Congress expands Social Security, funds it by taxing the wealthy and investment income

What it does

This bill expands Social Security benefits and funds them through new taxes on high earners and investment income. It increases the benefit formula for all beneficiaries (raising the first bend point from 90% to 95% and adding an 18% boost), raises the minimum benefit for low-wage workers based on years worked, extends student benefits to age 22, switches to a more elderly-friendly cost-of-living index, and imposes payroll taxes on earnings above $250,000 plus a new 16.2% tax on investment income (up from 3.8%). It consolidates the two separate Social Security trust funds into one unified fund.

Why we flagged it

The bill's core mechanism is benefit expansion funded by progressive taxation—higher payroll taxes on earnings above $250k and a substantial increase in the net investment income tax. This is a straightforward policy choice to broaden and strengthen Social Security, not a hidden carve-out or deregulation.

What the text implies

• The 16.2% tax on investment income (Section 8) is a major revenue source but may reduce capital formation and investment returns for retirement accounts and pension funds that hold equities.
• Consolidating two separate trust funds into one (Section 9) simplifies administration but eliminates separate accounting for disability vs. retirement benefits, potentially obscuring future solvency pressures in either program.
• The CPI-E switch (Section 3) benefits elderly beneficiaries with higher COLAs but may increase long-term program costs if elderly inflation consistently exceeds general inflation.
• Extending student benefits to age 22 (Section 5) broadens eligibility but creates administrative complexity in verifying full-time student status and may incentivize longer school enrollment.

Section numbers refer to the bill text the analysis read — linked under Primary records below.

Who it affects

Ordinary workers and retirees receive across-the-board benefit increases, improved cost-of-living adjustments, higher minimum benefits for low-wage workers, and extended student benefits—all funded by progressive taxation on high earners and investment income. The tax burden falls on those with incomes above $250,000 and investment gains, not on typical workers.

Who stands to gain

• Social Security beneficiaries (all ages, especially low-wage workers and students)
• Elderly consumers (via CPI-E cost-of-living adjustments)

Named in the bill

Social Security Administration, Internal Revenue Service, Department of Treasury, Department of Labor (Bureau of Labor Statistics), Federal Old-Age and Survivors Insurance Trust Fund, Federal Disability Insurance Trust Fund, Railroad Retirement Board, Section 3121 (payroll tax), Section 1411 (net investment income tax), Section 215 (benefit computation)

Where it stands

10 cosponsors: 10 Democrats.

• Feb 27, 2025 — Introduced · Congress.gov: “Introduced in Senate”
• Feb 27, 2025 — Referred to Senate Committee on Finance · Congress.gov: “Read twice and referred to the Committee on Finance”

Dates and quoted wording are Congress.gov's action record; the timeline shows status changes, not every procedural step.

Money around this bill

8 lobbying clients named this bill on 14 disclosure filings across 2 quarters, Dec 2025 to Jun 2026. Those filings disclosed $920,000 in lobbying spend. A filing names 14 bills on average, so that figure is what each filing reported, not a share belonging to this bill.

More lobbying clients named this bill than 88% of bills with at least one filing.

Bernie Sanders, the sponsor, reported $-5,000 in PAC receipts in the 2026 cycle.

• National Committee to Preserve Social Security and Medicare — $400,000 on 2 filings
• American Postal Workers Union AFL-CIO — $240,000 on 2 filings
• National Committee to Preserve Social Security and Medicare — $120,000 on 2 filings
• National Organization of Social Security Claimants' Representatives — $60,000 on 1 filing
• National Organization of Social Security Claimants' Representatives — $50,000 on 1 filing

Lobbying Disclosure Act filings through Jul 20, 2026. A filing shows who paid to lobby on a bill it names, not what changed.