Long Range Solvency Provisions

An annual cost-of-living adjustment (COLA) applies to benefits after initial eligibility. We provide a summary list of all options (printer-friendly PDF version) 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 2018 Trustees Report.

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

Number	Table and graph selection
A1	Starting December 2019, 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 2019, 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 2019, 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: Ribble FY 2014 Budget Chaffetz Becerra Fiscal Commission Bipartisan Policy Center 2010 Social Security Advisory Board
A4	Starting December 2021, 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 2019, 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 2020, 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: Deutch, Hirono 2019 Sanders, DeFazio 2019 Larson, Blumenthal, Van Hollen 2019 Deutch, Hirono 2017 Lawson Larson 2017 Sanders, DeFazio 2017 Sanchez Sanders 2016 Schatz Deutch 2015 DeFazio 2015 Sanders 2015 Larson 2015 Larson 2014 Harkin 2013 Harkin 2012 Becerra Deutch 2010
A7	Starting December 2019, 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
A8	Starting December 2019, for OASI beneficiaries only (DI beneficiaries would only be affected when their benefit converts to OASI at NRA), the annual COLA would be based on the chain-weighted version of the CPI-U. Summary measures and graphs (PDF version) Detailed single year tables (PDF version) Memorandum containing this or a similar provision: Bipartisan Policy Center October 2016 Bipartisan Policy Center June 2016
A9	For single/head-of-household/married-filing-separate taxpayers with modified adjusted gross income (MAGI) below $89,000 and for joint filers with MAGI below $178,000 for December 2020 ($85,000 and $170,000 multiplied by estimated CPI-U for 2019-2020), use the chain-weighted version of the Consumer Price Index for All Urban Consumers (C-CPI-U) to calculate the cost-of-living adjustment (COLA), beginning with the December 2020 COLA. For those beneficiaries whose MAGI is above these thresholds, provide no COLA. Use prior tax year income data for this determination. Index the eligibility income threshold amounts to the CPI-U after December 2020. Summary measures and graphs (PDF version) Detailed single year tables (PDF version) Memorandum containing this or a similar provision: Johnson 2016
	Summary list of all options in this category

Provisions Affecting Cost-of-Living Adjustment