The government announced that because inflation was so low this past year. Americans receiving Social Security and federal retirees would not see a cost of living adjustment in their checks.
Washington claims that because of sluggish economic growth and a falling deficit, inflation was less than zero which won’t trigger the automatic increase in payments.
The Social Security payments freeze will have the most immediate impact on the largest group of Americans. The government reported that since the price index used to calculate inflation actually dropped last year, the law says there’s no need for a cost-of-living raise because the average senior’s expenses didn’t go up.
It’s just the third time in the last four decades that inflation was too low to earn seniors a raise, and seniors advocacy groups said it will be particularly difficult to swallow because a large number of elderly will still have to pay more in premiums and deductibles for Medicare, the government’s medical insurance for the elderly.
Advocates said Congress should change the formula to make sure the elderly and federal retirees, whose pension payments are also tied to inflation, get more money. Some groups also pleaded with Congress and the White House to find a way to inject more money this year.