Provisions Affecting Cost-of-Living Adjustment

Information on the annual cost-of-living adjustment (COLA)

An annual cost-of-living adjustment (COLA) applies to benefits after initial eligibility. We provide a summary list of all options in this category. For each provision listed below, we provide an estimate of the financial effect on the OASDI program over the long-range period (the next 75 years) and for the 75th year. In addition, we provide graphs and detailed single year tables. We base all estimates on the intermediate assumptions described in the 2013 Trustees Report.

Choose the type of estimates (summary or detailed) from the list of provisions.

Number	Table and graph selection
A1	Starting December 2014, reduce the annual COLA by 1 percentage point. Summary measures and graphs (PDF version) Detailed single year tables (PDF version) Memorandum containing this or a similar provision: Social Security Advisory Board
A2	Starting December 2014, reduce the annual COLA by 0.5 percentage point. Summary measures and graphs (PDF version) Detailed single year tables (PDF version) Memorandum containing this or a similar provision: Social Security Advisory Board
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. Summary measures and graphs (PDF version) Detailed single year tables (PDF version) Memoranda containing this or a similar provision: FY 2014 Budget Chaffetz Becerra Fiscal Commission Bipartisan Policy Center Social Security Advisory Board
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. Summary measures and graphs (PDF version) Detailed single year tables (PDF version) Memorandum containing this or a similar provision: National Research Council & National Academy of Public Administration
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. Summary measures and graphs (PDF version) Detailed single year tables (PDF version) Memorandum containing this or a similar provision: Senate Special Committee on Aging
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. Summary measures and graphs (PDF version) Detailed single year tables (PDF version) Memoranda containing this or a similar provision: Larson Harkin 2013 Harkin 2012 Becerra Deutch
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. Summary measures and graphs (PDF version) Detailed single year tables (PDF version) Memorandum containing this or a similar provision: Hutchison
	Above provisions Summary measures


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