Distributional Effects of Reducing the Cost-of-Living Adjustments

by Anya Olsen
Policy Brief No. 2008-03 (released November 2008)
Table equivalent for Chart 1 Average individual benefit difference as a percentage of scheduled benefits for beneficiaries aged 62 or older in 2070, by policy option and age group
Age Chained-CPI Half-point One-point Payable
62–69 -1.3 -2.9 -5.6 -31.2
70–79 -2.9 -6.5 -12.5 -31.2
80–89 -5.0 -10.9 -20.6 -31.2
90 or older -7.4 -16.0 -29.3 -31.2
SOURCE: Author's calculations using Modeling Income in the Near Term (MINT) data.
NOTE: CPI = consumer price index.
Table equivalent for Chart 2 Average benefit reductions compared with scheduled benefits level off over time for the overall beneficiary population aged 62 or older, by policy option
Year Half-Point One-Point Chained-CPI Payable
2025 -5.20 -10.00 -2.30 0.00
2026 -5.40 -10.40 -2.40 0.00
2027 -5.50 -10.70 -2.50 0.00
2028 -5.70 -11.00 -2.60 0.00
2029 -5.80 -11.20 -2.60 0.00
2030 -6.00 -11.50 -2.70 0.00
2031 -6.10 -11.80 -2.80 0.00
2032 -6.20 -11.90 -2.80 0.00
2033 -6.40 -12.20 -2.90 0.00
2034 -6.50 -12.40 -2.90 0.00
2035 -6.60 -12.70 -3.00 0.00
2036 -6.70 -12.90 -3.00 0.00
2037 -6.80 -13.10 -3.10 0.00
2038 -6.90 -13.20 -3.10 0.00
2039 -7.00 -13.40 -3.20 0.00
2040 -7.10 -13.60 -3.20 0.00
2041 -7.20 -13.80 -3.30 0.00
2042 -7.30 -13.90 -3.30 -18.50
2043 -7.40 -14.00 -3.30 -26.90
2044 -7.40 -14.10 -3.40 -26.90
2045 -7.50 -14.20 -3.40 -26.90
2046 -7.50 -14.30 -3.40 -27.00
2047 -7.60 -14.40 -3.40 -27.00
2048 -7.60 -14.40 -3.50 -27.10
2049 -7.60 -14.50 -3.50 -27.10
2050 -7.70 -14.50 -3.50 -27.20
2051 -7.70 -14.50 -3.50 -27.40
2052 -7.70 -14.50 -3.50 -27.60
2053 -7.70 -14.50 -3.50 -27.70
2054 -7.60 -14.40 -3.50 -27.90
2055 -7.60 -14.40 -3.50 -28.10
2056 -7.60 -14.40 -3.50 -28.30
2057 -7.60 -14.40 -3.50 -28.60
2058 -7.60 -14.40 -3.50 -28.80
2059 -7.60 -14.40 -3.50 -29.00
2060 -7.60 -14.40 -3.50 -29.20
2061 -7.60 -14.40 -3.50 -29.40
2062 -7.60 -14.40 -3.50 -29.60
2063 -7.60 -14.40 -3.50 -29.80
2064 -7.60 -14.40 -3.50 -30.00
2065 -7.60 -14.40 -3.50 -30.20
2066 -7.60 -14.40 -3.50 -30.40
2067 -7.60 -14.40 -3.50 -30.60
2068 -7.60 -14.40 -3.50 -30.80
2069 -7.60 -14.40 -3.50 -31.00
2070 -7.60 -14.40 -3.50 -31.20
2071 -7.60 -14.40 -3.50 -31.30
2072 -7.60 -14.40 -3.50 -31.50
2073 -7.70 -14.50 -3.50 -31.60
2074 -7.70 -14.50 -3.50 -31.80
2075 -7.70 -14.50 -3.50 -31.90
2076 -7.70 -14.50 -3.50 -32.10
2077 -7.70 -14.50 -3.50 -32.30
2078 -7.70 -14.50 -3.50 -32.40
2079 -7.70 -14.40 -3.50 -32.60
2080 -7.70 -14.40 -3.50 -32.70
SOURCE: Author's calculations using Modeling Income in the Near Term (MINT) data.
NOTE: CPI = consumer price index.