Sponsors (11)
Introduced August 12, 2025 by Jill Tokuda · Last progress August 12, 2025
The bill shifts Social Security toward an elderly-specific inflation measure and counts some income above the payroll tax cap toward future benefits—boosting retirement benefit adequacy for many older Americans while increasing near- and long-term program costs and raising contribution or reporting burdens for higher earners and the self-employed.
Seniors and Medicare beneficiaries: Social Security benefits would be indexed to an elderly-specific price index (CPI–E), likely producing larger COLAs that increase retirement income and help cover elder-specific costs like healthcare and housing.
Low-income SSI recipients: Increases in Social Security benefits under the new indexing would not count as income or resources for SSI, protecting SSI eligibility and payments for low-income older adults.
High earners and the self-employed: Earnings above the Social Security contribution base would have a portion included in benefit calculations (surplus AIME and an applicable percentage for net self-employment earnings), potentially increasing future Social Security benefits for those with incomes above the current cap.
Taxpayers and the Social Security program: Using CPI–E to raise COLAs and counting additional earnings toward benefits would increase long-term Social Security outlays and liabilities, placing larger fiscal pressure on trust funds and federal budgets over time.
Some workers and self-employed people: A portion of income above the current contribution base would be counted (and could lead to higher reported contributions), increasing near-term tax/contribution burdens for those affected.
Federal statistical capacity: Creating and publishing a new monthly CPI–E imposes implementation costs and additional workload on the BLS, which could divert resources from other programs or require budget increases.
Based on analysis of 4 sections of legislative text.
Establishes a monthly CPI‑E for people 62+, makes it the statutory CPI for certain Social Security COLAs, and changes how earnings above the Social Security base are taxed and credited for benefits.
Creates a new monthly Consumer Price Index for Elderly Consumers (CPI‑E) based on spending of people aged 62+, and makes that CPI the statutory index used for certain Social Security cost‑of‑living adjustments. Changes how earnings above the Social Security contribution-and-benefit base are treated for payroll tax and benefit calculations by introducing an “applicable percentage” for remuneration and self‑employment income above the base, and adds new benefit computation rules (surplus‑AIME) with a specified bend point for initial 2026 calculations.