[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[S. 3462 Introduced in Senate (IS)]
<DOC>
119th CONGRESS
1st Session
S. 3462
To improve the retirement security of American families by increasing
Social Security benefits for current and future beneficiaries while
making Social Security stronger for future generations.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
December 11, 2025
Mr. Schatz introduced the following bill; which was read twice and
referred to the Committee on Finance
_______________________________________________________________________
A BILL
To improve the retirement security of American families by increasing
Social Security benefits for current and future beneficiaries while
making Social Security stronger for future generations.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE; TABLE OF CONTENTS.
(a) Short Title.--This Act may be cited as the ``Safeguarding
American Families and Expanding Social Security Act of 2025''.
(b) Table of Contents.--The table of contents for this Act is as
follows:
Sec. 1. Short title; table of contents.
Sec. 2. Determination of taxable wages and self-employment income above
contribution and benefit base after 2025.
Sec. 3. Adjustments to primary insurance amount formula and inclusion
of surplus earnings for benefit
determinations.
Sec. 4. Computation of cost-of-living increases for Social Security
benefits; consumer price index for elderly
consumers.
SEC. 2. DETERMINATION OF TAXABLE WAGES AND SELF-EMPLOYMENT INCOME ABOVE
CONTRIBUTION AND BENEFIT BASE AFTER 2025.
(a) Determination of Taxable Wages Above Contribution and Benefit
Base After 2025.--
(1) Amendments to the internal revenue code of 1986.--
Section 3121 of the Internal Revenue Code of 1986 is amended--
(A) in subsection (a)(1), by inserting ``the
applicable percentage (determined under subsection
(c)(1)) of'' before ``that part of the remuneration'';
and
(B) in subsection (c), by striking ``(c) Included
and Excluded Service.--For purposes of this chapter,
if'' and inserting the following:
``(c) Special Rules for Wages and Employment.--
``(1) Applicable percentage of remuneration in determining
taxable wages.--For purposes of subsection (a)(1), the
applicable percentage for a calendar year shall be equal to--
``(A) for 2026, 80 percent;
``(B) for 2027 through 2029, the applicable
percentage under this paragraph for the previous year,
decreased by 20 percentage points; and
``(C) for 2030 and each year thereafter, 0 percent.
``(2) Included and excluded service.--For purposes of this
chapter, if''.
(2) Amendments to the social security act.--Section 209 of
the Social Security Act (42 U.S.C. 409) is amended--
(A) in subsection (a)(1)--
(i) in subparagraph (I)--
(I) by inserting ``and before
2026'' after ``1974''; and
(II) by inserting ``and'' after the
semicolon; and
(ii) by adding at the end the following new
subparagraph:
``(J) The applicable percentage (determined under
subsection (l)) of that part of remuneration which,
after remuneration (other than remuneration referred to
in the succeeding subsections of this section) equal to
the contribution and benefit base (determined under
section 230) with respect to employment has been paid
to an individual during any calendar year after 2025
with respect to which such contribution and benefit
base is effective, is paid to such individual during
such calendar year;''; and
(B) by adding at the end the following new
subsection:
``(l) For purposes of subsection (a)(1)(J), the applicable
percentage for a calendar year shall be equal to--
``(1) for 2026, 80 percent;
``(2) for 2027 through 2029, the applicable percentage
under this subsection for the previous year, decreased by 20
percentage points; and
``(3) for 2030 and each year thereafter, 0 percent.''.
(3) Effective date.--The amendments made by this subsection
shall apply with respect to remuneration paid in calendar years
after 2025.
(b) Determination of Taxable Self-Employment Income Above
Contribution and Benefit Base After 2025.--
(1) Amendments to the internal revenue code of 1986.--
Section 1402 of the Internal Revenue Code of 1986 is amended--
(A) in subsection (b)(1), by striking ``that part
of the net earnings'' and all that follows through
``minus'' and inserting the following: ``an amount
equal to the applicable percentage (as determined under
subsection (d)(2)) of that part of the net earnings
from self-employment which is in excess of the
difference (not to be less than zero) between (i) an
amount equal to the contribution and benefit base (as
determined under section 230 of the Social Security
Act) which is effective for the calendar year in which
such taxable year begins, and''; and
(B) in subsection (d)--
(i) by striking ``(d) Employee and Wages.--
The term'' and inserting the following:
``(d) Rules and Definitions.--
``(1) Employee and wages.--The term''; and
(ii) by adding at the end the following:
``(2) Applicable percentage of net earnings from self-
employment in determining taxable self-employment income.--For
purposes of subsection (b)(1), the applicable percentage for a
taxable year beginning in any calendar year referred to in such
subsection shall be equal to--
``(A) for 2026, 80 percent;
``(B) for 2027 through 2029, the applicable
percentage under this paragraph for the previous year,
decreased by 20 percentage points; and
``(C) for 2030 and each year thereafter, 0
percent.''.
(2) Amendments to the social security act.--Section 211 of
the Social Security Act (42 U.S.C. 411) is amended--
(A) in subsection (b)--
(i) in paragraph (1)(I)--
(I) by striking ``or'' after the
semicolon; and
(II) by inserting ``and before
2026'' after ``1974'';
(ii) by redesignating paragraph (2) as
paragraph (3); and
(iii) by inserting after paragraph (1) the
following:
``(2) For any taxable year beginning in any calendar year
after 2025, an amount equal to the applicable percentage (as
determined under subsection (l)) of that part of net earnings
from self-employment which is in excess of the difference (not
to be less than zero) between--
``(A) an amount equal to the contribution and
benefit base (as determined under section 230) that is
effective for such calendar year, and
``(B) the amount of the wages paid to such
individual during such taxable year; or''; and
(B) by adding at the end the following:
``(l) For purposes of subsection (b)(2), the applicable percentage
for a taxable year beginning in any calendar year referred to in such
paragraph shall be equal to--
``(1) for 2026, 80 percent;
``(2) for 2027 through 2029, the applicable percentage
under this subsection for the previous year, decreased by 20
percentage points; and
``(3) for 2030 and each year thereafter, 0 percent.''.
(3) Effective date.--The amendments made by this subsection
shall apply with respect to taxable years beginning after
calendar year 2025.
SEC. 3. ADJUSTMENTS TO PRIMARY INSURANCE AMOUNT FORMULA AND INCLUSION
OF SURPLUS EARNINGS FOR BENEFIT DETERMINATIONS.
(a) Increase in Percentage Factor for Lowest Portion of Earnings
Used To Determine Primary Insurance Amounts.--Section 215(a)(1)(A)(i)
of the Social Security Act (42 U.S.C. 415(a)(1)(A)(i)) is amended by
striking ``90 percent'' and inserting ``95 percent''.
(b) Inclusion of Surplus Average Indexed Monthly Earnings in
Determination of Primary Insurance Amounts.--
(1) In general.--Section 215(a)(1)(A) of the Social
Security Act (42 U.S.C. 415(a)(1)(A)) is amended--
(A) in clauses (i), (ii), and (iii), by inserting
``basic'' before ``average indexed monthly earnings''
each place it appears;
(B) in clause (ii), by striking ``and'' at the end;
(C) in clause (iii), by adding ``and'' at the end;
and
(D) by inserting after clause (iii) the following
new clause:
``(iv) 5 percent of the individual's surplus average
indexed monthly earnings,''.
(2) Bend point adjustments.--Section 215(a)(1)(B) of such
Act (42 U.S.C. 415(a)(1)(B)) is amended--
(A) in clause (i), by inserting ``For individuals
who initially become eligible for old-age or disability
insurance benefits, or who die (before becoming
eligible for such benefits), in the calendar year 2026,
the amount established for purposes of clause (ii) of
subparagraph (A) shall be $6,300.'' after the period;
(B) in clause (ii)--
(i) by redesignating subclauses (I) and
(II) as items (aa) and (bb), respectively;
(ii) by striking ``For individuals'' and
inserting ``(I) Subject to subclause (II), for
individuals''; and
(iii) by adding at the end the following
new subclause:
``(II) For individuals who initially become eligible for
old-age or disability insurance benefits, or who die (before
becoming eligible for such benefits), in any calendar year
after 2026, the amount established for purposes of clause (ii)
of subparagraph (A) shall equal the product of the amount
established with respect to calendar year 2026 under clause (i)
of this subparagraph and the quotient obtained by dividing--
``(aa) the national average wage index (as defined
in section 209(k)(1)) for the second calendar year
preceding the calendar year for which the determination
is made, by
``(bb) the national average wage index (as so
defined) for 2024.'';
(C) by redesignating clause (iii) as clause (iv);
and
(D) by inserting after clause (ii) the following
new clause:
``(iii) For individuals who initially become eligible for
old-age or disability insurance benefits, or who die (before
becoming eligible for such benefits) in any calendar year after
2030, the amount determined under clause (ii) of this
subparagraph for purposes of subparagraph (A)(i) for such
calendar year shall be increased by--
``(I) for calendar year 2031, 1 percent;
``(II) for each of calendar years 2032 through
2044, the percent determined under this clause for the
preceding year increased by 1 percentage point; and
``(III) for calendar year 2045 and each year
thereafter, 15 percent.''.
(3) Recomputation of benefits for existing beneficiaries.--
Section 215(f) of the Social Security Act (42 U.S.C. 415(f)) is
amended by adding at the end the following new paragraph:
``(10) Recomputation of primary insurance amount for
individuals who became eligible for benefits before 2026.--
``(A) The Commissioner of Social Security shall
recompute the primary insurance amounts applicable to
beneficiaries whose benefits are based on a primary
insurance amount that was computed under this section
effective prior to January 2026. Such recomputation
shall be effective January 2026.
``(B) In recomputing the primary insurance amount
applicable to a beneficiary under this paragraph, the
Commissioner of Social Security shall calculate the
primary insurance amount of the individual under
subsection (a)(1) as in effect on the date that such
primary insurance amount was initially computed, except
that the Commissioner shall substitute for the amount
that applied under subparagraph (B)(ii) of such
subsection on such date an amount equal to the product
of--
``(i) the amount that applied under such
subparagraph on such date; and
``(ii) the ratio of--
``(I) 6,300; to
``(II) 6,002.
``(C) Each amount determined under subparagraph (B)
shall be rounded to the nearest $1, except that any
amount so established which is a multiple of $0.50 but
not of $1 shall be rounded to the next higher $1.
``(D) If a primary insurance amount applicable to a
beneficiary, as recomputed under this paragraph, is
lower than the primary insurance amount applicable to
such beneficiary as it was originally computed, such
higher primary insurance amount shall continue to apply
to such beneficiary.''.
(c) Basic AIME and Surplus AIME.--
(1) Basic aime.--Section 215(b)(1) of such Act (42 U.S.C.
415(b)(1)) is amended--
(A) by inserting ``basic'' before ``average''; and
(B) in subparagraph (A), by striking ``paragraph
(3)'' and inserting ``paragraph (3)(A)'' and by
inserting before the comma the following: ``to the
extent such total does not exceed the contribution and
benefit base for the applicable year''.
(2) Surplus aime.--
(A) In general.--Section 215(b)(1) of such Act (as
amended by paragraph (1)) is amended--
(i) by redesignating subparagraphs (A) and
(B) as clauses (i) and (ii), respectively;
(ii) by striking ``An individual's'' and
inserting ``(A) An individual's''; and
(iii) by adding at the end the following
new subparagraph:
``(B)(i) An individual's surplus average indexed monthly earnings
shall be equal to the quotient obtained by dividing--
``(I) the total (after adjustment under paragraph (3)(B))
of such individual's surplus earnings (determined under clause
(ii)) for such individual's benefit computation years
(determined under paragraph (2)), by
``(II) the number of months in those years.
``(ii) For purposes of clause (i) and paragraph (3)(B), an
individual's surplus earnings for a benefit computation year are the
total of such individual's wages paid in and self-employment income
credited to such benefit computation year, to the extent such total
(before adjustment under paragraph (3)(B)) exceeds the contribution and
benefit base for such year.''.
(B) Conforming amendment.--The heading for section
215(b) of such Act is amended by striking ``Average
Indexed Monthly Earnings'' and inserting ``Basic
Average Indexed Monthly Earnings; Surplus Average
Indexed Monthly Earnings''.
(3) Adjustment of surplus earnings for purposes of
determining surplus aime.--Section 215(b)(3) of such Act (42
U.S.C. 415(b)(3)) is amended--
(A) in subparagraph (A)--
(i) by striking ``subparagraph (B)'' and
inserting ``subparagraph (C)''; and
(ii) by inserting ``and determination of
basic average indexed monthly income under
paragraph (1)(A)'' after ``paragraph (2)'';
(B) by redesignating subparagraph (B) as
subparagraph (C); and
(C) by inserting after subparagraph (A) the
following new subparagraph:
``(B) For purposes of determining under paragraph (1)(B) an
individual's surplus average indexed monthly earnings, the individual's
surplus earnings for a benefit computation year shall be deemed to be
equal to the product of--
``(i) the individual's surplus earnings for such year (as
determined without regard to this subparagraph), and
``(ii) the quotient described in subparagraph (A)(ii).''.
(d) Effective Date.--The amendments made by this section shall
apply with respect to individuals who initially become eligible (within
the meaning of section 215(a)(3)(B) of the Social Security Act) for
old-age or disability insurance benefits under title II of the Social
Security Act, or who die (before becoming eligible for such benefits),
in any calendar year after 2030.
SEC. 4. COMPUTATION OF COST-OF-LIVING INCREASES FOR SOCIAL SECURITY
BENEFITS; CONSUMER PRICE INDEX FOR ELDERLY CONSUMERS.
(a) Computation of Cost-of-Living Increases.--
(1) In general.--Section 215(i) of the Social Security Act
(42 U.S.C. 415(i)) is amended--
(A) in paragraph (1)(G), by inserting before the
period the following: ``, and, with respect to any
monthly insurance benefit payable under this title,
effective for adjustments under this subsection to the
primary insurance amount on which such benefit is based
(or to any such benefit under section 227 or 228), the
applicable Consumer Price Index shall be the Consumer
Price Index for Elderly Consumers and such primary
insurance amount shall be adjusted under this
subsection using such Index''; and
(B) in paragraph (4)--
(i) by striking ``and by section 9001'' and
inserting ``, by section 9001''; and
(ii) by striking ``1986,'' and inserting
``1986, and by section 5(a) of the Safeguarding
American Families and Expanding Social Security
Act of 2025,''.
(2) Conforming amendments in applicable former law.--
Section 215(i)(1)(C) of the Social Security Act, as in effect
in December 1978 and applied in certain cases under the
provisions of such Act in effect after December 1978, is
amended by inserting before the period the following: ``, and,
with respect to any monthly insurance benefit payable under
this title, effective for adjustments under this subsection to
the primary insurance amount on which such benefit is based (or
to any such benefit under section 227 or 228), the applicable
Consumer Price Index shall be the Consumer Price Index for
Elderly Consumers and such primary insurance amount shall be
adjusted under this subsection using such Index''.
(3) Effective date.--The amendments made by this subsection
shall apply to determinations made by the Commissioner of
Social Security under section 215(i)(2) of the Social Security
Act (42 U.S.C. 415(i)(2)) with respect to cost-of-living
computation quarters ending on or after September 30, 2026.
(b) Consumer Price Index for Elderly Consumers.--
(1) In general.--The Bureau of Labor Statistics of the
Department of Labor shall prepare and publish an index for each
calendar month to be known as the ``Consumer Price Index for
Elderly Consumers'' that indicates changes over time in
expenditures for consumption which are typical for individuals
in the United States who have attained early retirement age (as
defined under section 216(l)(2) of the Social Security Act (42
U.S.C. 416(l)(2)) for purposes of an old-age, wife's, or
husband's insurance benefit.
(2) Effective date.--Paragraph (1) shall apply with respect
to calendar months ending on or after June 30 of the calendar
year in which this Act is enacted.
(3) Authorization of appropriations.--There are authorized
to be appropriated such sums as are necessary to carry out the
provisions of this subsection.
<all>