2022 cola increase4/11/2023 ![]() ![]() ![]() “Since taking office, Commissioner Saul has undermined and politicized Social Security disability benefits,” a White House official said this week. But the administration relied on a recent Supreme Court decision to fire the agency head at will and seek a replacement to fulfill the president’s agenda. Saul, a Trump-era appointee, was scheduled to serve his six-year term through 2025. But any future Social Security reform will require bipartisan action - something that’s in short supply following the president’s firing of Social Security Administration Commissioner Andrew Saul last week. President Biden campaigned on strengthening Social Security, increasing benefits for vulnerable populations, including boosting minimum benefits for the poor and extremely old, offering credits for caregivers, and increasing payroll taxes on those earning $400,000 or more to help pay for those expansions in benefits. There has been no indication when the 2021 trustees report will be released. But last year’s report did not take the pandemic into account. At that point Social Security would be able to pay only 79% of projected benefits unless Congress acts before then. The last report, released in April 2020, forecast the trust fund would run dry in 2035. Social Security watchers are anxiously awaiting the latest Social Security trustees’ report for an indication of how the economic fallout of the pandemic has affected the trust funds. The critical retirement, disability and survivor benefits program paid out over $1 trillion in benefits to about 65 million Americans last year. The trust funds are expected to be exhausted within the next 15 years unless Congress acts before then to address the long-term solvency of Social Security. Those trust funds continued to grow for about 25 years before Social Security began tapping them in 2010 to augment benefits as the first wave of baby boomers started retiring in the wake of the Great Recession. Johnson said she was flabbergasted by the huge jump in June CPI. It is based on the increase in the average CPI for the third quarter of 2021 over the previous year’s third quarter. The official COLA for 2022 will be announced in October. “Much of today’s inflation is due to reopening factors and supply constraints, but as supply chains normalize from Covid-related shocks and inventories are rebuilt, we expect much of the recent inflation will be more transitory, with some longer-term stickiness in pricing pressure.” “Today’s robust inflation data surprised in its strength and price increases which will likely persist in the short term,” said Rick Rieder, chief investment officer for BlackRock’s Global Field Income Investment Team. ![]() If current inflationary trends continue through September, the result could be the largest annual cost-of-living increase in Social Security benefits since 1983. The June increase was the largest year-over-year increase since 2008.īased on the June CPI data, Mary Johnson, Social Security analyst for the Senior Citizen League, projects Social Security benefits could increase 6.1% in 2022, nearly five times the 1.3% COLA increase in January 2021. The Bureau of Labor Statistics reported that the consumer price index leaped 0.9% in June from the previous month and was up 5.4% over the past 12 months.
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