Government Shutdown Delays Key Social Security COLA Announcement

URGENT UPDATE: The announcement of the annual Social Security cost-of-living adjustment (COLA) has been delayed due to the ongoing government shutdown, now entering its third week. Originally set for October 18, 2023, beneficiaries will have to wait until October 24, 2023 for this crucial update, impacting 70.6 million recipients across the nation.

The postponement adds to the financial uncertainty for millions reliant on Social Security, as the COLA is typically adjusted based on inflation data from the September Consumer Price Index (CPI), which has also not yet been released. Projections suggest a modest COLA increase of about 2.7%, but many beneficiaries are concerned it won’t adequately address rising living costs.

Beneficiaries like Sue Conard, a 75-year-old retired nurse from La Crosse, Wisconsin, are voicing their frustrations. Conard recently traveled to the U.S. Capitol to advocate for improved healthcare protections and adjustments to Social Security calculations. “The issue of how the COLA is determined is flat-out wrong because health care is not factored into the CPI,” she stated outside the Longworth House Office Building.

Calls for change are growing louder, with some lawmakers proposing the use of the Consumer Price Index for the Elderly (CPI-E) to better reflect the spending patterns of older Americans. The AARP has echoed these concerns, with CEO Myechia Minter-Jordan emphasizing that the COLA is “not just a source of income — it’s a lifeline of independence and dignity.”

The impact of the shutdown is palpable. Beneficiaries like Vanessa Fields, a 70-year-old former social worker from Philadelphia, reported spending nearly $1,000 per month on groceries, noting that the current COLA adjustments don’t keep pace with her rising expenses. “We’re going to be in bad shape if lawmakers don’t act,” she warned.

Despite the delays, a spokesperson for the Social Security Administration confirmed that retirement and Supplemental Security Income benefits would still be adjusted starting January 1, 2026, irrespective of the shutdown. However, beneficiaries are left waiting for critical updates that affect their financial planning.

The situation is further complicated by recent reports indicating a looming financial shortfall for Social Security. The latest annual report from the Social Security and Medicare trustees revealed that the program’s trust fund could run out of money by 2034, a year earlier than previously estimated. If this occurs, beneficiaries may receive only 81% of their scheduled benefits.

As the government shutdown continues, pressure mounts on lawmakers to reach a resolution. Advocates stress that swift action is needed to ensure that Social Security benefits keep pace with inflation and that essential services are maintained for millions of Americans. The public eagerly awaits the delayed COLA announcement, which could have significant implications for financial stability in 2024.

Watch for updates on the COLA announcement and potential legislative actions in the coming days as this developing story unfolds.