What Does the Social Security Expansion Act Do?

The Social Security Expansion Act is a bill in Congress that would raise every Social Security recipient’s monthly benefit by $200, change the formula used for annual cost-of-living adjustments, restore student benefits for children of deceased or disabled workers, and pay for those changes by applying Social Security taxes to earnings above $250,000 and to investment income of high-income households. Its sponsors say the combination would keep Social Security solvent for 75 years. Senator Bernie Sanders introduced the Senate version, S. 770, on February 27, 2025, and Representative Jan Schakowsky introduced the House companion, H.R. 1700, the same day. Both remain in committee as of early 2026.¹

A $200 Monthly Benefit Increase for Everyone

The bill’s headline provision is a flat $200-per-month raise, worth $2,400 a year, for every current and future beneficiary. The increase is the same dollar amount regardless of your benefit level, so it lands hardest at the bottom of the scale. For someone collecting the average retired-worker benefit of roughly $1,970 a month, it works out to about a 10 percent raise.²

A New Cost-of-Living Formula

Social Security’s annual cost-of-living adjustments are currently tied to the Consumer Price Index for Urban Wage Earners and Clerical Workers, or CPI-W. That index tracks the spending patterns of working-age people, not retirees, and seniors spend a bigger share of their money on healthcare and housing.

The bill would switch the COLA to the Consumer Price Index for the Elderly (CPI-E), an experimental Bureau of Labor Statistics index that measures spending by Americans 62 and older. Historically CPI-E has run about 0.2 to 0.3 percentage points higher per year than CPI-W.³ Small annual gaps compound over a long retirement.

A Higher Minimum Benefit

Social Security already has a “special minimum benefit” for people who worked decades at low wages, but it does not deliver much in practice. For 2026, the maximum special minimum benefit for someone with 30 years of qualifying coverage is about $1,124 per month, and many low-wage retirees receive less.

The Social Security Expansion Act would reset that floor to 125 percent of the federal poverty level. The 2026 poverty guideline for a single person in the 48 contiguous states is $15,960 per year,⁴ so 125 percent works out to roughly $19,950 a year, or about $1,663 a month. That is more than $500 above the current special minimum.

Restored Benefits for Student Children

Before 1983, children of deceased or disabled workers could keep collecting Social Security through age 21 if they were full-time students. Congress ended those payments in the 1983 reforms. The bill would bring them back and extend eligibility to age 22 for full-time students at a college, university, or vocational school recognized under the Higher Education Act. If a student turns 22 during a term, payments continue through the end of that semester or quarter. Students being paid by an employer to attend school, or incarcerated after a felony conviction, would not qualify.⁵

Merging the Two Trust Funds

Social Security is run through two separate trust funds today: OASI for retirement and survivor benefits, and DI for disability. Each has its own revenue and its own projected exhaustion date, and money cannot move between them without an act of Congress. The bill would combine them into a single Social Security Trust Fund so that surpluses on one side automatically cover shortfalls on the other.

How the Bill Would Pay for All This

Two revenue changes fund the increases. Together, the sponsors project, they would extend Social Security’s solvency for 75 years while leaving more than 93 percent of households with no tax increase at all.²

Payroll Tax on Earnings Above $250,000

In 2026, Social Security’s 12.4 percent payroll tax applies only to the first $184,500 of wages. Everything above that is exempt.⁶ The bill would apply the same 12.4 percent tax to earnings above $250,000, split between employer and employee or paid in full by the self-employed.⁷

Wages between $184,500 and $250,000 would stay untaxed for Social Security, creating what analysts call a “donut hole.” Because the regular taxable maximum rises with average wages each year while the $250,000 threshold is fixed, the Congressional Budget Office projects the two figures will meet around 2036, closing the gap and subjecting all wages to the tax.⁷

A New Tax on Investment Income

Payroll taxes reach only wages and self-employment earnings, so households whose income comes mostly from investments and business profits contribute little to Social Security. To address that, the bill would add 12.4 percentage points to the net investment income tax for high earners. The existing 3.8 percent net investment income tax funds Medicare and applies to individuals with modified adjusted gross income above $200,000, or $250,000 for married couples filing jointly.⁸ The additional 12.4 percent would go to Social Security, matching what wage earners pay on their earnings.²

Why the Bill Exists Now

Social Security pays out more each year than it collects in payroll taxes and has been drawing down its accumulated reserves to cover the difference. The Congressional Budget Office projects that the combined OASI and DI trust funds will run out around 2034.⁷

Exhaustion does not shut the program down. Incoming payroll taxes would still cover about three-quarters of scheduled benefits, meaning an automatic benefit cut of roughly 25 percent for every retiree, survivor, and disabled beneficiary unless Congress acts. The Social Security Expansion Act is one of several proposals aimed at preventing that cut, and it stands out for raising benefits at the same time.

Where the Bill Stands

Sanders introduced S. 770 with cosponsors including Senators Elizabeth Warren, Jeff Merkley, and Kirsten Gillibrand, and it was referred to the Senate Committee on Finance.¹ Schakowsky introduced the House companion, H.R. 1700, with Representative Val Hoyle.⁹

Neither bill has moved out of committee as of early 2026. Enactment would require committee approval in both chambers, floor votes in the House and Senate, and a presidential signature. Earlier versions of the Social Security Expansion Act have been introduced in previous Congresses without reaching a floor vote.

1
GovInfo. S. 770 (IS) – Social Security Expansion Act – Content Details
2
Bernie Sanders Senate Website. Social Security Expansion Act Fact Sheet
3
U.S. Bureau of Labor Statistics. Experimental CPI for Americans 62 Years of Age and Older
4
ASPE – HHS.gov. 2026 Poverty Guidelines – 48 Contiguous States
5
Senate.gov. Social Security Expansion Act Text
6
Social Security Administration. Contribution and Benefit Base
7
Congressional Budget Office. Increase the Maximum Taxable Earnings That Are Subject to Social Security Payroll Taxes
8
Internal Revenue Service. Net Investment Income Tax
9
Congress.gov. H.R. 1700 – Social Security Expansion Act