Long Range Solvency Provisions

Provisions Affecting Cost-of-Living Adjustment

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 2023 Trustees Report.

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

Number	Table and graph selection
A1	Starting December 2024, 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 2005
A2	Starting December 2024, 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 2005
A3	Starting December 2024, 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 2016 FY 2014 Budget Chaffetz 2011 Becerra 2011 Fiscal Commission 2010 Bipartisan Policy Center 2010 Social Security Advisory Board 2005
A4	Starting December 2026, 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 2010
A5	Starting December 2024, 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 2010
A6	Starting December 2025, 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: Sanders 2023 Deutch, Hirono 2022 Sanders, DeFazio 2022 Lawson 2021 Larson, Blumenthal, Van Hollen September 2019 Deutch, Hirono 2019 Sanders, DeFazio 2019 Larson, Blumenthal, Van Hollen January 2019 Deutch, Hirono 2017 Lawson 2017 Larson 2017 Sanders, DeFazio 2017 Sanchez 2016 Sanders 2016 Schatz 2015 Deutch 2015 DeFazio 2015 Sanders 2015 Larson 2015 Larson 2014 Harkin 2013 Harkin 2012 Becerra 2011 Deutch 2010
A7	Starting December 2024, 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 2011
A8	Starting December 2024, 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) Memoranda 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 $108,700 and for joint filers with MAGI below $217,400 for December 2025 ($85,000 and $170,000 multiplied by estimated CPI-U for 2018-2025), 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 2025 COLA. For those beneficiaries whose MAGI is above these thresholds, provide no COLA. Use prior tax year income data for this determination. Use the chain-weighted CPI for the COLA for years prior to benefit receipt. Index the eligibility income threshold amounts to the CPI-U after December 2025. 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