Past COLA Changes Costing Seniors Thousands In Social Security Annually

Past COLA Changes Costing Seniors Thousands In Social Security Annually

A widely-discussed plan to reduce the federal deficit would use a slower-growing consumer price index (CPI), known as the “chained” CPI, to calculate the annual cost-of-living adjustment (COLA).  The proposal, often referred to as “chaining” the COLA, would not be the first time the government has tweaked the inflation index to cut government spending on benefit programs

A new analysis by The Senior Citizens League (TSCL), one of the nation's largest nonpartisan seniors groups, indicates that changes the government has already made in the late 1990s to how it calculates the CPI have resulted in cutting the Social Security benefits of today’s seniors by about 7 percent since 2000.  Social Security recipients, who retired with average monthly benefits of about $816 in 2000, lost $947 this year alone, and about $7,293 in COLA growth over the past twelve years.  According to the analysis, the CPI changes that became effective by 2000 will cut more than $32,000 of Social Security income from individuals who retired with average benefits over a 25-year retirement.  “Chaining the COLA would further deepen the loss of benefits,” says Larry Hyland, Chairman of TSC

The previous changes have not only resulted in cutting the growth of COLAs received by Social Security recipients, but those of military retirees and COLA recipients in all other federal benefit programs as well.  They came after a 1996 government commission headed by economist Michael Boskin said the CPI overstated the rate of inflation, and thus “overpaid” COLA recipients.  Proponents of slowing COLA growth today make the same argument.

“That simply isn’t the case,” says TSCL Chairman, Larry Hyland.  TSCL conducts an annual survey of typical senior costs.  “That data indicates that Social Security benefits have lost more than one-third of their buying power since 2000,” Hyland says.  “Changes that cut COLAs even further would make it that much harder for seniors and disabled beneficiaries to afford rising Medicare, energy, and other costs,” he notes.

More than 45 million Social Security beneficiaries were receiving benefits by 2000.  The beneficiaries who are still alive are the group that has absorbed the fullest extent of the COLA cuts to date, which compound like interest, growing deeper over time.  Chaining the COLA would cut benefits for this group an additional 10% through 2025, the analysis found.

“We are mobilizing our grassroots efforts to fight COLA cuts and contact Members of Congress,” Hyland says.  To learn more, or to take a poll, visit  For more ideas about saving on Medicare costs and stretching retirement income, request a free issue of TSCL’s ”The Best Ways To Save” newsletter.  Send $1 for postage and handling to: The Senior Citizens League, ATTN:  BWTS, 1001 N. Fairfax St., #101, Alexandria, VA  22314.


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With about 1 million supporters, The Senior Citizens League is one of the nation's largest nonpartisan seniors groups. Located just outside Washington, D.C., its mission is to promote and assist members and supporters, to educate and alert senior citizens about their rights and freedoms as U.S. Citizens, and to protect and defend the benefits senior citizens have earned and paid for.