A Washington budget watchdog wants to limit annual Social Security cost-of-living adjustments for the top quarter of beneficiaries. Senior advocacy groups are not taking it quietly.
The Committee for a Responsible Federal Budget formally introduced its COLA cap proposal in October 2025 as part of its Trust Fund Solutions Initiative, then expanded on it with a companion “Six Figure Limit” rollout in March 2026. Neither measure has become law — but both are gaining traction among fiscal hawks as the program’s financial clock ticks louder.
What the COLA Cap Would Actually Do
Beneficiaries in the bottom 75% of earners — those receiving roughly $45,000 or less annually in Social Security benefits — would continue receiving the full annual COLA adjustment tied to the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). The Social Security Administration announced a 2.8% COLA effective January 2026. Retirees above that threshold would face a hard dollar cap on their adjustment.
Using the Urban Institute’s DYNASIM model, researchers project that a 2.8% CPI-W rate would produce a $950 cap figure for 2026. In practical terms: a higher earner whose COLA would have been $1,150 would instead receive $950. A typical retiree with an $850 COLA would see no change at all.
The current spread is worth spelling out. The 2.8% adjustment translates to roughly $650 for a retiree with a $24,000 annual benefit and approximately $1,400 for the highest-income beneficiary collecting $49,400 per year.
CRFB estimates the 75th-percentile cap would save $115 billion over 10 years — approximately 10% of the program’s 75-year funding shortfall. Dropping the cap to the 50th percentile would expand savings to $385 billion over a decade, though it would affect half of all beneficiaries.
“A COLA cap could meaningfully and quickly improve the solvency of Social Security’s trust funds while concentrating adjustments on those most able to bear them, maintaining full inflation protection for most beneficiaries, continuing to maintain inflation protection on an adequate level of benefits for all beneficiaries, and ensuring solvency solutions are spread over more generations.” — CRFB report
The Trust Fund Math Behind the Urgency
The solvency picture has deteriorated. SSA Chief Actuary Karen Glenn warned in an August 5, 2025, letter to Senator Ron Wyden that the One Big Beautiful Bill Act — specifically its new $6,000-per-person senior deduction that reduces the taxable portion of benefits — would pull forward the combined OASDI trust fund depletion from the third quarter of 2034 to the first quarter of 2034. The OASI fund alone would now deplete by the fourth quarter of 2032, one quarter earlier than the prior estimate of the first quarter of 2033.
At depletion, incoming payroll tax revenue would cover only 81% of scheduled benefits under the combined fund scenario. Under the OBBBA-accelerated OASI-only scenario, CRFB’s analysis projects an automatic, across-the-board benefit cut of roughly 24% once the OASI fund runs dry in 2032. On a $1,976 average monthly benefit, that’s a $474-per-month reduction, dropping the average check to approximately $1,502. Under current law with the combined fund, the projected benefit cut at depletion is approximately 19%.
TSCL’s Objections — and Its Counter-Proposal
The Senior Citizens League is pushing back sharply. The organization argues the cap penalizes workers who spent careers in higher-wage jobs and paid proportionally more into the system.
“Rather than taking away benefits from people who have paid into the system their entire working lives, we should focus on strengthening America’s pension system.” — TSCL Executive Director Shannon Benton
TSCL’s preferred revenue fix: eliminate the payroll tax wage cap entirely. In 2026, only wages up to $184,500 are subject to Social Security taxation. Lifting that ceiling, TSCL argues, would generate new revenue without touching benefit structures. The organization is also pressing Congress to institute a minimum 3% annual COLA floor and switch the COLA calculation from CPI-W to the CPI-E — an index that more accurately tracks spending patterns of Americans aged 62 and older.
“Americans are right to worry about our current COLA projection. The fact is that most senior households already get by on only about 58% as much income as their working-age counterparts.” — Shannon Benton, TSCL
The Companion Proposal Worth Watching
CRFB’s Six Figure Limit proposal, rolled out March 24, 2026, would cap Social Security retirement benefits at $100,000 per year for couples collecting at the Normal Retirement Age — currently headed to 67 — and $50,000 for single filers. Delayed claimers would face adjusted caps: $124,000 for couples both claiming at 70. Early claimers at 62 would see a $70,000 ceiling.
Today, the cap would affect fewer than 0.05% of couples. The threshold is not indexed to wage growth, though — meaning it would gradually reach further down the income scale over time.
What to Watch Next
The official 2027 COLA will be announced by SSA in mid-October 2026, calculated from third-quarter 2026 inflation data. That number will set the stakes for any cap proposal moving through Congress. No vote has been scheduled on either the COLA cap or the Six Figure Limit.
Near-retirees with high earnings histories and projected benefits above $45,000 annually should monitor legislative developments closely — the structure of any enacted cap could directly affect lifetime income planning.
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