2015 COLA: What They Are Saying

By on October 24, 2014 in Current Events with 39 Comments

The cost of living adjustment (COLA) for 2015 was announced earlier this week. It came in at 1.7%. Since that time, various individuals and organizations have been sounding off on the news, and to put it mildly, they are unhappy.

This will be the third straight year that federal retirees, along with millions of Social Security recipients and disabled veterans, will receive historically small increases in their cost of living adjustment (COLA). There were two years (2010 and 2011) in which there was no COLA increase at all. The 1.7% increase is less than it was in 2012 when the increase was 3.6%.

Since this is an election year, the political rhetoric and blame surrounding the COLA and Social Security in general seems more terse than usual, and politicians are using Social Security as an election issue which is reflected in many of the statements being released about the COLA.

Here is a sampling of some of the comments that have been made about the 2015 COLA:

Congressman Paul Tonko (D-NY) condemned the COLA in a statement:

Headshot of Congressman Paul Tonko (D-NY)

Congressman Paul Tonko (D-NY)

“Social Security is a pledge to hard working Americans that they will retire with the dignity they deserve. The rising cost of groceries, gas, and other goods far outpace the extra $20 on average per month that seniors in the Capital Region and across the nation will receive as their cost-of-living-adjustment this year. In Congress, I continue to push legislation that would increase benefits for current beneficiaries while making Social Security stronger for future generations.”

Congressman Xavier Becerra (D-CA) said:

Headshot of Congressman Xavier Becerra (D-CA)

Congressman Xavier Becerra (D-CA)

“For over 58 million Americans, Social Security provides indispensable economic security, allowing them to live a life of dignity. In order to ensure that this earned benefit continues to help millions of Americans, beneficiaries will receive an automatic cost-of-living increase starting in January 2015 to address the rising prices of food, housing and other basic necessities. House Democrats will continue to fight to protect Social Security and make sure that this earned benefit will remain strong for generations to come.”

Senator Bernie Sanders (I-VT) said he was disappointed by the COLA and said Republicans want to make it worse:

Headshot of Senator Bernie Sanders (I-VT)

Senator Bernie Sanders (I-VT)

“For over 58 million Americans, Social Security provides indispensable economic security, allowing them to live a life of dignity. In order to ensure that this earned benefit continues to help millions of Americans, beneficiaries will receive an automatic cost-of-living increase starting in January 2015 to address the rising prices of food, housing and other basic necessities. House Democrats will continue to fight to protect Social Security and make sure that this earned benefit will remain strong for generations to come. As bad as that is, it could be a lot worse. Many Republicans believe that these cost-of-living adjustments are too generous. They want to significantly cut Social Security by enacting a so-called chained CPI.”

Sanders went on to say that under a chained CPI, the average senior who retires at age 65 would see Social Security benefits cut by about $658 a year when reaching age 75 and by about $1,100 a year once at age 85.

Senator Sherrod Brown (D-OH) said that a more realistic formula for the COLA must be used:

Headshot of Senator Sherrod Brown (D-OH)

Senator Sherrod Brown (D-OH)

“The budgets of many seniors are already stretched to the breaking point and the current COLA formula does not make a realistic estimate of seniors’ true cost of living. We must uphold our promise to seniors that they will receive the insurance they have purchased. That means moving to the more realistic CPI-E formula.”

The American Federation of Government Employees president J. David Cox, Sr. had only one positive thing to say about the COLA:

Headshot of J. David Cox, Sr.

J. David Cox, Sr.

“At least the modest 1.7% increase for retirees is better than the paltry 1% wage increase current federal employees will receive next year. Federal employees are just now coming out of an unprecedented three-year pay freeze and are seeing their wages cut as they are forced to pay more into a retirement system that is fully funded.”

National Active and Retired Federal Employees Association president Joseph A. Beaudoin said:

Headshot of Joseph A. Beaudoin

Joseph A. Beaudoin

“Despite the partial relief this 1.7 percent COLA will provide, the announcement is a reminder that our method for calculating the increasing cost of goods and services is out of sync with the reality faced by millions of federal annuitants, Social Security recipients and military retirees, who spend more than twice as much on medical care than the population measured by the current CPI-W formula. The average 3.8 percent increase in health care premiums for federal employees and retirees in 2015 shows that medical costs continue to outpace the COLA as it is calculated presently. We need a cost-of-living formula that doesn’t force these Americans to take one step forward, then two steps back.”

FedSmith.com users have weighed in on the discussion as well. Here are some of the comments they have shared:

User Scottr350 said:

“I am thankful for any COLA that I receive. Low COLAs mean low relatively low inflation.”

User Brad Howard said:

“The politics here are pretty clear. SS recipients vote both ways so those in power want to keep them happy. The vast majority of government employees vote one way…and that has come to hurt them. Why? The so called conservatives on the right believe that most government workers vote for the other side so they flat out have disdain for them. The so called liberals on the left believe they have the vast majority of government workers are in their pocket so they will vote for their side no matter what, through thick or thin. And so since the so called liberals believe that they can get away with spending money that could otherwise go toward fair pay adjustments on other things such as health care subsidies, stimulus, more favorable increases for SS recipients, etc. It’s a paradigm that can only be reversed if the big government unions start more evenly supporting candidates from both sides — so that one side does not believe that they are hated by government workers and the other side does not believe that the have the government workers’ support through thick ‘n thin.”

User HappilyRetiredFed said:

“It’s better than nothing, but still not enough to keep up. When was the last time we got a 3% increase? Definitely before I retired.”

User Fed_Peasant said:

“Seniors vote & a major election is two years away. A “new” COLA formula would be no surprise, to cater to that demographic.”

Have other thoughts on the subject? Feel free to share your opinion in the comments below.

© 2016 Ian Smith. All rights reserved. This article may not be reproduced without express written consent from Ian Smith.

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About the Author

Ian Smith is one of the co-founders of FedSmith.com. He enjoys writing about current topics that affect the federal workforce. Ian also has a background in web development and does the technical work for the FedSmith.com web site and its sibling sites.

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