The 0.3 percent COLA federal and military retirees will receive in January is they will not get, in the opinion of many, what they deserve. The COLA, the smallest actual adjustment ever, is little more than a bad joke to seniors for whom living costs are going up, although their inflation-protector doesn’t seem to know it.

COLAs are based on a complicated system that compares the rise in the Labor Department’s CPI (consumer price index) for the current year over the level of the CPI in the previous years’ third quarter. The third quarter, of course, is July, August and September.

Normally, the 2017 CPI is based on any increase over the previous year (which was 2015). But since there was no COLA increase in 2016 — because the government said inflation was flat — they reached back to the third quarter of 2014 as the measuring point. Even so, the raise the retirees will get is just slightly better than nothing. And in the sense of dollars and cents, maybe it is worse than nothing.

The worse part is that unless Congress acts fast, millions of people who don’t get Social Security benefits will see their Medicare Part B premiums jump from $121 to $149 per month — a 23 percent increase starting in 2017.

J. David Cox, president of the American Federation of Government Employees, says those facing the jump in Part B premiums include 1.6 million federal retirees under the old Civil Service Retirement System. The CSRS program, which was ended in the 1980s, is a stand-alone defined benefit pension plan outside of Social Security. It was replaced by the Federal Employees Retirement System which includes a reduced civil service benefit, Social Security and the Thrift Savings Plan, the government’s generous (5 percent match) in-house 401k package.

Only 4 out of every 100 current still-on-the-job federal civil servants are under the CSRS program. The vast majority are under the FERS program. But the vast majority of federal and postal retirees are CSRS types. And they will get a double-whammy because of the so-called “hold harmless” provision, which prevents Medicare Part B premiums from going up more than the dollar increase in an individual’s monthly Social Security benefit.

But there are roughly 16 million people, most of them CSRS federal retirees and employees of state governments who didn’t pay into Social Security and therefore aren’t eligible for benefits.

So what are the odds Congress will save the retirees from a 23 percent jump in Medicare Part B payments? The same situation popped up last year when it was determined there would be no COLA for January 2016. Congress extended the ‘hold harmless’ provision then because there was no raise. This year is different because Congress is so behind in its work, has only a few legislative working days left, and because there is a COLA (0.3) even though it is almost invisible.

Rule one in American politics says that Social Security is like the third rail of the subway system: Touch it and you are dead! If that holds true, Congress may find time to rescue 16 million folks from the Part B premium hike BEFORE the November 8 election.

Some members of Congress and union officials are demanding that Congress either increase the amount of the COLA (ain’t-gonna happen) or block the rise in Medicare Part B premiums for retired feds. Time will tell.

Nearly Useless Factoid

By Jory Heckman

Dolphins cannot drink seawater; their only source of hydration comes from the foods they eat.

Source: Dolphin EAR

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