Photo by Danie Franco

Woody Guthrie in his song “Pretty Boy Floyd,“ wrote the line: ”Some men rob you with a sixgun, some with a fountain pen.” If he were living and singing today (and lord knows we could use him!), he might well have revised those lyrics to say “Some men rob you with a sixgun and some with an Oval Office pen”. Because that’s what President Trump, with his import tariffs and his gutting of the Bureau of Labor Statistics (BLS) staff is doing with the Social Security benefits owed the nation’s 75 million elders.

Here’s the scam:

The average Social Security benefit check for retirees is currently about $2000 a month, or $24,000 per year. While the Republican government shutdown and layoffs of staff at the critically important BLS has delayed a calculation of next year’s inflation adjustment, it is widely predicted to be a benefit rise of around 2.5%. That would raise that average monthly benefit check to $2050 a month —an annual bump up of about $600.

That may sound pretty good, but what if in 2026 instead of being just 2.5% inflation, elders find their cost of living rising by 3% or 3.5%, or perhaps even more? If an elder household were just getting by this year on $2000 a month, that would mean they’d need another $20-30/month to pay all the bills.That may not sound like a disaster, but for people already living on the edge, and with Republicans working hard to gut Medicaid, to end low-income premium subsidies for Affordable Care Act (ACA) health insurance, and with food assistance programs like SNAP cutting eligibility for millions of people, every Social Security dollar is precious.

America’s elder, disabled and dependent populations, a large percentage of whom depend entirely or heavily upon Social Security monthly benefit checks for their survival, are likely to be stIffed this year by the Trump administration, and by Congressional Republicans’ stubborn refusal to change the way the Social Security Agency calculates the cost-of-living adjustment of those benefits.

The problem is that, first of all, Congressional Republicans have continued to use an inappropriate index— the CPI-W index—that measures inflation for urban workers instead of a CPI-E index that measures the actual inflation in things that the elderly are most impacted by, including housing and health care. Studies have shown that even a seemingly small amount, when compounded over years, makes a serious dent in low-earners’ ability to make ends meet. Historically this methodology alone has been undercounting inflation’s impact on elders by 0.2% annually for years.

As economist Robert Reich, an emeritus professor of public policy at the Goldman School of Public Policy of Berkeley University, a former Secretary of Labor in the Clinton Administration says of the impact of a failure to account for the impact of tariffs on inflation in 2026, “It will just add to the burden on many Social Security recipients because, even as it is, Social Security doesn’t take into account many higher costs paid by seniors for medications not covered by Medicare, medical equipment, and housing.”

He explains, “Because the CPI-W index being used Social Security’s Cost of Living Admuatment isn’t used to account for these higher expenses, according to one analysis Social Security benefits lost about 20% of their buying power between 2010 and 2024.”

And this year there is a risk that actual inflation for elders will be substantially higher, and the benefits adjustment significantly lower in calendar year 2026. This is because each new year’s Social Security Benefit payment is adjusted not based on an estimate of the expected inflation for that year, or even on the inflation in the cost-of-living over the entire prior year, but rather on just the inflation measured during the third quarter of the prior year. That is to say the Social Security benefits paid in 2026 will be increased by the annualized rate of inflation measured during the months of July, August and September 2025.

Ordinarily that peculiar methodology has produced a fairly accurate measure of the following year’s over-all inflation rate, but in many ways this has not been a normal year, to say the least.

Aside from the advent of a fascist government, the invasion of several major cities by US National Guard units from other states, and by active troops from the US Northern Command as well as the untrained rabble hired onto the nation’s new national masked and heavily armed police force, the Immigration and Customs Enforcement service (ICE) , we’ve had President Trump’s insane and reckless nine-month (and counting!) economic tantrum fit of implementing and then pulling back from, and then re-declaring of staggering 100% tariffs on all goods and services shipped to the US by our trading partners around the globe… If you’re a manufacturer like, say, an automobile factory, and need a flow of parts to assemble your product and get them rolled out to dealers, you need to know what those parts or “inputs” are going cost, so you can settle on a price for your finished products that will still allow you and the dealers to make a sale and a profit,

Faced with Trump’s mercurial on-again, off-again tariff threats on goods from such supplier nations, what many companies have done is pre-order goods at pre-tariff prices. And those are the prices — for medicines Imported from India, vehicles with major components imported from China or Tequila from Mexico that are used in calculating inflation adjustments for 2026 Social Security benefit payments. Yet when those advance purchases run out, as they surely will by 2026, importers will have pay the Trump tariffs, making their own products’ prices rise to cover the added cost of the items. In some cases the tariffs could more than double the cost of the imported goods!

There is no study I can find that definitively lays out how much pre-ordering of imports to avoid higher tariffs took place, or how much added inflation Trump’s unprecedented seat-of-the-pants tariff war will add in the next 14 months. I did find a Wharton School study showing that Excise taxes and Customs duties paid into the US Treasury hit $270 billion year to date as of Oct. 2 —a figure representing 6.9% of all federal revenues. That is 3.5 times the historical share of federal revenue from that category of taxation. Also, I located a Goldman Sachs study showing that because of pass-throughs of those higher costs for imported goods, 40% of that $270 billion, or in other words $108 billion, was being paid in the form of inflated prices by consumers (the rest was paid 40% by businesses and 20% by foreign suppliers).

While Trump (who is known to have hired students to take tests for him at the University of Penn’s Wharton School of Business (where he was a “DEI admission” on account of his family’s wealth) was never known as scholar of economics or business, apparently relying on his own “stable genius” knowledge of those fields, economic history and how they actually work, he ordered tariffs on almost all US trading partners, insisting ignorantly that such taxes are paid to into the US treasury by foreign governments.

Given that the $108 billion in excise taxes and customs duties paid through nine months so far this year, divided among 150 million American families, works out to extra inflationary prices of $720 per family household, the public is not wrong in claiming that they are being hurt by Trump’s tariff policies and that the government’s depicting of inflation as running at 2.5% is way too low.

In fact, as shocked economists and tax experts repeatedly tried in vain to explain to the president, tariffs are paid typically by the importer at the time of entry and are then recovered in the form of higher prices for the goods paid first by the US business receiving the goods or, as is often the case, the manufacturer importing the needed supplies or raw materials, who then passes those higher costs on to the final consumer.

It’s important for us all to understand this, because what appears to have happened in this wholly unique year of unprecedentedly high tariffs, is that many US importers, anticipating an economic crisis of higher prices, reduced sales and plunging profits, have responded by ‘front-loading’ their imports of foreign goods before Trump’s tariffs were imposed. Those goods have been piling up on warehouses and are only now beginning to run out. Once those imports are gone, US factories, assemblers, car dealers, retailers and all other parts of the economy will start having to pay for imported goods from places like China,India, Europe, South America and Southeast Asia at prices that include 100% or even higher tariffs, which of course they will pass on to whomever they sell them to.

The damage to the US and to global economies will be severe. But also inflation in the US will soar unless tariffs are negotiated downward.

Meanwhile elders living on fixed incomes, most of whose spending is for necessities like housing, food, utilities, transportation and healthcare, will be particularly hard-hit if, as seems increasingly highly likely, a surge of higher prices begins thanks to tacked on tarriff costs.

So far it doesn’t look like there is much chance of elders getting any significant rise in their 2026 Social Security benefit payments beyond the inasdequate 2.5% adjustment.

And so much of the pet food sold in this country is imported from China, and will thus will be hit with Trump tariff-caused inflation, even that dire fall-back option reportedly turned to by some desperate elders won’t be of much help.

The post Of Tariffs and Social Security: the Nation’s Elders and Disabled are About to be Stiffed appeared first on CounterPunch.org.

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