Social Security Expansion Act

Summary

Raises several Social Security benefit floors and changes how benefits and cost-of-living adjustments are calculated, expands student dependent eligibility to age 22 for full-time post-secondary students, consolidates the OASI and DI trust funds into a single Social Security Trust Fund, and requires annual transfers equal to Social Security payroll taxes into that Fund. It also expands the payroll-tax base for high earners (including self-employment tax adjustments), increases the Net Investment Income Tax rate, and directs the BLS to publish a Consumer Price Index for Elderly Consumers (CPI–E) to be used in Social Security COLA calculations after a transition period. The bill phases some benefit minimums by years of work, requires agencies to recompute benefits where needed, sets multiple effective dates (notably Jan 1, 2026 for many benefit changes), and changes reporting and trustee arrangements for the unified Social Security Trust Fund. Several provisions raise revenue by taxing higher wages and investment income more heavily while increasing benefit protections for many workers and retirees who first become eligible after 2025.

• Raises the first bend-point fraction in the Social Security benefit formula (from 90% to 95%) and increases the second bend-point amount by 18% for eligibles after 2025.
• Establishes an alternative minimum PIA tied to the 2025 poverty guideline for workers with more than 10 years of work who first become eligible after 2025.
• Changes the COLA index used for Social Security to the Consumer Price Index for Elderly Consumers (CPI–E) after a transition, and directs BLS to publish CPI–E monthly.
• Expands dependent child benefits so full-time post-secondary students may remain eligible until age 22, with rules for temporary nonattendance and enrollment timing.
• Expands the payroll-tax base to tax wages between the contribution base and $250,000 when the statutory base is below $250,000; applies similar treatment to self-employment tax.
• Raises the Net Investment Income Tax rate to 16.2% and narrows exclusions so some active business income is counted as investment income, while excluding items already subject to FICA/SE tax.
• Creates a single consolidated Social Security Trust Fund combining OASI and DI assets and requires annual deposits equal to Social Security payroll taxes.
• Requires federal agencies (SSA, IRS, Treasury, BLS) to implement new computations, publish CPI–E, recompute affected benefits, and adjust reporting and trustee structures.
• Multiple effective dates and recomputation rules introduce administrative complexity and transitional adjustments for beneficiaries, employers, and tax filers.