Representative John Larson and Senator Richard Blumenthal have reintroduced the Social Security 2100 Act. This legislative proposal aims to increase monthly payments, modify how cost-of-living adjustments are calculated, and reduce federal income taxes on benefits for many retirees.
The bill suggests a 2% benefit increase for recipients, effective from 2027 through 2036. It also proposes changing the inflation tracking method to prioritize spending habits of those aged 62 and older, which could lead to larger annual adjustments during periods of high healthcare and housing costs. Lower-income retirees with 30 years of work history could see a higher minimum benefit, while surviving spouses might access an alternative calculation to preserve more of a household's total income.
Additional provisions target long-term recipients by offering incremental increases starting in the 16th year of eligibility. To ensure these changes do not disqualify seniors from other critical support, the bill specifies that these increases would not count toward income limits for Medicaid or Supplemental Security Income. These adjustments are designed to protect those who rely on government programs for long-term health needs.
Funding for these initiatives would come from changes to the Social Security payroll tax. Currently, taxes are only applied to earnings up to a specific cap. The proposal would remove this cap, requiring payroll taxes on all wages. Additionally, high earners making over $400,000 would face an extra tax on net investment income.
While the bill has been introduced in both the House and the Senate, it remains in committee. Its path to becoming law depends on congressional approval and a presidential signature. Given the current political climate in Washington, the prospect for passage is uncertain as the proposal awaits further debate.