Unsolved mysteries…like your COLA!

Senior Correspondent Mike Causey wants to know, do you believe our government is telling the truth or concealing details about some very important things, like ...

Do you believe our government is telling the truth or concealing details about some very important things? Such as…

* Some people firmly believe that Lee Harvey Oswald was not the lone gunman in the JFK assassination.

* Some people genuinely feel that somewhere in Wright- Patterson AFB in Dayton there is a room containing the remains of a space alien and his (her) craft that crashed in 1947 near Roswell, New Mexico.

* A lot of people — most of them retirees — believe that Uncle Sam is either cooking the books or, at best, using a faulty system to track inflation. People who get Social Security benefits, civil service retirement annuities or retired military pay are indexed to inflation. Unlike many private sector pension plans, where benefits are frozen at the time of retirement, the federal program is designed to protect retirees from inflation. If living costs go up, they get a cost-of-living adjustment (COLA) each January.

If the cost of living goes down (deflation), as has happened, retiree benefits do NOT drop. The inflation escalator only runs one way … up!

To many people, being indexed to inflation seems like a good deal. But some have problems with the way living costs are measured.

In January 2014, the retirees got a 1.5 percent COLA. That reflected the rise in the Consumer Price Index from the third quarter (July, August, September) of 2013 over the third quarter of 2012.

Earlier this year, using the same CPI program, retirees were tentatively on track to get a 1.9 percent raise in January 2015. Then that amount dropped to 1.8 percent and, as reported here Thursday, it is down to 1.6 percent. The final figure for the 2015 COLA won’t be known until mid-October when the Bureau of Labor Statistics announces the September numbers.

While nobody knows what that magic COLA number will be, it is sure that a lot of people won’t believe it. Some think the system is flawed. That the BLS should use a different measure that takes into account goods and services that retirees use most. Others believe the government knows exactly what it is doing and that it is low-balling the numbers to hold down expenses. About one in every six Americans benefits from the January COLA. That means that even a small increase, like 1.6 percent or less, would cost a ton of money.

Typical of the many complaints about the COLA-determining process is this comment from retiree Bob Lancione. He writes:

“Mike, there is no doubt in my mind that they manipulate the COLA. There was no way they were going to increase social security or the retirees’ pay by 2 percent this year. They manipulate the gas prices any time they want because that is the major thing that drives the COLA. Food prices are still high — bacon and seafood are outrageous. When is somebody finally going to expose what is going on??”

Nothing out of Washington is simple. Whether your believe the system is fair, foul or fowl, all agree that the process is complicated. If you doubt it, check out this press release explaining the August CPI numbers. We’ve blacked out the contact names to protect the public affairs officers (career feds themselves) from a tidal wave of phone calls.

Nearly Useless Factoid by Julia Ziegler

Approximately 54,250 tennis balls are used during The Championships period at Wimbledon. (Source: Wimbledon)


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