The U.S. Department of Labor will not issue the September Consumer Price Index report on October 16 as originally scheduled due to the federal government shutdown.
Without the September CPI figures, the Social Security Administration will not be able to calculate the cost-of-living allowance for Social Security beneficiaries for 2014. Normally, SSA issues its COLA announcement, which affects benefits as well as the inflation-adjusted taxable wage base for the following year, in mid-October.
A phone call to SSA, which is short-staffed due to the government shutdown, was not returned.
"The purpose of the COLA is to ensure that the purchasing power of Social Security and Supplemental Security Income (SSI) benefits is not eroded by inflation," according to the SSA website. "It is based on the percentage increase in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) from the third quarter of the last year a COLA was determined to the third quarter of the current year."
Last year, the COLA increased 1.7% for benefits and taxable wages in 2013. Earlier this year, the Conressional Budget Office estimated that the COLA would increase by 1.5% for 2014.
A 1.5% increase would boost the average Social Security benefit by about $19 per month to $1,280 and hike the taxable wage base by about $1,750 to $115,405 per year.
“The 7.65% tax rate is the combined rate for Social Security and Medicare. The Social Security portion (OASDI) is 6.20% on earnings up to the applicable taxable maximum amount. The Medicare portion (HI) is 1.45% on all earnings.
Now, we'll all have to wait a bit longer to see if the CBO is right.