Government Shutdown Delays Social Security Adjustments
WASHINGTION — The ongoing government shutdown has put a hold on the annual announcement regarding social security cost-of-living adjustments (COLA) for millions of beneficiaries. Initially set for Wednesday, the 2024 COLA announcement will now be released on October 24, coinciding with the forthcoming Consumer Price Index for September, which is yet to be published.
The Social Security Administration typically adjusts benefits yearly to account for inflation. The postponement of this announcement is a recent development, highlighting the challenges as the shutdown stretches into its third week with little resolution in sight—complicating financial planning for many.
According to projections from the Coalition on Aging and AARP, the COLA is expected to increase by around 2.7%. Roughly 70 million individuals rely on Social Security, including retirees, disabled persons, and children.
Beneficiaries have expressed worries that the increase may not be sufficient to keep up with escalating costs. Sue Conard, a 75-year-old retired nurse from La Crosse, Wisconsin, recently visited Capitol Hill with fellow retired members to advocate for meaningful progress regarding health care and Social Security reforms amidst the shutdown.
Conard mentioned that lawmakers should reconsider how COLAs are calculated, arguing that the standard Consumer Price Index (CPI) fails to encompass many expenses faced by older adults. “The way COLA is determined is fundamentally flawed because it overlooks medical expenses,” she stated on the steps of the Longworth House Office Building.
In response, some lawmakers have suggested using an alternative index, known as the Consumer Price Index for the Elderly (CPI-E), which would provide a more accurate reflection of seniors’ spending habits—particularly concerning health care and groceries.
Last Congress, Senator Bob Casey (D-Pennsylvania) introduced legislation aimed at altering the COLA calculation to CPI-E, but it did not receive consideration from the Senate Finance Committee.
AARP’s CEO, Miekia Minter-Jordan, noted that COLA is not merely a financial adjustment but a “lifeline of independence and dignity for tens of millions of older Americans.” Nonetheless, she pointed out that, even with the anticipated increase, many still struggle to meet basic needs.
Another recipient, Vanessa Fields, a 70-year-old retired social worker from Philadelphia, highlighted the impact of rising prices on her monthly grocery expenses, stating she’s spending around $1,000, which is an increase from her usual budget. “If lawmakers don’t take action, we’ll find ourselves in a serious predicament,” she warned.
The Social Security Administration plans to inform recipients about the new benefit amounts in early December. A representative from the agency, who spoke anonymously, confirmed that regardless of the government’s current funding issues, retirement and Supplemental Security Income benefits will still be adjusted as scheduled from January 1, 2026.
This delay in announcing the COLA comes at a time when the Social Security program is grappling with significant funding challenges, and the agency has recently seen substantial staffing reductions.
A report released in June by the Social Security and Medicare Administrative Board indicated that the trust fund is projected to deplete faster than previously estimated, with full benefits potentially unavailable by 2034 rather than the earlier forecast of 2035. If this occurs, beneficiaries could only receive about 81% of the scheduled benefits.
Furthermore, at least 7,000 of the agency’s 60,000 employees were laid off earlier this year, which has increased the workload for remaining staff who are tasked with managing claims and assisting an increasing number of beneficiaries.
