Sponsors (11)
The bill improves benefit accuracy and fairness for retirees and better credits some high earners’ extra wages, but does so at the cost of higher federal/state spending, increased taxes on top earners, and added administrative burden.
Seniors (age 62+) would likely receive larger Social Security cost-of-living adjustments because COLAs would be tied to a CPI that better reflects elderly spending, increasing monthly benefits for many retirees.
Low-income beneficiaries on SSI or Medicaid would keep increases from Title II without those increases being counted as income or resources, protecting eligibility and access to means-tested supports.
Workers with earnings above the current Social Security contribution-and-benefit base — including many middle- and higher-earners and self-employed people — would have a portion of those extra earnings counted toward future benefits, improving benefit accruals and making treatment of high earnings more progressive.
All taxpayers could face greater federal fiscal pressure because higher COLAs and expanded counted earnings would likely raise Social Security outlays and federal spending unless fully offset.
Higher-earning employees and self-employed people would face increased Social Security payroll tax liability on earnings above the current wage base (via the applicable-percentage inclusion), reducing take-home pay for affected workers and businesses.
States that administer Medicaid could see higher program costs and matching obligations if more beneficiaries remain eligible or qualify for higher payments because Social Security increases aren’t counted as income.
Based on analysis of 4 sections of legislative text.
Adopts a CPI–E for Social Security COLAs and applies an "applicable percentage" to earnings above the Social Security wage base for tax and benefit computations.
Creates a new Consumer Price Index for Elderly Consumers (CPI–E) to use when computing Social Security cost-of-living adjustments, and changes how earnings above the Social Security wage base are treated for payroll and self-employment tax and benefit calculations by applying a new “applicable percentage.” The CPI–E must be published monthly by BLS and the Social Security Act’s definition of “Consumer Price Index” is amended to mean the CPI–E, with effective dates phased in; separate amendments take effect for remuneration and self-employment earnings above the contribution-and-benefit base for calendar years after 2025 (taxable years starting in or after 2026).
Official title: To amend title II of the Social Security Act and the Internal Revenue Code of 1986 to make improvements in the old-age, survivors, and disability insurance program.
Introduced August 12, 2025 by Jill Tokuda · Last progress August 12, 2025