The Impact of the Consumer Price Index on the Insolvency of the Social Security Trust Fund

Yearly changes in the consumer price index are used to adjust social security benefits in order to keep the purchasing power of social security beneficiaries the same. Currently, social security benefits are adjusted using a fixed-weighted price index that reflects the purchasing patterns of workers. However, some believe that a price index that captures the spending habits of the elderly should adjust monthly social security benefits, while others argue that a chain-weighted price index is a more accurate indexation technique.