Strengthening Social Security Act of 2021
Bill: H.R.4921 | Sponsor: Rep. Sánchez, Linda T. (D-CA)
Policy area: Social Welfare

Summary:
Strengthening Social Security Act of 2021
This bill expands benefits, and increases specified taxes, related to the Social Security retirement and disability benefits program.
Changes to benefits include (1) increasing the primary insurance amount for certain beneficiaries, (2) calculating cost-of-living adjustments by using a price index that tracks the spending patterns of older consumers, and (3) establishing an alternative benefit for widows or widowers in two-income households.
Changes to taxes include phasing out the cap on earnings subject to the Social Security payroll tax. Under current law, the maximum amount subject to this tax is $142,800.

To improve the retirement security of American families by 
                     strengthening Social Security.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Strengthening Social Security Act of 
2021''.

SEC. 2. DETERMINATION OF TAXABLE WAGES AND SELF-EMPLOYMENT INCOME ABOVE 
              CONTRIBUTION AND BENEFIT BASE AFTER 2022.

    (a) Determination of Taxable Wages Above Contribution and Benefit 
Base After 2022.--
            (1) Amendments to the internal revenue code of 1986.--
        Section 3121 of the Internal Revenue Code of 1986 is amended--
                    (A) in subsection (a)(1), by inserting ``the 
                applicable percentage (determined under subsection 
                (c)(1)) of'' before ``that part of the remuneration''; 
                and
                    (B) in subsection (c), by striking ``(c) Included 
                and Excluded Service.--For purposes of this chapter, 
                if'' and inserting the following:
    ``(c) Special Rules for Wages and Employment.--
            ``(1) Applicable percentage of remuneration in determining 
        taxable wages.--For purposes of subsection (a)(1), the 
        applicable percentage for a calendar year shall be equal to--
                    ``(A) for 2023, 80 percent,
                    ``(B) for 2024 through 2026, the applicable 
                percentage under this paragraph for the previous year, 
                decreased by 20 percentage points, and
                    ``(C) for 2027 and each year thereafter, 0 percent.
            ``(2) Included and excluded service.--For purposes of this 
        chapter, if''.
            (2) Amendments to the social security act.--Section 209 of 
        the Social Security Act (42 U.S.C. 409) is amended--
                    (A) in subsection (a)(1)(I)--
                            (i) by inserting ``and before 2023'' after 
                        ``1974''; and
                            (ii) by inserting ``and'' after the 
                        semicolon;
                    (B) in subsection (a)(1), by adding at the end the 
                following new subparagraph:
                    ``(J) The applicable percentage (determined under 
                subsection (l)) of that part of remuneration which, 
                after remuneration (other than remuneration referred to 
                in the succeeding subsections of this section) equal to 
                the contribution and benefit base (determined under 
                section 230) with respect to employment has been paid 
                to an individual during any calendar year after 2022 
                with respect to which such contribution and benefit 
                base is effective, is paid to such individual during 
                such calendar year;''; and
                    (C) by adding at the end the following new 
                subsection:
    ``(l) For purposes of subsection (a)(1)(J), the applicable 
percentage for a calendar year shall be equal to--
            ``(1) for 2023, 80 percent,
            ``(2) for 2024 through 2026, the applicable percentage 
        under this subsection for the previous year, decreased by 20 
        percentage points, and
            ``(3) for 2027 and each year thereafter, 0 percent.''.
            (3) Effective date.--The amendments made by this subsection 
        shall apply with respect to remuneration paid in calendar years 
        after 2022.
    (b) Determination of Taxable Self-Employment Income Above 
Contribution and Benefit Base After 2022.--
            (1) Amendments to the internal revenue code of 1986.--
        Section 1402 of the Internal Revenue Code of 1986 is amended--
                    (A) in subsection (b)(1), by striking ``that part 
                of the net earnings'' and all that follows through 
                ``minus'' and inserting the following: ``an amount 
                equal to the applicable percentage (as determined under 
                subsection (d)(2)) of that part of the net earnings 
                from self-employment which is in excess of the 
                difference (not to be less than zero) between (i) an 
                amount equal to the contribution and benefit base (as 
                determined under section 230 of the Social Security 
                Act) which is effective for the calendar year in which 
                such taxable year begins, and''; and
                    (B) in subsection (d)--
                            (i) by striking ``(d) Employee and Wages.--
                        The term'' and inserting the following:
    ``(d) Rules and Definitions.--
            ``(1) Employee and wages.--The term''; and
                            (ii) by adding at the end the following:
            ``(2) Applicable percentage of net earnings from self-
        employment in determining taxable self-employment income.--For 
        purposes of subsection (b)(1), the applicable percentage for a 
        taxable year beginning in any calendar year referred to in such 
        paragraph shall be equal to--
                    ``(A) for 2023, 80 percent,
                    ``(B) for 2024 through 2026, the applicable 
                percentage under this paragraph for the previous year, 
                decreased by 20 percentage points, and
                    ``(C) for 2027 and each year thereafter, 0 
                percent.''.
            (2) Amendments to the social security act.--Section 211 of 
        the Social Security Act (42 U.S.C. 411) is amended--
                    (A) in subsection (b)--
                            (i) in paragraph (1)(I)--
                                    (I) by striking ``or'' after the 
                                semicolon; and
                                    (II) by inserting ``and before 
                                2023'' after ``1974'';
                            (ii) by redesignating paragraph (2) as 
                        paragraph (3); and
                            (iii) by inserting after paragraph (1) the 
                        following:
            ``(2) For any taxable year beginning in any calendar year 
        after 2022, an amount equal to the applicable percentage (as 
        determined under subsection (l)) of that part of net earnings 
        from self-employment which is in excess of the difference (not 
        to be less than zero) between--
                    ``(A) an amount equal to the contribution and 
                benefit base (as determined under section 230) that is 
                effective for such calendar year, and
                    ``(B) the amount of the wages paid to such 
                individual during such taxable year, or''; and
                    (B) by adding at the end the following:
    ``(l) For purposes of subsection (b)(2), the applicable percentage 
for a taxable year beginning in any calendar year referred to in such 
paragraph shall be equal to--
            ``(1) for 2023, 80 percent,
            ``(2) for 2024 through 2026, the applicable percentage 
        under this subsection for the previous year, decreased by 20 
        percentage points, and
            ``(3) for 2027 and each year thereafter, 0 percent.''.
            (3) Effective date.--The amendments made by this subsection 
        shall apply with respect to taxable years beginning during or 
        after calendar year 2023.

SEC. 3. ADJUSTMENTS TO BEND POINTS IN DETERMINING PRIMARY INSURANCE 
              AMOUNT AND INCLUSION OF SURPLUS EARNINGS FOR BENEFIT 
              DETERMINATIONS.

    (a) Adjustments Relating to First Bend Point.--
            (1) Increase in first bend point factor.--
                    (A) In general.--Section 215(a)(1)(A)(i) of the 
                Social Security Act (42 U.S.C. 415(a)(1)(A)(i)) is 
                amended by striking ``90 percent'' and inserting ``95 
                percent''.
                    (B) Effective date; application rule.--The 
                amendment made by subparagraph (A) shall apply with 
                respect to computations or recomputations of primary 
                insurance amounts made on or after January 1, 2027, 
                except that section 215(a)(1)(A)(i) of the Social 
                Security Act shall be applied by making the following 
                substitutions for ``95 percent'' for computations and 
                recomputations made in the following calendar years:
                            (i) For calendar year 2027, by substituting 
                        ``91 percent''.
                            (ii) For calendar year 2028, by 
                        substituting ``92 percent''.
                            (iii) For calendar year 2029, by 
                        substituting ``93 percent''.
                            (iv) For calendar year 2030, by 
                        substituting ``94 percent''.
            (2) Increase in first bend point.--Section 215(a)(1)(B) of 
        such Act (42 U.S.C. 415(a)(1)(B)) is amended--
                    (A) by redesignating clause (iii) as clause (iv); 
                and
                    (B) by inserting after clause (ii) the following 
                new clause:
            ``(iii) With respect to computations or recomputations of 
        primary insurance amounts made on or after January 1, 2027, the 
        amount determined under clause (i) of this subparagraph for 
        purposes of subparagraph (A)(i) for such calendar year shall be 
        increased by--
                    ``(I) for calendar year 2028, 1 percent,
                    ``(II) for each of calendar years 2029 through 
                2041, the percent determined under this clause for the 
                preceding year increased by 1 percentage point, and
                    ``(III) for calendar year 2042 and each year 
                thereafter, 15 percent.''.
            (3) Application of increase; recomputations.--The 
        amendments made by this subsection shall apply with respect to 
        every individual who becomes entitled to old-age or disability 
        insurance benefits under title II of the Social Security Act, 
        or who dies (before becoming so entitled), in any calendar 
        year. Notwithstanding section 215(f)(1) of the Social Security 
        Act, the Commissioner of Social Security shall recompute the 
        primary insurance amount of each such individual on the first 
        day of each calendar year during the period beginning with 
        calendar year 2027 and ending with calendar year 2042 to the 
        extent necessary to carry out the amendments made by this 
        section.
    (b) Inclusion of Surplus Average Indexed Monthly Earnings in 
Determination of Primary Insurance Amounts.--Section 215(a)(1)(A) of 
the Social Security Act (42 U.S.C. 415(a)(1)(A)) is amended--
            (1) in clauses (i), (ii), and (iii), by inserting ``basic'' 
        before ``average indexed monthly earnings'' each place it 
        appears;
            (2) in clause (ii), by striking ``and'' at the end;
            (3) in clause (iii), by adding ``and'' at the end; and
            (4) by inserting after clause (iii) the following new 
        clause:
            ``(iv) 5 percent of the individual's surplus average 
        indexed monthly earnings,''.
    (c) Basic AIME and Surplus AIME.--
            (1) Basic aime.--Section 215(b)(1) of such Act (42 U.S.C. 
        415(b)(1)) is amended--
                    (A) by inserting ``basic'' before ``average''; and
                    (B) in subparagraph (A), by striking ``paragraph 
                (3)'' and inserting ``paragraph (3)(A)'' and by 
                inserting before the comma the following: ``to the 
                extent such total does not exceed the contribution and 
                benefit base for the applicable year''.
            (2) Surplus aime.--
                    (A) In general.--Section 215(b)(1) of such Act (as 
                amended by paragraph (1)) is amended--
                            (i) by redesignating subparagraphs (A) and 
                        (B) as clauses (i) and (ii), respectively;
                            (ii) by inserting ``(A)'' after ``(b)(1)''; 
                        and
                            (iii) by adding at the end the following 
                        new subparagraph:
    ``(B)(i) An individual's surplus average indexed monthly earnings 
shall be equal to the quotient obtained by dividing--
            ``(I) the total (after adjustment under paragraph (3)(B)) 
        of such individual's surplus earnings (determined under clause 
        (ii)) for such individual's benefit computation years 
        (determined under paragraph (2)), by
            ``(II) the number of months in those years.
    ``(ii) For purposes of clause (i) and paragraph (3)(B), an 
individual's surplus earnings for a benefit computation year are the 
total of such individual's wages paid in and self-employment income 
credited to such benefit computation year, to the extent such total 
(before adjustment under paragraph (3)(B)) exceeds the contribution and 
benefit base for such year.''.
                    (B) Conforming amendment.--The heading for section 
                215(b) of such Act is amended by striking ``Average 
                Indexed Monthly Earnings'' and inserting ``Basic 
                Average Indexed Monthly Earnings; Surplus Average 
                Indexed Monthly Earnings''.
            (3) Adjustment of surplus earnings for purposes of 
        determining surplus aime.--Section 215(b)(3) of such Act (42 
        U.S.C. 415(b)(3)) is amended--
                    (A) in subparagraph (A), by striking ``subparagraph 
                (B)'' and inserting ``subparagraph (C)'' and by 
                inserting ``and determination of basic average indexed 
                monthly income'' after ``paragraph (2)'';
                    (B) by redesignating subparagraph (B) as 
                subparagraph (C); and
                    (C) by inserting after subparagraph (A) the 
                following new subparagraph:
    ``(B) For purposes of determining under paragraph (1)(B) an 
individual's surplus average indexed monthly earnings, the individual's 
surplus earnings (described in paragraph (2)(B)(ii)) for a benefit 
computation year shall be deemed to be equal to the product of--
            ``(i) the individual's surplus earnings for such year (as 
        determined without regard to this subparagraph), and
            ``(ii) the quotient described in subparagraph (A)(ii).''.
    (d) Effective Date.--The amendments made by subsections (b) and (c) 
shall apply with respect to individuals who initially become eligible 
(within the meaning of section 215(a)(3)(B) of the Social Security Act) 
for old-age or disability insurance benefits under title II of the 
Social Security Act, or who die (before becoming eligible for such 
benefits), in any calendar year after 2027.

SEC. 4. CONSUMER PRICE INDEX FOR ELDERLY CONSUMERS.

    (a) In General.--The Bureau of Labor Statistics of the Department 
of Labor shall prepare and publish an index for each calendar month to 
be known as the ``Consumer Price Index for Elderly Consumers'' that 
indicates changes over time in expenditures for consumption which are 
typical for individuals in the United States who have attained early 
retirement age (as defined under section 216(l)(2) of the Social 
Security Act (42 U.S.C. 416(l)(2)) for purposes of an old-age, wife's, 
or husband's insurance benefit).
    (b) Effective Date.--Subsection (a) shall apply with respect to 
calendar months ending on or after June 30 of the calendar year in 
which this Act is enacted.
    (c) Authorization of Appropriations.--There are authorized to be 
appropriated such sums as are necessary to carry out the provisions of 
this section.

SEC. 5. COMPUTATION OF COST-OF-LIVING INCREASES FOR SOCIAL SECURITY 
              BENEFITS.

    (a) In General.--Section 215(i) of the Social Security Act (42 
U.S.C. 415(i)) is amended--
            (1) in paragraph (1)(G), by inserting before the period the 
        following: ``, and, with respect to any monthly insurance 
        benefit payable under this title, effective for adjustments 
        under this subsection to the primary insurance amount on which 
        such benefit is based (or to any such benefit under section 227 
        or 228), the applicable Consumer Price Index shall be deemed to 
        be the Consumer Price Index for Elderly Consumers and such 
        primary insurance amount shall be deemed adjusted under this 
        subsection using such Index''; and
            (2) in paragraph (4), by striking ``and by section 9001'' 
        and inserting ``, by section 9001'', and by inserting after 
        ``1986,'' the following: ``and by section 5(a) of the 
        Strengthening Social Security Act of 2021,''.
    (b) Conforming Amendments in Applicable Former Law.--Section 
215(i)(1)(C) of the Social Security Act, as in effect in December 1978 
and applied in certain cases under the provisions of such Act in effect 
after December 1978, is amended by inserting before the period the 
following: ``, and, with respect to any monthly insurance benefit 
payable under this title, effective for adjustments under this 
subsection to the primary insurance amount on which such benefit is 
based (or to any such benefit under section 227 or 228), the applicable 
Consumer Price Index shall be deemed to be the Consumer Price Index for 
Elderly Consumers and such primary insurance amount shall be deemed 
adjusted under this subsection using such Index''.
    (c) Effective Date.--The amendments made by this section shall 
apply to determinations made by the Commissioner of Social Security 
under section 215(i)(2) of the Social Security Act (42 U.S.C. 
415(i)(2)) with respect to cost-of-living computation quarters ending 
on or after September 30, 2022.

SEC. 6. IMPROVING SOCIAL SECURITY BENEFITS FOR WIDOWS AND WIDOWERS IN 
              TWO-INCOME HOUSEHOLDS.

    (a) In General.--
            (1) Widows.--Section 202(e) of the Social Security Act (42 
        U.S.C. 402(e)) is amended--
                    (A) in paragraph (1)--
                            (i) in subparagraph (B), by inserting 
                        ``and'' at the end;
                            (ii) in subparagraph (C)(iii), by striking 
                        ``and'' at the end;
                            (iii) by striking subparagraph (D);
                            (iv) by redesignating subparagraphs (E) and 
                        (F) as subparagraphs (D) and (E), respectively; 
                        and
                            (v) in the flush matter following 
                        subparagraph (E)(ii), as so redesignated, by 
                        striking ``or becomes entitled to an old-age 
                        insurance benefit'' and all that follows 
                        through ``such deceased individual,'';
                    (B) by striking subparagraph (A) in paragraph (2) 
                and inserting the following:
            ``(2)(A) Except as provided in subsection (k)(5), 
        subsection (q), and subparagraph (D) of this paragraph, such 
        widow's insurance benefit for each month shall be equal to the 
        greater of--
                    ``(i) subject to paragraph (9), the primary 
                insurance amount (as determined for purposes of this 
                subsection after application of subparagraphs (B) and 
                (C)) of such deceased individual, or
                    ``(ii) subject to paragraphs (9) and (10), in the 
                case of a fully insured widow or surviving divorced 
                wife, 75 percent of the sum of any old-age or 
                disability insurance benefit for which the widow or the 
                surviving divorced wife is entitled for such month and 
                the primary insurance amount (as determined for 
                purposes of this subsection after application of 
                subparagraphs (B) and (C)) of such deceased 
                individual.'';
                    (C) in paragraph (5)--
                            (i) in subparagraph (A), by striking 
                        ``paragraph (1)(F)'' and inserting ``paragraph 
                        (1)(E)''; and
                            (ii) in subparagraph (B), by striking 
                        ``paragraph (1)(F)(i)'' and inserting 
                        ``paragraph (1)(E)(i)''; and
                    (D) by adding at the end the following new 
                paragraphs:
            ``(9) For purposes of clauses (i) and (ii) of paragraph 
        (2)(A), in the case of a surviving divorced wife, the amount 
        determined under either such clause (and, for purposes of 
        clause (ii) of paragraph (2)(A), as determined after 
        application of paragraph (10)) shall be equal to the applicable 
        percentage (as determined under section 202(b)(2)(B)) of such 
        amount (as determined before application of this paragraph but 
        after application of subsection (k)(3)).
            ``(10) For purposes of paragraph (2)(A)(ii), the amount 
        determined under such paragraph shall not exceed the primary 
        insurance amount for such month of a hypothetical individual--
                    ``(A) who became entitled to old-age insurance 
                benefits upon attaining early retirement age during the 
                month in which the deceased individual referred to in 
                paragraph (1) became entitled to old-age or disability 
                insurance benefits, or died (before becoming entitled 
                to such benefits), and
                    ``(B) to whom wages and self-employment income were 
                credited in each of such hypothetical individual's 
                elapsed years (within the meaning of section 
                215(b)(2)(B)(iii)) in an amount equal to the national 
                average wage index (as described in section 209(k)(1)) 
                for each such year.''.
            (2) Widowers.--Section 202(f) of the Social Security Act 
        (42 U.S.C. 402(f)) is amended--
                    (A) in paragraph (1)--
                            (i) in subparagraph (B), by inserting 
                        ``and'' at the end;
                            (ii) in subparagraph (C)(iii), by striking 
                        ``and'' at the end;
                            (iii) by striking subparagraph (D);
                            (iv) by redesignating subparagraphs (E) and 
                        (F) as subparagraphs (D) and (E), respectively; 
                        and
                            (v) in the flush matter following 
                        subparagraph (E)(ii), as so redesignated, by 
                        striking ``or becomes entitled to an old-age 
                        insurance benefit'' and all that follows 
                        through ``such deceased individual,'';
                    (B) by striking subparagraph (A) in paragraph (2) 
                and inserting the following:
            ``(2)(A) Except as provided in subsection (k)(5), 
        subsection (q), and subparagraph (D) of this paragraph, such 
        widower's insurance benefit for each month shall be equal to 
        the greater of--
                    ``(i) subject to paragraph (9), the primary 
                insurance amount (as determined for purposes of this 
                subsection after application of subparagraphs (B) and 
                (C)) of such deceased individual, or
                    ``(ii) subject to paragraphs (9) and (10), in the 
                case of a fully insured widower or surviving divorced 
                husband, 75 percent of the sum of any old-age or 
                disability insurance benefit for which the widower or 
                the surviving divorced husband is entitled for such 
                month and the primary insurance amount (as determined 
                for purposes of this subsection after application of 
                subparagraphs (B) and (C)) of such deceased 
                individual.'';
                    (C) in paragraph (5)--
                            (i) in subparagraph (A), by striking 
                        ``paragraph (1)(F)'' and inserting ``paragraph 
                        (1)(E)''; and
                            (ii) in subparagraph (B), by striking 
                        ``paragraph (1)(F)(i)'' and inserting 
                        ``paragraph (1)(E)(i)''; and
                    (D) by adding at the end the following new 
                paragraphs:
            ``(9) For purposes of clauses (i) and (ii) of paragraph 
        (2)(A), in the case of a surviving divorced husband, the amount 
        determined under either such clause (and, for purposes of 
        clause (ii) of paragraph (2)(A), as determined after 
        application of paragraph (10)) shall be equal to the applicable 
        percentage (as determined under section 202(c)(2)(B)) of such 
        amount (as determined before application of this paragraph but 
        after application of subsection (k)(3)).
            ``(10) For purposes of paragraph (2)(A)(ii), the amount 
        determined under such paragraph shall not exceed the primary 
        insurance amount for such month of a hypothetical individual--
                    ``(A) who became entitled to old-age insurance 
                benefits upon attaining early retirement age during the 
                month in which the deceased individual referred to in 
                paragraph (1) became entitled to old-age or disability 
                insurance benefits, or died (before becoming entitled 
                to such benefits), and
                    ``(B) to whom wages and self-employment income were 
                credited in each of such hypothetical individual's 
                elapsed years (within the meaning of section 
                215(b)(2)(B)(iii)) in an amount equal to the national 
                average wage index (as described in section 209(k)(1)) 
                for each such year.''.
    (b) Effective Date.--The amendments made by this section shall 
apply with respect to widow's and widower's insurance benefits payable 
for months after December 2022.

SEC. 7. HOLDING SSI BENEFICIARIES HARMLESS.

    For purposes of determining the income of an individual to 
establish eligibility for, and the amount of, benefits payable under 
title XVI of the Social Security Act, the amount of any benefit to 
which the individual is entitled under title II of such Act shall be 
deemed not to exceed the amount of the benefit that would be determined 
for such individual under such title as in effect on the day before the 
date of the enactment of this Act.
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