Sponsors (11)
The bill shifts benefit calculations to better reflect elderly spending and counts more high earnings toward retirement benefits—boosting benefits for many seniors and aligning contributions/benefits for higher earners—while increasing taxes for some workers and raising federal/state costs and administrative complexity.
Seniors (age 62+) would see their Social Security COLAs more closely track the inflation they experience because benefits would be tied to a CPI series reflecting elderly spending, likely increasing retirement benefits for many retirees.
Workers with earnings above the current contribution/benefit wage base — including higher-earning employees and self-employed people — would have a portion of those excess earnings counted toward future Social Security benefits (via an applicable-percentage inclusion), increasing their eventual benefit credits and better aligning contributions with benefit calculations.
Low-income beneficiaries on SSI and those relying on Medicaid would be protected because increases to Title II benefits would not be counted as income or resources for means-tested programs, helping preserve eligibility and access to services.
Taxpayers and the federal budget would face higher long-run Social Security outlays because (a) COLAs tied to an elderly-focused price index would likely raise benefit levels and (b) counting more earnings toward benefits could increase future payouts, adding fiscal pressure unless offset elsewhere.
Higher-earning employees and self-employed individuals would face increased Social Security payroll tax liability on earnings above the current wage base, and some of those workers may pay more without receiving proportionate near-term benefit increases, reducing net take-home pay.
States that administer Medicaid could incur higher costs and matching obligations if Title II increases are excluded from income calculations, raising state fiscal burdens and possibly affecting state budgets and services.
Based on analysis of 4 sections of legislative text.
Creates a CPI for people 62+, makes Social Security COLAs use it, and applies an "applicable percentage" tax/inclusion to earnings above the Social Security wage base after 2025.
Introduced August 12, 2025 by Jill Tokuda · Last progress August 12, 2025
Creates a new Consumer Price Index for Elderly Consumers (CPI–E) that measures price changes for U.S. residents aged 62 and older and requires the Bureau of Labor Statistics to publish it monthly. It changes Social Security cost-of-living adjustments (COLAs) to use that CPI–E and protects the increase from counting as income or resources for SSI and Medicaid eligibility. Adds a new payroll/self-employment tax rule for earnings above the Social Security contribution-and-benefit base: an “applicable percentage” will be applied to remuneration and net self-employment earnings above the wage cap when computing Social Security tax and benefit bases for years after 2025 (self-employment additions begin in taxable years starting in or after 2026). The bill authorizes necessary funding for the CPI–E work and sets phased effective dates for the various changes.