Could a flat-rate COLA help fix Social Security?

(NewsNation) — One idea to strengthen Social Security‘s finances would give every beneficiary the same annual dollar increases in their monthly checks.

A new analysis from the Committee for a Responsible Federal Budget examined how replacing the current cost-of-living adjustment (COLA) with a flat rate could affect the program as it faces a looming funding shortfall.

Under current law, all Social Security beneficiaries receive the same percentage benefit increase each year through COLA, which is based on inflation.

However, because the adjustment is calculated as a percentage, beneficiaries with higher monthly checks receive larger annual dollar increases — a difference that compounds over time.

A so-called “flat-rate COLA” would also be based on inflation, but instead of giving everyone the same percentage increase, it would give everyone the same dollar increase based on a benchmark benefit level.

That option would help shore up Social Security’s finances by slowing future benefit growth broadly, though the largest reductions would fall on those with the highest lifetime earnings.

It’s one of several reforms lawmakers could consider as they look for ways to put the nation’s primary retirement program on stable footing.

Without congressional action, retirees could........

© The Hill