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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 2009 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.
 -2.00 -4.34
A1 Beginning December 2010, reduce cost-of-living adjustment for OASDI benefits by 1 percentage point.
graph | table | pdf-graph | pdf-table | memo 		1.55 2.19 -0.45 -2.15
A2 Beginning December 2010, reduce cost-of-living adjustment for OASDI benefits by 0.5 percentage point.
graph | table | pdf-graph | pdf-table | memo 		0.81 1.15 -1.20 -3.19
A3 Starting with the December 2010 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 -1.51 -3.64
A4 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. 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 -1.64 -3.84
A5 Beginning December 2010, 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 -0.10 -2.08 -4.44
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Last reviewed or modified September 28, 2010