As the Joint Select Committee on Deficit Reduction searches for ways to cut $1.5 trillion from the federal budget over 10 years, the issue of how the Social Security Cost of Living Index (COLA) will be indexed could become controversial for retired clients.
The committee is expected to recommend replacing the current Consumer Price Index for Urban Wage Workers and Clerical Workers (CPI-W) with the Chained Consumer Price Index for all Urban Consumers (chained CPI).
Would this change create a financial impact on seniors?
Recommended For You
The Congressional Budget Office has estimated that switching to the chained CPI could save the federal government $208 billion over a decade, and more than half the savings would come from a reduction in Social Security benefits. For a 65-year-old person with an average work record, the Strengthen Social Security Campaign estimates that the change would result in a $984 cumulative loss in benefits through age 85 and a $1,392 loss through age 95.
You can read Strengthen Social Security's fact sheet on the proposal here:
AARP opposes this change in calculating the COLA, and its reasoning is here: www.aarp.org/work/social-security/info-07-2011/social-security-lower-colas.html
© 2025 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
