The size of the Dec. 1 cost-of-living adjustment in military retired pay and Social Security will not be announced as scheduled this week if the government shutdown continues.
A COLA of about 1.5 percent is expected, but the official calculation cannot be made until the Labor Department’s Bureau of Labor Statistics releases the September index for the price of goods and services. An announcement on the BLS website says no reports will be released and no data collected until the government shutdown ends.
The increase is supposed to take effect on Dec. 1 and first appear in January checks.
The annual adjustment in retired pay and Social Security benefits is made by comparing Consumer Price Index results for July, August and September of this year to the same three months in the previous year. The missing ingredient is the September 2013 consumer data.
The COLA is automatic for Social Security recipients and military and federal civilian retirees, but an act of Congress is required for the increase to be extended to veterans’ disability compensation, veterans’ pensions and dependency and indemnity compensation.
The House has passed legislation to increase veterans’ benefits by the same amount as Social Security. The Senate Veterans’ Affairs Committee has passed similar legislation but a final bill has not yet been approved.
For the moment, a delay in calculating the COLA does not jeopardize payment of the increase in January checks, but the government shutdown and the additional threat that the U.S. could be in financial default as early as Thursday because it is running out of borrowing power, could result in problems paying federal benefits.
Treasury Secretary Jacob Lew warned Congress last week that Nov. 1 checks to government employees and retirees, to veterans and to Social Security beneficiaries could be reduced or delayed if the nation doesn’t have enough money to pay its debts.
Additionally, Veterans Affairs Secretary Eric Shinseki has told Congress that a government shutdown that extends into the last week of October could jeopardize veterans’ benefits checks even if the government borrowing issue is resolved, because VA won’t have enough money to make Nov. 1 payments for disability, survivor and education benefits.