Alternative Inflation Measures for the Social Security Cost-of-Living Adjustment (COLA)

Source: Julie M. Whittaker, Congressional Research Service, CRS Report, R43363, October 15, 2015

…This report explains how the Social Security COLA is computed under current law and explains some criticisms of using the CPI-W to compute COLAs. It discusses two alternative measures of inflation, the C-CPI-U and the CPI-E. The report then explains how using those alternative measures would affect different groups and how it would affect Social Security’s finances. It concludes with a review of key recent proposals to change COLA computations and other possible changes to the COLA…