HR-4968-119
Referred to the Committee on Ways and Means, and in addition to the Committees on Energy and Commerce, and Education and Workforce, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.
What it does
This bill would make two major changes to Social Security. First, it would switch the annual cost-of-living adjustment (COLA) for Social Security benefits from the current Consumer Price Index for Urban Wage Earners (CPI-W) to a new index specifically designed to track spending patterns of Americans aged 62 and older (CPI-E), which the Bureau of Labor Statistics would be required to publish. Second, it would phase out the current cap on wages subject to Social Security payroll taxes — known as the "contribution and benefit base" — between 2026 and 2031, so that by 2032, all wages and self-employment income above the cap would be fully subject to the Social Security payroll tax. Earnings above the cap would also be partially credited in the benefit formula at a reduced rate (3% and 0.25% tiers).
Who benefits
Current and future Social Security beneficiaries aged 62 and older, who would receive higher annual COLAs if the CPI-E rises faster than the CPI-W — particularly those with higher healthcare and housing costs. Disability insurance and survivors' benefit recipients who also receive COLA adjustments. Lower- and middle-income retirees who depend most heavily on Social Security as a share of their income. The Social Security trust fund, which would receive significantly more revenue from high-earning workers. Future beneficiaries who would otherwise face reduced benefits if the trust fund becomes insolvent. SSI and Medicaid recipients, who are explicitly protected from losing eligibility due to any benefit increase under this bill.
Who is hurt
High-earning workers and self-employed individuals — those earning above the current taxable wage base (approximately $176,100 in 2025) — who would pay Social Security payroll taxes on all of their wages by 2032, with no phase-in relief after that point. Employers of high-earning workers, who match employee payroll tax contributions and would face equivalent increases in labor costs. Small business owners and self-employed professionals (doctors, lawyers, consultants) who pay both the employee and employer share of self-employment taxes. Businesses that may reduce compensation or adjust hiring in response to higher payroll costs for high-salary positions.
Supporters argue
Supporters argue that the CPI-W systematically undercounts inflation as experienced by seniors, who spend a disproportionately larger share of income on healthcare and housing — categories that have risen faster than the overall index. They contend that switching to the CPI-E would correct a structural inequity that has eroded the purchasing power of retirees over decades. On the revenue side, supporters argue that the payroll tax cap means a worker earning $200,000 pays a lower effective Social Security tax rate than one earning $50,000, and that eliminating the cap restores the program's fiscal footing without cutting benefits — addressing projected trust fund shortfalls that the Social Security Administration estimates could trigger automatic benefit cuts as early as 2033.
Opponents argue
Opponents argue that eliminating the payroll tax cap would impose a substantial new tax on high earners — potentially adding over $15,000 annually per affected worker — without a proportional increase in their future benefits, effectively converting Social Security from an earned-benefit program into a redistributive transfer program. They contend this structural change could reduce the program's political durability and set a precedent for further decoupling contributions from benefits. On the COLA side, critics argue that the CPI-E has not been rigorously validated as a standalone index and that its higher readings may reflect demographic spending shifts rather than true inflation experienced by all beneficiaries, potentially overstating benefit increases and accelerating trust fund depletion.