Sponsors (3)
The bill would raise Social Security benefits and improve elderly‑focused inflation data and benefit predictability—helping retirees and some low‑income beneficiaries—at the cost of higher federal and potential state spending, added administrative burdens, and distributional/long‑term financing concerns.
Seniors and current Social Security beneficiaries (age 62+) would see COLAs tied to an elderly-weighted price index (CPI–E), likely increasing monthly benefits more accurately to reflect their spending.
Low‑income Social Security, SSI, and Medicaid recipients would experience improved purchasing power from higher COLAs without losing means‑tested benefits because increases to title II payments are excluded as countable income/resources.
High earners and self‑employed workers would have portions of earnings above the Social Security contribution base counted toward benefits, raising potential future benefit amounts for people who exceed the wage base.
All taxpayers and current/future beneficiaries face higher federal Social Security outlays and greater long‑term trust‑fund pressure, which could require higher payroll taxes, reduced benefits elsewhere, or other fiscal adjustments.
State governments and state taxpayers may incur higher Medicaid costs if benefit increases or eligibility interactions raise state spending obligations.
Employers, the IRS, SSA, and BLS would face added administrative and compliance costs (system updates, new tables, and resource needs) to implement the new indexing, applicable‑percentage tables, and CPI–E publication.
Based on analysis of 4 sections of legislative text.
Makes CPI–E the legal CPI for Social Security COLAs and requires counting a statutory portion of earnings above the payroll-tax cap when computing benefits.
Introduced July 31, 2025 by Mazie Hirono · Last progress July 31, 2025
Creates a new Consumer Price Index for Elderly Consumers (CPI–E) that the Bureau of Labor Statistics will publish monthly and makes that index the statutory Consumer Price Index used to set Social Security cost‑of‑living adjustments (COLAs). It also changes how some earnings above the Social Security payroll-tax cap are treated for benefit calculations by introducing an adjustable “applicable percentage” to include a portion of wages and self‑employment income above the contribution-and-benefit base when computing benefits and related calculations. The bill phases in the CPI–E reporting and applies the CPI–E to COLA calculations on a delayed schedule, authorizes appropriations for BLS to publish the new index, and adds technical tax‑code and Social Security Act changes that take effect for calendar years after 2025 or tax years beginning in 2026. It also specifies that increases to title II benefits caused by these changes are not counted as income or resources for SSI or Medicaid eligibility purposes.