WASHINGTON – American Federation of Government Employees National President J. David Cox Sr. today issued the following statement in response to the announcement that federal retirees and Social Security recipients will receive a cost of living adjustment (COLA) of 1.7% in January:
While next year’s COLA is much smaller than the increase federal retirees and Social Security recipients received at the beginning of this year, it could have been much worse. Under the deficit reduction plan proposed by Morgan Stanley Director Erskine Bowles and ex-Senator Alan Simpson, the annual COLA would be cut by three-tenths of a percentage point.
So if Bowles-Simpson were in effect today, retirees would be getting a 1.4% adjustment in January instead of the 1.7% increase. Although a 0.3% cut doesn’t sound like much, it adds up over time. Over 10 years, that 0.3% difference would mean a 3% cut in benefits. Over 20 years, the loss in benefits rises to 6%.
This cut in COLA benefits is just one of many outrageous and indefensible ways in which Bowles and Simpson proposed to cut the nation’s deficit by slashing wages and benefits of working class Americans. Any attempts to revive their fatally flawed recommendations must be vigorously rejected.