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Summary of Provisions That Would Change the Social Security Program
Solvency Provisions

Description of Proposed Provisions:
Cost-of-Living Adjustment

Estimates based on the intermediate assumptions of the 2015 Trustees Report


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  Change from present law
[percent of payroll]		 Shortfall eliminated
Long-range
actuarial
balance		 Annual
balance in
75th year		 Long-range
actuarial
balance		 Annual
balance in
75th year
Present law shortfall in long-range actuarial balance is 2.68 percent of payroll and in annual balance for the 75th year is 4.65 percent of payroll.
A1 Starting December 2016, reduce the annual COLA by 1 percentage point.
graph | table | pdf-graph | pdf-table | memo (Social Security Advisory Board) 		1.73 2.35 65% 51%
A2 Starting December 2016, reduce the annual COLA by 0.5 percentage point.
graph | table | pdf-graph | pdf-table | memo (Social Security Advisory Board) 		0.90 1.23 34% 27%
A3 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.
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 0.76 21% 16%
A4 Starting December 2018, 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) 		0.41 0.56 15% 12%
A5 Starting December 2016, 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 -3% -2%
A6 Starting December 2017, 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 (Schatz) | memo (Deutch 2015) | memo (DeFazio 2015) | memo (Sanders 2015) | memo (Larson 2015) | memo (Larson 2014) | memo (Harkin 2013) | memo (Harkin 2012) | memo (Becerra) | memo (Deutch 2010) 		-0.38 -0.53 -14% -11%
A7 Starting December 2016, 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) 		1.63 2.22 61% 48%
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Last reviewed or modified September 14, 2015