social Security and Medicare in the final moments of the Wednesday presidential debate. There was no real discussion to speak of. Here is Max Richtman's full statement after the debate:
“Rather than focusing on the candidate’s plans for improving Social Security and Medicare’s long-term solvency, strengthening benefits and tackling the retirement crisis looming for millions of workers and retirees, last night’s viewers were stuck with the same old crisis calls that ‘entitlements’ are bankrupting America.
“No doubt, Washington’s billion dollar anti-Social Security lobby was happy to have some life pumped back into their middle-class killing campaign to cut benefits; however, America’s voters deserved far more from this debate.
”Make no mistake about it, the choices between Clinton and Trump couldn’t be starker. Donald Trump’s Social Security shape-shifting leaves voters with no idea of how he plans to improve solvency and benefit adequacy. Doing nothing isn’t an option.
“Contrary to his insult last night, hearing Hillary Clinton tell the truth about how to strengthen Social Security's funding isn't ‘nasty,’ it's just reality. As long as America's wealthiest are allowed to avoid paying their share of payroll taxes, Social Security suffers. Period.
“While Clinton supports expanding benefits, Trump’s only policy promise last night was to repeal Obamacare. That cuts years from Medicare’s solvency and billions in preventive care, prescription drugs and cost-reducing benefits to seniors.
“Most Americans know that our nation faces a retirement crisis. Our economy depends on strong Social Security and Medicare programs and improving benefits is vital to keeping millions from poverty. Too bad voters weren’t allowed to hear any of that debated last night.”
Perhaps in a new administration some progress can be made in Congress on this kind of legislation. Stay tuned here after the January inauguration for ideas on how you and I can make a difference.
Meanwhile, don't spend your COLA all in one place.
Oh, wait. One more thing from our friends at the NCPSSM coming off Trump calling Hillary a "nasty woman" at the Wednesday debate: