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On Social Security? A Big Change Could Be Coming to How Benefits Are Calculated

Social Security COLA

A lot of people are concerned about rising inflation in the present economy, but one group that seems likely to benefit from inflation is Social Security beneficiaries.

That’s because of the cost-of-living adjustment (COLA) built into Social Security, which could cause benefits to jump as high as 6.1 percent.

That’s the prediction, issued earlier this summer, from the Senior Citizens League.

“This is the highest COLA I’ve ever estimated in my 26-plus years of researching the annual inflation adjustment,” Mary Johnson, the Social Security and Medicare analyst for the Senior Citizens League, said last month. “While the [COLA] adjustment is high and will come as a welcome boost, retirees are trying to cope with soaring inflation right no with only a 1.3 percent boost to their benefit this year.”

Of course, it’s not all good news, since inflation means that Social Security beneficiaries will be paying higher prices for goods, along with everyone else. And the change won’t go into effect until the next benefits go out early next year.

“The big concern is that current high inflation gets built into customers’ and business’ expectations, leading to higher long-run inflation, as happened in the 1970s,” economist Gus Faucher of PNC Financial Services Group said in a recent note that was cited by CBS.

Meanwhile, one member of Congress has proposed legislation to change how such benefits are calculated.

Congressman John Garamendi, a Democrat from California, has introduced a bill called the Fair COLA for Seniors Act.

“This bipartisan legislation would create a new Consumer Price Index for the Elderly (CPI-E) to produce a cost of living adjustment (COLA) that would reflect the expenses seniors have more accurately than the current, flawed calculation that Social Security uses,” Garamendi said in a statement on his Facebook page earlier this month. The Congressman had introduced similar legislation in 2017 and 2019.

“Using a COLA that actually reflects how retirees spend their money – especially in healthcare – is a no-brainer that will increase benefits and make Social Security work better for the people it serves.”

It remains unclear whether the Fair COLA for Seniors Act has any major amount of support in Congress.

It has been endorsed by Social Security Works, however.

“Social Security Works applauds Rep. Garamendi for championing Social Security and sponsoring the Fair COLA for Seniors Act of 2021,”  Nancy Altman, President of Social Security Works, said in a statement.

“One of the most valuable features of Social Security is its inflation protection. However, the current method of calculating inflation under-measures the cost of living of seniors and people with disabilities who are disproportionately burdened by rising costs of prescription drugs and other essential medical care. By more accurately accounting for the costs faced by Social Security beneficiaries, this legislation better prevents the erosion over time of Social Security’s modest but vital earned benefits.”

 Stephen Silver is a journalist, essayist and film critic, who is also a contributor to The Philadelphia Inquirer, Philly Voice, Philadelphia Weekly, the Jewish Telegraphic Agency, Living Life Fearless, Backstage magazine, Broad Street Review and Splice Today. The co-founder of the Philadelphia Film Critics Circle, Stephen lives in suburban Philadelphia with his wife and two sons. Follow him on Twitter at @StephenSilver.

Written By

Stephen Silver is a journalist, essayist, and film critic, who is also a contributor to Philly Voice, Philadelphia Weekly, the Jewish Telegraphic Agency, Living Life Fearless, Backstage magazine, Broad Street Review, and Splice Today. The co-founder of the Philadelphia Film Critics Circle, Stephen lives in suburban Philadelphia with his wife and two sons. Follow him on Twitter at @StephenSilver.



  1. Alberticus

    July 23, 2021 at 7:16 am

    Social Security is NOT an “entitlement”
    Social Security is YOUR money, that YOU put in & matched by your Employer which makes it all YOUR pay.
    Social Security is the Private PROPERTY of the Workers that PAID for it.
    Social Security is a TONTINE, a TRUST FUND.. American workers pay into it their entire lives through payroll deductions. Social Security payments are supposed to come from that fund. So why is Social Security needing an increase in the debt ceiling? Where did our money go? Of course, this is a rhetorical question. Starting with the Lyndon Johnson administration, the government “borrowed” the cash in the Social Security Trust Fund, replacing is with Treasury Bonds that the US Government is now unable to redeem. $3TRILLION dollars. The implications are obvious. Because the US Government cannot redeem those Treasury Bonds in the Social Security Trust Fund, the US Government is already in default against the American workers. The American workers’ money is gone. The US Government has effectively embezzled the retirement money ($2.6TRILLION+) of American workers. So, in borrowing money to replace the looted cash, the US Government is expecting future workers to pay for Social Security benefits that were already paid for once before, effectively double-billing We The People. To put it another way, the US Government just sold us an apple, but is forcing us to pay for two, and trying to look like this is wise fiscal management of the peoples’ retirement funds!
    Now sit down:
    This PIG has been living off YOUR future for 20 YEARS — Free Health Care, Free rent, $700 in Soc Sec & $280 in food stamps. and “your” politicians claim YOUR Social Security is “going broke”?!??! The Politicians STOLE it and GAVE it away
    . How many 100thousands ILLEGALS are living directly off YOU thanks to “your” Treasonous politicians????

  2. Wilbert Morales

    July 23, 2021 at 9:13 am

    This year will be a very bad year to change to CPI-E due to higher inflation in certain categories. The comparison data shows the CPI-W versus CPI-E for 2021. As you can see below, switching to the CPI-E this year would cost retirees a lot of money. I think the people have a right to know before this bill is passed how much they will lose. Hopefully, Congress will pass the bill with provision to start Q3 of 2022 and not starting Oct 2021. Please help to bring it to everyone’s attention.
    Thanks, Wilbert

    CPI-W is for Urban Wage Earners and Clerical Workers
    2020 251.361 251.935 251.375 249.515 249.521 251.054 252.636 253.597 254.004 254.076 253.826 254.081
    2021 255.296 256.843 258.935 261.237 263.612 266.412
    Estimated COLA Increase for 2022 6.1%

    CPI-E is for Elderly People age 62 and Older
    2020 281.482 282.284 281.778 280.266 280.306 281.716 282.939 283.593 283.885 284.006 283.922 284.217
    2021 285.422 286.939 288.726 290.74 292.759 295.083
    Estimated COLA Increase for 2022 4.8%

  3. J

    July 23, 2021 at 9:42 am

    I’ll make it easy for ’em: Don’t pay me SS benefits in retirement, just give me back everything I paid in in one lump sum. I’ll sign a binding agreement to never request government funds again. I can invest and live off the money better than govt can. And I can do something with it that I can’t with the money in the “Social Security Trust Fund” : I can leave it to my heirs.

  4. John Doe

    July 23, 2021 at 3:06 pm

    Alberticus is wrong, in several ways.

    The Supreme Court ruled that SS is exactly an “entitlement program”, that Congress can change any time they can garner the votes to change the law, and have no contractual obligation to pay you back anything. See Flemming v Nestor (1960).

    The General Fund _borrowed_ the SS surpluses, and are paying them back precisely according to the terms of those loans (bonds), and will continue to do so until all these bonds are completely satisfied. SS law REQUIRES surpluses to be invested in US Treasury Bonds and always has. There is no other rational place to invest them, nowhere that would not be politicized, and leaving them in a vault in cash would be stupid and would leave SS with FEWER funds.

    But yes, SS is a foolish Ponzi scheme that should never have been created. If a private pension system were structured this way, people would be in prison over it. Virtually everyone born after WW1 would have done far better keeping the SS payments in their own name and investing them by themselves, even if they had only invested in US Treasury Bonds. The only reasonable thing to do at this point is to phase it out over four or five decades.

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