E7-620. Title II Cost of Living Increases in Primary Insurance Amounts

AGENCY:

Social Security Administration.

ACTION:

Final rules.

SUMMARY:

We are revising our rules that deal with automatic cost-of-living increases to primary insurance amounts under title II of the Social Security Act (the Act). The revision is necessary because, beginning with the Consumer Price Index (CPI) for January 2007, the Bureau of Labor Statistics will publish the CPI to three decimal places. The CPI is currently published to one decimal place as is now reflected in our regulations. With this revision, our rules will conform to the change in the reporting of the CPI.

DATES:

These regulations are effective January 18, 2007.

FOR FURTHER INFORMATION CONTACT:

Jerry Strauss, Social Insurance Specialist, Office of Income Security Programs, Social Security Administration, 107 Altmeyer Building, 6401 Security Boulevard, Baltimore, MD 21235-6401, [phone] or TTY [phone]. For information on eligibility or filing for benefits: Call our national toll-free number, 1-800-772-1213 or TTY 1-800-325-0778 or visit our Internet Web site, Social Security Online, at http://www.socialsecurity.gov.

SUPPLEMENTARY INFORMATION:

Electronic Version: The electronic file of this document is available on the date of publication in the Federal Register at http://www.gpoaccess.gov/​fr/​index.html.

Background

The Social Security Act requires annual increases in Social Security benefits to keep up with increases in the cost-of-living as measured by the CPI. In order to provide more accurate information regarding increases in the CPI, the Bureau of Labor Statistics will begin publishing the CPI to the third, rather than the first, decimal place for January 2007. The effect of this change on benefit amounts is negligible. For additional information on cost-of-living increases and the types of benefits affected, see §§ 404.270 and 404.271.

Explanation of Changes

We have revised § 404.275(a) by replacing the current language stating that we will round the calculations of the CPI average to the nearest 0.1 with language stating that we will round the CPI average “to the same number of decimal places as the published CPI figures.” In addition, we added language stating that when a different number of decimal places is used for the beginning and ending quarters, we will use the number for the ending quarter. Therefore, since the CPI is now published by the Bureau of Labor Statistics to the third decimal place, rather than the first, our computation of quarterly average CPI's will be consistent with such publication.

Regulatory Procedures

Pursuant to section 702(a)(5) of the Social Security Act, 42 U.S.C. 902(a)(5), as amended by section 102 of Public Law 103-296, SSA follows the Administrative Procedure Act (APA) rulemaking procedures specified in 5 U.S.C. 553 in the development of its regulations. The APA provides exceptions to its notice and public comment procedures when an agency finds there is good cause for dispensing with such procedures on the basis that they are impracticable, unnecessary, or contrary to the public interest.

In the case of these final rules, we have determined that, under 5 U.S.C. 553(b)(B), good cause exists for dispensing with the notice and public comment procedures in this case because these regulations merely conform our rules to reflect the way the Bureau of Labor Statistics now publishes the CPI. Also, these regulations contain no substantive changes of interpretation. Therefore, opportunity for prior comment is unnecessary, and we are issuing these regulations as final rules.

In addition, we find good cause for dispensing with the 30-day delay in the effective date of a substantive rule, provided for by 5 U.S.C. 553(d), since we are making no substantive changes in the cost-of-living increase provisions. Without this change, however, our rules will conflict with the computation of the CPI as reported by the Bureau of Labor Statistics.

Executive Order 12866

We have consulted with the Office of Management and Budget (OMB) and determined that these rules do not meet the criteria for a significant regulatory action under Executive Order 12866, as amended by Executive Order 13258. Thus, they were not subject to OMB review. We have also determined that these rules meet the plain language requirement of Executive Order 12866, as amended by Executive Order 13258.

Regulatory Flexibility Act

We certify that these regulations will not have a significant economic impact on a substantial number of small entities. Therefore, a regulatory flexibility analysis as provided in the Regulatory Flexibility Act, as amended, is not required.

Paperwork Reduction Act

These final regulations impose no additional reporting or recordkeeping requirements requiring OMB clearance.

(Catalog of Federal Domestic Assistance Program Nos. 96.001, Social Security—Disability Insurance; 96.002, Social Security—Retirement Insurance; 96.004, Social Security—Survivors Insurance)

List of Subjects in 20 CFR Part 404

• Administrative practice and procedure
• Blind
• Disability benefits
• Old-age
• Survivors and Disability Insurance
• Reporting and recordkeeping requirements
• Social Security

Dated: January 10, 2007.

Jo Anne B. Barnhart,

Commissioner of Social Security.

For the reasons set forth in the preamble, we are amending subpart C of part 404 of title 20 of the Code of Federal Regulations as follows:

PART 404—FEDERAL OLD-AGE, SURVIVORS AND DISABILITY INSURANCE (1950-)

Subpart C—[Amended]

1. The authority citation for subpart C of part 404 continues to read as follows:

Authority: Secs. 202(a), 205(a), 215, and 702(a)(5) of the Social Security Act (42 U.S.C. 402(a), 405(a), 415, and 902(a)(5)).

2. Section 404.275 (a) is revised to read as follows:

§ 404.275

How is an automatic cost-of-living increase calculated?

(a) Increase based on the CPI. We compute the average of the CPI for the quarters that begin and end the measuring period by adding the three monthly CPI figures, dividing the total by three, and rounding the result to the same number of decimal places as the published CPI figures. If the number of decimal places in the published CPI values differs between those used for the beginning and ending quarters, we use the number for the ending quarter. If the average for the ending quarter is higher than the average for the beginning quarter, we divide the average for the ending quarter by the average of the beginning quarter to determine the percentage increase in the CPI over the measuring period.

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