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Backing New COLA Formula: A Pragmatic Step to Save Social Security for Future Generations

Published July 25, 2026 at 12:03 PM UTC

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Supporters of the proposed COLA formula change argue it is a necessary and moderate adjustment to prevent the entire Social Security system from becoming insolvent. Without changes, the trust funds are set to run out in about a decade, triggering an across-the-board benefit cut of roughly 20 percent. Switching to chained CPI is seen as a relatively painless way to reduce the shortfall by about half, according to the Social Security Administration's own actuaries. The adjustment would only modestly reduce annual increases — by an average of 0.3 percentage points — and would not affect current retirees' base benefits. Proponents also note that chained CPI is already used in other federal programs, such as tax brackets, and is considered a more accurate measure of inflation. By acting now, Congress can avoid deeper cuts later. The change would affect future COLAs gradually, giving retirees time to plan. Fiscal watchdog groups, including the Committee for a Responsible Federal Budget, have endorsed similar measures as part of a balanced package. They argue that protecting the system for younger workers and future retirees outweighs the smaller short-term gains for current beneficiaries. Without action, everyone faces a worse outcome.