Government Shutdown Averted, But Social Security Cost-of-Living Adjustment Could Be Delayed
A government shutdown was narrowly avoided. Congress passed a last-minute bill to keep the government funded. However, this short-term solution could impact Social Security recipients.
What Happened?
Lawmakers reached an agreement to fund the government temporarily. This prevents a shutdown that would have impacted many federal services. The bill funds the government through mid-November.
Potential Impact on Social Security
The deal involves some accounting changes. These changes might delay the release of key economic data. This data is used to calculate the Social Security cost-of-living adjustment (COLA).
What is COLA?
COLA is a yearly increase in Social Security benefits. It helps retirees keep up with inflation. The COLA is based on the Consumer Price Index (CPI). The CPI measures changes in the prices of goods and services.
Why the Delay?
The government funding bill could affect the CPI data collection. A delay in the CPI data could push back the COLA announcement. This could mean beneficiaries won’t know their 2026 raise as early as usual.
How Big is the COLA?
The Senior Citizens League estimates the 2025 COLA to be around 2.6%. However, the exact amount will depend on the CPI data released later this year.
When is the Announcement?
Typically, the Social Security Administration announces the COLA in October. This is based on the September CPI data. If there are delays, the announcement could be pushed back to November or later.
What if There’s a Shutdown Later?
The current funding bill is temporary. Congress must pass another funding bill by mid-November. If they fail to do so, another government shutdown is possible. Another shutdown could further delay economic data and the COLA announcement.
What Should Retirees Do?
Retirees should stay informed about the COLA announcement. Check the Social Security Administration website for updates. It’s also wise to plan your budget carefully. A potential delay in the COLA should be considered.
Looking Ahead
The temporary funding deal averts an immediate crisis. However, the potential impact on Social Security COLA highlights the need for stable government funding. Beneficiaries should monitor the situation closely.
Source: usatoday.com
