HR4968-119

What This Bill Does

The Protecting and Preserving Social Security Act combines higher-benefit inflation indexing with new taxable earnings above the current contribution and benefit base. BLS must publish a monthly Consumer Price Index for Elderly Consumers, or CPI-E, for spending typical of people age 62 or older, and Social Security cost-of-living adjustments would use CPI-E for computation quarters ending on or after the specified future date. Increases caused by the CPI-E switch would not count as income or resources for later SSI or Medicaid eligibility and benefit calculations. The bill also amends payroll tax wage and self-employment income rules after 2025 so an applicable percentage of remuneration or net self-employment earnings above the contribution and benefit base is included. It then adds surplus average indexed monthly earnings to the Social Security benefit formula, giving some benefit credit for newly taxed high earnings above the base.

Who Benefits and How

Social Security beneficiaries benefit if CPI-E produces larger cost-of-living adjustments that better reflect older adults' expenses. Older adults age 62 or older benefit because BLS must publish an elderly-consumer price index focused on their spending patterns. SSI and Medicaid recipients benefit because CPI-E-driven Social Security increases do not count as income or resources for later eligibility calculations. Social Security trust fund advocates benefit from additional payroll tax coverage on some earnings above the contribution and benefit base.

Who Bears the Burden and How

High-income workers must pay payroll taxes on an applicable percentage of wages above the contribution and benefit base after 2025. Self-employed high earners must include an applicable percentage of above-base net earnings in Social Security tax calculations. Bureau of Labor Statistics staff must prepare and publish CPI-E every month. Social Security Administration actuaries and payment staff must implement CPI-E COLAs, new contribution rules, and surplus earnings benefit credits.

Key Provisions

• Creates a monthly Consumer Price Index for Elderly Consumers at BLS.
• Amends Social Security COLA rules to use CPI-E for covered future computation quarters.
• Protects SSI and Medicaid eligibility from treating CPI-E-driven Social Security increases as income or resources.
• Applies payroll tax rules after 2025 to an applicable percentage of earnings above the contribution and benefit base.
• Adds surplus average indexed monthly earnings to the benefit formula for covered high earners.