Sponsors (41)
Official title: To enhance Social Security benefits and ensure the long-term solvency of the Social Security program.
Introduced February 27, 2025 by Val Hoyle · Last progress February 27, 2025
The bill increases Social Security benefits and tightens tax rules to raise revenue and clarify coverage, benefiting many retirees and lower‑earners while substantially raising program costs, taxes for higher earners, and administrative complexity—creating a trade‑off between improved benefits/targeting and larger fiscal, compliance, and distributional consequences.
Social Security beneficiaries (new and some existing) will receive higher monthly benefits because the Primary Insurance Amount formula and the first bend point are increased and some past PIAs are to be recomputed.
All Social Security beneficiaries will likely get larger cost-of-living adjustments because COLAs will use the CPI–E (a measure that better reflects older Americans' inflation) and BLS will publish CPI–E monthly for greater transparency.
Low-income workers with 10+ years of earnings will have a higher, poverty-linked minimum Social Security benefit that is indexed so the floor maintains value over time.
A wide group of Americans (taxpayers and future beneficiaries) will face higher long‑term Social Security outlays because benefit increases (formula changes, COLA using CPI–E, higher minimums, and extended eligibility) add recurring cost pressure on the program.
Workers, self‑employed people, small businesses, and high‑income investors will face higher taxes or tax bills — payroll-tax exposure on wages up to $250,000 and an expanded NIIT base increase tax liabilities for many individuals and businesses.
Federal agencies, employers, payroll processors, tax preparers, and beneficiaries will face substantial administrative and compliance burdens (recomputations of PIAs, new CPI–E implementation, layered wage rules, NIIT changes, and Trust Fund accounting changes), raising costs and creating risk of errors or delays.
Based on analysis of 16 sections of legislative text.
Raises Social Security PIA bend-point/share and minimum PIA, switches COLAs to CPI‑E, extends student benefits to age 22, changes payroll/self‑employment tax layers up to $250k, raises NIIT to 16.2%, and merges OASI/DI trust funds.
Raises several Social Security benefit floors and changes how benefits are indexed and calculated, including increasing the first PIA bend point percentage, adding a new minimum PIA tied to poverty guidelines for longer-working beneficiaries, switching COLA calculations to the CPI–E, and extending student-child benefit eligibility to age 22 in many cases. It also makes major tax-law changes that affect payroll and self-employment tax treatment above the Social Security wage base, creates an intermediate $250,000 covered-pay tier, raises the net investment income tax from 3.8% to 16.2% and broadens its base to include active business income in many cases, and consolidates the OASI and DI trust funds into a single Social Security Trust Fund. The bill affects retirees and near-retirees, current workers (including employees and the self-employed), high earners and investors, the Social Security Administration and Treasury operations. Many benefit provisions take effect January 1, 2026, while tax provisions apply beginning in the first calendar or taxable year after enactment as specified in each provision.