Nearly 3 million Americans are poised to see bigger Social Security benefit checks. For some, that could trigger larger tax bills and Medicare premium payments.

Biden estimated the bill should lead to an average monthly increase of $360 for certain public employees and their spouses and survivors. The outgoing president said more than 2.5 million Americans will receive a lump sum payment worth "thousands of dollars" to compensate for the benefits they should have received last year.

The Social Security Fairness Act eliminates two provisions that reduced Social Security benefits for some retirees who also received pension income.