CBO Projects No Cost-of-Living Raise for Next Three Years

In his blog today, Douglas W. Elmendorf, the director of the Congressional Budget Office, announced that he does not anticipate that retirees, specifically those receiving Social Security benefits, will receive a cost-of-living adjustment (COLA) in January. Since by law, military retirees receive the same COLAs as Social Security beneficiaries, their won’t be any COLA for them in January either.

Looking forward, Mr. Elmendorf believes that inflationary pressures will be very low over the next few years and that the next cost-of-living adjustment will come in January of 2013, and is projected to be 0.8 percent.

even though CBO is projecting price increases in fiscal years 2010 and 2011, those annual price increases would not be large enough to offset the price declines that have already taken place in recent months.

Beneficiaries in other federal programs, including civil service and military retirement, and those drawing veterans’ compensation and pensions, also will not receive COLAs in 2010, 2011, or 2012, by CBO’s projections, because their COLAs are tied to Social Security’s under current law.

Mr. Elmendorfs explaination can be found at http://cboblog.cbo.gov/?p=235

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