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Committee for a Responsible Federal Budget Proposes Capping Cost-of-Living Adjustments for High-Income Social Security Beneficiaries

The Committee for a Responsible Federal Budget has proposed a new solution to address the looming insolvency of the Social Security trust fund. The bipartisan nonprofit suggests limiting cost-of-living adjustments (COLA) for the highest-income earners, which would preserve the full adjustment for middle- and low-income retirees while capping the increase for those with the largest benefits. According to the proposal, the top 25% of beneficiaries could face a smaller annual increase than currently required by law. This move is intended to help restore solvency and put the program on a sustainable path. The latest Social Security Trustees Report indicates that the retirement trust fund is projected to run out of reserves in the fourth quarter of 2032. Without congressional action, the program would only be able to pay 78% of scheduled retirement benefits after that point. Experts suggest that focusing on high-income earners allows for necessary cuts to be made by those who can most afford it. The proposal aims to save approximately $115 billion over 10 years if the cap applies to the top 25% of beneficiaries.

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