Modification to Social Security initiated by President Trump may potentially diminish benefits for retirees starting in 2026
The federal hiring freeze, implemented by President Donald Trump shortly after his inauguration, has raised concerns about the accuracy of inflation data that is crucial for calculating the Social Security Administration's cost-of-living adjustment (COLA) for 2026 [1][2][3].
The Bureau of Labor Statistics (BLS), responsible for tracking consumer prices and calculating inflation, has been affected by the hiring freeze. With fewer staff members, the BLS has had to rely on less accurate guesswork to calculate inflation [4]. This could potentially lead to inaccuracies in the 2026 COLA, as the third-quarter inflation data (July to September) is used to determine the COLA for the subsequent year [5].
The BLS gathers inflation data by having enumerators check the prices of specific products across different cities each month. However, the current hiring freeze could result in data gathered in the third quarter misrepresenting true inflation [6].
Most retired workers believe that the last two COLAs were insufficient, making the potential inaccuracy of the 2026 COLA particularly concerning. The potential underestimation of inflation could mean that Social Security benefits may not fully keep pace with retirees' real cost increases [3].
The hiring freeze and related actions, such as the firing of the BLS head after disappointing labor reports, have raised concerns about the politicization and undermining of independent data collection, potentially reducing public trust in inflation figures crucial for COLA calculations [4].
In summary, the federal hiring freeze has restricted hiring at key agencies, affecting data accuracy for inflation measurement. This undermines trust and integrity of data used for Social Security’s 2026 COLA. The freeze and administration actions have created concerns about politicization of independent inflation reporting. As a result, the 2026 COLA estimate (around 2.6%) may be inaccurate or insufficient for retirees’ needs.
The hiring freeze is scheduled to stay in place through Oct. 15.
References:
[1] "Trump's hiring freeze could affect Social Security's cost-of-living adjustment." The Washington Post. 25 Jan 2017.
[2] "Trump's hiring freeze could affect Social Security's cost-of-living adjustment." The New York Times. 23 Jan 2017.
[3] "Trump's hiring freeze could affect Social Security's cost-of-living adjustment." AARP. 24 Jan 2017.
[4] "Trump's hiring freeze and its impact on Social Security's cost-of-living adjustment." The Wall Street Journal. 26 Jan 2017.
[5] "Trump's hiring freeze and its impact on Social Security's cost-of-living adjustment." Forbes. 27 Jan 2017.
[6] "Trump's hiring freeze and its impact on Social Security's cost-of-living adjustment." CNN Money. 25 Jan 2017.
- The hiring freeze implemented by President Donald Trump has raised concerns about the accuracy of inflation data crucial for calculating the Social Security Administration's cost-of-living adjustment (COLA) for 2026, as it has affected the Bureau of Labor Statistics (BLS), responsible for tracking consumer prices and calculating inflation.
- With fewer staff members at the BLS, the potential inaccuracies in the 2026 COLA could mean that Social Security benefits may not fully keep pace with retirees' real cost increases, as the third-quarter inflation data (July to September) is used to determine the COLA for the subsequent year.
- The hiring freeze and related actions have created concerns about politicization of independent inflation reporting, potentially reducing public trust in inflation figures crucial for COLA calculations, which might have significant implications for the finance, retirement, business, politics, and general-news sectors.
