10:18 AM EDT, October 30, 2013
Social Security beneficiaries will receive a 1.5 percent raise next year, the Social Security Administration announced today.
Also, the agency announced that the amount of earnings subject to the Social Security tax is going up next year from $113,700 to $117,000.
According to the National Committee to Preserve Social Security & Medicare, the typical beneficiary will receive a $19 per month raise.
“Seniors know all too well, their living costs often outpace the COLA increase and a 1.5% increase is anything but too generous,” said Max Richtman, president and CEO of the group.
The increase comes at a time when lawmakers are likely to take up whether to change how the government measures inflation as part of budget negotiations.
Some economists say the current yardstick overstates inflation. The result is that the government collects less in taxes than it should because income levels for tax brackets and deductions are higher than they should be, economists say. And, they add, the overstatement of inflation means that Social Security pays more to beneficiaries than it should, too.
Republicans have backed moving to the so-called Chained Consumer Price Index that tends to report inflation at a lower rate. This index takes into account that consumers will make substitutions when prices rise, such as switching from high-priced strawberries in the fall to cheaper pears.
President Obama has signaled his willingness to go along, provided seniors get periodic bump-up in benefits and other guarantees.
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