No Cost-Of-Living Adjustment for Social Security

We won’t take up much of our time today rehashing the particulars; you can read those anywhere. Republicans get the military spending increases they want. Democrats get the social spending increases they want.

Fiscal restraint? What’s that?!

Still, a handful of items did catch our eye, because they tie into other themes we’ve covered in our virtual pages:

  • A looming crisis in Social Security disability — the disability trust fund was set to start paying out more than it was taking in next year — has been postponed. Eligibility requirements will be tightened, allegedly saving $5 billion
  • Some oil will be unloaded from the Strategic Petroleum Reserve. The stated reason is to raise revenue. On the other hand, “The SPR has been regularly toyed with to affect oil prices over the years, and its impact has at times been substantial,” Jim Norman wrote in his 2008 book The Oil Card. If oil prices are being deliberately suppressed to stick it to the Russians, as happened in the 1980s, a release of SPR oil can only help in that regard
  • Through a little-used parliamentary maneuver, the Export-Import Bank will be raised from the dead. Congressional authorization for this outrageous exercise in corporate welfare expired over the summer… but the zombie budget revives a government agency critics rightly call the “Bank of Boeing.”

And yes, the looming 52% Medicare Part B premium increase has been averted — at a price.

We gave you a heads-up about this in early September. Because the government says there’s been no inflation this year — oy — there will be no cost-of-living adjustment for Social Security next year. And under the law, most Medicare recipients wouldn’t have their Part B premiums raised, either.

But under a quirk in that law, some Medicare recipients would have had their premiums raised a lot to cover Medicare’s relentlessly rising costs. The burden would’ve fallen hardest on people who’ve not yet begun taking Social Security benefits.

Anyway, the budget deal puts an end to all that. But don’t cheer too loudly. To make up for the shortfall, payments will be cut — again — to doctors and other providers.

So your premiums won’t increase… but your doctor might stop accepting Medicare patients. Besta luck!


Dave Gonigam
for The Daily Reckoning

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