Tens of Millions on Social Security Go Without Cost-of-Living Adjustment Due to Government Shutdown
The ongoing government shutdown has delayed the announcement of the annual Social Security cost-of-living adjustment (COLA) for tens of millions of beneficiaries, leaving them uncertain about their financial future. The 2024 COLA announcement was originally scheduled for Wednesday but will now be made on October 24.
According to projections by the Senior Citizens League and AARP, the COLA increase is expected to be around 2.7%. This adjustment is based on inflation rates, which are typically released in September. However, due to the shutdown, the Consumer Price Index (CPI) data has not been made available yet.
The Social Security Administration adjusts its benefits every year based on inflation to ensure that recipients' purchasing power remains intact. The delay in announcing the COLA increase is just one of the many consequences of the government shutdown, which has entered its third week with little progress toward a resolution.
"Millions of Americans are already struggling to make ends meet, and this uncertainty will only add to their stress," said AARP Senior Vice President for Government Affairs, Nancy LeaMond. "We urge lawmakers to come to an agreement as soon as possible to avoid further disruptions."
The Social Security Administration has not commented on the delay, but a spokesperson confirmed that the announcement would be made once the CPI data is released.
The government shutdown has already had significant impacts on various aspects of American life, including national parks, food assistance programs, and federal employees' paychecks. The delay in announcing the COLA increase will likely exacerbate financial uncertainty for millions of Social Security beneficiaries.
As the shutdown continues, lawmakers are facing increasing pressure to find a solution. Senate Majority Leader Chuck Schumer has called on Republicans to join Democrats in passing a bill to reopen the government, while House Speaker Kevin McCarthy has insisted that any legislation must address border security and other Republican priorities.
The fate of the COLA announcement remains uncertain until the CPI data is released. In the meantime, millions of Social Security beneficiaries will have to wait longer for clarity on their financial future.
Background:
The Social Security Administration provides benefits to over 70 million people, including retirees, disabled individuals, and children. The COLA adjustment is an essential component of ensuring that recipients' purchasing power remains intact in the face of inflation.
Additional Perspectives:
"This delay is a perfect example of how government shutdowns can have far-reaching consequences for everyday Americans," said Max Richtman, President and CEO of the National Committee to Preserve Social Security and Medicare. "We urge lawmakers to prioritize the needs of their constituents and find a solution to this crisis."
"The uncertainty surrounding the COLA increase is just one of many issues that need to be addressed in the context of the government shutdown," said Representative Pramila Jayapal, a Democrat from Washington state. "We must work together to ensure that our most vulnerable citizens are not further harmed by this crisis."
Current Status and Next Developments:
The government shutdown continues with no clear end in sight. Lawmakers will likely face increasing pressure to find a solution as the shutdown enters its third week. The fate of the COLA announcement remains uncertain until the CPI data is released on October 24.
*Reporting by Fortune.*
