COLA Act of 2021

To amend title II of the Social Security Act to provide for a minimum annual cost-of-living increase for Social Security benefits, and for other purposes. 1. Short title This Act may be cited as the Certainty for Older Living Americans Act of 2021 COLA Act of 2021 2. Computation of cost-of-living increases (a) In general Section 215(i) of the Social Security Act ( 42 U.S.C. 415(i) (1) in paragraph (1)(B), by striking with respect to which the applicable increase percentage is greater than zero; (2) in paragraph (2)— (A) in subparagraph (A)— (i) in clause (ii), in the matter following subclause (III), by striking applicable increase percentage the increase percentage determined under clause (iv) for such year (ii) by adding at the end the following: (iv) The increase percentage determined under this clause for a year shall be the greater of— (I) the applicable increase percentage with respect to a cost-of-living computation quarter in such year; or (II) the arithmetical mean of the increase percentages determined under this clause for each of the years in the 10-year period ending with the year before such year. ; and (B) in the first sentence of subparagraph (D), by striking and the percentage thereof , the percentage thereof, and the increase percentage determined under subparagraph (A)(iv) for the following year (b) Effective date The amendments made by this section shall apply with respect to cost-of-living computation quarters ending on or after September 30, 2021. 3. Working group on use of national accounts data (a) Establishment The Secretary of Labor and the Secretary of Commerce shall establish a working group (in this section referred to as the Working Group (1) an accurate, timely, and relevant Consumer Price Index; and (2) up-to-date expenditure weights. (b) Membership (1) Appointment The Secretary of Labor and the Secretary of Commerce shall appoint to the Working Group individuals with expertise relating to statistical and computational methods, survey research, and economic, social, and demographic measurement. (2) Representation In appointing representatives to the Working Group, the Secretary of Labor and the Secretary of Commerce shall consider appointing members from relevant Federal agencies and non-Federal stakeholder groups, including— (3) the Bureau of Labor Statistics; (4) the Bureau of Economic Analysis; and (5) the Federal Economic Statistics Advisory Committee. (c) Report Not later than 12 months after the date of enactment of this Act, the Working Group shall submit to the Committee on Education and Labor of the House of Representatives and the Committee on Health, Education, Labor, and Pensions of the Senate a report that includes the findings and recommendations of the Working Group under subsection (a). (d) Termination The Working Group shall terminate upon submission of the report required under subsection (c).

Summary: Certainty for Older Living Americans Act of 2021 or the COLA Act of 2021 This bill sets out an alternative method to calculate cost-of-living adjustments for Social Security benefits. The current method is based on the annual change in the Consumer Price Index for Urban Wage Earners and Clerical Workers, which results in no or small increases to benefits following a year with deflation or low inflation. The alternative method established by this bill is based on a 10-year average of cost-of-living adjustments. The Social Security Administration must use whichever method results in the larger increase for a given year. In addition, the Department of Labor and the Department of Commerce must establish a working group to make recommendations on incorporating specified economic data when producing relevant consumer price indexes.