HR1700-119

What This Bill Does

The Social Security Expansion Act pairs benefit increases with higher dedicated taxes. It changes Social Security cost-of-living adjustments to use the Consumer Price Index for Elderly Consumers and requires the Bureau of Labor Statistics to publish CPI-E monthly. It increases the minimum benefit for lifetime low earners with more than 10 years of work, tied to a percentage of the federal poverty guideline and indexed by the national average wage index. It extends child benefits to full-time students up to age 22 when the child is tied to disability insurance benefits or a deceased insured worker. To finance the expansion, it applies Social Security payroll and railroad retirement taxes to wages above the current contribution base up to $250,000, applies parallel self-employment tax rules, increases the net investment income tax from 3.8 percent to 16.2 percent, broadens net investment income, and consolidates the old-age, survivors, and disability trust funds into a single Social Security Trust Fund funded by payroll, self-employment, and 62 percent of section 1411 receipts.

Who Benefits and How

Social Security retirees benefit because CPI-E may produce cost-of-living adjustments that better reflect older households' spending. Lifetime low earners benefit from a higher minimum benefit after 2025 based on years of work. Student children of disabled or deceased workers benefit because full-time student benefits can continue until age 22. Social Security beneficiaries benefit from new dedicated revenue streams intended to strengthen the trust fund.

Who Bears the Burden and How

High-income wage earners face renewed payroll tax exposure on wages above the current contribution base and up to $250,000. Self-employed high earners face parallel Social Security tax increases on net earnings above the contribution base. Investors with net investment income face a tax increase from 3.8 percent to 16.2 percent and broader taxable income. Social Security Administration staff must recompute benefits, administer CPI-E COLAs, student eligibility, and trust-fund consolidation. Bureau of Labor Statistics staff must publish the CPI-E each month.

Key Provisions

• Requires Social Security COLAs to use the Consumer Price Index for Elderly Consumers.
• Expands the minimum benefit for lifetime low earners with more than 10 years of work.
• Extends child benefits for full-time students tied to disabled or deceased insured workers until age 22.
• Requires higher-income wages and self-employment earnings above the contribution base to face added Social Security tax exposure.
• Requires a higher and broader net investment income tax with part of those receipts deposited into Social Security.