COLA Index Increases at Highest Rate in 40 Years

COLA Index Increases at Highest Rate in 40 Years
IronHeart/Getty Images

The latest figures tracking consumer prices – numbers that determine the annual cost-of-living adjustment (COLA) for military retirees, disabled veterans, and many others – show an increase not seen in decades.


The last time these rates were recorded, legislation designed to right the federal budget nearly cost military retirees their COLA. Time will tell whether history repeats itself, and whether MOAA will again need to join with other advocacy groups to combat such proposals.


Facts and Figures

Each year’s COLA increase comes from the average increase of the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) for July, August, and September of the previous year. The 2022 figure of 5.9% came from an average CPI-W of 268.421 for those months in 2021 compared with 253.412 in 2020, for example. The Social Security Administration breaks down the math.


MOAA tracks the monthly release of CPI-W figures on its COLA Watch page. The January 2022 figures, which came out last week, offer more than just a jump on the COLA Watch chart – they represent the largest year-over-year increase for CPI-W to begin a calendar year since 1983.


While the January figures don’t factor directly into the COLA calculation, each month’s release provides a trend line toward those critical summer months. And the 8.23% increase from January 2021 to January 2022 stands out among recent data; no January number has been more than 5% above the previous January number since 1991.


So What?

When COLA figures skyrocketed in the early 1980s, Congress took action – and not in a good way for beneficiaries.

  • First, a budget reconciliation act in 1982 delayed the effective date of the COLA by a month for each of the next three years – from a March payout in 1982 to a June payout in 1986.
  • Then, the 1983 omnibus specifically targeted “military and entitlement spending” as part of efforts to reduce the federal budget.
  • The Balanced Budget and Emergency Deficit Control Act of 1985 (better known as the Gramm-Rudman-Hollings Act) stopped COLA entirely for some beneficiaries, offering exemptions to veterans compensation but not military retirees.
  • The COLA set to take effect Dec. 1, 1985, was suspended, and no adjustment was made until the following December.


The short version: As costs rose and benefits increased, legislators attempted to weaken the purchasing power of military retirement pay significantly in the name of budget reform. And if rumblings of benefit cuts are any indication, military members past and present could be in the fiscal crosshairs yet again.


Now What?

MOAA stood up to protect these benefits when they came under threat decades ago. The Retired Officers Association (TROA, which became MOAA in 2003), co-led the formation of The Military Coalition as part of its work to turn back this legislation. That coalition now represents about 5.5 million members of the uniformed services community, and its members stand ready to protect what’s been earned through service and sacrifice.


While legislators or think-tank reports may see a cut to your COLA as a way to make the math work, MOAA recognizes it could make a significant difference in the daily lives of so many military retirees and their families. As fewer legislators bring uniformed service to the Hill, MOAA and our Military Coalition partners will continue to ensure these lawmakers understand the impact of such actions. While the figures may reflect those from the early 1980s, we will work to avoid a similar, damaging legislative cycle.


Keep track of these efforts and others at MOAA’s Advocacy News page or via The MOAA Newsletter.


The More Members We Have, the More Influence We Have Over Our Benefits

MOAA is committed to protecting the rights of servicemembers and their families. Lend your voice and support these efforts today. Because the larger our voice is, the greater our impact will be.

Join or Upgrade Now

About the Author

Kevin Lilley
Kevin Lilley

Lilley serves as MOAA's digital content manager. His duties include producing, editing, and managing content for a variety of platforms, with a concentration on The MOAA Newsletter and Follow him on Twitter: @KRLilley