- Created on 30 October 2013
This undated handout image provided by the Social Security Administration shows a prepaid MasterCard debit card that Social Security and Supplemental Security Income recipients who do not have bank accounts have the option of getting with their benefits instead of a paper check. The annual cost-of-living adjustment, or COLA, is based on a government measure of inflation that will be released Wednesday, Oct. 30, 2013. (AP Photo / Social Security Administration)
WASHINGTON (AP) -- Social Security benefits for nearly 58 million people will increase by 1.5 percent next year, the government announced Wednesday.
The increase is among the smallest since automatic adjustments were adopted in 1975. It is small because consumer prices haven't gone up much in the past year.
The annual cost-of-living adjustment, or COLA, is based on a government measure of inflation that was released Wednesday morning.
The COLA affects benefits for more than one-fifth of the country. In addition to Social Security payments, it affects benefits for millions of disabled veterans, federal retirees and people who get Supplemental Security Income, the disability program for the poor.
The amount of wages subject to Social Security taxes is also going up. Social Security is funded by a 12.4 percent tax on the first $113,700 in wages earned by a worker, with half paid by employers and the other half withheld from workers' pay.
The wage threshold will increase to $117,000 next year, the Social Security Administration said. Wages above the threshold are not subject to Social Security taxes.
About 165 million workers pay Social Security taxes. About 10 million earn wages above the threshold, the agency said.
Social Security pays retired workers an average of $1,272 a month. A 1.5 percent raise comes to about $19.
"By providing protection against inflation, the COLA helps beneficiaries of all ages maintain their standard of living, keeping many from falling into poverty," said AARP executive vice president Nancy LeaMond. "The COLA announced today is vital to millions, but at an average of just $19 per month, it will quickly be consumed by the rising costs of basic needs like food, utilities and health care."
The COLA announcement had been scheduled for two weeks ago. It was delayed because the Bureau of Labor Statistics did not issue the inflation report for September during the partial government shutdown.
Since 1975, annual Social Security raises have averaged just over 4 percent. Next year will mark only the seventh time the COLA has been less than 2 percent, including several recent ones. This year's increase was 1.7 percent. There was no COLA in 2010 or 2011 because inflation was too low.
In some years, part of COLA has been erased by an increase in Medicare Part B premiums, which are deducted automatically from Social Security payments. But Medicare announced Monday that Part B premiums, which cover doctor visits, will stay the same in 2014, at $104.90 a month for most seniors.
By law, the cost-of-living adjustment is based on the consumer price index for urban wage earners and clerical workers, a broad measure of consumer prices generated by the Bureau of Labor Statistics. It measures price changes for food, housing, clothing, transportation, energy, medical care, recreation and education.
The COLA is calculated by comparing consumer prices in July, August and September each year to prices in the same three months from the previous year. If prices go up over the course of the year, benefits go up, starting with payments delivered in January.
Lower prices for gasoline are helping keep inflation low, said Polina Vlasenko, a research fellow at the American Institute for Economic Research.
The average price of a gallon of regular gasoline has dropped over the past year from $3.53 to about $3.28, according to the automotive club AAA. Overall transportation costs have dropped by 2 percent in the past year, according to the Bureau of Labor Statistics.
Prices for food and beverages have gone up by 1.4 percent, while clothing costs have gone up by 0.7 percent.
Automatic COLAs were adopted so that benefits for people on fixed incomes would keep pace with rising prices. Some advocates for older Americans, however, complain that the COLA sometimes falls short, especially for people with high medical costs.
Over the past year, medical costs went up less than in previous years but still outpaced other consumer prices, rising 2.4 percent, according to the government report. Housing costs went up 2.3 percent.
- Created on 28 October 2013
In what is sure to be the divorce of the century, McDonald's, the world's largest quick-service chain by sales, is ending its longstanding relationship with Heinz, the world's largest producer of ketchup.
That means that every McDonald's location around the world will soon have to stop serving Heinz ketchup with its fries and burgers. The chain issued the following statement on the decision in an email to The Huffington Post:
"We value the relationship we've maintained with Heinz for more than 40 years. As a result of recent management changes at Heinz, we have decided to transition our business to other suppliers over time. We have spoken to Heinz and plan to work together to ensure a smooth and orderly transition of the McDonald's restaurant business, and are confident that there will be no impact to our business, our customers and our great tasting food at McDonald's."
Given that many connoisseurs believe Heinz is the best-tasting ketchup in the world, bar none, it seems like a stretch to say that the decision will have no impact. So why did McDonald's make it?
It's worth noting that most McDonald's locations in the U.S. stopped serving Heinz ketchup a long time ago. Only the stores in the areas around Pittsburgh (the home of Heinz) and Minneapolis currently carry Heinz, John Bennett, vice president of food-service ketchup, condiments and sauces for Heinz, told the Wall Street Journal in 2011. However, many McDonald's locations overseas do use Heinz.
The Pittsburgh Post-Gazette noted that the breakup follows the appointment of Bernardo Hees to the job of Heinz CEO. Hees was formerly the CEO at McDonald's chief competitor, Burger King. Heinz was also recently acquired by 3G Capital and Berkshire Hathaway, and New York-based 3G Capital already owns Burger King.
The backstage intrigue that led up to the breakup news remains a mystery. But some analysts started speculating as early as February that 3G might cut off the supply of Heinz ketchup to McDonald's as a way to boost sales at Burger King.
McDonald's representatives refused to say which company supplies ketchup to the majority of McDonald's American restaurants at the moment, or which companies might be tapped to produce its ketchup going forward. And a visit to the McDonald's closest to Huffington Post HQ, on 3rd Avenue in Manhattan's East Village, provided no answers; the ketchup there came in packets marked "McDonald's Fancy Ketchup."
Heinz did not immediately respond to a request for comment.
- Created on 25 October 2013
A United Airlines Boeing 787 Dreamliner taxis to a gate at O'Hare International Airport on May 20, 2013 in Chicago, Illinois. (Photo by Scott Olson/Getty Images) | Getty
WASHINGTON (AP) — United Airlines will pay more than $1 million in fines for stranding passengers on 13 planes for more than three hours on the tarmac last year in Chicago.
The Transportation Department says it's the biggest fine against an airline since 2010. That's when new rules barred airlines from stranding passengers on the tarmac for longer than three hours without giving them the opportunity to leave the plane.
The delays involve 13 United and United Express planes at Chicago's O'Hare International Airport. They happened on a day when severe thunderstorms and lightning caused several ramp closures and disrupted the movement of aircraft at O'Hare. Toilets weren't working on two planes.
United will pay the government only $475,000. The rest of the fine will go toward steps to prevent similar events.
- Created on 24 October 2013
A black woman has just been named as president and CEO of one of the largest philanthropic foundations in the United States.
According to a press release, La June Montgomery Tabron will take the helm at the W.K. Kellogg Foundation as the president and CEO on January 1