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Federal News Radio
Unsolved
mysteries...like your COLA!
By Mike Causey
Friday - 9/26/2014
Do you believe our government is telling the truth or concealing
details about some very important things? Such as...
* Some people firmly believe that Lee Harvey Oswald was not the lone
gunman in the JFK assassination.
* Some people genuinely feel that somewhere in Wright- Patterson AFB in
Dayton there is a room containing the remains of a space alien and his
(her) craft that crashed in 1947 near Roswell, New Mexico.
* A lot of people — most of them retirees — believe that Uncle Sam is
either cooking the books or, at best, using a faulty system to track
inflation. People who get Social Security benefits, civil service
retirement annuities or retired military pay are indexed to inflation.
Unlike many private sector pension plans, where benefits are frozen at
the time of retirement, the federal program is designed to protect
retirees from inflation. If living costs go up, they get a
cost-of-living adjustment (COLA) each January.
If the cost of living goes down (deflation), as has happened, retiree
benefits do NOT drop. The inflation escalator only runs one way ... up!
To many people, being indexed to inflation seems like a good deal. But
some have problems with the way living costs are measured.
In January 2014, the retirees got a 1.5 percent COLA. That reflected
the rise in the Consumer Price Index from the third quarter (July,
August, September) of 2013 over the third quarter of 2012.
Earlier this year, using the same CPI program, retirees were
tentatively on track to get a 1.9 percent raise in January 2015. Then
that amount dropped to 1.8 percent and, as reported here Thursday, it
is down to 1.6 percent. The final figure for the 2015 COLA won't be
known until mid-October when the Bureau of Labor Statistics announces
the September numbers.
While nobody knows what that magic COLA number will be, it is sure that
a lot of people won't believe it. Some think the system is flawed. That
the BLS should use a different measure that takes into account goods
and services that retirees use most. Others believe the government
knows exactly what it is doing and that it is low-balling the numbers
to hold down expenses. About one in every six Americans benefits from
the January COLA. That means that even a small increase, like 1.6
percent or less, would cost a ton of money.
Typical of the many complaints about the COLA-determining process is
this comment from retiree Bob Lancione. He writes:
"Mike, there is no doubt in my mind that they manipulate the COLA.
There was no way they were going to increase social security or the
retirees' pay by 2 percent this year. They manipulate the gas prices
any time they want because that is the major thing that drives the
COLA. Food prices are still high — bacon and seafood are outrageous.
When is somebody finally going to expose what is going on??"
Nothing out of Washington is simple. Whether your believe the system is
fair, foul or fowl, all agree that the process is complicated...
Causey offers an example, check it out at Federal News Radio
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