Sponsors (11)
Introduced February 27, 2025 by Bernard Sanders · Last progress February 27, 2025
The bill raises Social Security benefits, strengthens protections for low‑earners and students, and increases tax enforcement on investment income—providing bigger, more tailored retirement and survivor benefits while increasing federal outlays, payroll/surtax burdens for some taxpayers, and administrative complexity.
Seniors and disabled beneficiaries (including some already receiving benefits and those first eligible after 2025) will receive higher initial and recomputed Social Security benefits because bend-point percentages and dollar bend points are raised and PIAs will be recomputed.
Low-earning workers with 10+ years of work who become eligible after 2025 will get a higher guaranteed minimum PIA tied to the single-person poverty guideline, increasing baseline benefit income for many low-income retirees and disabled beneficiaries.
Seniors and retirees will likely see larger, more representative annual COLAs because cost-of-living adjustments are tied to CPI–E (an index focused on elderly spending), and the BLS will publish CPI–E monthly to inform policymakers and the public.
Taxpayers and program finances face substantial long-term pressure because higher benefits, larger COLAs, and a higher guaranteed minimum increase Social Security outlays, raising risks to trust-fund solvency and the possibility of future payroll tax increases or benefit adjustments.
Employees and employers whose pay falls in the newly taxed band (between the payroll-tax base and $250,000) will face higher payroll-tax liabilities, reducing workers' take-home pay and raising employer labor costs.
Small-business owners, pass-through shareholders, and investors could face much higher marginal tax on business-related investment income under the expanded surtax rules, reducing after-tax returns and increasing compliance and planning costs.
Based on analysis of 16 sections of legislative text.
Changes Social Security benefit formulas and indexing (CPI‑E), raises benefit floors, extends student eligibility to 22, expands payroll/self‑employment taxes up to $250k, hikes NIIT to 16.2%, and merges trust funds.
Makes broad changes to Social Security benefit math and indexing, raises certain payroll and self‑employment tax liabilities on higher earnings, sharply increases the net investment income tax rate, and consolidates Social Security trust funds into a single fund. It also extends child/student entitlement through age 22 and requires the Bureau of Labor Statistics to publish a Consumer Price Index for the elderly (CPI‑E) to be used in Social Security cost‑of‑living adjustments. Many changes take effect in calendar and tax years after enactment (notably January 1, 2026 for key benefit and student‑eligibility changes). The package increases benefits for some low‑income and long‑career workers, while generating new tax revenue from wages, self‑employment income, and investment income to support program finances and a merged trust fund structure.