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Social Security Cost-of-Living Adjustments and the Consumer Price Index /

개인저자
Burdick, Clark ;, Fisher, Lynn
수록페이지
73-88 p.
발행일자
2007.09.14
출판사
Social Security Board :For sale by the Supt. of Docs., U.S. G.P.O.
초록
[영문]OASDI benefits are indexed for inflation to protect beneficiaries from the loss of purchasing power implied by inflation. In the absence of such indexing, the purchasing power of Social Security benefits would be eroded as rising prices raise the cost of living. By statute, cost-of-living adjustments (COLAs) for Social Security benefits are calculated using the Bureau of Labor Statistics Consumer Price Index for Urban Wage Earners and Clerical Workers. Others argue that the measure of inflation underlying the COLA is technically biased, causing it to overestimate changes in the cost of living. This argument implies that current COLAs tend to increase, rather than merely maintain, the purchasing power of benefits over time. Price indexes are not true cost-of-living indexes, but approximations of cost-of-living indexes (COLI). Changes in the index used to calculate COLAs directly affect the amount of benefits paid, and as a result, projected solvency of the Social Security program.