October 24th brought with it the news of a 2.8% increase to all benefits starting in Janaury 2026. This 2.8% increase is known as the Cost of Living Adjustment, or COLA. The COLA is an increased implemented to all benefits issued by the Social Security Administration (SSA) annually in order to counter the effects of year over year inflation hikes.
Relative to the average retiree benefit, a 2.8% increase equates to around $56, however, advocacy groups and lawmakers claim that is not enough for seniors. Subsequently, on October 30th, Senator Elizabeth Warren, with the backing of a number of other Democratic senators, proposed the Social Security Emergency Inflation Relief Act to Congress. Here is what you need to know.
What is the Social Security Emergency Inflation Relief Act?
On October 30th, a group of Democratic senators introduced to Congress the Social Security Emergency Inflation Relief Act. If passed, the proposed legislation will result in an additional $200 being added to all Social Security and Veterans Affairs benefits for a temporary period of six months ending in July 2026. This $200 benefit bump would be implemented in addition to the already confirmed 2.8% COLA increase that is also slated to go into effect as of January 2026.
Co-sponsors who have signed onto this proposed bill include, Senate Minority Leader Chuck Schumer (D-N.Y.), Senate Finance Committee Ranking Member Ron Wyden (D-Ore.), Senators Mark Kelly (D-Ariz.), Angela Alsobrooks (D-Md.), Tammy Duckworth (D-Ill.), Kirsten Gillibrand (D-N.Y.), Chris Van Hollen (D-Md.), Amy Klobuchar (D-Minn.), Alex Padilla (D-Calif.), Tina Smith (D-Minn.) and Peter Welch (D-Vt.).
“While Donald Trump sends $40 billion to Argentina, I’m proposing sending American seniors on Social Security an extra $200 a month to offset higher prices. The cost of everything from coffee to beef to health care is up, in large part due Trump’s chaotic tariffs, and Democrats are fighting to deliver some financial relief and lower costs for Americans,” Sen. Warren asserted in a statement. “This new legislation to expand Social Security is an emergency lifeline for seniors struggling to afford Trump’s tariffs and rising inflation.”
Why are the COLAs falling short?
Advocacy groups such as The Senior Citizens League (TSCL) believe that the incorrect index is being used to determine the COLA each year. As a result, seniors are losing out on thousands of dollars, with the loss only compounding with each passing year.
The COLA is currently determined using the CPI-W, which measures the spending habits of those currently in the work force. TSCL advocates for the index to be switched over to the Consumer Price Index for the Elderly (CPI-E). The CPI-E is currently an experimental index that measures the spending habits of seniors aged 62 and older.
According to a new analysis from TSCL, “the average senior who retired in 1999 has lost nearly $5,000 in Social Security payments as a result of the government using the wrong price index to calculate Cost-of-Living Adjustments (COLAs).”
As such, a proposal to change the index used in the COLA calculation from the CPI-W to the CPI-E has been introduced to Congress. Whether or not either of the proposed bills will be passed remains to be seen, however, the likelihood of it happening is somewhat low.
This is because the proposal has been put forward by the Democratic Party while the Republican Party is in power. Not to mention the fact that the Social Security program has a projected insolvency date that is less than a decade away.
“Americans deserve to retire with dignity, not spend their golden years just trying to get by. Our seniors have spent a lifetime of hard work paying into Social Security, but the payouts simply aren’t keeping up with rising costs, and this year’s annual cost-of-living adjustment is not enough to keep seniors afloat,” Senator Kirsten Gillibrand of New York, who has also co-signed on the proposed bill stated in a news release.
“These two bills would help make sure that older Americans don’t have to choose between paying for medication and buying groceries, providing both short-term relief and long-term solutions. As the top Democrat on the Senate Aging Committee, I’m determined to pass these critical bills to make sure our seniors can age comfortably.”