Sponsors (12)
The bill would raise retirement benefits for many older Americans and better credit very high earnings toward benefits while protecting low‑income eligibility, but it does so at the cost of higher taxes for top earners, increased federal/state spending, and additional administrative burdens.
Seniors (age 62+) would likely receive larger annual COLA increases because Social Security adjustments would be tied to a price index (CPI–E) that better reflects elderly spending patterns.
Low-income beneficiaries on SSI and Medicaid keep Title II benefit increases from counting as income or resources, protecting their eligibility for means-tested programs and preserving access to health and support services.
Workers with earnings above the current Social Security contribution base — including some middle/high earners and self-employed people — would have more of those high earnings counted toward future benefit computation, increasing their potential retirement benefits and aligning benefits more closely with contributions.
The combination of higher COLAs and expanded counted earnings would raise federal Social Security outlays and could increase long‑run fiscal pressure on the program and federal budget unless fully offset.
Higher-earning employees and self-employed people will face higher Social Security tax liability on earnings above the current wage base due to the 'applicable percentage,' reducing take-home pay for those workers.
States could incur higher Medicaid costs because Title II increases would not be counted as income for eligibility, raising state matching obligations and budgetary pressure at the state level.
Based on analysis of 4 sections of legislative text.
Creates a CPI–E for people 62+ and makes it the Social Security COLA index, and applies a new "applicable percentage" to earnings above the Social Security wage base for tax and benefit computations after 2025.
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
Creates a new Consumer Price Index for Elderly Consumers (CPI–E) published monthly by the Bureau of Labor Statistics and makes that index the official price measure used to compute Social Security cost-of-living adjustments (COLAs). The CPI–E reporting begins for months ending on or after July 31 of the calendar year following enactment, and Social Security COLA computations start using CPI–E for quarters ending on or after September 30 of the second calendar year after enactment. Imposes a new "applicable percentage" calculation that brings earnings above the Social Security contribution-and-benefit base into the Social Security and self-employment tax and benefit computation framework for calendar years after 2025 (and taxable years starting in or after 2026 for self-employment). The bill amends both the Internal Revenue Code and the Social Security Act to apply that percentage to wages and net self-employment income above the annual earnings cap.