A cost-of-living adjustment is based on the

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A cost-of-living adjustment is based on the rate of inflation, which measures the general increase in prices for goods and services over time. It is used to ensure that the purchasing power of a person's income remains consistent and keeps up with the rising cost of living. Financing by Congress, federal deficit, and changing needs of each recipient may be factors considered in determining the amount of the adjustment, but the basis of the adjustment is the rate of inflation.

A Cost-Of-Living Adjustment Is Based on the