RSSSocial Security Cost of Living Adjustments (since 1975)
Each year, the Social Security Administration computes a Cost of Living Adjustment (COLA) for the payments it makes to beneficiaries which attempts to ensure that spending power of beneficiaries is preserved. The annual COLA has been mandated by federal law since 1975. Prior to 1975, social security payments were adjusted by legislation.
The first automatic COLA, for June 1975, was based on the increase in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) from the second quarter of 1974 to the first quarter of 1975. The 1976-83 COLAs were based on increases in the CPI-W from the first quarter of the prior year to the corresponding quarter of the current year in which the COLA became effective. After 1983, COLAs have been based on increases in the CPI-W from the third quarter of the prior year to the corresponding quarter of the current year in which the COLA became effective.
The COLA for 2008 is set at 5.8%, the largest increase since 1982, primarily due to significant inflation in fuel and food prices during 2008. You can see the computation of the COLA for 2008 at the Social Security Administraton.
Interestingly enough, the current legislation enacted in 1983 does provide for suspension of Cost of Living Adjustments, if the combined assets of the Social Security trust funds are below 20 percent of annual expenditures. (This limitation only applies to Social Security; SSI would be unaffected.) Such limitation has not occurred in the past, nor does it affect the current COLA determination. The combined trust fund assets at the beginning of 2008 are estimated to be 359.0 percent of 2008 expenditures.
2 Responses to “Social Security Cost of Living Adjustments (since 1975)”
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December 12th, 2008 at 12:01 pm
seems to me that social security has been holding steady,but medicare and medicaid keep rising. there seems to be a need for a national health care program which could be partly funded by a sliding payment schedule and a prescription program that realy works and a health program with 2 or 3 payment levels were gov. payment and private insurance payment could be incorparated so that both could work hand and hand that way people who want private insurance would pay for it and another payment schedule for the gov. funded ins. at another rate why not have it that way so that everyone would be covered and the doctors and hospitals could take either or both as we are doing anyway but move up the payments given to the docs. and hosp. by medicare and mediciad with out all the paper work
December 19th, 2008 at 11:02 am
J0hnny175, I know this takes the discussion away from social security. But your idea takes the payment of medical even further away from the person receiving medical care. It sounds good to have both the government and private insurance paying for medical coverage, but that money has to come from somewhere.
The primary problem with our healthcare system is that we spend more money on medical care than we have. Howard Dean of all people came out and said such here (http://www.reason.com/blog/show/130609.html). People are going to have to be responsible for their healthcare otherwise we are going to bankrupt our country trying not to be the bad guys. The worse part of what we are doing now is passing our bills (including medical bills) to the next generation which will in effect have to pay for our medical bills, and worry about their own.
So I see two main things needing to be done. One, we need to determine how much we are willing to spend on our healthcare and how we are going to raise the money. Two, we need an unending push to do everything we can to make healthcare cheaper and more efficient.
Last note, the best way to make something inefficient is to get the government involved. The second best way is to get a large corporation involved.