Senate bill would tie Social Security raises to what seniors actually spend

What does this do?

S 2614 would replace the current Social Security cost-of-living adjustment formula with a new index that tracks spending patterns of people 62 and older, with a focus on costs like healthcare and housing. It would also phase in Social Security payroll taxes on wages above the current cap of roughly $170,000 between 2026 and 2032, so that all wages above that cap are fully taxed by 2032. Higher earners subject to the new taxes would receive a small additional benefit based on those extra taxed earnings, though calculated at a lower rate than regular earnings.

Who does it affect?

Current and future Social Security recipients, workers earning above roughly $170,000, and self-employed individuals in that same income range are the primary people affected. Recipients who see higher Social Security payments under this bill would be protected from losing Medicaid or Supplemental Security Income eligibility as a result.

Why does it matter?

Benefit increases tied to a senior-specific spending index could diverge from increases under the current general inflation measure, changing the dollar amounts recipients receive each year. Workers and self-employed individuals earning above the current payroll tax cap would pay Social Security taxes on a larger share of their income during the phase-in period and fully after 2032.

What does it cost, and who pays?

• Payroll tax on wages above ~$170,000
• Phase-in runs 2026 to 2032
• Self-employed also affected