Social Security stands as an enduring pillar of American financial security, a program that has for generations provided a crucial safety net for millions. Yet, this vital system is currently at the heart of an intensive national conversation, with a flurry of proposed changes and looming adjustments on the horizon. For retirees, those planning for retirement, and indeed every working American, understanding these dynamic shifts is not merely an academic exercise; it is essential for proactive financial planning and securing one’s future.
Since its inception in 1935, signed into law by President Franklin D. Roosevelt, Social Security has transformed the landscape of poverty in America. Before the program, a staggering 50 percent of the nation’s seniors lived in poverty, a stark reality shared by countless Americans with disabilities and surviving dependents of deceased workers. Nearly 90 years later, this figure has dramatically decreased, with the senior poverty rate now standing at a significantly lower 9.7 percent.
In fact, the program’s profound impact on poverty alleviation continues to be evident year after year. In 2023 alone, Social Security lifted an impressive 27.6 million Americans out of poverty, a group that included more than 19.5 million seniors. Even amidst the profound challenges posed by the Covid-19 pandemic in 2021, Social Security demonstrated its resilience and effectiveness, pulling 26.3 million Americans out of poverty, including over 18 million seniors.
Despite this remarkable legacy of success, the program faces significant financial pressures that demand attention and innovative solutions. The Social Security Administration’s chief actuary and the Congressional Budget Office have both issued warnings that the trust funds relied upon to pay benefits are projected to face depletion. Projections indicate that the trust funds may be unable to pay full benefits starting in 2035, with some forecasts suggesting depletion as early as 2033, which could result in a 23 percent cut in planned benefit payments by 2034 if no action is taken.
It is within this context of both vital necessity and looming challenge that we see the introduction of ambitious legislative proposals, notably the Social Security Expansion Act. This forward-thinking bill, spearheaded by Senators Bernie Sanders of Vermont and Elizabeth Warren of Massachusetts in the Senate, alongside Representatives Jan Schakowsky of Illinois and Val Hoyle of Oregon in the House, seeks to not only bolster benefits for today’s seniors but also fortify Social Security’s long-term financial health for generations to come.
A cornerstone of the Social Security Expansion Act is its innovative approach to financing. The legislation proposes to apply the 12.4 percent Social Security payroll tax—a tax currently split between employees and employers—to all incomes above $250,000. This is a significant departure from the current system, where in 2025, Americans only pay Social Security taxes on the first $176,100 they earn annually.
As Senator Sanders forcefully stated, the current system allows a “Wall Street CEO who makes $30 million pays the same amount into Social Security as someone who makes $160,000 a year.” This proposed change aims to rectify what many see as an inherent inequity, ensuring that the wealthiest individuals contribute their proportional share to a program that benefits all Americans. Crucially, an analysis from the Social Security Administration’s chief actuary projects that this new revenue stream would extend Social Security’s solvency for at least an additional 75 years, securing its future through the end of the 21st century.
Beyond solvency, the Social Security Expansion Act is designed to provide immediate and tangible relief to beneficiaries. One of its most impactful features is a proposed increase of an estimated average of $200 a month, or $2,400 per year, for the average beneficiary. This would be achieved by modifying the way benefits are calculated to include more income in the formula, a change specifically designed to favor lower-income seniors, though it is projected that virtually all beneficiaries would see an improvement in their payments.
The bill also addresses the critical issue of how cost-of-living adjustments (COLAs) are calculated, aiming for a more accurate reflection of the financial realities faced by seniors. It proposes changing the cost-of-living index from the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) to the Consumer Price Index for the Elderly (CPI-E). The CPI-E is a statistic developed by the Bureau of Labor Statistics that weighs inflation specifically to account for the spending patterns of those aged 62 and older, particularly their higher proportional spending on healthcare. While the Bureau has cautioned about limitations such as a smaller sample population and a lack of official usage, proponents argue it offers a more appropriate measure for seniors’ actual expenses, potentially increasing COLAs by “0.2 percentage points per year on average.”
Further strengthening the safety net, the Social Security Expansion Act aims to lift the lowest-income workers out of poverty by improving the Special Minimum Benefit. It would increase this benefit to 125 percent of the poverty line, translating to “over $18,000 for a single worker who had worked their full career.” Additionally, the bill proposes increasing the first income-percentage “bend point” from 90 percent to 95 percent, meaning that 95 percent of the first $1,115 in monthly wages (for 2023, indexed to inflation) would count toward Social Security benefits. This strategically frontloads benefit increases, ensuring that low-income workers proportionally benefit more.
This comprehensive legislation has garnered significant support across various sectors. Beyond its primary sponsors, the Social Security Expansion Act counts among its proponents an impressive roster of senators including Jeff Merkley, Peter Welch, Alex Padilla, Tina Smith, Chris Van Hollen, Ed Markey, Cory Booker, Kirsten Gillibrand, and Sheldon Whitehouse, along with 24 cosponsors in the House of Representatives. Moreover, it has received endorsements from over 25 prominent advocacy and labor groups, demonstrating a broad coalition rallying behind its objectives.
The widespread appeal of this bill is further underscored by public opinion. Polling results published by Data for Progress indicate that the Social Security Expansion Act enjoys overwhelming popularity, with 78 percent of likely voters supporting it. This includes significant bipartisan backing, with 85 percent of Democrats, 75 percent of Independents, and notably, 72 percent of Republicans expressing their support. As Alex Lawson, Executive Director of Social Security Works, aptly summarized, “This bill is the answer to any politician or pundit who claims we ‘can’t afford’ Social Security. It protects and expands benefits, and it is fully paid for by finally requiring the wealthy to contribute their fair share.”
While the Social Security Expansion Act represents a bold step towards expanding benefits and securing the program’s future, it is not the only significant legislative effort underway. Another noteworthy proposal is the Senior Citizens Tax Elimination Act, introduced by Representative Thomas Massie. This bill aims to fulfill a promise made on the campaign trail by former President Trump, seeking to remove income taxes on all Social Security benefits.
Representative Massie argues that it is “unfair double taxation” for seniors to pay income taxes on their Social Security benefits, given that they have already paid tax on their contributions via the payroll tax. He emphasized that his bill “would exempt Social Security retirement benefits from taxation and boost the retirement income of millions of older Americans.” While this proposal is not new, having been first introduced by Rep. Ron Paul in 2003, and subsequently by Massie in each Congress since 2012, it now appears to have a renewed prospect of passing.
Further enhancing fairness within the system, the Social Security Fairness Act, which passed in early 2025, represents another victory for certain beneficiaries. This crucial legislation eliminated both the Windfall Elimination Provision and the Government Pension Offset. These provisions had previously led to reduced Social Security benefits for individuals receiving government pensions, a change that will now provide significant relief and equity for those affected.
Beyond direct benefits and taxation, legislative proposals also address the administrative efficacy and fiscal integrity of Social Security. Measures to boost administrative funding for the Social Security Administration are on the table, which could reverse recent office closures, expand office hours, and crucially, shorten the current backlog of nearly two years in processing applications for Social Security disability benefits. Additionally, the Social Security and Medicare Lockbox Act, proposed in the House, aims to safeguard surplus Social Security funds by restricting how and where they are invested, seeking to ensure long-term financial sustainability.
