Social Security Expansion Act

Bill Number: H.R. 1700
Origin Chamber: House
Congress: 119th Congress, Session 1
Policy Area: Social Welfare
Status: Introduced
Latest Action: 2025-02-27: Referred to the Subcommittee on Railroads, Pipelines, and Hazardous Materials.
Last Updated: 2026-07-10T08:06:40Z

AI-Generated Summary

Summary of H.R. 1700: Social Security Expansion Act

Purpose of the Legislation

This bill aims to improve Social Security benefits for retirees, disabled individuals, survivors, and their families while securing the program's financial future by increasing revenue through targeted tax changes and consolidating trust funds. It seeks to provide higher payouts, better inflation adjustments, and support for low earners and students, funded by expanding taxes on high-income wages, self-employment income, and investments.

Key Provisions

Benefit Increases (Sec. 2): Raises the replacement rate for low to moderate earners by changing the benefit formula—specifically, increasing the first "bend point" (a calculation threshold in the benefit formula) from 90% to 95% of average earnings and adding an 18% boost to the second bend point amount for those becoming eligible after 2025. Applies to monthly benefits starting January 1, 2026, with retroactive recalculations for earlier retirees.

Cost-of-Living Adjustments (Sec. 3): Shifts annual cost-of-living adjustments (COLAs) from the general Consumer Price Index to the Consumer Price Index for Elderly Consumers (CPI-E), which better reflects spending patterns of older adults (e.g., on healthcare). The Bureau of Labor Statistics must publish this index monthly starting the year after enactment. Effective for COLA determinations ending after September 30 of the second year following enactment.

Minimum Benefit for Low Earners (Sec. 4): Introduces a new minimum monthly benefit for workers with 11 or more years of covered employment (defined as years with full quarters of Social Security-covered earnings). The minimum starts at 6.25% of the federal poverty guideline for one person (scaled up to 125% for 30+ years) and is adjusted annually based on average wage growth. Applies to those eligible after 2025, with recalculations for prior beneficiaries.

Extended Child Benefits for Students (Sec. 5): Extends survivor and disability benefits for children of deceased or disabled parents up to age 22 if they are full-time students at elementary, secondary, or higher education institutions (as defined under federal education law). Benefits end when schooling stops or at age 22 (or 19 for elementary/secondary only in some cases). Excludes those paid by employers to attend school or incarcerated for felonies. Also applies to Railroad Retirement benefits. Effective January 1, 2026.

Payroll Tax Expansion (Sec. 6): Applies Social Security payroll taxes (currently capped at a wage base, around $168,600 in 2024) to earnings between that cap and $250,000 annually. Employers and employees each pay the standard 6.2% rate on this additional amount. Includes rules for successor employers (e.g., in business acquisitions). Effective for wages paid after the first full year following enactment.

Self-Employment Tax Expansion (Sec. 7): Mirrors the payroll tax change for self-employed individuals, taxing net earnings between the wage cap and $250,000 at the 12.4% self-employment rate (after deducting the employer-equivalent portion). Effective for earnings after the first full year following enactment.

Investment Income Tax Increase (Sec. 8): Raises the Net Investment Income Tax (currently 3.8% on certain unearned income like interest, dividends, and capital gains for high earners) to 16.2%. Expands it to include income from active trades or businesses (with rules similar to passive activity loss limits), but excludes amounts already taxed as wages or self-employment income. No deduction for net operating losses. Effective for tax years after enactment.

Trust Fund Consolidation (Sec. 9): Merges the existing Federal Old-Age and Survivors Insurance (OASI) and Federal Disability Insurance (DI) Trust Funds into a single Social Security Trust Fund. Transfers 62% of the new investment tax revenue to this fund, along with all payroll and self-employment taxes (excluding Medicare portions). Includes extensive conforming changes to laws referencing the old funds. Requires annual actuarial reports on costs for disabled, retired, and survivor benefits. Effective January 1 of the first full year after enactment.

Significant Changes to Existing Law

Benefit Structure: Alters the primary insurance amount formula under the Social Security Act (Title II) to favor low and moderate earners more generously, introduces a work-based minimum benefit, and extends child benefits beyond current age limits (previously up to 19 for high school students only).

Inflation Indexing: Replaces the broad CPI with CPI-E for Social Security COLAs, potentially leading to higher annual increases (CPI-E often rises faster due to elderly-specific costs). Exempts other federal programs from automatically following this change.

Tax Base Expansion: Removes the current full exemption for earnings above the wage cap up to $250,000 under the Internal Revenue Code, affecting both employee payroll taxes (Sections 3101/3111) and self-employment taxes (Section 1401). Significantly broadens the Net Investment Income Tax (Section 1411) in rate and scope.

Fund Management: Eliminates separate OASI and DI funds, creating a unified structure with adjusted appropriations, investments, and reporting. Removes provisions for inter-fund loans and certain administrative splits.

Potential Impacts

On Citizens: Retirees, disabled workers, and survivors (especially low-wage workers and families with student children) could see 5-20% higher monthly benefits, plus stronger COLA protection against inflation. High earners (above ~$250,000) and investors face increased taxes, potentially reducing take-home pay or investment returns by thousands annually. Low earners gain a safety net tied to poverty levels.

On Government Agencies: The Social Security Administration (SSA) must recalculate millions of benefits, update eligibility rules, and manage the new trust fund, increasing administrative workload and costs (offset by fund appropriations). The IRS handles expanded tax collections and reporting. The Treasury oversees fund transfers and investments. The Bureau of Labor Statistics publishes the new CPI-E index.

On International Relations: Minimal direct impact, though enhanced U.S. social safety nets could indirectly influence global perceptions of American retirement policy or trade discussions on labor standards. No foreign entities are directly affected.

Main Stakeholders Affected

Beneficiaries: Elderly retirees, disabled individuals, survivors (widows/widowers, children), and low-wage workers (e.g., those with 10+ years in covered jobs), who gain from expanded benefits and minimums.
Families: Parents of full-time students up to age 22, particularly those relying on survivor or disability benefits.
High-Income Individuals: Workers, self-employed people, and investors earning over $250,000 or with significant unearned income, who pay more in Social Security-related taxes.
Employers: Businesses with high-paid employees, facing higher payroll tax liabilities on executive compensation.
Government Entities: SSA (benefit administration), IRS (tax enforcement), Treasury (fund management), and Congress (oversight of solvency reports).

Notable Legal, Constitutional, or Political Implications

Legal: Amends core sections of the Social Security Act (42 U.S.C. §§ 401 et seq.) and Internal Revenue Code (26 U.S.C. §§ 3101 et seq.), requiring precise implementation to avoid disputes over recalculations or tax applicability. The trust fund merger simplifies administration but mandates continuity for existing trustees and assets, preserving prior legal obligations.

Constitutional: Involves Congress's powers to tax (Article I, Section 8) and spend for general welfare, which courts have upheld for Social Security expansions. No apparent equal protection or due process issues, as changes are uniformly applied based on earnings and eligibility.

Political: Likely to spark debate over "entitlement" expansions versus tax hikes on the wealthy, potentially affecting budget reconciliation or fiscal policy. Solvency improvements (via revenue boosts) could reduce pressure for benefit cuts, but the $250,000 threshold and investment tax rate may face opposition from business groups. Annual actuarial reports enhance transparency but could highlight ongoing demographic challenges (e.g., aging population).

This summary was generated by AI and may contain inaccuracies. Refer to the official source document for the authoritative text.

Sponsor

Rep. Hoyle, Val T. [D-OR-4]

Cosponsors (38)

Rep. Schakowsky, Janice D. [D-IL-9], Rep. Carter, Troy A. [D-LA-2], Rep. Casar, Greg [D-TX-35], Rep. Chu, Judy [D-CA-28], Rep. Cohen, Steve [D-TN-9], Rep. Deluzio, Christopher R. [D-PA-17], Rep. Frankel, Lois [D-FL-22], Rep. Jayapal, Pramila [D-WA-7], Rep. Khanna, Ro [D-CA-17], Rep. McGovern, James P. [D-MA-2], Rep. Moore, Gwen [D-WI-4], Rep. Nadler, Jerrold [D-NY-12], Del. Norton, Eleanor Holmes [D-DC-At Large], Rep. Pingree, Chellie [D-ME-1], Rep. Pocan, Mark [D-WI-2], Rep. Ramirez, Delia C. [D-IL-3], Rep. Salinas, Andrea [D-OR-6], Rep. Tlaib, Rashida [D-MI-12], Rep. Tokuda, Jill N. [D-HI-2], Rep. García, Jesús G. "Chuy" [D-IL-4], Rep. Adams, Alma S. [D-NC-12], Rep. Lynch, Stephen F. [D-MA-8], Rep. Ansari, Yassamin [D-AZ-3], Rep. Waters, Maxine [D-CA-43], Rep. Omar, Ilhan [D-MN-5], Rep. Stansbury, Melanie A. [D-NM-1], Rep. Scanlon, Mary Gay [D-PA-5], Rep. Ocasio-Cortez, Alexandria [D-NY-14], Rep. Thanedar, Shri [D-MI-13], Rep. Cisneros, Gilbert Ray, Jr. [D-CA-31], Rep. Friedman, Laura [D-CA-30], Rep. Foushee, Valerie P. [D-NC-4], Rep. Craig, Angie [D-MN-2], Rep. Grijalva, Adelita S. [D-AZ-7], Rep. Lee, Summer L. [D-PA-12], Rep. Kennedy, Timothy M. [D-NY-26], Rep. Johnson, Julie [D-TX-32], Rep. McCollum, Betty [D-MN-4]

Recent Actions

2025-02-27: Referred to the Subcommittee on Railroads, Pipelines, and Hazardous Materials.
2025-02-27: Referred to the Committee on Ways and Means, and in addition to the Committees on Education and Workforce, and Transportation and Infrastructure, 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.
2025-02-27: Referred to the Committee on Ways and Means, and in addition to the Committees on Education and Workforce, and Transportation and Infrastructure, 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.
2025-02-27: Referred to the Committee on Ways and Means, and in addition to the Committees on Education and Workforce, and Transportation and Infrastructure, 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.
2025-02-27: Introduced in House
2025-02-27: Introduced in House

Bill Versions

Social Security Expansion Act — issued 2025-02-27 — PDF (48 pages)