A brand-new legislative proposal, recently introduced in Congress, could bring a ray of hope to dwindling retirement payments: the Social Security Expansion Act, which is supposed to inject an extra $200 a month into the pockets of millions of retirees, disabled people, and survivors, for six months.
This would mean that, starting in January 2026, you could live for six months on a check that not only covers the basics but also provides real relief from inflation that erodes savings. This is a concrete initiative, championed by Senator Bernie Sanders and his progressive allies, that could redefine American Social Security.
The proposal to give $1,200 to Social Security beneficiaries
The law, known as S.770 in the Senate and H.R.1700 in the House, goes beyond a simple increase. Starting next year, it would add $200 per month—equivalent to $2,400 per year—to current benefits, without affecting the already scheduled 2.8% cost-of-living adjustment (COLA).
For the 70 million beneficiaries who depend on Social Security, this would provide a buffer against the high costs of healthcare, housing, and medication that have fueled inflation. The current average benefit is around $1,838 per month, an amount that for many barely covers rent and medicine, leaving little room for unexpected expenses.
In 2023, this program lifted 27.6 million people out of poverty, including 19.5 million seniors, reducing the poverty rate among those over 65 from nearly 50% in 1935 to the current 9.7%. However, 40% of retirees use it as their primary source of income, and for 14.3%, it represents more than 90% of their income.
What about the Social Security’s COLA 2026?
What makes this proposal so compelling is its ambition beyond an immediate check. It would change the formula of the CPI-W index’s COLA, which focuses on working households, to the CPI-E, designed to capture the real expenses of the elderly: those runaway increases in medical premiums and rent that the current index ignores.
Furthermore, it would raise the minimum benefit to 125% of the poverty line – around $18,000 annually for those who have contributed for 30 years or more – especially benefiting low-wage earners and the disabled, where poverty still affects 25%.
And it doesn’t stop there: it would extend payments to children in school until age 22 if a parent is disabled or deceased, reversing a 1983 cut that left thousands without support for college or vocational training. All of this, by merging the retirement and disability trust funds into one for smoother management, would extend the program’s solvency until 2100, avoiding the projected 17 to 20% cuts by 2035.
Financing is also contemplated: without touching the taxes of 91% of households, the law would raise the contribution cap – currently at $176,100 – for incomes above $250,000, forcing millionaires and CEOs to pay 12.4% on their entire salary.
An executive earning $20 million annually, for example, who currently contributes the same as a middle-class worker, would see their tax burden align with reality. Combined with a new 12.4% tax on investment and business income for the ultra-wealthy—raising the rate from 3.8% to 16.2%—this would generate between $1 and $2 trillion over a decade, enough to cover expansions and ensure solvency.
Amid this tug-of-war, the urgency is palpable. The 2025 Trustees Report warns of a potential exhaustion by 2033-2035, and as millennials and Gen Z age, injecting $168 billion annually into the economy—boosting spending in healthcare and retail—could be the perfect antidote.