Protecting and Preserving Social Security Act
- Sponsor
- Rep. Tokuda, Jill N. [D-HI-2]
- Committees
- Education and Workforce Committee (primary)
- Last action
- Aug 12, 2025
Bottom line
The bill seeks to strengthen Social Security by increasing benefits for retirees through a more representative inflation measure and by boosting program revenue through increased contributions from high-income earners.
What it actually does
This bill proposes two major changes to the Social Security program: it mandates the use of a new Consumer Price Index for Elderly Consumers (CPI-E) for calculating annual cost-of-living adjustments (COLAs), and it gradually eliminates the cap on earnings subject to Social Security taxes while also including a small portion of these newly taxed 'surplus earnings' in the benefit calculation formula. These changes aim to enhance benefits for seniors and improve the program's long-term financial stability.
Proponents argue
Proponents argue that this bill will ensure Social Security benefits keep pace with the actual cost of living for seniors, who often face higher healthcare and housing costs than the general population. They also contend that requiring higher earners to contribute more to the system and crediting those contributions in benefit calculations will improve the program's long-term solvency and fairness, ensuring that the wealthiest contribute their fair share.
Opponents contend
Opponents might argue that increasing the Social Security tax base to include all earnings above the current cap constitutes a significant tax increase on high-income earners, potentially disincentivizing work, investment, or entrepreneurship. They may also raise concerns that expanding benefits, even through CPI-E, could accelerate the depletion of Social Security trust funds if not accompanied by more substantial, comprehensive reforms to address the program's actuarial deficit.
The bill is concise enough for an informed reader to understand its core provisions within a reasonable timeframe, making it accessible for public scrutiny.
Title I, Sec. 101 & 102
Use of Consumer Price Index for Elderly Consumers (CPI-E) for Cost-of-Living Adjustments
This provision directs the Bureau of Labor Statistics to create and publish a new Consumer Price Index specifically for individuals aged 62 or older (CPI-E). Starting with COLA determinations after September 30 of the second calendar year following enactment, Social Security cost-of-living increases will be calculated using this CPI-E, which is expected to better reflect the spending patterns and inflation experienced by seniors, particularly regarding healthcare and housing costs.
Supporters argue
Supporters argue that the CPI-E more accurately reflects the inflation experienced by seniors, whose spending patterns (e.g., higher healthcare costs) differ from the general population. Using CPI-E would ensure that Social Security benefits maintain their purchasing power more effectively for retirees.
Critics contend
Some critics might argue that shifting to CPI-E could accelerate the depletion of Social Security trust funds if not accompanied by other revenue-generating or benefit-modifying measures, as it generally results in higher benefit payouts.
Tradeoffs
The tradeoff is between ensuring benefits keep pace with seniors' actual costs of living and the potential for increased strain on the Social Security trust funds.
Title II, Sec. 201
Phased Elimination of the Social Security Taxable Earnings Cap
This provision gradually phases out the cap on earnings subject to Social Security taxes (the contribution and benefit base). Starting in 2026, a decreasing percentage of earnings above the current cap will be subject to Social Security taxes, reaching 0% of the excess (meaning all earnings above the base are taxed) by 2032. This applies to both wages and self-employment income, significantly increasing the revenue base for the program.
Title II, Sec. 202
Crediting of Surplus Earnings in Social Security Benefit Formula
This provision amends the Social Security benefit formula to include a portion of the 'surplus earnings' (earnings above the contribution and benefit base that are now taxed under Sec. 201) in the calculation of an individual's Primary Insurance Amount (PIA). Specifically, it adds new bend points to the AIME calculation, crediting 3% of surplus AIME up to a certain threshold and 0.25% of surplus AIME beyond that threshold. This means higher earners will not only pay more into Social Security but will also receive a slightly higher benefit in return, though at a much lower rate than earnings below the base.
Section 102(c) specifies that the change to CPI-E for COLA calculations will not affect adjustments under other laws that reference Social Security benefit amounts. Section 102(d) clarifies that any increase in Social Security benefits due to CPI-E will not count as income or resources for determining eligibility for Supplemental Security Income (SSI) or Medicaid.
Sec. 102(c) and (d)
Why it matters:This is standard legislative practice to prevent unintended consequences and ensure the primary intent of the bill (changing Social Security COLA) does not inadvertently alter other federal programs or eligibility criteria.
Case for: Supporters would argue these provisions are essential to prevent unintended negative impacts on other federal programs and to protect vulnerable beneficiaries from losing access to SSI or Medicaid due to a slight increase in their Social Security benefits.
Case against: No specific opposition is typically raised against these types of technical carve-outs, as they are designed to prevent adverse effects and maintain the integrity of other social safety net programs.
Estimated impact: Prevents potentially widespread disruptions across federal benefit programs and protects low-income seniors and disabled individuals from losing critical assistance.