WASHINGTON, DC, Jan 25 — For the second year in a row the Social Security Administration promised seniors big boosts in their Social Security checks to help them cope with the Biden administration’s inflationary spiral – a 5.9% Cost of Living [COLA] bump in 2022 and a whopping 8.7% increase in 2023. But an analysis by the independent Senior Citizens League [SCL] shows that last year’s increase missed the mark by 46% a month and this year it’s “too early to say how well the 8.7% COLA will keep pace with inflation in 2023.”
Indeed, inflation hit the country hard last year, particularly among seniors, when it hovered in the 9%-plus high in 2022. It has come down to an uncomfortable 6.3% in the new year, still too high for too many of America’s elderly citizens. And it looks like things are getting worse. Despite the fact that the Consumer Price Index [CPI] came down in December, it was by just one-tenth of one percent.
But essential food prices have continued to increase. Will Luther, the American Institute for Economic Research’s Sound Money Project, recently told Newsmax that the CPI report is deceiving; food prices are still on the rise. Luther said, “The increase in food prices is unfortunately even higher than it seems by looking at year-on-year growth in the CPI release…I don’t think there’s any reason to think food prices will come back down to a level consistent with average price growth we have seen over the past couple of years. Prices will, unfortunately, remain elevated over the next couple of years.”
The Newsmax report cites American Institute for Economic Research economist Peter C. Earle, who agrees food prices “broadly are still rising.” However, they are rising more slowly than they were a few months ago and that a decline will be particularly gradual “because agriculture and other food-related businesses are still reeling from the pandemic policies.”
In her analysis, Mary Johnson, SCL’s Social Security and Medicare policy specialist, says “inflation appears to be moderating but will Social Security recipients ‘catch up’? Inflation as measured by the same index that’s used to calculate the cost-of-living adjustment was 6.3% through December. That’s lower than the new 8.7% COLA starting this month. Will 2023 be the year that seniors catch up? Before anyone can answer that question, we first need to have a measure of just how far Social Security benefits fell short due to cost-of-living adjustments that didn’t match up to actual inflation.”
In fact, a Motley Fool survey found that 55% of respondents said that the 8.7% cost-of-living adjustment wasn’t enough. In its report on the survey, the Motley Fool noted that “there’s a great deal of disagreement over how important Social Security benefits are to retired Americans.” So they included the question in their survey and 70% of them said they rely on their Social Security payments.
Kaiser Health News [KHN], meanwhile, reports that 54% of older women living alone and 45% of single men are “either poor according to federal poverty standards or with incomes too low to pay for essential expenses.” KHN quotes the Gerontology Institute, which revealed “that nearly 5 million older women living alone, 2 million older men living alone, and more than 2 million older couples had incomes that made them economically insecure…Nationally and in every state, the minimum cost of living for older adults calculated by the Elder Index far exceeds federal poverty thresholds, which are used to calculate official poverty statistics.” And that was before inflation soared to more than 9%.
John Grimaldi served on the first non-partisan communications department in the New York State Assembly and is a founding member of the Board of Directors of Priva Technologies, Inc. He has served for more than thirty years as a Trustee of Daytop Village Foundation, which oversees a worldwide drug rehabilitation network.
Not really sure what the purpose of this article is beyond stating the obvious. Obviously the real rate of inflation in both 2021 and 2022 exceeded the SS COLA increases granted in both years, so the net net effect to the average SS recipient was a loss of purchasing power in both years. I think just about everyone already understands that.
Social Security was NEVER designed to be one’s sole source of income in retirement. It was designed to be a supplimental source to other retirement income sources. Anyone living solely on SS in retirement will always be losing ground, when it comes to inflation exceeding whatever COLA is granted year over year. The SS program is only allowed to invest whatever surplus funds it has in ultra-low U.S. Treasuries, which are hardly designed to produce dividend yields above the rate of inflation. That was an intentional component of how the program was originally setup to function, as SS was primarily designed by the FDR administration to provide a steady stream of income to the federal government by means of a locked-in buyer, the American worker, to its Treasury bonds.
If people desire the SS program to be able to function as a full-blown, standalone retirement program on its own, one capable of providing a solid middle income lifestyle all by itself, then the SS program needs a complete top to bottom redesign and it wouldn’t look much like the current system now. Which means it will NEVER be done, as it would be mostly private based and the United States government would lose one of its largest buyers of Treasury bonds via FICA taxes. So the situation remains status quo at best. No one really happy, but the alternative approaches not being politically viable.
The Western Europeans have largely gone the government controlled route by creating huge social welfare economies with predictable results. Economic growth has been stagnant all across Europe for decades. Taxes all across the continent are substantially higher than here in order to fund the beast and most seniors over there are ALL still complaining that whatever benefits they receive are still NOT ENOUGH to offset annual inflation rates that higher than here. So that system has already been proven to be a huge failure on multiple fronts.
Social Insecurity COLA’s have never enough to keep up ever increasing cost of living. The current inflation started three years ago with the Wuhan virus shut down of businesses and shipping of goods. The current administration is about as useless as I can ever remember in my 73 yrs. Obama made Jimmy Carter look good FJB has turned Carter into a stellar performer.
8.7% COLA for 2023, Hilarious,since DICTATOR Beijing biden’s INFLATION has INCREASED OVER 500% and CLIMBING since January 21, 2021.
Last year’s COLA raise was a JOKE too.
We have been in the Hole for 2 years straight going on 3.
We didn’t get more money. We got LESS money and we are PAYING MORE and HAVE MORE TAXES.
Just like when Obama was in . Don’t forget that BIG $1.00 COLA raise we got in his last year while Medicare Premiums JUMPED UP by $20.00 including Food and Fuel outrageous prices till
PRESIDENT TRUMP put money back in our pockets and made us
ENERGY INDEPENDENT and #1 in
the WORLD.
Democrats don’t care about seniors. They only care about their corrupt schemes to fill their pockets.
I was “effected” by God and my birth parents. And, yes, I am affected by these idiots in the admin. I think you need to be careful of these homonym issues. I’ll volunteer to screen your stuff if you’ll give me some hours to work. I’m an inveterate editor.
Thanks to Pax Americana our generation lived the life that dreams are made of There has not been anything like it ever before It will be some time before it happens again .
… everything on my 2023 budget was well up, over 8.7%. Not one darned thing on my 2023 budget is less than 8.7%, year over year, from 2022 –
I don’t know where they get that 8.7% figure from, the essentials food and gas are up well over that mark. I’m guessing it’s just another lie to keep us from getting OUR money back that we paid into Social Security!
I vote that only people who have actually paid into SS get to reap the benefits. That is my money and I don’t feel like sharing.
Reagan started taxing SS at 50% in 1984. For joint, there was a $32K income exemption. For 38 years, this number has not changed a single $ with inflation.
Clinton started taxing SS at 85% in 1994. For joint, there was an additional $12K income exemption. For 28 years, this number has not changed a single $ with inflation.
Besides inflation eating at spendable income, the Senior tax rate is going up every year.
The correct word here is affected, not effected.