Description of Proposed Provisions:
Cost-of-Living Adjustment
Estimates based on the intermediate assumptions of
the 2017 Trustees Report
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Change from current law [percent of payroll] |
Shortfall eliminated | |||||
---|---|---|---|---|---|---|
Long-range actuarial balance |
Annual balance in 75th year |
Long-range actuarial balance |
Annual balance in 75th year |
|||
Current law shortfall in long-range actuarial balance is 2.83 percent of payroll and in annual balance for the 75th year is 4.48 percent of payroll. | ||||||
A1 |
Starting December 2018, reduce the annual COLA by 1 percentage point.
graph | table | pdf-graph | pdf-table | memo (Social Security Advisory Board) |
1.80 | 2.38 | 64% | 53% | |
A2 |
Starting December 2018, reduce the annual COLA by 0.5 percentage point.
graph | table | pdf-graph | pdf-table | memo (Social Security Advisory Board) |
0.94 | 1.25 | 33% | 28% | |
A3 |
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.
graph | table | pdf-graph | pdf-table | memo (Ribble) | memo (FY 2014 Budget) | memo (Chaffetz) | memo (Becerra) | memo (Fiscal Commission) | memo (Bipartisan Policy Center 2010) | memo (Social Security Advisory Board) |
0.57 | 0.77 | 20% | 17% | |
A4 |
Starting December 2020, 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) |
0.43 | 0.57 | 15% | 13% | |
A5 |
Starting December 2018, 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 2019, 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 (Deutch, Hirono) | memo (Lawson) | memo (Larson 2017) | memo (Sanders, DeFazio) | memo (Sanchez) | memo (Sanders 2016) | 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) |
-0.39 | -0.54 | -14% | -12% | |
A7 |
Starting December 2018, 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) |
1.70 | 2.25 | 60% | 50% | |
A8 |
Starting December 2018, 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.
graph | table | pdf-graph | pdf-table | memo (Bipartisan Policy Center October 2016) | memo (Bipartisan Policy Center June 2016) |
0.49 | 0.64 | 17% | 14% | |
A9 |
For single/head-of-household/married-filing-separate taxpayers with modified adjusted
gross income (MAGI) below $87,200 and for joint filers with MAGI below $174,400 for
December 2019 ($85,000 and $170,000 multiplied by estimated CPI-U for 2019), 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 2019
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 2019.
graph | table | pdf-graph | pdf-table | memo (Johnson 2016) |
1.30 | 2.42 | 46% | 54% |