The good news is that the 2023 federal-military pay raise and the federal Social Security COLA could be the biggest in years! But if you are a likely recipient, you may want to wipe that smile off your face. For luck! But spoiler alert …
The less than good news is that workers and retirees will need every penny of the near-record raise and COLA. Maybe plus some, just to keep pace with inflation reflected in everything from gasoline and rent to bagels and baby food. For a variety of reasons everything from luxury items to basics — eggs, cereal, medicine and cars — is going up.
So while it’s too early to be forecasting the precise 2023 final numbers, it is very likely both will be the highest in years. And that’s mixed good news, as always, because the inflation rate (currently 8.3%) is going to eat into whatever percentage amount federal, military and Social Security retirees get next year. The inflation-adjustment for retirees (FERS, CSRS, Social Security and military) COLA is likely to be higher — as a percentage — than any federal civilian or military pay raise. For some it will be one step forward, two steps back. For others it will be a financial exercise in treading water.
The White House proposed a 4.9% increase for all feds except those capped at different steps of GS-15 in many cities. House Democrats are pushing for a 5.1% pay raise next January. As always the final amount will be a political-fiscal decision.
The January inflation catch-up will be determined by the official rate of inflation. That’s as determined by the Labor Department’s Consumer Price Index for urban wage earners based on the rise of living costs from the current third quarter (July, August and September) over the third quarter for the previous year. That will be computed and announced in early October. Currently some specialists who track it say the COLA could come in around 6%. But this is now, and based partly on the fact that the year to year increase dropped from 8.5% in March to 8.3% in April.