Budget & Taxes (Seniors)

This bill would change how Social Security cost-of-living adjustments are calculated by creating a new Consumer Price Index for Elderly Consumers (CPI-E) that tracks spending patterns specific to seniors aged 62 and older. It would also modify tax calculations for high earners by applying declining percentages of income above the Social Security tax cap (from 86% in 2026 down to 0% after 2031) for both wages and self-employment income. Additionally, the bill would adjust benefit calculations to include "surplus earnings" above the tax cap for individuals with high lifetime earnings. These changes would primarily affect Social Security beneficiaries and high-earning workers, particularly those becoming eligible for benefits after 2025.

The Protecting and Preserving Social Security Act creates a new Consumer Price Index for Elderly Consumers (CPI-E) to determine Social Security cost-of-living increases, replacing the current index that tracks general inflation. It changes how benefits are calculated for income above the Social Security contribution base after 2025, with a declining percentage (starting at 86% in 2026 and decreasing to 0% by 2031) of that income counting toward benefits. The bill also establishes a new formula for calculating benefits based on "surplus earnings" for individuals reaching retirement age after 2025. These changes will primarily affect high-income workers and retirees, but any benefit increases from these changes won't impact eligibility for Supplemental Security Income (SSI) or Medicaid.