Some seniors react to the COLA as if it were a policy crafted by lawmakers, expressing anger at elected officials when, as was the case this past year, they do not get a yearly increase.So there's this government program and the rise in benefits is dictated by the current law which is based on the inflation rate. The inflation rate has been historically low, so the rise in benefits is low. But that's no fair! And it's not political posturing - perish the thought.
In reality, the size of the COLA is not in politicians’ hands. Designed to keep inflation from eroding benefits, the COLA is automatically based on growth in the consumer price index designed for wage earners and clerical workers, a metric known as the CPI-W. A year-over-year rise in the CPI-W means an increase in benefits for Social Security recipients.
However, that doesn’t mean progressive groups are engaging in empty political posturing. To be sure, they are using the meager COLAs to advance their larger argument that Social Security benefits are too modest, particularly in light of the growing role the program plays in providing retirement security.
The answer, of course, is to raise the Social Security tax rate so that seniors can receive more generous benefit hikes. And since SS is universal program with a flat tax rate, this tax hike would apply equally to all income. What do you say, Bernie Sanders? Let's have a tax hike for everyone.