Proposal to Cap Social Security COLAs for High-Income Earners Aims to Preserve Program Solvency
A new proposal from the Committee for a Responsible Federal Budget (CRFB), a bipartisan nonprofit, suggests limiting annual Cost-of-Living Adjustments (COLAs) for Social Security beneficiaries with the highest incomes. Under this plan, all beneficiaries would still receive a COLA, but those with the largest benefits, typically corresponding to higher lifetime earnings, would face a fixed-dollar cap on their annual increase. For example, a beneficiary receiving $50,000 in annual benefits might see their COLA capped at $900 instead of the full $1,000 if the COLA is 2%. Beneficiaries earning less than $45,000 would continue to receive the full adjustment. The cap would be based on the COLA received by beneficiaries around the 75th percentile of benefits. This proposal aims to help restore the solvency of the Social Security program, which is projected to run out of reserves by the fourth quarter of 2032, potentially leading to a reduction in scheduled benefits to 78%. 
