Government: No benefit hike for Social Security next year

[mahatmakanejeeves]

Source: Associated Press via the Washington Post

Politics

Government: No benefit hike for Social Security next year

By Stephen Ohlemacher | AP October 15 at 8:48 AM

WASHINGTON — There will be no benefit increase next year for millions of Social Security recipients, disabled veterans and federal retirees, the government said Thursday. ... It’s just the third time in 40 years that payments will remain flat. All three times have come since 2010.

And there’s more bad news. The lack of a benefit increase means that many older people could face higher Medicare costs, an issue that has advocates lobbying Congress. ... The main reason for no increase next year is low gas prices.

By law, the annual cost-of-living adjustment, or COLA, is based on a government measure of inflation. That gauge came out Thursday.
....

The cost-of-living adjustment is based on the Consumer Price Index for Urban Wage Earners and Clerical Workers, or CPI-W, a broad measure of consumer prices generated by the Bureau of Labor Statistics. It measures price changes for food, housing, clothing, transportation, energy, medical care, recreation and education.
....

Copyright 2015 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.


Read more: https://www.washingtonpost.com/politics/millions-of-social-security-recipients-to-learn-cola-fate/2015/10/15/6c2e8efe-730f-11e5-ba14-318f8e87a2fc_story.html

---

That BLS report is here: CPI for all items falls 0.2% in September; energy declines outweigh food, shelter...

The Associated Press provided these links:

Online:

Social Security Administration: https://www.ssa.gov/

Social Security Interactive: http://hosted.ap.org/interactives/2015/social-security/

[procon]

1. Bummer. nt

[azmom]

2. Fuckers

[CharlotteVale]

3. So in effect cutting it.

[Recursion]

5. No, actually raising it. Keeping it even would involve a nominal cut (nt)

[CharlotteVale]

7. Try telling that to someone on SS paying more for everything.

And not more money to pay for it with.

It's a cut. No other way to spin it and it amazes me anyone would try.

[Recursion]

10. They aren't. There is no such person.

You're lying if you're saying there is such a person.

That's what the CPI is: a study of how much people are paying for things.

[CharlotteVale]

12. You make zero sense and your name calling is childish.

And I am done with this conversation.

[Recursion]

13. Name me a person losing money.

One person.

[tavernier]

25. I'm sure you're right in someone's numbers study,

but at my grocery store, the price of meat and produce has nearly doubled, due to the loss of crops from climate problems these past two years, I'm told. Paying twice as much for provisions on the same income definitely means Losing Money in my book.

P.S. And as far as eating out, ironically the only place I can afford to get a steak these days on our retirement salary is the Indian casino restaurant 100 miles away.

[Igel]

31. It's a mixed bag.

My mother was like that. She'd look at what she bought and only see the price increases.

If she was asked if anything decreased, she'd bitterly say, "No." Then if you pointed out things that decreased in price she'd get increasingly irritated at having the facts refuse to spin leftward on command until finally she'd just get up and leave. Or become openly hostile.

The CPI is a piss-poor measure of inflation for retirees. There was an attempt to alter it, but it would have meant lower that COLAs. Why? Because energy prices were skyrocketing. While seniors use less gas on average than younger workers, even "covert" gas usage like buses and the like, their COLAs were pegged to a "basket" of consumables more like something a 30- or 40-something would buy. Their COLAs were higher than an actual consumer price index tailored to their needs would have given them. It benefited them.

Hence the outrage at the very idea of adjusting the CPI used to be what retirees actually bought. They'd have gotten less money than they did.

I figure that the politicians and advocates and their supporters got what they wanted. A CPI that's applied to retirees but reflects mostly what younger workers actually encounter. The only hitch is that now it's crystal clear that the alternative CPI would yield them a fairly good COLA ... now. The CPI that they insisted on retaining then yields them no increase in money now, so now it's evil.

100 miles. Probably 3, 4 gallons of gas. So that's going to be probably $9-15 one way, plus wear and tear on the vehicle. (Assuming no bus, in which case your savings are less.)

[haele]

27. The way CPI is figured for SS and other safety net programs both assumes and doesn't consider a lot.

The CPI survey used for support programs assumes that if the steak and fresh veggies gets too expensive, people will switch to ground beef and canned or frozen veggies. That people will forgo purchasing individual meal portions of fresh produce and stock up on sale, bulk, or ding and dent food and household maintenance (i.e. cleaning, repair, and sanitary/medical) items - and somehow have the appropriate storage area available for those items. The assumption is that somehow, everyone already has access to fresh produce, steak, or goes to the store every day to purchase only those items they want for dinner, because that's the way shopping was done up through the 1960's, is done in many places in the world. CPI also does not take into account the cost of otc medicines, which are also not stable; they go up regularly, even if it's by nickels and pennies.

CPI assumes that people that require SS or safety net programs have stable housing costs that do not rise, such as a paid off house (with no or stable property taxes), a fixed mortgage, or a rent-controlled housing. Which is news to most renters or low-income property owners, who typically see rents and/or fees assessed on residential property go up annually by incremental amounts.

CPI does not take into account sales taxes and use fees, which are increasingly being used to offset "cutting" taxes on upper level incomes and businesses.

CPI does not include transportation costs or the associated costs with having transportation. Public transportation costs increase at least biannually every place I've been. The cost to own, license, and maintain a vehicle increases, because license fees are being increased, going to a shop for parts, repairs, or annual services keeps going up, even though the price of gas falls.

CPI does not include utility costs. Water and electricity is going up across the board, so even if the person is in good health, lives in a rent-controlled location, walks everywhere, and is a frugal shopper, there is still a increased cost just to do washing, use the refrigerator, heating and cooling, and turn on the lights.

CPI assumes a lot - that a person will cut current expenses and make a few "small" sacrifices to get additional income to offset any minor increases in housing, utilities, transportation, or additional costs of living that can be considered voluntary. Small sacrifices like selling off personal items or collections that are not being "used" (no matter the personal value they might have, or the effort it took to build a collection, or if items are intended to be passed down to a child or grandchild), giving up a car or pet, taking in a boarder, or walking instead of taking the bus. That they would purchase clothes from discount, consignment or thrift stores instead of going to a major department store. The sort of sacrifices a reasonably healthy person would make when they find themselves in a temporary financial setback. Because there is "no inflation".

The problem is that even though there is not an "overall inflation rate" because gas prices are down and manufacturer's aren't upping the price of big ticket items like cars and TV's, there is still an inflation in prices of necessary services and products because of market pressures inherent to those categories - like housing, food, and utilities. While the inflation rate of products and services that the government uses to estimate CPI does have impact on the cost of living an individual faces, it is not the most significant impact. The market economy has the most significant impact. The revenue and profit "needs" of the businesses providing goods and services to the general public has the most significant impact on the ability of an individual to purchase what s/he needs to survive.
The CoL (Cost of Living) of a person on SS in rural Missouri is probably four to six times less than the CoL a person on SS living in the San Francisco Bay Area, even with the differential in transportation costs. While some people can live on what they're getting now, others can't.

Also, most people who are on SS, SSDI, welfare or other supplemental financial support programs that are pegged to CPI have already cut expenses and typically made the "small" sacrifices that it would be assumed that a reasonable and healthy individual would be able to make long before they ended up on those programs. There are quite a few people who will be hurt by a flat SS payment, even if there's an inclusion that Medicare part B premiums aren't going to go up for the seniors who aren't above a certain income level.

Too often, there's still the question of "do we get enough food for more than 400 calories a day, use electricity for anything other than the refrigerator and hot water heater, keep the cat or dog we've had for 10 years, or pay the entire rent for the month? Or do we just sell the beater we are driving now, and hope to be able to get to doctor's appointments and go shopping by begging rides from neighbors, walking, or taking public transportation?"

The philosophy in the US is that no one that needs SS for their primary form of income deserves to be comfortable, because obviously, they made poor choices. So when the government decides that since "as a whole, there is no inflation" and does not make allowances or a differential for local market conditions, there are people who won't feel more than a slight pinch, and then there are people who are living such that even $20 more a month could make a difference between starvation, paying the utility bills or eventual homelessness.
There is a philosophy that the "anti-big-government/free market" types like to espouse. The most important virtue is to be able to accumulate enough money and things to not have to worry about the future - for you or your children. One needs to be able to afford the services desired, otherwise that person is just taking unfair advantage and stealing from other people who work just as hard or harder. The idea of mercy or sharing common resources is just an excuse for lazy people. One's net worth is the only human value that should be considered.
Being unlucky, poor, disabled, or old - being without money to "pay your own way" is a now sin in the US. People who fall into any those categories must be punished until they learn their lesson and just disappear.

Haele

[mahatmakanejeeves]

30. Sherman, set the WABAC Machine for July 2015.

CPI for all items rises 0.3% in June as gasoline, shelter, food indexes rise

From the commentary:

Note that there is a:

Consumer Price Index for All Urban Consumers (CPI-U)

Chained Consumer Price Index for All Urban Consumers (C-CPI-U)

Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W)

The fine print goes into the distinction.

Here's the thread from three months ago about the March CPI:

CPI for all items rises 0.2% as gasoline and shelter prices rise; food prices decline

Cryptoad points out the significance of the CPI-W. It is used to calculate Social Security's Cost-of-Living Adjustment (COLA):

Based on the increase in the Consumer Price Index (CPI-W) from the third quarter of 2013 through the third quarter of 2014, Social Security and Supplemental Security Income (SSI) beneficiaries will receive a 1.7 percent COLA for 2015.

Consumer Price Index Frequently Asked Questions (FAQs)

[div style="display:inline; background-color:#FFFF66;"]What goods and services does the CPI cover?

The CPI represents all goods and services purchased for consumption by the reference population (U or W) BLS has classified all expenditure items into more than 200 categories, arranged into eight major groups. Major groups and examples of categories in each are as follows:
FOOD AND BEVERAGES (breakfast cereal, milk, coffee, chicken, wine, full service meals, snacks)
HOUSING (rent of primary residence, owners' equivalent rent, fuel oil, bedroom furniture)
APPAREL (men's shirts and sweaters, women's dresses, jewelry)
TRANSPORTATION (new vehicles, airline fares, gasoline, motor vehicle insurance)
MEDICAL CARE (prescription drugs and medical supplies, physicians' services, eyeglasses and eye care, hospital services)
RECREATION (televisions, toys, pets and pet products, sports equipment, admissions);
EDUCATION AND COMMUNICATION (college tuition, postage, telephone services, computer software and accessories);
OTHER GOODS AND SERVICES (tobacco and smoking products, haircuts and other personal services, funeral expenses).

The CPI-U is used by the Treasury Department to set the interest rates on I Bonds.

I Savings Bonds

How do I Bonds earn interest?

Interest on an I Bond rates is a combination of two rates:
1.A fixed rate of return which remains the same throughout the life of the I Bond

and
2.A variable inflation rate which we calculate twice a year, based on changes in the nonseasonally adjusted Consumer Price Index for all Urban Consumers (CPI-U) for all items, including food and energy (CPI-U for March compared with the CPI-U for September of the same year, and then CPI-U for September compared with the CPI-U for March of the following year).

[Igel]

32. Not entirely true.

What goods and services does the CPI cover?

The CPI represents all goods and services purchased for consumption by the reference population (U or W) BLS has classified all expenditure items into more than 200 categories, arranged into eight major groups. Major groups and examples of categories in each are as follows:

FOOD AND BEVERAGES (breakfast cereal, milk, coffee, chicken, wine, full service meals, snacks)
HOUSING (rent of primary residence, owners' equivalent rent, fuel oil, bedroom furniture)
APPAREL (men's shirts and sweaters, women's dresses, jewelry)
TRANSPORTATION (new vehicles, airline fares, gasoline, motor vehicle insurance)
MEDICAL CARE (prescription drugs and medical supplies, physicians' services, eyeglasses and eye care, hospital services)
RECREATION (televisions, toys, pets and pet products, sports equipment, admissions);
EDUCATION AND COMMUNICATION (college tuition, postage, telephone services, computer software and accessories);
OTHER GOODS AND SERVICES (tobacco and smoking products, haircuts and other personal services, funeral expenses).

Also included within these major groups are various government-charged user fees, such as water and sewerage charges, auto registration fees, and vehicle tolls. In addition, the CPI includes taxes (such as sales and excise taxes) that are directly associated with the prices of specific goods and services. However, the CPI excludes taxes (such as income and Social Security taxes) not directly associated with the purchase of consumer goods and services.

The CPI does not include investment items, such as stocks, bonds, real estate, and life insurance. (These items relate to savings and not to day-to-day consumption expenses.)

For each of the more than 200 item categories, using scientific statistical procedures, the Bureau has chosen samples of several hundred specific items within selected business establishments frequented by consumers to represent the thousands of varieties available in the marketplace. For example, in a given supermarket, the Bureau may choose a plastic bag of golden delicious apples, U.S. extra fancy grade, weighing 4.4 pounds to represent the Apples category.

http://www.bls.gov/cpi/cpifaq.htm#Question_7

It pays to note that the list of examples after each category is precisely that--not what they sampled, but the kinds of things they sampled. There are 200 categories, so that list is far from exhaustive.

There is no assumption that given higher prices consumers change their spending toward lower-priced alternatives. That would be a "chained CPI," which is one of the proposals explicitly discussed and vehemently rejected in the last decade. The CPI-W is based on expense diaries kept by those selected surveyed and surveyed from specific SESs and urban areas. If you're a lawyer, if you're in a rural area, you're not included.

[Scuba]

4. Why won't Obama fight for this like he's fighting for his TPP?

Oh yeah, he's a moderate Republican.

[Recursion]

6. My Lord you guys are dishonest.

Seriously, I'm incredibly disappointed here.

Social Security benefits are going up in real terms, and you have the gall to accuse the administration of cutting them?

Appalling.

[Scuba]

8. You're going to need to make a case that SS benefits are going up.

I'll wait.

[Recursion]

9. No, I don't. Seriously.

I literally don't have to do that.

Inflation was negative.

Nominal benefits were untouched.

There's simply no argument. Benefits went up. You are a liar if you disagree.

Inflation was negative. Nominal benefits were untouched.

Benefits went up, and I am incredibly disgusted with you right now. I thought you were an honest person, but clearly you're not.

[Scuba]

11. Food and housing costs both went up. That's the biggest expense for most SS recipients. The ...

... overall drop is due to dropping fuel costs. Since many of us don't drive, that does not convert to savings for us.

the indexes for food and for all items less food and energy both
accelerated in September. The food index rose 0.4 percent, its largest increase since May 2014. The
index for all items less food and energy rose 0.2 percent in September. The indexes for shelter, medical
care, household furnishings and operations, and personal care all increased

Source


Disagreement does not equal lying. Shame on you for saying that it does.

[Recursion]

15. They did not, and they are not

Neither food nor housing costs went up, and food and housing costs are not the two biggest expense categories.

Nice try!

[Scuba]

16. Are you saying the BLS is lying, but only about prices that went up?

Your posts on this thread are over-the-top. Maybe you should take a few deep breaths.

[Recursion]

21. You're right, Scuba, and I apologize

It's been a long day. You are clearly not saying things you actively think are untrue, and so my claims of dishonesty were way, way over the top, and I really apologize.

Sorry.

[Scuba]

22. Apology accepted. Hope your day gets better.

[Recursion]

23. Thanks, it seems to be.

I'll sit back and think for a while.

Though I'm also declaring a blood-feud against Issa, if you want to join.

[packman]

19. I understand what you're saying -

But quit with the "Liar" labelling - just state the facts and if one doesn't accept them, move on. You're a better poster and person for it. The problem lies in the word "benefits" - may be difficult to view something as a benefit that remains the same even though things around you are improving. Semantics -

[Recursion]

20. Sorry. You're right. Scuba, I apologize

You said that well.

[catnhatnh]

28. For people whose medicare costs are rising

they are losing and that is very obvious.

[jtuck004]

14. His donors wouldn't appreciate it. They prefer their older folks eating dog food. n/t

[Scuba]

17. Maybe we'll save money on airline travel and new cars. Yeah, that's it.

The indexes for shelter, medical care, household furnishings and operations, and personal care all increased; the indexes for apparel, used cars and trucks, new vehicles, and airline fares were among those that declined.

http://www.bls.gov/news.release/pdf/cpi.pdf

[tabasco]

18. Republicans control the House and Senate ...

therefore, the disabled and elderly are forgotten as compassionate conservatives fight for tax cuts for Paris Hilton.

[yellowcanine]

24. Gasoline prices should be less important in the formula.

Most seniors do not drive very many miles in a year so the effect of lower gasoline prices on their living costs is fairly minimal. Whereas prescription drug costs can have a disproportionate effect so that should be calculated in somehow. With our hodge podge system, many seniors end up paying a significant portion of their prescription drug costs.

[CountAllVotes]

26. True

What they go by is in this chart here:

http://inflationdata.com/Inflation/Consumer_Price_Index/HistoricalCPI.aspx?reloaded=true

Not that I agree with any of this.

Sickening if you ask me, plain sickening. Let one of these shills on the teevee try to living on abt. $900/month.

[ThingsGottaChange]

29. This needs to change!

Be nice if they based this on reality. So, gas prices are down. Us poor slobs on SSDI can afford more gas for our non-existent vehicles? Or maybe get a gallon or two once in a while to pour on our generic cereal? This is so fucked up and no one will do anything about it.

Meanwhile, I live below the young girl with two little kids who doesn't have to work, only has the kids some of the time, yet gets her rent and all utilities paid while she runs around all day and night in her newer SUV. Yes, I know this isn't the case with every mom. But, in the low rent complex where I have to live now, I see it every day. No incentive for these people to get a job. Thanks to all the funding cuts, no one to check to see if these folks are taking advantage of the system or not.

And so you know, I put in my over 30 years of work while having C-PTSD, depression, social anxiety, et al. I didn't have a choice. Oh, fuck it.

[Number9Dream]

33. Gas prices shouldn't outweigh everything else that has gone up

This is bullshit. Shame on the government.

[Le Taz Hot]

34. What do you want to be that right after the first of the year

gas prices spike up?