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Summary of Provisions That Would Change the Social Security Program

Description of Proposed Provisions:
Cost of Living Adjustment

Estimates based on the intermediate assumptions of the 2013 Trustees Report


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  Change from present law Results with this provision
Long-range
actuarial
balance
Annual
balance in
75th year
Long-range
actuarial
balance
Annual
balance in
75th year
  Present Law, Alternative II.
    -2.72 -4.77
A1 Starting December 2014, reduce the annual COLA by 1 percentage point.
graph | table | pdf-graph | pdf-table | memo (Social Security Advisory Board)
1.73 2.35 -0.99 -2.42
A2 Starting December 2014, reduce the annual COLA by 0.5 percentage point.
graph | table | pdf-graph | pdf-table | memo (Social Security Advisory Board)
0.90 1.23 -1.82 -3.54
A3 Starting December 2014, compute the COLA using a chained version of the consumer price index for wage and salary workers (CPI-W). We estimate this new computation will reduce the annual COLA by about 0.3 percentage point, on average.
graph | table | pdf-graph | pdf-table | memo(FY 2014 Budget) | memo (Chaffetz) | memo (Becerra) | memo (Fiscal Commission) | memo (Bipartisan Policy Center) | memo (Social Security Advisory Board)
0.55 0.75 -2.17 -4.01
A4 Starting December 2016, compute the COLA using a chained version of the consumer price index for wage and salary workers (CPI-W). We estimate this new computation will reduce the annual COLA by about 0.3 percentage point, on average. The new COLA will not apply to DI benefits. It will apply to OASI benefits, except for those of formerly disabled-workers who converted to retired-worker status.
graph | table | pdf-graph | pdf-table | memo (NRC/NAPA)
0.40 0.56 -2.31 -4.21
A5 Starting December 2014, add 1 percentage point to the annual COLA for beneficiaries who have lived past a "specified age". The "specified age" is the sum of: (1) 65 and (2) the unisex cohort life expectancy at age 65.
graph | table | pdf-graph | pdf-table | memo (Senate Special Committee on Aging)
-0.09 -0.11 -2.81 -4.88
A6 Starting December 2015, compute the COLA using the Consumer Price Index for the Elderly (CPI-E). We estimate this new computation will increase the annual COLA by about 0.2 percentage point, on average.
graph | table | pdf-graph | pdf-table | memo (Harkin 2013) | memo (Harkin 2012) | memo (Becerra) | memo (Deutch)
-0.37 -0.53 -3.09 -5.30
A7 Starting December 2014, reduce the annual COLA by 1 percentage point, but not to less than zero. In cases where the unreduced COLA is less than 1 percentage point, do not carry over the unused reduction into future years.
graph | table | pdf-graph | pdf-table | memo (Hutchison)
1.62 2.21 -1.09 -2.55
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Last reviewed or modified October 23, 2013