Millions could receive $200 monthly increase if Social Security bill passes

A bill introduced earlier this year by Senate Democrats could increase monthly Social Security payments by $200 for millions of Americans starting in 2026.

The Social Security Expansion Act, introduced in the Senate in February, proposes a $200 monthly increase in benefits for all recipients beginning in January next year.

The goal of the bill is to provide inflation relief and strengthen long-term wealth of the Social Security program.

In addition to the benefit boost, the legislation includes changes to how cost-of-living adjustments are calculated, expands eligibility for certain dependents and introduces new tax measures to fund the program, according to a review of the bill by Cleveland.com, a SILive.com sister site.

One new funding measure is an addition of Social Security payroll taxes to those earning above $250,000, removing the current income cap.

The bill also calls for the increase of taxes on net earnings from self-employment and raises the investment income tax rate from 3.8% to 16.2% to help fund Social Security.

The bill proposes expanded eligibility for child benefits to full-time students up to age 22, and it raises the minimum monthly benefit for lifetime low earners based on years worked, with a sliding scale that reaches 125% of the poverty line for those working for at least 30 years.

Other key components

The bill also proposes a shift in the cost-of-living adjustment formula from the CPI-W to the CPI-E, which means, instead of the current method, which tracks costs for working-age households, the new approach would focus on expenses seniors typically face, like healthcare, housing and prescription drugs.

And it merges the Old-Age and Survivors Insurance and Disability Insurance Trust Funds into a single Social Security Trust Fund for streamlined management and reporting.