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Creates a monthly Consumer Price Index for Elderly Consumers (CPI–E) that the Bureau of Labor Statistics must publish and requires that the CPI–E be used as the statutory Consumer Price Index for Social Security cost-of-living adjustments. It also changes how earnings above the Social Security taxable maximum (the contribution-and-benefit base) are treated: some of those "surplus" earnings would be subject to specified percentages for taxation and would be included in a new surplus component when computing benefits, with new bend points and indexing rules. The bill phases in the CPI–E publication and the COLA change over the year after enactment, applies payroll-tax rules for calendar years after 2025 and self‑employment rules for taxable years beginning in or after 2026, and limits counting increased benefits toward SSI or Medicaid eligibility. It authorizes necessary funds for implementation and creates new computation steps for benefit and tax administration that will affect retirees, high earners, and self‑employed workers, and require rulemaking and systems changes at BLS, SSA, and IRS.
The bill increases Social Security benefits and protects low‑income seniors by tying COLAs to an elderly‑specific CPI, improving elderly inflation measurement and implementation capacity, but it raises federal costs and creates potential administrative mismatches and short‑term confusion.
Seniors (age 62+) will receive larger Social Security cost‑of‑living adjustments because COLAs are tied to an elderly‑specific CPI (CPI–E), increasing monthly retirement income to better match costs they face (e.g., health care).
People who rely on means‑tested programs (SSI and Medicaid beneficiaries, including many low‑income seniors) are protected from losing eligibility when Social Security benefits rise, because increases attributable to the CPI–E are excluded as income/resources for eligibility determinations.
The Bureau of Labor Statistics will be required to publish a monthly CPI–E that better reflects spending patterns of people 62+, and the bill authorizes implementation funding to BLS and SSA so the new index and benefit computations can be rolled out more smoothly, improving government measurement and supporting timely implementation.
All taxpayers and the federal budget will face higher Social Security outlays because larger COLAs under CPI–E raise benefit costs, potentially increasing deficits, future tax pressure, or crowding out other spending.
State and local programs and some federal laws that link adjustments to Social Security COLAs (outside title II/XVI) will not automatically adopt CPI–E, creating inconsistent indexing across programs and additional administrative complexity for governments and recipients.
Beneficiaries (seniors and Medicaid/SSI recipients) may face confusion or temporary disruptions over the timing or retroactivity of CPI–E adjustments and related payments, complicating benefit administration even if income exclusions are provided.
Introduced August 12, 2025 by Jill Tokuda · Last progress August 12, 2025