Is the Flat-Rate COLA a solution to the insolvency issue? - Committee for a Responsible Federal Budget
One of the proposed parts of the solutions to the impending Social Security Trust Fund insolvency issue concerns how the annual cost-of-living adjustment is calculated and applied. Two terms that have been used are COLA cap and Flat-Rate COLA. A COLA cap limits the annual cost-of-living adjustment for Social Security benefits, reducing increases for higher earners while maintaining inflation protection for most beneficiaries. A Flat-Rate COLA would set a fixed, uniform cost-of-living adjustment for all beneficiaries, rather than the current COLA application, which gives higher-income beneficiaries a larger dollar amount. As part of the Committee for a Responsible Federal Budget’s Trust Fund Solutions Initiative, which introduces novel ideas to shore up Social Security, the Committee looks at the impact of the Flat-Rate COLA and the COLA cap limits would have on the Social Security Trust Fund. To read their assessment, click here…
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