Aug 14, 2015

Happy birthday Social Security - but no COLA gift for seniors in 2016

Happy 80th birthday, Social Security! President Roosevelt signed the groundbreaking program into law on August 14, 1935. While celebrating the profound improvement the program has made in the lives of millions of older Americans, there is one piece of not-so-great news just ahead: It looks like there will be no COLA increase next year. The final announcement will be made in October, but unless there is a dramatic uptick in the Consumer Price Index soon, seniors' checks will remain unchanged next year.

Some argue that tying Social Security increases to the Consumer Price Index shortchanges beneficiaries. Among them is U.S. Rep. Alan Grayson of Florida. He contends that the CPI factors in prices for goods such as gasoline that don't have that much of an impact on most seniors. Instead, Grayson wants Social Security to base cost-of-living increases on the Consumer Price Index for the Elderly (CPI-E), a statistic that puts greater weight on items such as health care that figure more importantly in seniors' lives.

Of course, this is not Social Security's only problem. With an election months away, the system is under more intense scrutiny than usual. Nearly 10,000 Americans turn 65 every day. With fewer workers to keep the system solvent, and retirees living longer than President Roosevelt could have imagined back in 1935, the system is under immense strain. Its problems will be resolved. They must be. The real question is, how?

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