ThinkTankWeekly

Congress Uses Outdated Inflation Measures for Benefit Spending

CATO | 2026-10-19 | economy

Topics: United States

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English Summary

The article argues that federal benefit programs (like Social Security and SSI) use outdated inflation measures (CPI-W/CPI-U) that systematically overestimate the true cost of living by failing to account for the substitution effect. This creates a "double standard," as the tax code already uses the more accurate Chained CPI-U. The author notes that this methodological flaw leads to automatic benefit increases that cost taxpayers more than necessary, citing potential savings in the trillions of dollars. Policy-wise, the recommendation is that Congress mandate the use of Chained CPI-U for all benefit indexing to align benefit spending with the more accurate inflation measure used in the tax code, thereby ensuring greater fiscal sustainability.

中文摘要

本文論述聯邦福利計畫(如社會安全和SSI)所使用的通脹衡量指標(CPI-W/CPI-U)過時,它們未能計入替代效應,從而系統性地高估了真實生活成本。這形成了一種「雙重標準」,因為稅法本身已經採用了更為準確的鏈式CPI-U(Chained CPI-U)。作者指出,這種方法論上的缺陷導致福利自動增加的支出超出必要範圍,並援引了數兆美元的潛在節省額度。在政策層面,建議國會強制要求所有福利的指數化調整均採用鏈式CPI-U,以使福利支出與稅法中使用的更準確通脹指標保持一致,從而確保更高的財政永續性。

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