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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 2010 Trustees Report

  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.
-1.92 -4.12
A1 Beginning in December 2011, reduce the annual COLA by 1 percentage point.
graph | table | pdf-graph | pdf-table | memo
1.58 2.19 -0.34 -1.93
A2 Beginning in December 2011, reduce the annual COLA by 0.5 percentage point.
graph | table | pdf-graph | pdf-table | memo
0.82 1.15 -1.10 -2.97
A3 (2011) Starting with the December 2011 cost-of-living adjustment (COLA), compute the COLA using a chained version of the consumer price index for wage and salary workers (CPI-W). This new computation is estimated to result in an annual COLA that is 0.3 percentage point less, on average.
graph | table | pdf-graph | pdf-table | memo (Social Security Advisory Board) | memo (Fiscal Commision)
0.50 0.70 -1.42 -3.42
A3 (2012) Starting with the December 2012 cost-of-living adjustment (COLA), compute the COLA using a chained version of the consumer price index for wage and salary workers (CPI-W). This new computation is estimated to result in an annual COLA that is 0.3 percentage point less, on average.
graph | table | pdf-graph | pdf-table | memo
0.49 0.70 -1.43 -3.42
A4 Starting with the December 2013 cost-of-living adjustment (COLA), compute the COLA using a chained version of the consumer price index for wage and salary workers (CPI-W). This new computation is estimated to result in an annual COLA that is 0.3 percentage point less, on average. The new COLA would not apply to DI benefits and would apply for all OASI benefits, except for those who are converted from disabled worker to retired worker status.
graph | table | pdf-graph | pdf-table | memo
0.36 0.50 -1.56 -3.62
A5 Beginning December 2011, add 1 percentage point to the annual cost-of-living adjustment for OASDI monthly benefits for beneficiaries who have lived past a "specified age", which reflects their age 65 life expectancy. The "specified age" is based on the beneficiary's year of birth and is determined as the sum of: (1) 65 and (2) the unisex cohort life expectancy at age 65 for the Social Security area population with the same year of birth as the beneficiary.
graph | table | pdf-graph | pdf-table | memo
-0.08 -0.11 -2.00 -4.23
A6 Starting with the December 2012 cost-of-living adjustment (COLA), compute the COLA based on changes in the Consumer Price Index for the Elderly (CPI-E). Use of this CPI series is estimated to result in an annual COLA that is 0.2 percentage point higher, on average, than using the consumer price index for urban wage and clerical workers (CPI-W).
graph | table | pdf-graph | pdf-table | memo
-0.34 -0.49 -2.26 -4.61
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Last reviewed or modified February 28, 2011