CBO on Federal Budget: COLA's Will Cost 1/2 Trillion LESS Over Next 10 Years ; No COLA's at ALL for 2010-2012.

Yeah, I know this is NOT exactly a housing post, but it's a weird factoid related to deflation that I picked up looking at the most recent CBO budget projection HERE and it will impact future rent affordability for seniors with fixed incomes.

CBO report says (pg.20 ):

" CBO has reduced estimated outlays by $500 billion for federal retirement and benefit
programs, including Social Security, because projected cost-of-living adjustments (COLAs) have fallen since January. No COLA's are currently projected for such programs from 2010 through 2012; the COLA would amount to less than 2 percent in all future years (an average of 0.8 percentage points below CBO’s previous projections for years after 2011). "

This all is triggered by some good or bad timing for the 2009 COLA's (depending on whether you are receiving or paying), which were computed based on summer 08 quarter when gas prices spiked. The resulting 5.8% COLA increase was the largest since early 1980's.

In re lack of future COLA's for 2010-2012, idea is that future adjustments will not occur until costs exceed summer 08 levels, which CBO apparently projects will not happen until summer of 2012 (resulting in a modest 2013 increase).