Sponsors (3)
Official title: 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 July 31, 2025 by Mazie Hirono · Last progress July 31, 2025
The bill shifts benefit calculations to better reflect older Americans' inflation and count more high-end earnings toward benefits—boosting retirement income and transparency for seniors while raising federal costs, adding administrative burden, and introducing some uncertainty in distributional outcomes.
People age 62+ would see Social Security COLAs calculated using a price index that better reflects elderly spending (CPI–E), likely increasing monthly benefits for current retirees.
People first eligible for benefits after 2025 (future retirees) will have more wages above the payroll contribution base counted toward benefits, likely raising their future monthly benefits.
SSI and Medicaid beneficiaries will not lose program eligibility because COLA increases from using the new price index are excluded from income/resource tests.
Millions of beneficiaries and taxpayers will face higher Social Security costs because larger COLAs and counting more earnings above the base raise benefit payouts, increasing federal spending and long-term pressure on the Trust Funds and the deficit.
The BLS and SSA will incur implementation and administrative costs to produce the new monthly index and apply changes, with funding and appropriations unspecified.
Workers and small‑business owners will face more complex reporting and recordkeeping because wages and self‑employment income above the payroll base are prorated by an applicable percentage and integrated into benefit calculations.
Based on analysis of 4 sections of legislative text.
Directs BLS to produce a monthly CPI–E for Social Security COLAs and applies an "applicable percentage" to earnings above the payroll base for post‑2025 wage/self‑employment computations.
Creates a new Bureau of Labor Statistics Consumer Price Index for Elderly Consumers (CPI–E) to be used for Social Security cost‑of‑living adjustments and changes how earnings above the Social Security contribution/benefit base are counted for payroll and self‑employment purposes beginning after 2025. The bill directs BLS to publish CPI–E monthly, authorizes necessary appropriations to implement it, and inserts an “applicable percentage” rule and table to determine what portion of remuneration and net self‑employment earnings above the payroll base are included in Social Security wage and benefit calculations. The changes will generally increase how COLAs are calculated (potentially raising Social Security benefit growth) while also altering the statutory computation of wages and self‑employment earnings above the contribution base for tax and benefit accounting starting in calendar years after 2025 (taxable years beginning 2026 and later). It includes cross‑references to preserve other federal indexing rules and specifies treatment for SSI and Medicaid resource counting.