[Federal Register Volume 66, Number 100 (Wednesday, May 23, 2001)]
[Notices]
[Pages 28589-28591]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-13131]


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SOCIAL SECURITY ADMINISTRATION


Office of the Commissioner; Benefit Adjustments Pursuant to 
Public Law 106-554

AGENCY: Social Security Administration.

ACTION: Notice.

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SUMMARY: Pub. L. 106-554 authorizes Federal agencies to compensate 
beneficiaries, to the extent practicable and feasible, for any 
shortfall in benefits that may have been caused by an error that 
affected the Consumer PriceIndex starting in 1999. This index, produced 
by the Bureau of Labor Statistics in the Department of Labor, was 
slightly understated for certain months in 1999.Pursuant to Pub. L. 
106-554, the Commissioner has determined that some recipients of Social 
Security and Supplemental Security Income benefits did experience a 
shortfall in payments in 2000 and 2001 due to the Consumer PriceIndex 
error. This is because the 2.4-percent cost-of-living increase, 
promulgated in the Federal Register on October 25, 1999, would have 
been 2.5 percent in the absence of the 1999 Consumer Price Index error.
    Accordingly, the Commissioner has proposed, and the Office of 
Management and Budget has approved, a plan for making the appropriate 
compensation payments under Pub. L. 106-554.By August 1, 2001, we will 
make a one-time payment that compensates for the entire shortfall 
experienced in months prior to August 2001. Benefits paid in August 
2001 and later will be adjusted as if the Consumer Price Index error 
had not occurred. In this notice we are announcing the appropriate 
bases and formulas we will use to compute benefits to be paid in August 
2001 and thereafter.

FOR FURTHER INFORMATION CONTACT: Jeffrey L. Kunkel, Office of the Chief 
Actuary,Social Security Administration, 6401 Security Boulevard, 
Baltimore, MD 21235, (410) 965-3013.

[[Page 28590]]

Background

    Sections 215(i)(1) and 1617 of the Social Security Act (the Act) 
provide that the Consumer Price Index (CPI) be used to determine 
``automatic'' adjustments to benefits under title II and title XVI of 
the Act. The Bureau of Labor Statistics (BLS) in the Department of 
Labor publishes the CPI. On September 28, 2000, the BLS announced their 
discovery of a software error used in the CPI calculation, affecting 
the calculation for months after 1998. The BLS recalculated the CPI for 
each month from January 1999 through August 2000. Based on criteria 
related to the size of the error, the BLS revised the CPI for January 
2000 through August 2000, but did not revise the index for January 
through December of 1999.

Effects of Pub. L. 106-554

    Section 308 of Pub. L. 106-554, enacted December 21,2000, requires 
the Office of Management and Budget and Federal agencies that 
administer benefit programs to determine whether the CPI computation 
error for 1999 resulted in a shortfall in payments to beneficiaries and 
to compensate beneficiaries for any such shortfall. We determined that 
the 2.4-percent cost-of-living increase, promulgated in the Federal 
Register on October 25, 1999, would have been 2.5 percent in the 
absence of the 1999 CPI error. We also determined that the 3.5-percent 
cost-of-living increase, promulgated in the Federal Register on October 
24, 2000, was not affected by the 1999 CPI error. In compliance with 
Pub. L. 106-554, payments will be made to compensate for the past 
shortfall, and ongoing payments will be increased to the extent 
required to remove the effects of the CPI error. The following 
describes the basis for such compensation and adjustment.

Basis for Compensation and Adjustment

    Bulletin No. 01-04 from the ExecutiveOffice of the President, 
Office of Management and Budget, dated January 16,2001, contains the 
recalculated CPI values for 1999 (these were not published as revisions 
by the BLS). For the quarter ending September 30, 1999, the published 
CPI for Urban Wage Earners and Clerical Workers was in error only for 
the month of September. The published CPI for September 1999 is 164.7 
while the recalculated value is 164.8. Thus, the recalculated CPI 
values for this quarter are: July 1999, 163.3; August 1999, 163.8; and 
for September 1999, 164.8. The average CPI for this calendar quarter 
was originally determined based on published values to be 163.9. It is 
164.0 based on the recalculated CPI values. The average CPI for the 
third quarter of 1998 is 160.0 (this was unaffected by the computation 
error). Thus, on a recalculated basis, the average CPI for the quarter 
ending September 30, 1999, exceeds the average for the quarter ending 
September 30, 1998, by 2.5 percent.
    The quarter ending September 30, 1999, was a cost-of-living 
computation quarter for all purposes of the Act. The average CPI for 
the quarter ending September 30, 2000, (169.7 as published October 24, 
2000 in the Federal Register) exceeds that for the quarter ending 
September 30, 1999 on either basis, (164.0 recalculated or 163.9 based 
on BLS-published monthly CPIs) by 3.5 percent. Thus, the cost-of-living 
increase for December 2000 remains 3.5 percent, unchanged from the 
value previously promulgated.

Title II Benefits

    Consistent with the above cost-of-living increase calculations and 
pursuant to Pub. L. 106-554, we will calculate title II benefits, to be 
paid in August 2001 and later, as if the December 1999 cost-of-living 
increase had been 2.5 percent. Such calculation applies only in the 
case of workers and family members for whom eligibility for benefits 
(that is, the worker's attainment of age 62, or disability or death 
before age 62) occurred before 2000.
    For eligibility after 1978, we generally determine benefits by 
means of a formula. This formula, while unaffected by the CPI error, 
produces an initial benefit that is subsequently increased with cost-
of-living increases that become effective in or after the first year of 
eligibility.
    For eligibility before 1979, we determine title II benefits by 
means of a benefit table. Both the table for December 1999 and the 
table for December 2000 are affected when they are computed as if the 
cost-of-living increase for December 1999 had been 2.5 percent. The 
table for December 2000 is affected because values in that table are 
dependent on those in the December 1999 table. A copy of either 
adjusted table is available on the Internet at http://www.ssa.gov/OACT/ProgData/tableForm.html. For a printed copy, write to:Social Security 
Administration, Office of Public Inquiries, 4100 Annex, Baltimore, MD 
21235.
    Other title II benefits given by specific tables are ``special 
minimum'' benefits, as described in section 215(a)(1)(C)(i) of the Act. 
As in the case of the benefit tables applicable to beneficiaries 
eligible before 1979, the special minimum benefit tables for both 
December 1999 and December 2000 are affected by computation as if the 
December 1999 cost-of-living increase had been 2.5 percent. The 
adjusted tables are shown below.

                      Special Minimum Primary Insurance Amounts and Maximum Family Benefits
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                                            Payable for December 1999             Payable for December 2000
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     Number of years of coverage      Primary insurance    Maximum family   Primary insurance    Maximum family
                                            amount            benefit             amount            benefit
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11..................................             $28.50             $43.20             $29.40             $44.70
12..................................              57.50              86.90              59.50              89.90
13..................................              86.80             130.50              89.80             135.00
14..................................             115.60             174.00             119.60             180.00
15..................................             144.70             217.30             149.70             224.90
16..................................             173.80             261.30             179.80             270.40
17..................................             202.90             305.10             210.00             315.70
18..................................             232.00             348.60             240.10             360.80
19..................................             261.00             392.20             270.10             405.90
20..................................             290.00             435.70             300.10             450.90
21..................................             319.40             479.70             330.50             496.40
22..................................             348.20             523.10             360.30             541.40
23..................................             377.60             567.40             390.80             587.20
24..................................             406.70             610.70             420.90             632.00
25..................................             435.70             653.90             450.90             676.70

[[Page 28591]]

 
26..................................             465.10             698.40             481.30             722.80
27..................................             494.00             741.70             511.20             767.60
28..................................             523.00             785.20             541.30             812.60
29..................................             552.00             829.00             571.30             858.00
30..................................             581.10             872.30             601.40             902.80
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Title XVI Benefits

    Supplemental Security Income (SSI) payment levels for the aged, 
blind, and disabled, payable under title XVI of the Social Security 
Act, are increased annually with cost-of-living increases. For SSI 
payment levels for the year 2000, we used a cost-of-living increase of 
2.4 percent based on published CPI figures. Pursuant to Pub. L. 106-
554, in order to compensate for the shortfall in past benefit payments 
and provide the basis for adjusting ongoing and future payments, we 
will adjust the title XVI Federal payment levels as if the cost-of-
living increase for January 2000 had been 2.5 percent. Accordingly, we 
provide the following calculations of title XVI payment levels.
    For 1999, we derived the monthly benefit amounts for an eligible 
individual, an eligible individual with an eligible spouse, and for an 
essential person from yearly unrounded Federal SSI benefit amounts of 
$6,010.02, $9,014.01, and $3,011.89. For adjusted 2000 values, these 
yearly unrounded amounts increase by 2.5 percent (on a recalculated 
basis) to $6,160.27, $9,239.36, and $3,087.19 respectively. Each of 
these resulting amounts must be rounded, when not a multiple of $12, to 
the next lower multiple of $12. Accordingly, the corresponding adjusted 
annual amounts, effective for 2000, are $6,156, $9,228, and $3,084. 
Dividing the yearly amounts by 12 gives the corresponding monthly 
amounts for 2000--$513, $769, and $257, respectively. Of these 3 
monthly amounts, only the $513 amount for an eligible individual is 
higher than the previously determined value for 2000 (based on the 
published CPI).
    Similarly, SSI payment levels for the aged, blind, and disabled 
increased by 3.5 percent effective for January 2001. For 2001, the 
adjusted yearly unrounded amounts for 2000, as shown above, increase by 
3.5 percent to $6,375.88, $9,562.74, and $3,195.24 for an eligible 
individual, an eligible individual with an eligible spouse, and for an 
essential person, respectively. Following the procedure outlined above, 
the corresponding adjusted monthly amounts for 2001 are $531, $796, and 
$266. Again, of these 3 monthly amounts, only the amount for an 
eligible individual ($531) is higher than the previously determined 
value for 2001.

    Dated: May 18, 2001.
Larry G. Massanari,
Acting Commissioner of Social Security.
[FR Doc. 01-13131 Filed 5-21-01; 11:23 am]
BILLING CODE 4191-02-P