Annual automatic cost-of-living adjustment for Social Security recipients
The first automatic annual adjustment to Social Security benefits was paid in 1975, the result of legislation passed by Congress in 1972. Before that, cost-of-living adjustments were awarded periodically by lawmakers, generally in large amounts. For example, there was a 10 percent increase in 1971, a 20 percent increase in 1972 and two increases in 1974 totaling 18 percent.
The 2022 adjustment of 8.7 percent was the fourth-largest since automatic annual adjustments began, behind 9.9 percent in 1979, 11.2 percent in 1981 and 14.3 percent in 1980.
The move to an automatic COLA reflected bipartisan agreement, said Nancy Altman of Social Security Works and a historian of the program.
“Some progressives didn’t like the lag effect, where inflation could be rising but people might wait two years to get an adjustment, and some conservatives didn’t like the politics, where there might be a COLA that was larger than the actual rate of inflation,” she said.
William Arnone of the National Academy of Social Insurance thinks the large COLA for 2023 could become a political issue this fall. “Democrats could try to leverage it, especially with the one-two punch of the Part B premium going down,” he said.
By contrast, he notes that two Republican senators, Ron Johnson of Wisconsin and Rick Scott of Florida, have suggested that Social Security and Medicare should be eliminated as federal entitlement programs and instead should be approved annually by Congress.
“It could be a sleeper issue in the midterm elections,” Mr. Arnone said.
President Biden signaled as much last month when he warned that Republicans posed a threat to Social Security and Medicare, citing the proposals made by the two senators.