Budget office releases estimate for 2014 COLA

The cost-of-living adjustment in government benefits for next year is likely to be 1.5 percent, according to an August 8 estimate from the Congressional Budget Office.

This would be smaller than the 1.7 percent COLA received this year.

The COLA becomes effective Dec. 1 and first shows up in January paychecks.

The nonpartisan budget office’s prediction comes in a cost estimate for S 893, a veterans’ COLA measure that applies to veterans’ disability, survivors’ and pension payments. The Senate Veterans’ Affairs Committee approved the bill on July 24.

Under federal law, annual COLAs are automatic for military and federal civilian retirees and Social Security beneficiaries, with the increase linked to the Consumer Price Index, a measure of the cost of goods and services. Veterans’ benefits, however, increase only if Congress approves.

The Senate bill provides veterans the same COLA that would apply to other federal entitlements. There is a similar House bill, HR 569, pending before the House Veterans’ Affairs Committee.

CBO’s long-range economic forecast predicts consumer prices will increase 2 percent in 2014, an average of 2.2 percent a year from 2015 to 2018 and by 2.3 percent a year from 2019 through 2022.