Shutdown delays COLA announcement

Millions of federal retirees will have to wait to find out the size of next year's cost-of-living adjustment. The Labor Department says it won't report inflatio...

Associated Press

WASHINGTON (AP) – Millions of federal retirees as well as nearly 58 million Social Security recipients are still getting monthly benefits during the partial government shutdown. But they will have to wait to find out the size of next year’s cost-of-living adjustment.

Social Security was scheduled to announce the annual raise Oct. 16. That’s the same day the Labor Department was scheduled to release inflation statistics for September.

The Labor Department, however, said Wednesday it will not issue the inflation report because of the shutdown. No new release date was set.

By law, the inflation numbers for July, August and September are used each year to calculate next year’s automatic increase in benefits, or COLA. Without a report for September, the government cannot announce the COLA.

The COLA is scheduled to take effect for January payments. The COLA is announced in October to give Social Security and other federal retirement programs time to adjust payments.

The Social Security Administration has given no indication that raises would be delayed but advocates for seniors said the uncertainty was unwelcome.

“There’s enough anxiety around right now. We don’t need to add to it by delaying information,” said Max Richtman, who heads the National Committee to Preserve Social Security and Medicare. “They expect it. You talk to seniors, they know when the announcement comes out and they watch it very carefully.”

This year’s increase was 1.7 percent. Monthly Social Security payments average $1,162.

The cost-of-living increases affect federal retirees differently than the general public.

If the COLA for next year is more than 3 percent, employees in the Federal Employees Retirement System receive 1 percent less than the general increase. If the COLA is between 2 percent and 3 percent, FERS retirees receive just a 2 percent increase.

Federal retirees under the old Civil Service Retirement System receive the full COLA amount.

The government was partially shut down Oct. 1 after House Republicans demanded significant changes to President Barack Obama’s health care law in exchange for funding the government beyond Sept. 30, the end of the budget year. The standoff continues as Obama has been unwilling to negotiate with Republicans over reopening the government.

An even bigger financial crisis looms next week when the government is projected to reach the limit of its borrowing authority. The Treasury Department says that will happen Oct. 17.

If the U.S. defaults, Obama has said he cannot guarantee that Social Security payments will go out on time.

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