On Oct. 13, the Social Security Administration announced Social Security benefits would increase by 5.9% in 2022 to account for inflation. The AARP says that this will boost benefits by an average of $92 a month next year.
Many social media users credited President Joe Biden for the increase in retirement benefits.
Is the president directly responsible for Social Security benefit increases?
No, the president does not directly set Social Security benefit increases. Increases in Social Security benefits are automatically determined through a formula based on the Consumer Price Index (CPI).
WHAT WE FOUND
The SSA explains its cost-of-living adjustment, called COLA, is calculated by taking the percent increase in Consumer Price Index (CPI) from one year to the next. It’s calculated at the end of September, hence why the SSA announced it this month. If there’s no increase, then there isn’t any adjustment in Social Security benefits that year.
The Bureau of Labor Statistics describes the CPI as “the most widely used measure of inflation.” The measure is designed to show changes in the average price of common consumer goods. If the CPI is higher than it was the year before, then, on average, consumers have to pay more for the same things. If a person is paying more for the same things, then their cost of living is higher — and that’s inflation.
In its most recent CPI press release, the BLS said the CPI has increased by 5.4% over the last 12 months. The CPI-W, a specific subset of the CPI that Social Security uses for its adjustments, has increased by 5.9% over the last year. That’s the exact increase in Social Security benefits for 2022.
This COLA happens automatically each year as described in the Social Security Act under “Cost-Of-Living Increases In Benefits.” The SSA says this was enacted as part of the 1972 Social Security Amendments.
Prior to the Amendments taking effect in 1975, Congress had to set any Social Security benefit increases with legislation. The COLA increased benefits anywhere from 5.9% to 14.3% between 1975 and 1982, but until this year, benefit increases have not been that high. The largest increases since 1982 were in 1990 and 2008, when benefits increased by 5.4% and 5.8% respectively.
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