washingtonscene \\ COLA News //
COLA Stays Afloat Breaking the trend of the past few years, the August inflation index rose slightly and now stands at 234.909, which puts it 0.3 percent above the 2014 COLA baseline. Because there was no COLA last year, the FY 2014 baseline is still used to determine the next COLA. Follow the trends at
www.moaa.org/cola.
preferences in those regions. Direct com- parison will be made of 900 items across the commissary to the same items in those three competitors’ stores to estab- lish a regional savings calculation. These two measurements will be used together to establish standards for both national and regional savings and ensure they do not decrease going forward. Commissary officials say the new meth- od will help commissary patrons better understand the savings the commissary provides. Many patrons don’t understand that commissary prices are standardized nationwide, which means patron savings in different localities can vary because commercial store prices vary by region. Thus, patron savings are generally greater in high-cost regions and less in low-cost regions, relative to local grocers’ prices. Officials emphasize the new system of measuring savings won’t have any effect on what commissary shoppers pay. It just will make it clearer what patrons’ cur- rent savings are by region. Some questions remain about how the
seven regions will be divided and how the 900 items in the new regional market bas- kets will be selected. But MOAA appreciates DoD’s efforts
to establish explainable benchmarks of national and regional patron savings to ensure the level of patrons’ current sav- ings is maintained as new commissary ef- ficiency initiatives are implemented.
How Secure is F
Social Security? Trust fund will be depleted in 2034.
or decades, ominous state- ments from various quarters have been made that the Social
32 MILITARY OFFICER NOVEMBER 2016
Security program will go broke at some point in the future. The latest report from Social Security actuaries says the Social Security trust fund will be exhausted by 2034. Periodically, there have been various
proposals to “save” Social Security, rang- ing from changing the COLA calculation to letting taxpayers shift part of their Social Security taxes into personal stock market accounts. Most of these proposals have gone
nowhere, as legislators have feared a backlash from angry seniors. There’s a reason Social Security has been viewed on Capitol Hill as the third rail of politics — “touch it, and you die.” On the other hand, a 2015 survey found 30 percent of Americans under age 50 believe Social Security won’t be there for them when they retire. The reality is Social Security will not disappear in 2034 or on any other date. Exhausting the trust fund doesn’t mean the program will end; it means benefits paid can’t exceed payroll taxes collected after that date. There wouldn’t be any funds left to make up the difference. The fact is, Social Security benefit
payouts have exceeded payroll taxes collected since 2010. But the trust fund — currently about $2.8 billion — still is growing, largely because the interest (the fund is invested in Treasury bonds) makes up the difference. In about 2020, that balance is expected
to tip. From then on, payouts will exceed total revenue (payroll taxes, plus interest, plus income taxes paid on Social Security benefits by higher-income recipients), and the size of the trust fund will drop until it’s exhausted 14 years later. Why is this happening? There are
three main reasons. First, the baby boom- er generation started collecting Social Security several years ago, so payments to
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