Overview
Title
To amend title II of the Social Security Act and the Internal Revenue Code of 1986 to make improvements in the old-age, survivors, and disability insurance program.
ELI5 AI
The bill, called the "Protecting and Preserving Social Security Act," wants to make Social Security better for older people by changing how their costs are figured out and updating how much money they can get from benefits, aiming to make it fairer and more sustainable.
Summary AI
The bill, known as the "Protecting and Preserving Social Security Act," aims to enhance the Social Security program in the United States. It proposes adjustments to the Consumer Price Index specifically for elderly consumers to better reflect their spending habits. The bill also outlines new ways to determine wages and self-employment income that exceed current contribution and benefit limits, and it revises how surplus earnings are included in the Social Security benefit formula. These changes are intended to improve fairness and sustainability in the Social Security system.
Published
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Bill Statistics
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Complexity
AnalysisAI
Overview of the Bill
This piece of legislation, referred to as the âProtecting and Preserving Social Security Act,â intends to make modifications and improvements to the Social Security program and the Internal Revenue Code. Its primary focus is on updating cost-of-living adjustments for Social Security beneficiaries by creating a Consumer Price Index specifically for elderly consumers and adjusting how wages and self-employment income are determined for tax purposes after 2024. Additionally, it seeks to incorporate surplus earnings into the formula used to calculate Social Security benefits.
Significant Issues
Among the notable issues, the bill allows for an unspecified amount of funding to support the creation of a new Consumer Price Index for Elderly Consumers. This lack of a specific funding cap can lead to potential excess spending, which may have implications for the federal budget and taxpayers. Furthermore, the bill introduces complex language and new terms that could pose challenges for interpretation and compliance, especially for taxpayers and individuals unfamiliar with tax law or Social Security benefits.
The inclusion of surplus earnings in the Social Security benefit formula might also generate confusion due to its complicated calculations and the introduction of new terms like "basic average indexed monthly earnings" and "surplus average indexed monthly earnings." These terms are not clearly defined, and the percentage figures used in calculations are not explicitly justified in the text, which could lead to misunderstandings and implementation issues.
Additionally, the timeliness of the bill's provisions is ambiguous due to its reliance on the enactment date. This could delay the implementation of its measures, causing uncertainty for elderly consumers and taxpayers planning their finances.
Potential Impact on the Public
Broadly speaking, this bill aims to better align Social Security benefits with the cost of living experienced by elderly Americans. By considering the specific consumption patterns of the elderly, the bill could lead to more accurate and potentially higher cost-of-living adjustments for this demographic. However, if not managed properly, this could result in significant administrative costs or budget concerns due to undefined spending limits in the legislation.
Contributors to Social Security through wages and self-employment income could see changes in how their taxable income is calculated, impacting their Social Security contributions. For high earners, the new structure for calculating contributions above the contribution and benefit base may impose more equitable tax burdens, albeit with increased complexity.
Impact on Specific Stakeholders
For elderly consumers, the introduction of the Consumer Price Index for Elderly Consumers could lead to favorable adjustments in their Social Security benefits, better reflecting inflation pressures on goods and services they frequently purchase. However, the lack of specific timelines and spending controls might affect the reliability and timeliness of these adjustments.
Tax professionals and accountants might find the language and structural changes in wage and self-employment income determination a source of additional complexity, potentially increasing the compliance burden. Similarly, individuals planning for Social Security benefits may need to navigate more complex calculations, making access to professional advice more crucial.
In conclusion, while the Protecting and Preserving Social Security Act has a commendable goal of updating and safeguarding Social Security in line with contemporary economic realities for the elderly, it also introduces complexities and ambiguities that require careful consideration and clear implementation strategies to avoid negative repercussions.
Financial Assessment
The bill, titled the "Protecting and Preserving Social Security Act," primarily focuses on enhancing the Social Security program in the United States. It has specific financial implications that merit examination.
Financial Allocations and Spending
One major financial aspect of the bill is in Section 101, which authorizes the creation and maintenance of a new "Consumer Price Index for Elderly Consumers." This section includes an authorization for "such sums as are necessary" to be appropriated to carry out these provisions. This means there is no specific financial limit set for this task, potentially leading to a flexible budget that can expand based on needs. However, this flexibility also raises concerns over potential excessive or wasteful spending. Without a cap, there is a likelihood of impacting the federal budget significantly and increasing the financial burden on taxpayers.
Relation to Identified Issues
The authorization of "such sums as are necessary" could clearly result in issues related to unchecked spending. This ties into the identified issue that such language lacks specificity and could lead to inefficiencies or misallocations of funds. The absence of a concrete financial ceiling necessitates a rigorous oversight mechanism to ensure funds are used efficiently and effectively.
Additionally, the broad language in Section 102, which excludes the amendments' effects on other laws without clear boundaries, raises concerns about potential conflicts. Such conflicts could result in legal uncertainties or administrative burdens that might indirectly affect financial allocations, especially if resources are needed to resolve these conflicts.
Furthermore, the bill introduces complex language regarding calculations related to Social Security contributions and benefits. Section 202 introduces terms like "basic average indexed monthly earnings" that include financial calculations involving percentages such as 3% and 0.25% of an individual's earnings. The complexity and ambiguity associated with these new calculations might lead to confusion among taxpayers and complicate compliance, which can impact individuals' understanding of their benefit entitlements. Proper clarification and education on these financial terms are necessary to avoid misunderstanding and ensure equitable distribution of Social Security benefits.
Finally, the ambiguous effective dates noted in several sections, such as Sections 101, 102, and 201, could lead to implementation challenges. This ambiguity can result in delays in the enactment of financial benefits or compliance measures, which may affect financial planning, especially for elderly individuals relying on accurate Social Security updates.
In summary, while the bill aims to enhance fairness and sustainability within the Social Security system, financial references within it pose significant challenges. These challenges arise from broad and non-specific language that could lead to excessive spending and financial misinterpretations. Addressing these issues with precise definitions, clear financial limits, and detailed implementation timelines will be critical for the bill's successful execution.
Issues
The authorization of 'such sums as are necessary' for the Consumer Price Index for Elderly Consumers in Section 101 could lead to excessive or wasteful spending due to the lack of a specific funding limit. This can impact the federal budget and taxpayers significantly.
The definition of 'Consumer Price Index' in Section 102 is specific to the Consumer Price Index for Elderly Consumers, which might lead to inconsistencies with other cost-of-living indices used, requiring justification or reconciliation to avoid legal or administrative conflicts.
Sections 201 and 202 involve complex language regarding the determination of wages and self-employment income over the contribution and benefit base, as well as surplus earnings inclusion. This complexity might cause confusion for taxpayers and complicate compliance, potentially affecting equitable tax burdens.
The lack of clear definitions for new terms introduced in Section 202, such as 'basic average indexed monthly earnings' and 'surplus average indexed monthly earnings,' could create ambiguity and difficulties in implementation, impacting individuals' understanding of their Social Security benefits.
The bill's effective dates are ambiguous in multiple sections, including Sections 101, 102, and 201. The reliance on the enactment date introduces uncertainty in implementation timelines, which could delay benefits or compliance measures for elderly consumers and taxpayers.
Section 101's transition period linked to the enactment date without a specific timeline could lead to confusion among stakeholders about when the Consumer Price Index for Elderly Consumers comes into effect, affecting financial planning for the elderly.
In Section 102, the broad exclusion of the amendments affecting other laws without clear parameters might lead to conflicts in legal interpretation and application, necessitating clarification to avoid administrative burdens or unintended legal consequences.
Sections
Sections are presented as they are annotated in the original legislative text. Any missing headers, numbers, or non-consecutive order is due to the original text.
1. Short title and table of contents Read Opens in new tab
Summary AI
The Protecting and Preserving Social Security Act introduces measures to adjust Social Security benefits, including cost-of-living increases specifically calculated for elderly consumers and changes to how wages and self-employment income are considered after 2024 to ensure fairness in contributions and benefits.
101. Consumer Price Index for Elderly Consumers Read Opens in new tab
Summary AI
The Bureau of Labor Statistics must create and publish a monthly index called the "Consumer Price Index for Elderly Consumers," which tracks spending changes typical for people aged 62 and older in the U.S. This requirement starts after a specified date, and funding will be provided as needed to support this initiative.
102. Computation of cost-of-living increases Read Opens in new tab
Summary AI
The section modifies the Social Security Act to use the Consumer Price Index for Elderly Consumers (CPIâE) when calculating cost-of-living adjustments for Social Security benefits, ensuring that this change does not impact other laws or eligibility for Supplemental Security Income and Medicaid. It will come into effect for computations made in quarters ending on or after September 30, two years after the Act is passed.
201. Determination of wages and self-employment income above contribution and benefit base after 2024 Read Opens in new tab
Summary AI
The section outlines changes to tax law and Social Security affecting how wages and self-employment income above a certain limitâknown as the contribution and benefit baseâare calculated for taxes after 2024. It introduces a table of decreasing percentages applied to income surpassing this limit each year from 2025 to 2030; starting from 86% in 2025 and eventually reaching 0% after 2030, for both wages and self-employment income.
202. Inclusion of surplus earnings in Social Security benefit formula Read Opens in new tab
Summary AI
The section proposes changes to how Social Security calculates benefits by including surplus earnings in the formula. It introduces a new component, Surplus Average Indexed Monthly Earnings (AIME), which will affect the primary insurance amounts for individuals becoming eligible for benefits after 2024, with specific provisions for how these earnings are calculated and adjusted.
Money References
- â (1) IN GENERAL.âSection 215(a)(1)(A) of the Social Security Act (42 U.S.C. 415(a)(1)(A)) is amendedâ (A) in clauses (i), (ii), and (iii), by inserting âbasicâ before âaverage indexed monthly earningsâ each place it appears; (B) in clause (ii), by striking âandâ at the end; and (C) by inserting after clause (iii) the following new clauses: â(iv) 3 percent of the individualâs surplus average indexed monthly earnings to the extent such surplus average indexed monthly earnings do not exceed the excess of the amount established for purposes of this clause by subparagraph (B) over 1â12 of the contribution and benefit base for the last of such individualâs computation base years, and â(v) 0.25 percent of the sum of the individualâs surplus average indexed monthly earnings plus 1â12 of the contribution and benefit base for the last of such individualâs computation base years, to the extent such sum exceeds the amount established for purposes of clause (iv) by subparagraph (B).â. (2) BEND POINT FOR SURPLUS EARNINGS.âSection 215(a)(1)(B) of such Act (42 U.S.C. 415(a)(1)(B)) is amendedâ (A) in clause (ii), by striking âthe amounts so establishedâ and inserting âthe amounts established for purposes of clauses (i) and (ii) of subparagraph (A)â; (B) by redesignating clause (iii) as clause (v); (C) in clause (v) (as redesignated), by inserting âor (iv) â after âclause (ii)â; and (D) by inserting after clause (ii) the following new clauses: â(iii) For individuals who initially become eligible for old-age or disability insurance benefits, or who die (before becoming eligible for such benefits), in the calendar year 2023, the amount established for purposes of clause (iv) of subparagraph (A) shall be $8,933.