Glossary term
Cost-of-living adjustment
The annual increase applied to Social Security benefits, indexed to a measure of consumer prices.
The adjustment is set by formula, not by decision. Under current law it is computed from the change in a specific price index — the CPI for Urban Wage Earners and Clerical Workers, CPI-W — measured over the third quarter against the same quarter of the last year in which an adjustment took effect.
Because it is formulaic and automatic, it is a good illustration of mandatory spending: no appropriation is passed, no vote is taken, and the outlay changes anyway.
Where you will see it
Announced each autumn for the following year. It is automatic under current law and does not require a vote.
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