Social Security for Future Generations Act of 2021
Bill: H.R.5737 | Sponsor: Rep. Lawson, Al, Jr. (D-FL)
Policy area: Social Welfare

Summary:
Social Security for Future Generations Act of 2021
This bill increases specified benefits and taxes related to, and otherwise modifies, the Social Security program.   Changes to benefits include
Changes to taxes include subjecting earnings in excess of $250,000 to Social Security payroll taxes. No taxes shall be applied to earnings between the contribution base (the maximum amount subject to the Social Security payroll tax, set at $142,800 for 2021) and $250,000.
The bill preserves eligibility for Supplemental Security Income payments and other means-tested programs, despite any changes to an individual's Social Security benefits under the bill.



To amend title II of the Social Security Act to enhance Social Security 
benefits and maintain the commitment and the long-term solvency of the 
                        Social Security program.

    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 ``Social Security for Future 
Generations Act of 2021''.

SEC. 2. PAYROLL TAX ON WAGES AND SELF-EMPLOYMENT INCOME UP TO 
              CONTRIBUTION AND BENEFIT BASE AND MORE THAN $250,000.

    (a) Determination of Wages Above Contribution and Benefit Base 
After 2021.--
            (1) Amendments to the internal revenue code.--
                    (A) In general.--Paragraph (1) of section 3121(a) 
                of the Internal Revenue Code of 1986 is amended by 
                inserting after ``such calendar year.'' the following: 
                ``The preceding sentence shall apply only to calendar 
                years for which the contribution and benefit base (as 
                so determined) is less than $250,000, and, for such 
                calendar years, only to the extent remuneration paid to 
                such employee by such employer with respect to 
                employment does not exceed $250,000.''.
                    (B) Conforming amendment.--Paragraph (1) of section 
                3121(a) of the Internal Revenue Code of 1986 is amended 
                by striking ``Act) to'' and inserting ``Act), or in 
                excess of $250,000, to''.
            (2) Amendment to the social security act.--Section 
        209(a)(1)(I) of the Social Security Act (42 U.S.C. 
        409(a)(1)(I)) is amended by inserting before the semicolon at 
        the end the following: ``except that this subparagraph shall 
        apply only to calendar years for which the contribution and 
        benefit base (as so determined) is less than $250,000, and, for 
        such calendar years, only to the extent remuneration paid to 
        such employee by such employer with respect to employment does 
        not exceed $250,000''.
            (3) Effective date.--The amendments made by this subsection 
        shall apply with respect to remuneration paid in calendar years 
        after 2021.
    (b) Determination of Self-Employment Income Above Contribution and 
Benefit Base After 2021.--
            (1) Amendments to the internal revenue code.--
                    (A) In general.--Paragraph (1) of section 1402(b) 
                of the Internal Revenue Code of 1986 is amended to read 
                as follows:
            ``(1) in the case of the tax imposed by section 1401(a), an 
        amount equal to--
                    ``(A) $250,000, reduced (but not below zero) by
                    ``(B) the sum of--
                            ``(i) the part of the net earnings from 
                        self-employment (if any) which is not in excess 
                        of--
                                    ``(I) the 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, minus
                                    ``(II) the amount of the wages paid 
                                to such individual during such taxable 
                                year, plus
                            ``(ii) the amount of the wages paid to such 
                        individual during such taxable year which is in 
                        excess of the amount in clause (i)(I); or''.
                    (B) Phaseout.--Subsection (b) of section 1402 of 
                the Internal Revenue Code of 1986 is amended by adding 
                at the end the following: ``Paragraph (1) shall apply 
                only to taxable years beginning in calendar years for 
                which the contribution and benefit base (as determined 
                under section 230 of the Social Security Act) is less 
                than $250,000.''.
            (2) Amendments to the social security act.--
                    (A) In general.--Section 211(b)(1) of the Social 
                Security Act (42 U.S.C. 411(b)) is amended--
                            (i) in subparagraph (I)--
                                    (I) by inserting ``and before 
                                2021'' after ``1974''; and
                                    (II) by striking ``or'' at the end; 
                                and
                            (ii) by adding at the end the following:
                    ``(J) For any taxable year beginning in any 
                calendar year after 2021, an amount equal to--
                            ``(i) $250,000, reduced (but not below 
                        zero) by
                            ``(ii) the sum of--
                                    ``(I) the part of the net earnings 
                                from self-employment (if any) which is 
                                not in excess of--
                                            ``(aa) the amount equal to 
                                        the contribution and benefit 
                                        base (as determined under 
                                        section 230) which is effective 
                                        for the calendar year in which 
                                        such taxable year begins, minus
                                            ``(bb) the amount of the 
                                        wages paid to such individual 
                                        during such taxable year, plus
                                    ``(II) the amount of the wages paid 
                                to such individual during such taxable 
                                year which is in excess of the amount 
                                in subclause (I)(aa); or''.
                    (B) Phaseout.--Section 211(b) of the Social 
                Security Act (42 U.S.C. 411(b)) is amended by adding at 
                the end the following: ``Paragraph (1) shall apply only 
                to taxable years beginning in calendar years for which 
                the contribution and benefit base (as determined under 
                section 230) is less than $250,000.''.
            (3) Effective date.--The amendments made by this subsection 
        shall apply to net earnings from self-employment derived, and 
        remuneration paid, in calendar years after 2021.

SEC. 3. INCLUSION OF EARNINGS OVER $250,000 IN SOCIAL SECURITY BENEFIT 
              FORMULA.

    (a) Inclusion of Earnings Over $250,000 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 clause (ii), by striking ``and'' at the end;
            (2) in clause (iii), by inserting ``and'' at the end; and
            (3) by inserting after clause (iii) the following:
            ``(iv) 2 percent of the individual's excess average indexed 
        monthly earnings (as defined in subsection (b)(5)(A)).''.
    (b) Definition of Excess Average Indexed Monthly Earnings.--Section 
215(b) of the Social Security Act (42 U.S.C. 415(b)) is amended--
            (1) by striking ``wages'' and ``self-employment income'' 
        each place such terms appear and inserting ``basic wages'' and 
        ``basic self-employment income'', respectively; and
            (2) by adding at the end the following:
    ``(5)(A) An individual's excess average indexed monthly earnings 
shall be equal to the amount of the individual's average indexed 
monthly earnings that would be determined under this subsection by 
substituting `excess wages' for `basic wages' and `excess self-
employment income' for `basic self-employment income' each place such 
terms appear in this subsection (except in this paragraph).
    ``(B) For purposes of this subsection--
            ``(i) the term `basic wages' means that portion of the 
        wages of an individual paid in a year that does not exceed the 
        contribution and benefit base for the year;
            ``(ii) the term `basic self-employment income' means that 
        portion of the self-employment income of an individual credited 
        to a year that does not exceed an amount equal to the 
        contribution and benefit base for the year minus the amount of 
        the wages paid to the individual in the year;
            ``(iii) the term `excess wages' means that portion of the 
        wages of an individual paid in a year after 2021 in excess of 
        the higher of $250,000 or the contribution and benefit base for 
        the year; and
            ``(iv) the term `excess self-employment income' means that 
        portion of the self-employment income of an individual credited 
        to a year after 2021 in excess of the higher of $250,000 or 
        such contribution and benefit base.''.
    (c) Conforming Amendment.--Section 215(e)(1) of the Social Security 
Act (42 U.S.C. 415(e)(1)) is amended by inserting ``and before 2021'' 
after ``after 1974''.
    (d) Effective Date.--The amendments made by this section 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 2021.

SEC. 4. COMPUTATION OF COST-OF-LIVING INCREASES.

    (a) In General.--Section 215(i)(1) of the Social Security Act (42 
U.S.C. 415(i)(1)) is amended by adding at the end the following new 
subparagraph:
            ``(H) the term `Consumer Price Index' means the Consumer 
        Price Index for Elderly Consumers (CPI-E, as published by the 
        Bureau of Labor Statistics of the Department of Labor).''.
    (b) Application to Pre-1979 Law.--
            (1) In general.--Section 215(i)(1) of the Social Security 
        Act as in effect in December 1978, and as applied in certain 
        cases under the provisions of such Act as in effect after 
        December 1978, is amended by adding at the end the following 
        new subparagraph:
            ``(D) the term `Consumer Price Index' means the Consumer 
        Price Index for Elderly Consumers (CPI-E, as published by the 
        Bureau of Labor Statistics of the Department of Labor).''.
            (2) Conforming change.--Section 215(i)(4) of the Social 
        Security Act (42 U.S.C. 415(i)(4)) is amended by inserting 
        ``and by section 4 of the Social Security for Future 
        Generations Act of 2021'' after ``1986''.
    (c) No Effect on Adjustments Under Other Laws.--Section 215(i) of 
the Social Security Act (42 U.S.C. 415(i)) is amended by adding at the 
end the following:
    ``(6) Any provision of law (other than in this title, title VIII, 
or title XVI) which provides for adjustment of an amount based on a 
change in benefit amounts resulting from a determination made under 
this subsection shall be applied and administered without regard to the 
amendments made by section 4 of the Social Security for Future 
Generations Act of 2021.''.
    (d) Publication of Consumer Price Index for Elderly Consumers.--The 
Bureau of Labor Statistics of the Department of Labor shall prepare and 
publish the index authorized by section 191 of the Older Americans 
Amendments Act of 1987 (29 U.S.C. 2 note) for each calendar month, 
beginning with July of the calendar year following the calendar year in 
which this Act is enacted, and such index shall be known as the 
``Consumer Price Index for Elderly Consumers''.
    (e) Effective Date.--The amendments made by subsection (a) shall 
apply to determinations made with respect to cost-of-living computation 
quarters (as defined in section 215(i)(1)(B) of the Social Security Act 
(42 U.S.C. 415(i)(1)(B))) ending on or after September 30 of the second 
calendar year following the calendar year in which this Act is enacted.

SEC. 5. EXTENDED BENEFIT ELIGIBILITY FOR CHILDREN WHO ARE FULL-TIME 
              STUDENTS.

    (a) In General.--Section 202(d) of the Social Security Act (42 
U.S.C. 402(d)) is amended--
            (1) in paragraphs (1)(B), (1)(E), (1)(F)(i), (1)(G)(ii), 
        (6)(A), (6)(D), (6)(E)(i), (7)(A), (7)(B), and (7)(D), by 
        striking ``full-time elementary or secondary school student'' 
        each place it appears and inserting ``full-time student'';
            (2) in paragraphs (1)(B), (1)(F)(ii), (1)(G)(iii), (6)(A), 
        (6)(D), (6)(E)(ii), and (7)(D), by striking ``19'' each place 
        it appears and inserting ``23'';
            (3) in subparagraphs (A), (B), and (D) of paragraph (7), by 
        striking ``elementary or secondary school'' each place it 
        appears and inserting ``educational institution'';
            (4) in paragraph (7)(A), by striking ``schools involved'' 
        and inserting ``institutions involved'';
            (5) in paragraph (7), by amending subparagraph (C) to read 
        as follows:
                    ``(C) For purposes of this subsection, the term 
                `educational institution' means--
                            ``(i) a school which provides elementary or 
                        secondary education as determined under the law 
                        of the State or other jurisdiction in which it 
                        is located; and
                            ``(ii) an institution described in section 
                        102 of the Higher Education Act of 1965 (20 
                        U.S.C. 1002).''; and
            (6) in paragraph (7)(D), by striking ``diploma or 
        equivalent certificate from a secondary school (as defined in 
        subparagraph (C)(i))'' and inserting ``diploma, degree, or 
        equivalent certificate from an institution described in 
        subparagraph (C)(ii)''.
    (b) Railroad Retirement Act.--
            (1) In general.--Section 2(d) of the Railroad Retirement 
        Act of 1974 (45 U.S.C. 232(2)(d)) is amended--
                    (A) in clause (iii) of paragraph (1), by striking 
                ``will be less than nineteen years of age and a full-
                time elementary or secondary school student'' and 
                inserting ``will be less than 23 years of age and a 
                full-time student at an educational institution (as 
                defined in section 202(d)(7) of the Social Security 
                Act)''; and
                    (B) in paragraph (4)--
                            (i) by striking ``elementary or secondary 
                        school'' each place it appears and inserting 
                        ``educational institution'';
                            (ii) by striking ``nineteen'' and inserting 
                        ``23''; and
                            (iii) by striking ``a diploma or equivalent 
                        certificate from a secondary school (as defined 
                        in section 202(d)(7)(c)(i) of the Social 
                        Security Act)'' and inserting ``a diploma, 
                        degree, or equivalent certificate from an 
                        institution described in section 
                        202(d)(7)(C)(ii) of the Social Security Act''.
            (2) Conforming amendment.--Section 5(c)(7) of the Railroad 
        Retirement Act of 1974 (45 U.S.C. 235(c)(7)) is amended--
                    (A) by striking ``elementary or secondary school'' 
                and inserting ``educational institution''; and
                    (B) by striking ``19'' and inserting ``23''.
    (c) Effective Date.--The amendments made by this section shall 
apply to child's insurance benefits that are payable for months 
beginning after December 31, 2021.

SEC. 6. INCREASE IN MINIMUM BENEFIT FOR LIFETIME LOW EARNERS BASED ON 
              YEARS IN THE WORKFORCE.

    (a) In General.--Section 215(a)(1) of the Social Security Act (42 
U.S.C. 415(a)(1)) is amended--
            (1) by redesignating subparagraph (D) as subparagraph (E); 
        and
            (2) by inserting after subparagraph (C) the following new 
        subparagraph:
    ``(D)(i) Effective with respect to the benefits of individuals who 
become eligible for old-age insurance benefits or disability insurance 
benefits (or die before becoming so eligible) after 2021, no primary 
insurance amount computed under subparagraph (A) may be less than the 
greater of--
            ``(I) the minimum monthly amount computed under 
        subparagraph (C); or
            ``(II) in the case of an individual who has more than 10 
        years of work (as defined in clause (iv)(I)), the alternative 
        minimum amount determined under clause (ii).
    ``(ii)(I) The alternative minimum amount determined under this 
clause is the applicable percentage of \1/12\ of the annual dollar 
amount determined under clause (iii) for the year in which the amount 
is determined.
    ``(II) For purposes of subclause (I), the applicable percentage is 
the percentage specified in connection with the number of years of 
work, as set forth in the following table:

``If the number of years                                 The applicable
   of work is:                                           percentage is:
        11...........................................     6.25 percent 
        12...........................................    12.50 percent 
        13...........................................    18.75 percent 
        14...........................................    25.00 percent 
        15...........................................    31.25 percent 
        16...........................................    37.50 percent 
        17...........................................    43.75 percent 
        18...........................................    50.00 percent 
        19...........................................    56.25 percent 
        20...........................................    62.50 percent 
        21...........................................    68.75 percent 
        22...........................................    75.00 percent 
        23...........................................    81.25 percent 
        24...........................................    87.50 percent 
        25...........................................    93.75 percent 
        26...........................................   100.00 percent 
        27...........................................   106.25 percent 
        28...........................................   112.50 percent 
        29...........................................   118.75 percent 
        30 or more...................................   125.00 percent.

    ``(iii) The annual dollar amount determined under this clause is--
            ``(I) for calendar year 2022, the poverty guideline for 
        2021; and
            ``(II) for any calendar year after 2022, the annual dollar 
        amount for 2021 multiplied by the ratio of--
                    ``(aa) the national average wage index (as defined 
                in section 209(k)(1)) for the second calendar year 
                preceding the calendar year for which the determination 
                is made, to
                    ``(bb) the national average wage index (as so 
                defined) for 2020.
    ``(iv) For purposes of this subparagraph--
            ``(I) the term `year of work' means, with respect to an 
        individual, a year to which 4 quarters of coverage have been 
        credited based on such individual's wages and self-employment 
        income; and
            ``(II) the term `poverty guideline for 2021' means the 
        annual poverty guideline for 2021 (as updated annually in the 
        Federal Register by the Department of Health and Human Services 
        under the authority of section 673(2) of the Omnibus Budget 
        Reconciliation Act of 1981) as applicable to a single 
        individual.''.
    (b) Recomputation.--Notwithstanding section 215(f)(1) of the Social 
Security Act, the Commissioner of Social Security shall recompute 
primary insurance amounts originally computed for months prior to 
November 2021 to the extent necessary to carry out the amendments made 
by this section.
    (c) Conforming Amendment.--Section 209(k)(1) of such Act (42 U.S.C. 
409(k)(1)) is amended by inserting ``215(a)(1)(E),'' after 
``215(a)(1)(D),''.

SEC. 7. ALTERNATE BENEFIT AMOUNT FOR WIDOW'S AND WIDOWER'S INSURANCE 
              BENEFITS.

    (a) Widows.--Section 202(e) of the Social Security Act (42 U.S.C. 
402(e)) is amended--
            (1) in paragraph (1)--
                    (A) in subparagraph (B), by inserting ``and'' at 
                the end;
                    (B) in subparagraph (C)(iii), by striking ``and'' 
                at the end;
                    (C) by striking subparagraph (D);
                    (D) by redesignating subparagraphs (E) and (F) as 
                subparagraphs (D) and (E), respectively; and
                    (E) in the flush matter following subparagraph 
                (E)(ii), as so redesignated, by striking ``becomes 
                entitled to an old-age insurance benefit'' and all that 
                follows through ``such deceased individual,'';
            (2) 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) 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 paragraph (9), 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.'';
            (3) in paragraph (5)--
                    (A) in subparagraph (A), by striking ``paragraph 
                (1)(F)'' and inserting ``paragraph (1)(E)''; and
                    (B) in subparagraph (B), by striking ``paragraph 
                (1)(F)(i)'' and inserting ``paragraph (1)(E)(i)''; and
            (4) by adding at the end the following new paragraph:
            ``(9) 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) Widowers.--Section 202(f) of the Social Security Act (42 U.S.C. 
402(f)) is amended--
            (1) in paragraph (1)--
                    (A) in subparagraph (B), by inserting ``and'' at 
                the end;
                    (B) in subparagraph (C)(iii), by striking ``and'' 
                at the end;
                    (C) by striking subparagraph (D);
                    (D) by redesignating subparagraphs (E) and (F) as 
                subparagraphs (D) and (E), respectively; and
                    (E) in the flush matter following subparagraph 
                (E)(ii), as so redesignated, by striking ``becomes 
                entitled to an old-age insurance benefit'' and all that 
                follows through ``such deceased individual,'';
            (2) 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) 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 paragraph (9), 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.'';
            (3) in paragraph (5)--
                    (A) in subparagraph (A), by striking ``paragraph 
                (1)(F)'' and inserting ``paragraph (1)(E)''; and
                    (B) in subparagraph (B), by striking ``paragraph 
                (1)(F)(i)'' and inserting ``paragraph (1)(E)(i)''; and
            (4) 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.''.
    (c) Reduction of Benefit for Individuals Entitled to Simultaneous 
Benefits.--Section 202(k)(3) of the Social Security Act (42 U.S.C. 
402(k)(3)) is amended--
            (1) in subparagraph (A), by striking ``If an individual'' 
        and inserting ``Except as provided in subparagraph (C), if an 
        individual''; and
            (2) by adding at the end the following new subparagraph:
    ``(C) If an individual is entitled for any month to a widow's or 
widower's insurance benefit and is also entitled to an old-age or 
disability insurance benefit for such month that is greater than such 
widow's or widower's insurance benefit, the reduction described in 
subparagraph (A), with respect to such widow's or widower's insurance 
benefit, shall be carried out by substituting an amount equal to the 
primary insurance amount of the deceased individual referred to in 
subsection (e)(1) or (f)(1) (as determined for purposes of subsection 
(e)(2)(A)(i) or (f)(2)(A)(i)) for the amount equal to the old-age or 
disability insurance benefit of the individual entitled to the widow's 
or widower's insurance benefit.''.
    (d) Effective Date.--The amendments made by this section shall 
apply with respect to widow's insurance benefits and widower's 
insurance benefits that are payable for months beginning after December 
31, 2021.

SEC. 8. HOLDING SSI, MEDICAID, AND CHIP 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, eligibility for medical 
assistance under the State plan under title XIX (or a waiver of such 
plan), or eligibility for child health assistance under the State child 
health plan under title XXI (or a waiver of the plan), 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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