SSA Cola Watch – September Report (Updated Monthly)

Background: Under current law Social Security determines whether there will be a COLA for the succeeding year and its amount in October each year by comparing the average CPI-W (Consumer Piece Index – Urban Wage Earners And Clerical Employees) for July through September of that same year to the average CPI-W for July through September of the last year which produced a COLA. I call this the “baseline .” This year, the baseline we are working from is the period from July through September, 2008, which generated a 5.8% COLA in 2009.

The Baseline CPI-W Amounts

July 2008 CPI-W: 216.304

August 2008 CPI-W: 215.247

September 2008 CPI-W: 214.935

2008 Average CPI-W: 215.495. This is shown as the bottom purple line on the graph below, and is the threshold we must exceed to receive any sort of COLA in 2012..

The Current CPI-W

The remarks which follow pertain to the CPI-W, not the CPI-U.

According to the Bureau of Labor Statistics (BLS), the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) increased 0.3% in August 2011 to an index level of 222.326 (1982-84=100).

Categories

Food and Beverages increased 0.6% in August and 4.5% over the past twelve months.

Housing increased 0.1% in August and 1.7% over the past twelve months.

Apparel increased 2.4% in August and 4.3% over the past twelve months.

Transportation was unchanged in August and increased 12.9% over the past twelve months. Gasoline decreased o.5% in August and increased 32.5% over the last twelve months.

Medical Care increased 0.2% in August and 3.3% over the past twelve months.

Recreation increased 0.0% in August and 0.2% over the past twelve months.

Education & Communications increased 0.6% in August and but only 0.3% over the past twelve months.

Other Goods & Services increased 0.2% in August and 1.1% over the past twelve months.

You can see the entire report at Consumer Price Index Summary. The CPI-W figures are in Table 4, a link to which is at the bottom of the page.

Current CPI-W Amounts

December 2010 CPI-W: 215.262 (+ 0.24%)

January 2011 CPI-W: 216.400 (+ 0.53%)

February 2011 CPI-W: 217.535 (+ 0.52%)

March 2011 CPI-W: 220.024 (+1.14%)

April 2011 CPI-W: 221.743 (+0.78%)

May 2011 CPI-W: 222.924 (+1.01%)

June 2011 CPI-W: 222.522 (-0.2%)

July 2011 CPI-W: 222.686 (+0.07%)

August 2011 CPI-W: 223.326 (+0.29%)

There are 5 colored horizontal lines on the graph. The lowest one, at 215.495, is the baseline CPI-W, which has to be exceeded in July through September for there to be any COLA in 2012. The other lines, at 217.650, 219.805, 221.960, and 224.155 are the CPI-W amounts needed for COLAs of 1%, 2%, 3%, and 4% respectively.

We are now 2/3 of the way through the three month period which determines the COLA. The average of the July 2011 CPI-W amount of 222.686 and the August 2011 CPI-W amount of 223.326 is 223.006. When compared to the average for July through September 2008, the baseline, 215.495, this would generate a COLA of about 3.49%. I believe SSA rounds this to the nearest tenth of a percent, so they would calculate the COLA to be 3.5% with the current data. I expect that the CPI-W will continue its increase in September. Anything above 223.006 would raise the average. I do not think the rate of increase will change much, perhaps another 0.3% or so. (By the way, this amount of increase in September would generate a COLA of about 3.6%)

The next report from the Bureau of Labor Statistics, showing the September 2011 CPI-W, is scheduled to be released Thursday, October 19 at 8:30 AM EDT.

Medicare

This information is also repeated essentially verbatim from preceding reports, and is repeated here as a reminder.

If we get a Social Security COLA in 2012, Medicare Part B premiums will increase by a significant amount.

Part B premiums have been kept at the 2009 amount, $96.40, in 2010 and 2011, for about 75% of beneficiaries who were eligible for Part B prior to January 2010. According to law, the Social Security check amount cannot be decreased, so beneficiaries entitled before January 2010 could not have their Medicare Part B premiums increased. The Trustees project that the 2012 Part B premium amount will be $111.40, based on the assumption that there will be a COLA in 2012. This is an increase of $15.00.

The average Social Security beneficiary receives $1170.00 per month. Let’s say that we do get a 3% COLA in January, 2012. That would mean that the COLA to a beneficiary receiving the average amount would be an increase of $35.00. That beneficiary’s Part B Premium increase of $15.00 would be deducted from this, leaving a net increase of $20.00 per month.

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5 Responses to SSA Cola Watch – September Report (Updated Monthly)

  1. marcus says:

    Thank you! very informative as usual.

  2. revenuer says:

    This comment is actually from Robert Dolan. Due to some glitch in the Word Press software, it was deleted by accident when I responded to it.

    Mr. Dolan’s comment:

    It is a shame, that our Senators, and Congressmen receive a salary of $174.000 a year plus have the best Health Care Plan in the world, and receive all the Perks that go with it, our tax dollars. Also receive a raise every year on their salary, and receive a pension which is the same as their salary, that is absurd. How many people do you know receive the same pesnion as what their was, only our Government Officials. They have the nerve to give maybe a 1 to 3% raise as a COLA raise. If a person is receiving $800 dollars a month social security, they would get a raise of $8.00 a month up to $24.00 a month, that is absurd and downright degrading. I would like to see our Senators and Congressmen live on $800 a month. Our officials forget who worked and built this great nation of ours, which is and has been going to the dogs for quite some time. Start getting off you rear ends and start doing and providing for the American People who elected you into office, it is our money that we paid into the Social Security System for many years, and we deserve to have it after we retire. Our government officials have to put God back into our nation and back into their decisions, this country used to be a nation under God until you people in office destroyed that. God will forgive you, for you know not what you do.

    A very dissapointed American, one who used to be proud of this nation and it’s government, and what it used to stand for, but our government elected officials are destroying all of that, day by day.

    • revenuer says:

      Robert,

      As I stated in another reply, by law congress is given the same COLA rate and the same health insurance plan as regular civil service employees. They grandstand and turn their COLAs down, usually. After all what is the odd 3% to them when they profit by “contributions” from those who can afford to make them and want to buy legislation. And as a former civil servant, I am fairly sure that even if they have the same health plan as Potluck and I, theirs takes care of them a lot better. I would like to see them try to manage as most people in this country do day in and day out. They wouldn’t be able to cope. I am thinking of Republican Congressman Walsh in particular right now. He owes $100,000 in back child support and recently said he couldn’t make it on a “penny less” than $400,000 per year. Still he won’t take care of his own children. In my mind that makes him a bad father and a poor excuse for a man.

      Their pensions are the same as all federal employees, administered under the same rules.

      You can still be proud of this country, Robert. The country and its people are not the same thing as the politicians elected to run it. They are supposed to be working for us but no one has held them accountable for years. It is time we start. There is still a lot of good in this country. In the constitution which they ignore but need to adhere to, and in the way we try to help each other when we can. It is time now to stand up and put the worst of the politicians out of office and for each of us to do what we can to help make this the country we want it to be. We won’t always agree, but a diversity of ideas is good. What is happening now happens because people let themselves be manipulated into walking in lockstep and keeping quiet. Now is the time to stop. One thing you could do now and that we can all do is to contact our representatives and the White House and tell them what we think they are doing wrong and what we want and expect of them. If they heard more
      from us
      maybe we would get a better result. It is worth a try isn’t it?

  3. Bill says:

    I think you meant “The Consumer Price Index for September 2011 is scheduled to be
    released on Wednesday, October 19, 2011, at 8:30 a.m. (EDT).” (not thursday oct 19 as reported).
    Thanks for your great website, it is really helpful.

    • revenuer says:

      We did. 😉 When Potluck is up to it he will edit his post to reflect the change. He was tired and in quite a bit of pain when he was typing that. This is one of the things I like about having a blog. We research as much as possible before we post anything, but we know that if we accidentally botch a detail our readers will point it out to us. That is a good thing and one of the reasons I like to check out my news on blogs before I decide what is what.

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