Retirees Shouldn’t Get Bigger Raises Than the Workers Who Fund Them

Starting next year, seniors receiving Social Security will see an increase in their benefit checks of 3.6 percent, or by approximately $75 per month on average. That is thanks to the program’s automatic Cost-of-Living Adjustment, or COLA, which raises benefits every year in accordance with inflation.

That seems fair: If the cost of living has gone up, retirees’ incomes should, too. But when inflation is running high, as it presently is, the adjustment imposes an enormous fiscal cost. Back-of-the-envelope calculations show that existing beneficiaries will receive more than $60 billion in additional funds in 2027. All that money has to be borrowed. Social Security is already scheduled to go insolvent by 2032, and shortfalls already add to the publicly owned national debt.

About the Author

John R. Puri

John R. Puri is the Thomas L. Rhodes Fellow at National Review.

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Starting next year, seniors receiving Social Security will see an increase in their benefit checks of 3.6 percent, or by approximately $75 per month on average. That is thanks to the program’s automatic Cost-of-Living Adjustment, or COLA, which raises benefits every year in accordance with inflation.

That seems fair: If the cost of living has gone up, retirees’ incomes should, too. But when inflation is running high, as it presently is, the adjustment imposes an enormous fiscal cost. Back-of-the-envelope calculations show that existing beneficiaries will receive more than $60 billion in additional funds in 2027. All that money has to be borrowed. Social Security is already scheduled to go insolvent by 2032, and shortfalls already add to the publicly owned national debt.