A new legislative initiative by Democrats in the US Congress seeks to provide financial relief to millions of older people who depend on Social Security. It seems that COLA adjustments are not enough, and inflation is eroding the purchasing power of all US citizens. This bill is presented as a direct response—almost like a band-aid on a broken bone—to the ongoing financial crisis experienced by Social Security beneficiaries.
In September 2025, the annual inflation rate reached 3% -this is the official rate according to the US government, although gold prices indicate a far steeper inflation in 2025 alone. For those living on fixed incomes, this increase in prices is rapidly eroding their purchasing power. The bill under debate is the Social Security Emergency Inflation Relief Act, which took shape after the announcement of the annual cost-of-living adjustment for 2026, which will be only 2.8 percent. This translates into an average monthly increase of just $56 per month for each average retired beneficiary. Many advocates for the elderly have called this figure laughable for keeping retirees afloat who depend almost exclusively on their monthly Social Security check.
The $200 emergency check
The bill would authorize an additional payment of $200 per month to millions of eligible recipients. This assistance is intended as a temporary emergency increase that would not be subject to taxation. Furthermore, receiving this money would not affect eligibility for other federal assistance programs. This relief proposal would apply for a period of six months, beginning in January 2026 and ending in June of the same year.
In addition to Social Security retirees, the bill also includes recipients of Supplemental Security Income (SSI), railroad retirement benefits, and veterans’ disability compensation or pensions. The sponsors of this bill are Democratic Senators Elizabeth Warren and Kirsten Gillibrand.
The senators argue that for most seniors living on a fixed income, money is tight. The average retirement benefit in August 2025 was approximately $2008 per month. This 10% difference can mean the difference between paying a medical bill or buying food. Although $200 per month is not enough to solve long-term poverty problems, proponents emphasize that it is short-term relief for an immediate crisis situation. The rest of Congress can only think that it is bread for today and more hunger for tomorrow.
The COLA Controversy
The second bill, known as the Boosting Benefits and COLAs for Seniors Act, wants to address the root cause of the annual adjustment. Currently, the SSA calculates COLA using the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). The problem is that this index is based on the spending habits of a much younger population, which has nothing to do with that of an older population that spends a higher percentage of its income on healthcare and housing.
The bill proposes adopting the Consumer Price Index for the Elderly (CPI-E). This experimental metric is specifically designed to track the expenses of Americans aged 62 and older. In other words, it is a metric that more accurately reflects the daily expenses of this segment of the population.
Although this bill sounds very nice, the state of government finances must be taken into account. Can the system really afford this expense? The estimated cost of the $200 emergency relief bill would be approximately $90 billion over the six-month period. If Social Security trust funds are already in trouble—they are estimated to run out in 2035—disbursing that amount would only accelerate the date of insolvency.
However, this does not mean that Social Security would collapse completely, but rather that benefits would be automatically reduced so that they would only be paid out of incoming revenue. It is estimated that benefits will be reduced to 78% of the amount currently scheduled. The pension system was created at a time when life expectancy did not exceed 65 years, and there were 16 active workers for every pensioner.
Today, in the United States, there are only four active workers for every pensioner, and life expectancy has increased by 15 years.
