A proposed congressional budget agreement would avoid a government shutdown in January and set spending for defense and domestic programs. It would:
—Establish overall non-war-related discretionary spending for the current fiscal year at $1.012 trillion and $1.014 trillion for fiscal 2015. Discretionary spending is the money approved by Congress each year for agency operations. The House budget level had been $967 billion and the Senate $1.058 trillion for the year that runs through next Sept. 30. Fiscal 2013 discretionary spending was $986 billion.
—Ease the across-the-board "sequester" spending cuts by $63 billion over two years, split between defense and domestic programs. In the current fiscal year, defense would be set at a base budget of $520.5 billion and domestic programs at $491.8 billion.
—Increase airline security fees from $5 to $11.20 for a typical round-trip ticket starting July 1, 2014. That would raise $13 billion over 10 years. Current fees are $2.50 per leg with a maximum fee of $10 for a round-trip with connecting flights or $5 for a nonstop round-trip fare.
—Reduce retirement benefits for working-age military retirees. The cost-of-living adjustment would be modified equal to inflation minus 1 percent. The changes would be phased in, with no change in the current year, a 0.25 percent reduction in December 2014 and a 0.5 percent decrease in December 2015. The change would not apply to retirees who left the service because of disability or injury. It would apply to retirees under the age of 62. The change would save $6 billion.
—Increase by 1.3 percentage points the pension contributions paid by federal civilian workers hired after Jan. 1, 2014. Raise $6 billion.
—Restrict access to Social Security death records to prevent identity thieves from filing fraudulent tax returns. Save $269 million.
—Raise premiums paid by corporations to the Pension Benefit Guarantee Corp. to guarantee pension benefits. Raise $8 billion.
—Eliminate a requirement that the Maritime Administration reimburse other federal agencies for additional costs associated with shipping food aid on U.S. ships. Saves $731 million.
—Cancel $1.6 billion in unobligated balances in Justice and Treasury Department funds that seize assets from criminals.
—Cap the maximum government payment for contract employees at $487,000, indexed to inflation. Agencies could make exceptions for scientists, engineers and other specialists.
—Give the Treasury Department greater access to prison data to prevent prisoners from claiming improper payments. Saves. $80 million.
—Approve a U.S.-Mexico agreement on oil and gas exploration in waters outside their exclusive economic zones.
—Permanently extend a requirement that states receiving mineral lease payments contribute to the federal government's administrative costs. Saves $415 million.
—Extend Bureau of Customs and Border Protection user fees. Raises $7 billion.
WASHINGTON (AP) — For the second straight year, millions of Social Security recipients, disabled veterans and federal retirees can expect historically small increases in their benefits come January.
Preliminary figures suggest a benefit increase of roughly 1.5 percent, which would be among the smallest since automatic increases were adopted in 1975, according to an analysis by The Associated Press.
Next year's raise will be small because consumer prices, as measured by the government, haven't gone up much in the past year.
The exact size of the cost-of-living adjustment, or COLA, won't be known until the Labor Department releases the inflation report for September. That was supposed to happen Wednesday, but the report was delayed indefinitely because of the partial government shutdown.
The COLA is usually announced in October to give Social Security and other benefit programs time to adjust January payments. The Social Security Administration has given no indication that raises would be delayed because of the shutdown, but advocates for seniors said the uncertainty was unwelcome.
Social Security benefits have continued during the shutdown.
More than one-fifth of the country is waiting for the news.
Nearly 58 million retirees, disabled workers, spouses and children get Social Security benefits. The average monthly payment is $1,162. A 1.5 percent raise would increase the typical monthly payment by about $17.
The COLA also affects benefits for more than 3 million disabled veterans, about 2.5 million federal retirees and their survivors, and more than 8 million people who get Supplemental Security Income, the disability program for the poor.
Automatic COLAs were adopted so that benefits for people on fixed incomes would keep up with rising prices. Many seniors, however, complain that the COLA sometimes falls short, leaving them little wiggle room.
David Waugh of Bethesda, Md., said he can handle one small COLA but several in a row make it hard to plan for unexpected expenses.
"I'm not one of those folks that's going to fall into poverty, but it is going to make a difference in my standard of living as time goes by," said Waugh, 83, who retired from the United Nations. "I live in a small apartment and I have an old car, and it's going to break down. And no doubt when it does, I'll have to fix it or get a new one."
Since 1975, annual Social Security raises have averaged 4.1 percent. Only six times have they been less than 2 percent, including this year, when the increase was 1.7 percent. There was no COLA in 2010 or 2011 because inflation was too low.
By law, the cost-of-living adjustment is based on the Consumer Price Index for Urban Wage Earners and Clerical Workers, or CPI-W, 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.
This year, average prices for July and August were 1.4 percent higher than they were a year ago, according to the CPI-W.
Once the September report, the final piece of the puzzle, is released, the COLA can be announced officially. If prices continued to slowly inch up in September, that would put the COLA at roughly 1.5 percent.
Several economists said there were no dramatic price swings in September to significantly increase or decrease the projected COLA. That means the projection shouldn't change by more than a few tenths of a percentage point, if at all.
Polina Vlasenko, a research fellow at the American Institute for Economic Research, projects the COLA will be between 1.4 percent and 1.6 percent.
Her projection is similar to those done by others, including AARP, which estimates the COLA will be between 1.5 percent and 1.7 percent. The Senior Citizens League estimates it will be about 1.5 percent.
Lower prices for gasoline are helping to fuel low inflation, Vlasenko said.
"In years with high COLA's, a lot of that had to do with fuel prices and in some cases food prices. Neither of those increased much this year," Vlasenko said. "So that kept the lid on the overall increase in prices."
Gasoline prices are down 2.4 percent from a year ago while food prices are up slightly, according to the August inflation report. Housing costs went up 2.3 percent and utilities increased by 3.2 percent.
Advocates for seniors say the government's measure of inflation doesn't accurately reflect price increases older Americans face because they tend to spend more of their income on health care. Medical costs went up less than in previous years but still outpaced other consumer prices, rising 2.5 percent.
"This (COLA) is not enough to keep up with inflation, as it affects seniors," said Max Richtman, who heads the National Committee to Preserve Social Security and Medicare. "There are some things that become cheaper but they are not things that seniors buy. Laptop computers have gone down dramatically but how many people at 70 are buying laptop computers?"
The cost of personal computers dropped by 10.6 percent over the past year, according the CPI-W.
That's a small consolation to Alberta Gaskins of the District of Columbia, who said she is concerned about keeping up with her household bills.
"It is very important to get the COLA because everything else you have in your life is on an upward swing, and if you're on a downward swing, that means your quality of life is going down," said Gaskins, who retired from the Postal Service in 1989.
WASHINGTON (AP) - President Barack Obama is proposing cuts to Social Security as an attempt to compromise with Republicans on the budget.
A senior administration official says the budget Obama will offer to Congress next Wednesday would reduce the deficit by $1.8 trillion over 10 years. It includes a revised inflation adjustment called "chained CPI" that would curb cost-of-living increases in Social Security and other benefit programs.
The senior administration official stressed it is not the president's preferred approach but a compromise proposal to try to reach a long-term budget deal. Obama first made the offer to House Speaker John Boehner last year.
The official spoke on a condition of anonymity since the budget has yet to be released. Technically, the administration actually would be limiting the growth of Social Security.
Besides the pain of deep defense cuts which could lay off some 8,000 defense workers, Missouri could lose nearly $12 million in education funding.
In Illinois, the defense cuts would furlough more than 14,000 defense department employees and cut more than $30 million from education.
Democrats have proposed a combination of tax increases and spending cuts, including a tax on income above $1 million and eliminating tax breaks for oil companies.
Republicans have said they will only consider spending cuts.
Democratic Congressman Bill Enyart of Belleville, told the St. Louis Post-Dispatch that the defense cuts would hit the area hard because of the importance of Scott Air Force Base and other military installations to the local economy.
Illinois Republican Representative John Shimkus told KSDK-TV that he doesn't believe a deal will be reached before the deadline.
The legislation temporarily suspends the $16.4 trillion limit on federal borrowing. Experts say that will allow the government to borrow about $450 billion to meet interest payments and other obligations.
The Senate gave the bill final approval last week and sent it to Obama, who signed it Monday shortly after returning from Minneapolis.
Democrats and Obama had warned that failure to pass the bill could set off financial panic and threaten the economic recovery.
The bill includes a provision attached by House Republicans that temporarily withholds lawmakers' pay in either chamber that fails to produce a budget plan.