WASHINGTON — The Social Security raise that arrives in January, the largest in four years, is built on the same inflation that is squeezing the people who will receive it, and much of that inflation is gasoline. More than 75 million Americans will get a 3.6 percent cost-of-living increase, the Social Security Administration announced on Wednesday, lifting the average payment by roughly $75 to about $2,170 a month.
The adjustment is set by inflation from July through September, and the September CPI inflation report EH covered earlier today showed consumer prices up 3.7 percent over twelve months, with gasoline and diesel doing much of the work. A 3.6 percent raise against 3.7 percent inflation roughly keeps pace; it does not catch up.
That is the argument advocates are making, and the numbers they bring are blunt. “The bottom line is that seniors aren’t getting ahead,” said Shannon Benton, executive director of the Senior Citizens League. Its survey found 89 percent of older Americans called this year’s 2.8 percent adjustment inadequate, and about 44 percent of seniors draw all their income from Social Security, according to NBC News.
The dispute is over the yardstick. The adjustment is built on the CPI-W, which tracks prices paid by workers, and advocates say it understates seniors’ costs, which rise faster in health care, prescription drugs, rent and home energy, CBS News reported. Max Richtman of the National Committee to Preserve Social Security and Medicare said: “We favor the adoption of the CPI-E,” an index built around older households. About 7.3 million people on Supplemental Security Income will see the increase starting December 31. The poverty rate among seniors was 15.4 percent last year, up from 14.2 percent in 2022.
NBC News noted that core inflation, which excludes food and energy, has stayed around 2.5 percent, well below the 3.7 percent headline, and that the increase is one of the largest this decade. It quoted Benton as saying the raise “provides a little breathing room but won’t undo the damage of what we’ve seen this decade.”
The longer clock is the trust fund. Social Security is projected to become insolvent in six years, which would mean a benefit cut of more than 20 percent unless lawmakers act, according to CBS. AARP chief executive Myechia Minter-Jordan said: “Americans cannot afford cuts to the benefits they have earned.”
Neither report includes the 2027 Medicare Part B premium or the 2027 taxable maximum, and the premium decides how much of the $75 a retiree actually keeps. Until it is announced, the size of the raise and the size of its bite are different numbers.
