Sponsors (11)
The bill increases retirement benefits and protects means-tested program eligibility by using an elderly-focused inflation measure and counting more high-end earnings toward benefits, but it raises taxes for higher earners, increases federal and state costs, and adds administrative complexity.
Seniors (age 62+) would likely receive larger annual COLA increases because benefits would be tied to a CPI that reflects elderly spending patterns (CPI–E), raising retirement income for many retirees whose costs rise faster than the general CPI.
Low-income beneficiaries on SSI and Medicaid would keep Social Security Title II benefit increases from being counted as income or resources, preserving eligibility and protecting their access to means-tested health and cash assistance.
Workers with earnings above the current Social Security contribution-and-benefit base — including higher-earning employees and self-employed individuals — would have more of their high earnings counted toward future benefits, potentially increasing their Social Security credits and future benefit amounts.
All taxpayers could face higher federal Social Security spending and longer‑run fiscal pressure because using CPI–E and counting more earnings toward benefits would raise benefit accruals and outlays.
Higher-earning employees and self-employed people would face increased Social Security payroll tax liability on earnings above the current wage base due to the applicable-percentage inclusion.
States that administer Medicaid could incur higher costs because Title II benefit increases would not be counted as income/resources for means-tested programs, raising state matching obligations and budget pressure.
Based on analysis of 4 sections of legislative text.
Creates a monthly CPI for people 62+, uses it for Social Security COLAs, and applies an "applicable percentage" to earnings above the Social Security wage base for wages and self‑employment 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) measured monthly for U.S. residents aged 62 and older and requires the Bureau of Labor Statistics to publish it. Directs that the CPI–E replace the current “Consumer Price Index” used to compute Social Security cost‑of‑living adjustments (COLAs) and clarifies that any resulting increase in Title II benefits does not count as income or resources for SSI or Medicaid eligibility. Separately, establishes an “applicable percentage” rule to count and tax a portion of wages and self‑employment earnings above the Social Security contribution-and-benefit base beginning for calendar years after 2025 (wages) and taxable years starting in or after 2026 (self‑employment), changing how payroll and self‑employment tax bases and Social Security benefit credits are calculated. The bill authorizes necessary appropriations and phases in the effective dates for different provisions.