How Big Were the Previous Social Security Cost-of-Living Adjustments?

The first automatic annual adjustment to Social Security benefits was paid in 1975, the result of legislation passed by Congress in 1972. Before that, cost-of-living adjustments were awarded periodically by lawmakers, generally in large amounts. For example, there was a 10 percent increase in 1971, a 20 percent increase in 1972 and two increases in 1974 totaling 18 percent.

Since automatic annual adjustments began, the largest rise was 14.3 percent in 1980.

The move to an automatic COLA reflected bipartisan agreement, said Nancy Altman of Social Security Works and a historian of the program.

“Some progressives didn’t like the lag effect, where inflation could be rising but people might wait two years to get an adjustment, and some conservatives didn’t like the politics, where there might be a COLA that was larger than the actual rate of inflation,” she said.

William Arnone of the National Academy of Social Insurance thinks the large COLA for 2023 could become a political issue this fall. “Democrats could try to leverage it, especially with the one-two punch of the Part B premium going down,” he said.

Article source: https://www.nytimes.com/2022/10/09/business/retirement/social-security-cola-history.html