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S 2614119th CongressIn Committee
Protecting and Preserving Social Security Act
Introduced: Jul 31, 2025
Sponsor: Sen. Hirono, Mazie K. [D-HI] (D-Hawaii)
Social Services
Standard Summary
Comprehensive overview in 1-2 paragraphs
The Protecting and Preserving Social Security Act seeks to reform how Social Security calculates cost-of-living adjustments (COLAs) and how wages above the traditional contribution and benefit base (CB base) are treated in benefit calculations. Title I would replace the current COLA basis with a new Consumer Price Index for Elderly Consumers (CPI-E) published by the Bureau of Labor Statistics, and apply that index to COLA determinations beginning in a future calendar period. Title II would phase in a new framework for counting wages above the CB base (and self-employment income) using a declining "applicable percentage" from 2026 through 2031, and would introduce a new concept called surplus earnings that would be added to the benefit formula (the PIA) in a structured way. The net effect is intended to change how benefits grow over time (via COLA) and how higher earners’ wages are counted toward future benefits, with a transition that starts in 2026 and ramps through 2031, plus a mechanism to incorporate surplus earnings into benefit computations for those newly eligible after 2025.
Key Points
- 1Title I, Sec. 101: Establishes a new monthly CPI for Elderly Consumers (CPI-E) to measure changes in expenditures typical of those aged 62 and older; to be published by the Bureau of Labor Statistics (BLS).
- 2Title I, Sec. 101-102: The CPI-E becomes the basis for cost-of-living increases; the term “Consumer Price Index” for COLA purposes is defined in relation to CPI-E; the changes apply to COLA computations for periods ending after the enacted date.
- 3Title I, Sec. 102: Amendments to 215(i) of the Social Security Act to use CPI-E for COLAs and to ensure certain adjustments under other laws are not affected by these changes; does not alter SSI/Medicaid eligibility rules on income/resources.
- 4Title I, Sec. 102: Effective date for COLA changes applies to determinations for cost-of-living quarters ending on or after September 30 of the second calendar year after enactment.
- 5Title II, Sec. 201: Establishes a stepped, declining “applicable percentage” for counting wages above the contribution and benefit base (CB base) starting in 2026: 86% (2026), 71% (2027), 57% (2028), 43% (2029), 29% (2030), 14% (2031), and 0% thereafter; mirrors a similar schedule for self-employment income.
- 6Title II, Sec. 201: Amends the Internal Revenue Code and SSA to apply these percentages to wages and to net earnings from self-employment after 2025, with corresponding SSA provisions (Section 209 and others) updated to reflect the percentage-based treatment.
- 7Title II, Sec. 201: Effective date for these wage/self-employment percentage changes is calendar year 2026 (i.e., for remuneration paid after 2025).
- 8Title II, Sec. 202: Adds “surplus earnings” into the Social Security benefit formula (PIA). It introduces two new components (clauses (iv) and (v)) to 215(a)(1)(A) that allocate portions of surplus AIME to the PIA, subject to thresholds tied to the CB base and prior years’ computation bases.
- 9Title II, Sec. 202: Updates the bend points and the structure of AIME (Basic vs. Surplus AIME) to incorporate surplus earnings into benefit calculations; establishes methods to compute surplus earnings and adjust the AIME used for PIA.
- 10Title II, Sec. 202: Effective date for the surplus-earnings provisions applies to individuals who first become eligible for Old-Age or Disability Insurance, or who die before becoming eligible, in calendar year after 2025 (i.e., 2026 and onward).
Impact Areas
Primary group/area affected: Future Social Security beneficiaries who become eligible after 2025, current and future retirees, and workers who earn above the current contribution and benefit base. The bill changes how COLAs are calculated (benefits could increase more quickly with CPI-E) and how high earners’ wages are treated in computing benefits (potentially lowering the immediate wage credits but adding surplus earnings into the long-term benefit formula).Secondary group/area affected: Self-employed individuals and workers subject to the CB base threshold, since self-employment income will be counted using the new percentage schedule; tax years 2026 and later are affected.Additional impacts: Administrative and actuarial implications for the Social Security program (e.g., need to implement CPI-E, recalculate formulas, adjust payroll and benefit processing); potential changes in program solvency/long-term cost depending on how CPI-E COLAs compare to prior COLA measures and how the surplus-earnings mechanism interacts with wage growth; little to no immediate impact on SSI and Medicaid eligibility rules, as those provisions state no effect on eligibility determinations under those programs. Transition provisions target new beneficiaries or deaths after 2025, not existing beneficiaries, though some effects (like COLA indexing) could affect all beneficiaries over time.The bill introduces complex, year-by-year percentage rules and a multi-part surplus-earnings mechanism. The stated intent appears to be to modernize COLAs via CPI-E and to reframe how wages above the CB base contribute to or affect benefit calculations, with a new surplus-earnings concept designed to be included in the PIA. The exact net effect on individuals will depend on their earnings history, when they become eligible, and how their wages compare to the CB base during the transition years.
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