Social Security Solvency Act of 2004

The Social Security Solvency Act of 2004 proposed a multi-pronged approach to ensure the long-term financial stability of the Social Security system. The bill sought to increase program revenue by raising the cap on earnings subject to Social Security taxes and permanently dedicating federal estate tax revenue to the Social Security Trust Fund. Additionally, it proposed changing how cost-of-living adjustments (COLAs) are calculated by using the "chained" consumer price index, which generally results in smaller annual benefit increases for retirees compared to the standard index.

For the average citizen, these changes would have meant that higher-income earners would pay more in payroll taxes, while all beneficiaries would likely see more modest annual increases in their monthly checks. The bill also included a "failsafe" mechanism that would automatically trigger future payroll tax increases if the Trust Fund’s reserves fell below a certain level. While the legislation was introduced to address projected funding shortfalls, it did not move past the committee stage and never became law.