(Sec. 101) Excludes ISF receipts and disbursements (and any ISF accounts) from the Federal budget, and exempts them from statutory limitations on Federal budgetary outlays.
Amends the Internal Revenue Code to provide for reductions in OASDI taxes and contribution of resulting savings to ISAs. Entitles ISA holders to a specified tax credit.
(Sec. 102) Specifies Federal contributions to individual KSAs.
(Sec. 103) Amends SSA title II to provide for adjustments to primary insurance amounts under the old OASDI program (redesignated as part A (Insurance Benefits) of SSA title II).
Title II: Social Security System Adjustments - Amends SSA title II with regard to: (1) adjustments to bend points in determining primary insurance amounts; (2) adjustment of widows' and widowers' insurance benefits; (3) elimination of the limitation on the amount of outside income which a beneficiary who has attained early retirement age may earn (earnings test) without incurring a reduction in benefits; (4) gradual increase in the number of benefit computation years, and the use of all years in computation; (5) maintenance of benefit and contribution base; (6) actuarial adjustment for retirement; and (7) modification of primary insurance amount factors to reflect change in life expectancy.
(Sec. 203) Requires the Commissioner of Social Security to report to Congress on: (1) a study on the effect of taking earnings into account in determining substantial gainful activity of individuals receiving disability insurance benefits; and (2) a detailed study plan for evaluating the effects of increases in life expectancy as well as an evaluation of the implications of the trends studied, along with appropriate recommendations.
(Sec. 206) Amends the Social Security Amendments of 1983 to provide for a reduction in the amount of certain transfers to the Medicare trust funds.
(Sec. 208) Directs the Commissioner of the Bureau of Labor Statistics (BLS) to publish annually in the Federal Register an estimate of the upper level substitution bias, quality-change bias, and new-product bias retained in the Consumer Price Index (CPI).
Makes appropriations to BLS for specified actions to improve the CPI..
Directs BLS to establish an administrative advisory committee regarding CPI revisions.
(Sec. 210) Amends SSA title VII (Administration) to prescribe a mechanism for remedying unforeseen deterioration in social security solvency.
[Congressional Bills 106th Congress]
[From the U.S. Government Publishing Office]
[S. 2774 Introduced in Senate (IS)]
106th CONGRESS
2d Session
S. 2774
To amend title II of the Social Security Act to provide for individual
savings accounts funded by employee and employer social security
payroll deductions, to extend the solvency of the old-age, survivors,
and disability insurance program, and for other purposes.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
June 22, 2000
Mr. Gregg (for himself, Mr. Kerrey, Mr. Breaux, Mr. Grassley, Mr.
Thompson, Mr. Robb, and Mr. Thomas) introduced the following bill;
which was read twice and referred to the Committee on Finance
_______________________________________________________________________
A BILL
To amend title II of the Social Security Act to provide for individual
savings accounts funded by employee and employer social security
payroll deductions, to extend the solvency of the old-age, survivors,
and disability insurance program, and for other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE; TABLE OF CONTENTS.
(a) Short Title.--This Act may be cited as the ``Bipartisan Social
Security Reform Act of 2000.''
(b) Table of Contents.--The table of contents of this Act is as
follows:
Sec. 1. Short title; table of contents.
TITLE I--INDIVIDUAL SAVINGS ACCOUNTS
Sec. 101. Individual savings accounts.
Sec. 102. Social security KidSave Accounts.
Sec. 103. Adjustments to primary insurance amounts under part A of
title II of the Social Security Act.
TITLE II--SOCIAL SECURITY SYSTEM ADJUSTMENTS
Sec. 201. Adjustments to bend points in determining primary insurance
amounts.
Sec. 202. Adjustment of widows' and widowers' insurance benefits.
Sec. 203. Elimination of earnings test for individuals who have
attained early retirement age.
Sec. 204. Gradual increase in number of benefit computation years; use
of all years in computation.
Sec. 205. Maintenance of benefit and contribution base.
Sec. 206. Reduction in the amount of certain transfers to Medicare
Trust Fund.
Sec. 207. Actuarial adjustment for retirement.
Sec. 208. Improvements in process for cost-of-living adjustments.
Sec. 209. Modification of PIA factors to reflect changes in life
expectancy.
Sec. 210. Mechanism for remedying unforeseen deterioration in social
security solvency.
TITLE I--INDIVIDUAL SAVINGS ACCOUNTS
SEC. 101. INDIVIDUAL SAVINGS ACCOUNTS.
(a) Establishment and Maintenance of Individual Savings Accounts.--
Title II of the Social Security Act (42 U.S.C. 401 et seq.) is
amended--
(1) by inserting before section 201 the following:
``Part A--Insurance Benefits'';
and
(2) by adding at the end the following:
``Part B--Individual Savings Accounts
``individual savings accounts
``Sec. 251. (a) Establishment.--
``(1) In general.--
``(A) Establishment in absence of kidsave
account.--Except as provided in subparagraph (B), the
Commissioner of Social Security, within 30 days of the
receipt of the first contribution received pursuant to
subsection (b) with respect to an eligible individual,
shall establish in the name of such individual an
individual savings account. The individual savings
account shall be identified to the account holder by
means of the account holder's Social Security account
number.
``(B) Use of kidsave account.--If a KidSave Account
has been established in the name of an eligible
individual under section 262(a) before the date of the
first contribution received by the Commissioner
pursuant to subsection (b) with respect to such
individual, the Commissioner shall redesignate the
KidSave Account as an individual savings account for
such individual.
``(2) Definition of eligible individual.--In this part, the
term `eligible individual' means any individual born after
December 31, 1937.
``(b) Contributions.--
``(1) Amounts transferred from the trust fund.--The
Secretary of the Treasury shall transfer from the Federal Old-
Age and Survivors Insurance Trust Fund, for crediting by the
Commissioner of Social Security to an individual savings
account of an eligible individual, an amount equal to the sum
of any amount received by such Secretary on behalf of such
individual under section 3101(a)(2) or 1401(a)(2) of the
Internal Revenue Code of 1986.
``(2) Other contributions.--For provisions relating to
additional contributions credited to individual savings
accounts, see sections 531(c)(2) and 6402(l) of the Internal
Revenue Code of 1986.
``(c) Designation of Investment Type of Individual Savings
Account.--
``(1) Designation.--Each eligible individual who is
employed or self-employed shall designate the investment type
of individual savings account to which the contributions
described in subsection (b) on behalf of such individual are to
be credited.
``(2) Form of designation.--The designation described in
paragraph (1) shall be made in such manner and at such
intervals as the Commissioner of Social Security may prescribe
in order to ensure ease of administration and reductions in
burdens on employers.
``(3) Special rule for 2001.--Not later than January 1,
2001, any eligible individual that is employed or self-employed
as of such date shall execute the designation required under
paragraph (1).
``(4) Designation in absence of designation by eligible
individual.--In any case in which no designation of the
individual savings account is made, the Commissioner of Social
Security shall make the designation of the individual savings
account in accordance with regulations that take into account
the competing objectives of maximizing returns on investments
and minimizing the risk involved with such investments.
``(d) Treatment of Incompetent Individuals.--Any designation under
subsection (c)(1) to be made by an individual mentally incompetent or
under other legal disability may be made by the person who is
constituted guardian or other fiduciary by the law of the State of
residence of the individual or is otherwise legally vested with the
care of the individual or his estate. Payment under this part due an
individual mentally incompetent or under other legal disability may be
made to the person who is constituted guardian or other fiduciary by
the law of the State of residence of the claimant or is otherwise
legally vested with the care of the claimant or his estate. In any case
in which a guardian or other fiduciary of the individual under legal
disability has not been appointed under the law of the State of
residence of the individual, if any other person, in the judgment of
the Commissioner, is responsible for the care of such individual, any
designation under subsection (c)(1) which may otherwise be made by such
individual may be made by such person, any payment under this part
which is otherwise payable to such individual may be made to such
person, and the payment of an annuity payment under this part to such
person bars recovery by any other person.
``definition of individual savings account; treatment of accounts
``Sec. 252. (a) Individual Savings Account.--In this part, the term
`individual savings account' means any individual savings account in
the Individual Savings Fund (established under section 254) which is
administered by the Individual Savings Fund Board.
``(b) Treatment of Account.--Except as otherwise provided in this
part and in section 531 of the Internal Revenue Code of 1986, any
individual savings account described in subsection (a) shall be treated
in the same manner as an individual account in the Thrift Savings Fund
under subchapter III of chapter 84 of title 5, United States Code.
``individual savings account distributions
``Sec. 253. (a) Date of Initial Distribution.--Except as provided
in subsection (c), distributions may only be made from an individual
savings account of an eligible individual on and after the earliest
of--
``(1) the date the eligible individual attains normal
retirement age, as determined under section 216 (or early
retirement age (as so determined) if elected by such
individual), or
``(2) the date on which funds in the eligible individual's
individual savings account are sufficient to provide a monthly
payment over the life expectancy of the eligible individual
(determined under reasonable actuarial assumptions) which, when
added to the eligible individual's monthly benefit under part A
(if any), is at least equal to an amount equal to \1/12\ of the
poverty line (as defined in section 673(2) of the Community
Services Block Grant Act (42 U.S.C. 9902(2) and determined on
such date for an individual) and adjusted annually thereafter
by the adjustment determined under section 215(i).
``(b) Forms of Distribution.--
``(1) Required monthly payments.--Except as provided in
paragraph (2), beginning with the date determined under
subsection (a), the balance in an individual savings account
available to provide monthly payments not in excess of the
amount described in subsection (a)(2) shall be paid, as elected
by the account holder (in such form and manner as shall be
prescribed in regulations of the Individual Savings Fund
Board), by means of the purchase of annuities or equal monthly
payments over the life expectancy of the eligible individual
(determined under reasonable actuarial assumptions) in
accordance with requirements (which shall be provided in
regulations of the Board) similar to the requirements
applicable to payments of benefits under subchapter III of
chapter 84 of title 5, United States Code, and providing for
indexing for inflation.
``(2) Payment of excess funds.--To the extent funds remain
in an eligible individual's individual savings account after
the application of paragraph (1), such funds shall be payable
to the eligible individual in such manner and in such amounts
as determined by the eligible individual, subject to the
provisions of subchapter III of chapter 84 of title 5, United
States Code.
``(c) Distribution in the Event of Death Before the Date of Initial
Distribution.--If the eligible individual dies before the date
determined under subsection (a), the balance in such individual's
individual savings account shall be distributed in a lump sum, under
rules established by the Individual Savings Fund Board, to the
individual's heirs.
``individual savings fund
``Sec. 254. (a) Establishment.--There is established and maintained
in the Treasury of the United States an Individual Savings Fund in the
same manner as the Thrift Savings Fund under sections 8437, 8438, and
8439 (but not section 8440) of title 5, United States Code.
``(b) Individual Savings Fund Board.--
``(1) In general.--There is established and operated in the
Social Security Administration an Individual Savings Fund Board
in the same manner as the Federal Retirement Thrift Investment
Board under subchapter VII of chapter 84 of title 5, United
States Code.
``(2) Specific investment and reporting duties.--
``(A) In general.--The Individual Savings Fund
Board shall manage and report on the activities of the
Individual Savings Fund and the individual savings
accounts of such Fund in the same manner as the Federal
Retirement Thrift Investment Board manages and reports
on the Thrift Savings Fund and the individual accounts
of such Fund under subchapter VII of chapter 84 of
title 5, United States Code.
``(B) Study and report on increased investment
options.--
``(i) Study.--The Individual Savings Fund
Board shall conduct a study regarding ways to
increase an eligible individual's investment
options with respect to such individual's
individual savings account and with respect to
rollovers or distributions from such account.
``(ii) Report.--Not later than 2 years
after the date of enactment of the Bipartisan
Social Security Reform Act of 2000, the
Individual Savings Fund Board shall submit a
report to the President and Congress that
contains a detailed statement of the results of
the study conducted pursuant to clause (i),
together with the Board's recommendations for
such legislative actions as the Board considers
appropriate.
``budgetary treatment of individual savings fund and accounts
``Sec. 255. The receipts and disbursements of the Individual
Savings Fund and any accounts within such fund shall not be included in
the totals of the budget of the United States Government as submitted
by the President or of the congressional budget and shall be exempt
from any general budget limitation imposed by statute on expenditures
and net lending (budget outlays) of the United States Government.''.
(b) Modification of FICA Rates.--
(1) Employees.--Section 3101(a) of the Internal Revenue
Code of 1986 (relating to tax on employees) is amended to read
as follows:
``(a) Old-Age, Survivors, and Disability Insurance.--
``(1) In general.--
``(A) Individuals covered under part a of title ii
of the social security act.--In addition to other
taxes, there is hereby imposed on the income of every
individual who is not a part B eligible individual a
tax equal to 6.2 percent of the wages (as defined in
section 3121(a)) received by him with respect to
employment (as defined in section 3121(b)).
``(B) Individuals covered under part b of title ii
of the social security act.--In addition to other
taxes, there is hereby imposed on the income of every
part B eligible individual a tax equal to 4.2 percent
of the wages (as defined in section 3121(a)) received
by such individual with respect to employment (as
defined in section 3121(b)).
``(2) Contribution of oasdi tax reduction to individual
savings accounts.--
``(A) In general.--In addition to other taxes,
there is hereby imposed on the income of every part B
eligible individual an individual savings account
contribution equal to the sum of--
``(i) 2 percent of the wages (as so
defined) received by such individual with
respect to employment (as so defined), plus
``(ii) so much of such wages (not to exceed
$2,000) as designated by the individual in the
same manner as described in section 251(c) of
the Social Security Act.
``(B) Inflation adjustment.--
``(i) In general.--In the case of any
calendar year beginning after 2001, the dollar
amount in subparagraph (A)(ii) shall be
increased by an amount equal to--
``(I) such dollar amount,
multiplied by
``(II) the cost-of-living
adjustment determined under section
1(f)(3) for the calendar year,
determined by substituting `calendar
year 2000' for `calendar year 1992' in
subparagraph (B) thereof.
``(ii) Rounding.--If any dollar amount
after being increased under clause (i) is not a
multiple of $10, such dollar amount shall be
rounded to the nearest multiple of $10.''.
(2) Self-employed.--Section 1401(a) of the Internal Revenue
Code of 1986 (relating to tax on self-employment income) is
amended to read as follows:
``(a) Old-Age, Survivors, and Disability Insurance.--
``(1) In general.--
``(A) Individuals covered under part a of the
social security act.--In addition to other taxes, there
shall be imposed for each taxable year, on the self-
employment income of every individual who is not a part
B eligible individual for the calendar year ending with
or during such taxable year, a tax equal to 12.40
percent of the amount of the self-employment income for
such taxable year.
``(B) Individuals covered under part b of title ii
of the social security act.--In addition to other
taxes, there is hereby imposed for each taxable year,
on the self-employment income of every part B eligible
individual, a tax equal to 10.4 percent of the amount
of the self-employment income for such taxable year.
``(2) Contribution of oasdi tax reduction to individual
savings accounts.--
``(A) In general.--In addition to other taxes,
there is hereby imposed for each taxable year, on the
self-employment income of every individual, an
individual savings account contribution equal to the
sum of--
``(i) 2 percent of the amount of the self-
employment income for each individual for such
taxable year, and
``(ii) so much of such self-employment
income (not to exceed $2,000) as designated by
the individual in the same manner as described
in section 251(c) of the Social Security Act.
``(B) Inflation adjustment.--
``(i) In general.--In the case of any
taxable year beginning after 2001, the dollar
amount in subparagraph (A)(ii) shall be
increased by an amount equal to--
``(I) such dollar amount,
multiplied by
``(II) the cost-of-living
adjustment determined under section
1(f)(3) for the calendar year in which
the taxable year begins, determined by
substituting `calendar year 2000' for
`calendar year 1992' in subparagraph
(B) thereof.
``(ii) Rounding.--If any dollar amount
after being increased under clause (i) is not a
multiple of $10, such dollar amount shall be
rounded to the nearest multiple of $10.''.
(3) Part b eligible individual.--
(A) Taxes on employees.--Section 3121 of such Code
(relating to definitions) is amended by inserting after
subsection (s) the following:
``(t) Part B Eligible Individual.--For purposes of this chapter,
the term `part B eligible individual' means, for any calendar year, an
individual who is an eligible individual (as defined in section
251(a)(2) of the Social Security Act) for such calendar year.''.
(B) Self-employment tax.--Section 1402 of such Code
(relating to definitions) is amended by adding at the
end the following:
``(k) Part B Eligible Individual.--The term `part B eligible
individual' means, for any calendar year, an individual who is an
eligible individual (as defined in section 251(a)(2) of the Social
Security Act) for such calendar year.''.
(4) Effective dates.--
(A) Employees.--The amendments made by paragraphs
(1) and (3)(A) apply to remuneration paid after
December 31, 2000.
(B) Self-employed individuals.--The amendments made
by paragraphs (2) and (3)(B) apply to taxable years
beginning after December 31, 2000.
(c) Matching Contributions.--
(1) In general.--Part IV of subchapter A of chapter 1 of
the Internal Revenue Code of 1986 (relating to credits against
tax) is amended by adding at the end the following:
``Subpart H--Individual Savings Account Credits
``Sec. 54. Individual savings account credit.''.
``SEC. 54. INDIVIDUAL SAVINGS ACCOUNT CREDIT.
``(a) Allowance of Credit.--Each part B eligible individual is
entitled to a credit for the taxable year in an amount equal to the sum
of--
``(1) $100, plus
``(2) 100 percent of the designated wages of such
individual for the taxable year, plus
``(3) 100 percent of the designated self-employment income
of such individual for the taxable year.
``(b) Limitations.--
``(1) Amount.--The amount determined under subsection (a)
with respect to such individual for any taxable year may not
exceed the excess (if any) of--
``(A) an amount equal to 1 percent of the
contribution and benefit base for such taxable year (as
determined under section 230 of the Social Security
Act), over
``(B) the sum of the amounts received by the
Secretary on behalf of such individual under sections
3101(a)(2)(A)(i) and 1401(a)(2)(A)(i) for such taxable
year.
``(2) Failure to make voluntary contributions.--In the case
of a part B eligible individual with respect to whom the amount
of wages designated under section 3101(a)(2)(A)(ii) plus the
amount self-employment income designated under section
1401(a)(2)(A)(ii) for the taxable year is less that $1, the
credit to which such individual is entitled under this section
shall be equal to zero.
``(c) Definitions.--For purposes of this section--
``(1) Part b eligible individual.--The term `part B
eligible individual' means, for any calendar year, an
individual who--
``(A) is an eligible individual (as defined in
section 251(a)(2) of the Social Security Act) for such
calendar year, and
``(B) is not an individual with respect to whom
another taxpayer is entitled to a deduction under
section 151(c).
``(2) Designated wages.--The term `designated wages' means
with respect to any taxable year the amount designated under
section 3101(a)(2)(A)(ii).
``(3) Designated self-employment income.--The term
`designated self-employment income' means with respect to any
taxable year the amount designated under section
1401(a)(2)(A)(ii) for such taxable year.
``(d) Credit Used Only for Individual Savings Account.--For
purposes of this title, the credit allowed under this section with
respect to any part B eligible individual--
``(1) shall not be treated as a credit allowed under this
part, but
``(2) shall be treated as an overpayment of tax under
section 6401(b)(3) which may, in accordance with section
6402(l), only be transferred to an individual savings account
established under part B of title II of the Social Security Act
with respect to such individual.''.
(2) Contribution of credited amounts to individual savings
account.--
(A) Credited amounts treated as overpayment of
tax.--Subsection (b) of section 6401 of such Code
(relating to excessive credits) is amended by adding at
the end the following:
``(3) Special rule for credit under section 54.--Subject to
the provisions of section 6402(l), the amount of any credit
allowed under section 54 for any taxable year shall be
considered an overpayment.''.
(B) Transfer of credit amount to individual savings
account.--Section 6402 of such Code (relating to
authority to make credits or refunds) is amended by
adding at the end the following:
``(l) Overpayments Attributable to Individual Savings Account
Credit.--In the case of any overpayment described in section 6401(b)(3)
with respect to any individual, the Secretary shall transfer for
crediting by the Commissioner of Social Security to the individual
savings account of such individual, an amount equal to the amount of
such overpayment.''.
(3) Conforming amendments.--
(A) Section 1324(b)(2) of title 31, United States
Code, is amended by inserting before the period at the
end ``, or enacted by the Bipartisan Social Security
Reform Act of 2000''.
(B) The table of subparts for part IV of subchapter
A of chapter 1 of the Internal Revenue Code of 1986 is
amended by adding at the end the following:
``Subpart H. Individual Savings Account Credits.''.
(4) Effective date.--The amendments made by this subsection
shall apply to refunds payable after December 31, 2000.
(d) Tax Treatment of Individual Savings Accounts.--
(1) In general.--Subchapter F of chapter 1 of the Internal
Revenue Code of 1986 (relating to exempt organizations) is
amended by adding at the end the following:
``PART IX--INDIVIDUAL SAVINGS FUND AND ACCOUNTS
``Sec. 531. Individual Savings Fund and
Accounts.
``SEC. 531. INDIVIDUAL SAVINGS FUND AND ACCOUNTS.
``(a) General Rule.--The Individual Savings Fund and individual
savings accounts shall be exempt from taxation under this subtitle.
``(b) Individual Savings Fund and Accounts Defined.--For purposes
of this section, the terms `Individual Savings Fund' and `individual
savings account' means the fund and account established under sections
254 and 251, respectively, of part B of title II of the Social Security
Act.
``(c) Contributions.--
``(1) In general.--No deduction shall be allowed for
contributions credited to an individual savings account under
section 251 of the Social Security Act or section 6402(l).
``(2) Rollover of inheritance.--Any portion of a
distribution to an heir from an individual savings account made
by reason of the death of the beneficiary of such account may
be rolled over to the individual savings account of the heir
after such death.
``(d) Distributions.--
``(1) In general.--Any distribution from an individual
savings account under section 253 of the Social Security Act
shall be included in gross income under section 72.
``(2) Period in which distributions must be made from
account of decedent.--In the case of amounts remaining in an
individual savings account from which distributions began
before the death of the beneficiary, rules similar to the rules
of section 401(a)(9)(B) shall apply to distributions of such
remaining amounts.
``(3) Rollovers.--Paragraph (1) shall not apply to amounts
rolled over under subsection (c)(2) in a direct transfer by the
Commissioner of Social Security, under regulations which the
Commissioner shall prescribe.''.
(2) Clerical amendment.--The table of parts for subchapter
F of chapter 1 of such Code is amended by adding after the item
relating to part VIII the following:
``Part IX. Individual savings fund and
accounts.''.
(3) Effective date.--The amendments made by this subsection
shall apply to taxable years beginning after December 31, 2000.
SEC. 102. SOCIAL SECURITY KIDSAVE ACCOUNTS.
Title II of the Social Security Act (42 U.S.C. 401 et seq.), as
amended by section 101(a), is amended by adding at the end the
following:
``Part C--KidSave Accounts
``kidsave accounts
``Sec. 261. (a) Establishment.--The Commissioner of Social Security
shall establish in the name of each individual born on or after January
1, 1995, a KidSave Account upon the later of--
``(1) the date of enactment of this part, or
``(2) the date of the issuance of a Social Security account
number under section 205(c)(2) to such individual.
The KidSave Account shall be identified to the account holder by means
of the account holder's Social Security account number.
``(b) Contributions.--
``(1) In general.--There are authorized to be appropriated
and are appropriated such sums as are necessary in order for
the Secretary of the Treasury to transfer from the general fund
of the Treasury for crediting by the Commissioner to each
account holder's KidSave Account under subsection (a), an
amount equal to the sum of--
``(A) in the case of any individual born on or
after January 1, 2001, $1,000, on the date of the
establishment of such individual's KidSave Account, and
``(B) in the case of any individual born on or
after January 1, 1995, $500, on the 1st, 2nd, 3rd, 4th,
and 5th birthdays of such individual occurring on or
after January 1, 2001.
``(2) Adjustment for inflation.--For any calendar year
after 2001, each of the dollar amounts under paragraph (1)
shall be increased by the cost-of-living adjustment using the
wage increase percentage determined under section 215(i) for
the calendar year.
``(c) Designations Regarding KidSave Accounts.--
``(1) Initial designations of investment vehicle.--A person
described in subsection (d) shall, on behalf of the individual
described in subsection (a), designate the investment vehicle
for the KidSave Account to which contributions on behalf of
such individual are to be deposited. Such designation shall be
made on the application for such individual's Social Security
account number.
``(2) Changes in investment vehicles.--The Commissioner
shall by regulation provide the time and manner by which an
individual or a person described in subsection (d) on behalf of
such individual may change 1 or more investment vehicles for a
KidSave Account.
``(d) Treatment of Minors and Incompetent Individuals.--Any
designation under subsection (c) to be made by a minor, or an
individual mentally incompetent or under other legal disability, may be
made by the person who is constituted guardian or other fiduciary by
the law of the State of residence of the individual or is
otherwise legally vested with the care of the individual or his estate.
Payment under this part due a minor, or an individual mentally
incompetent or under other legal disability, may be made to the person
who is constituted guardian or other fiduciary by the law of the State
of residence of the claimant or is otherwise legally vested with the
care of the claimant or his estate. In any case in which a guardian or
other fiduciary of the individual under legal disability has not been
appointed under the law of the State of residence of the individual, if
any other person, in the judgment of the Commissioner, is responsible
for the care of such individual, any designation under subsection (c)
which may otherwise be made by such individual may be made by such
person, any payment under this part which is otherwise payable to such
individual may be made to such person, and the payment of an annuity
payment under this part to such person bars recovery by any other
person.
``definitions and special rules
``Sec. 262. (a) Kidsave Accounts.--In this part, the term `KidSave
Account' means any KidSave Account in the Individual Savings Fund
(established under section 254) which is administered by the Individual
Savings Fund Board.
``(b) Treatment of Accounts.--
``(1) In general.--Except as provided in paragraph (2), any
KidSave Account described in subsection (a) shall be treated in
the same manner as an individual savings account under part B.
``(2) Distributions.--Notwithstanding any other provision
of law, distributions may only be made from a KidSave Account
of an individual on or after the earlier of--
``(A) the date on which the individual begins
receiving benefits under this title, or
``(B) the date of the individual's death.''.
SEC. 103. ADJUSTMENTS TO PRIMARY INSURANCE AMOUNTS UNDER PART A OF
TITLE II OF THE SOCIAL SECURITY ACT.
(a) In General.--Section 215 of the Social Security Act (42 U.S.C.
415) is amended by adding at the end the following:
``Adjustment of Primary Insurance Amount in Relation to Deposits Made
to Individual Savings Accounts and KidSave Accounts
``(j)(1) Except as provided in paragraph (2), an individual's
primary insurance amount as determined in accordance with this section
(before adjustments made under subsection (i)) shall be equal to--
``(A) the amount which would be so determined without the
application of this subsection, multiplied by
``(B) 1 minus the ratio of--
``(i) the sum of--
``(I) the total of all amounts which have
been credited pursuant to sections
3101(a)(2)(A)(i) and 1401(a)(2)(A)(i) of the
Internal Revenue Code of 1986 to the individual
savings account held by such individual, plus
``(II) 50 percent of the accumulated value
of the KidSave Account (established on behalf
of such individual under section 261(a))
determined on the date such KidSave Account is
redesignated as an individual savings account
held by such individual under section
251(a)(1)(B), plus
``(III) accrued interest on such amounts
compounded annually up to the date of initial
benefit entitlement based on the individual's
earnings, assuming an interest rate equal to
the projected interest rate of the Federal Old-
Age and Survivors Trust Fund, to
``(ii) the expected present value of all future
benefits paid based on the individual's earnings, as of
the date of initial benefit entitlement based on such
earnings, assuming future mortality and interest rates
for the Federal Old-Age and Survivors Trust Fund used
in the intermediate projections of the most recent
Board of Trustees report under section 201.
``(2) In the case of an individual who becomes entitled to
disability insurance benefits under section 223, such individual's
primary insurance amount shall be determined without regard to
paragraph (1).''.
(b) Conforming Amendment to Railroad Retirement Act of 1974.--
Section 1 of the Railroad Retirement Act of 1974 (45 U.S.C. 231) is
amended by adding at the end the following:
``(s) In applying applicable provisions of the Social Security Act
for purposes of determining the amount of the annuity to which an
individual is entitled under this Act, section 215(j) of the Social
Security Act and part B of title II of such Act shall be
disregarded.''.
(c) Effective Date.--The amendments made by this section shall
apply with respect to computations and recomputations of primary
insurance amounts occurring after December 31, 2000.
TITLE II--SOCIAL SECURITY SYSTEM ADJUSTMENTS
SEC. 201. ADJUSTMENTS TO BEND POINTS IN DETERMINING PRIMARY INSURANCE
AMOUNTS.
(a) Additional Bend Point.--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)--
(A) by striking ``15 percent'' and inserting ``32
percent'';
(B) by striking ``clause (ii),'' and inserting the
following: ``clause (ii) but do not exceed the amount
established for purposes of this clause by subparagraph
(B), and''; and
(3) by inserting after clause (iii) the following:
``(iv) 15 percent of the individual's average indexed
monthly earnings to the extent that such earnings exceed the
amount established for purposes of clause (iii),''.
(b) Initial Level of Additional Bend Point.--Section
215(a)(1)(B)(i) of such Act (42 U.S.C. 415(a)(1)(B)(i)) is amended--
(1) by striking ``clause (i) and (ii)'' and inserting
``clauses (i) and (iii)''; and
(2) by adding at the end the following: ``For individuals
who initially become eligible for old-age or disability
insurance benefits, or who die (before becoming eligible for
such benefit), in the calendar year 2001, the amount
established for purposes of clause (ii) of subparagraph (A)
shall be equal to 197.5 percent of the amount established for
purposes of clause (i).''.
(c) Adjustments to PIA Formula Factors.--Section 215(a)(1)(B) of
such Act (42 U.S.C. 415(a)(1)(B)) is amended further--
(1) by redesignating clause (iii) as clause (iv);
(2) by inserting after clause (ii) the following:
``(iii) For individuals who initially become eligible for old-age
or disability insurance benefits, or who die (before becoming eligible
for such benefits), in any calendar year after 2005, effective for such
calendar year--
``(I) the percentage in effect under clause (ii) of
subparagraph (A) shall be equal to the percentage in effect
under such clause for calendar year 2005 increased the
applicable number of times by 3.8 percentage points,
``(II) the percentage in effect under clause (iii) of
subparagraph (A) shall be equal to the percentage in effect
under such clause for calendar year 2005 decreased the
applicable number of times by 1.2 percentage points, and
``(III) the percentage in effect under clause (iv) of
subparagraph (A) shall be equal to the percentage in effect
under such clause for calendar year 2005 decreased the
applicable number of times by 0.5 percentage points.
For purposes of the preceding sentence, the term `applicable number of
times' means a number equal to the lesser of 10 or the number of years
beginning with 2006 and ending with the year of initial eligibility or
death.''; and
(3) in clause (iv) (as redesignated), by striking
``amount'' and inserting ``dollar amount''.
(d) Effective Date.--The amendments made by this section shall
apply with respect to primary insurance amounts of individuals
attaining early retirement age (as defined in section 216(l) of the
Social Security Act), or dying, after December 31, 2000.
SEC. 202. ADJUSTMENT OF WIDOWS' AND WIDOWERS' INSURANCE BENEFITS.
(a) Widow's Benefit.--Section 202(e)(2)(A) of the Social Security
Act (42 U.S.C. 402(e)(2)(A)) is amended by striking ``equal to'' and
all that follows and inserting ``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) the lesser of--
``(I) the applicable percentage of the joint
benefit which would have been received by the widow or
surviving divorced wife and the deceased individual for
such month if such individual had not died, or
``(II) the benefit which would have been received
by the widow or surviving divorced wife if such
individual's contributions were based on the maximum
contribution and benefit base amount (determined under
section 230) for each contribution base year (as
determined under section 215(b)(2)(B)(ii)) of such
individual.
For purposes of clause (ii)(I), the applicable percentage is equal to
50 percent in 2001, increased (but not above 75 percent) by 1
percentage point in every second year thereafter.''.
(b) Widower's Benefit.--Section 202(f)(3)(A) of the Social Security
Act (42 U.S.C. 402(b)(3)(A)) is amended by striking ``equal to'' and
all that follows and inserting ``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) the lesser of--
``(I) the applicable percentage of the joint
benefit which would have been received by the widow or
surviving divorced wife and the deceased individual for
such month if such individual had not died, or
``(II) the benefit which would have been received
by the widower or surviving divorced husband if such
individual's contributions were based on the maximum
contribution and benefit base amount (determined under
section 230) for each contribution base year (as
determined under section 215(b)(2)(B)(ii)) of such
individual.
For purposes of clause (ii)(II), the applicable percentage is equal to
50 percent in 2001, increased (but not above 75 percent) by 1
percentage point in every second year thereafter.''.
(c) Effective Date.--The amendments made by this section shall
apply individuals entitled to benefits after the date of enactment of
this Act.
SEC. 203. ELIMINATION OF EARNINGS TEST FOR INDIVIDUALS WHO HAVE
ATTAINED EARLY RETIREMENT AGE.
(a) In General.--Section 203 of the Social Security Act (42 U.S.C.
403) is amended--
(1) in subsection (c)(1), by striking ``retirement age''
and inserting ``early retirement age'';
(2) in paragraphs (1)(A) and (2) of subsection (d), by
striking ``retirement age'' each place it appears and inserting
``early retirement age'';
(3) in subsection (f)(1)(B), by striking ``retirement age''
and inserting ``early retirement age'';
(4) in subsection (f)(3)--
(A) by striking ``33\1/3\ percent'' and all that
follows through ``any other individual,'' and inserting
``50 percent of such individual's earnings for such
year in excess of the product of the exempt amount as
determined under paragraph (8),''; and
(B) by striking ``retirement age'' and inserting
``early retirement age'';
(5) in subsection (f)(5)(D)(i), by striking ``retirement
age'' and inserting ``early retirement age'';
(6) in subsection (f)(9)--
(A) by striking ``, (5)(D)(i), and (8)(D)'' and
inserting ``and (5)(D)(i)''; and
(B) by striking ``retirement age'' both places it
appears and inserting ``early retirement age'';
(7) in subsection (h)(1)(A), by striking ``retirement age
(as defined in section 216(l))'' each place it appears and
inserting ``early retirement age (as defined in section
216(l))''; and
(8) in subsection (j)--
(A) in the heading, by striking ``Retirement Age''
and inserting ``Early Retirement Age''; and
(B) by striking ``having attained retirement age
(as defined in section 216(l))'' and inserting ``having
attained early retirement age (as defined in section
216(l))''.
(b) Conforming Amendments Eliminating the Special Exempt Amount for
Individuals Who Have Attained Age 62.--
(1) Uniform exempt amount.--Section 203(f)(8)(A) of the
Social Security Act (42 U.S.C. 403(f)(8)(A)) is amended by
striking ``the new exempt amounts (separately stated for
individuals described in subparagraph (D) and for other
individuals) which are to be applicable'' and inserting ``a new
exempt amount which shall be applicable''.
(2) Conforming amendments.--Section 203(f)(8)(B) of the
Social Security Act (42 U.S.C. 403(f)(8)(B)) is amended--
(A) in the matter preceding clause (i), by striking
``Except'' and all that follows through ``whichever''
and inserting ``The exempt amount which is applicable
for each month of a particular taxable year shall be
whichever'';
(B) in clauses (i) and (ii), by striking
``corresponding'' each place it appears; and
(C) in the last sentence, by striking ``an exempt
amount'' and inserting ``the exempt amount''.
(3) Repeal of basis for computation of special exempt
amount.--Subparagraphs (D) and (E) of section 203(f)(8) of the
Social Security Act (42 U.S.C. 403(f)(8)) are repealed.
(c) Additional Conforming Amendments.--
(1) Elimination of redundant references to retirement
age.--Section 203 of the Social Security Act (42 U.S.C. 403) is
amended--
(A) in subsection (c), in the last sentence, by
striking ``nor shall any deduction'' and all that
follows and inserting ``nor shall any deduction be made
under this subsection from any widow's or widower's
insurance benefit if the widow, surviving divorced
wife, widower, or surviving divorced husband involved
became entitled to such benefit prior to attaining age
60.''; and
(B) in subsection (f)(1), by striking clause (D)
and inserting the following: ``(D) for which such
individual is entitled to widow's or widower's
insurance benefits if such individual became so
entitled prior to attaining age 60,''.
(2) Provisions relating to earnings taken into account in
determining substantial gainful activity of blind
individuals.--The second sentence of section 223(d)(4) of such
Act (42 U.S.C. 423(d)(4)) is amended by striking ``if section
102 of the Senior Citizens' Right to Work Act of 1996 had not
been enacted'' and inserting the following: ``if the amendments
to section 203 made by section 102 of the Senior Citizens'
Right to Work Act of 1996 and by the Bipartisan Social Security
Reform Act of 2000 had not been enacted''.
(d) Study of the Effect of Taking Earnings Into Account in
Determining Substantial Gainful Activity of Disabled Individuals.--
(1) In general.--Not later than February 15, 2001, the
Commissioner of Social Security shall conduct a study on the
effect that taking earnings into account in determining
substantial gainful activity of individuals receiving
disability insurance benefits has on the incentive for such
individuals to work and submit to Congress a report on the
study.
(2) Contents of study.--The study conducted under paragraph
(1) shall include the evaluation of--
(A) the effect of the current limit on earnings on
the incentive for individuals receiving disability
insurance benefits to work;
(B) the effect of increasing the earnings limit or
changing the manner in which disability insurance
benefits are reduced or terminated as a result of
substantial gainful activity (including reducing the
benefits gradually when the earnings limit is exceeded)
on--
(i) the incentive to work; and
(ii) the financial status of the Federal
Disability Insurance Trust Fund;
(C) the effect of extending eligibility for the
Medicare program to individuals during the period in
which disability insurance benefits of the individual
are gradually reduced as a result of substantial
gainful activity and extending such eligibility for a
fixed period of time after the benefits are terminated
on--
(i) the incentive to work; and
(ii) the financial status of the Federal
Hospital Insurance Trust Fund and the Federal
Supplementary Medical Insurance Trust Fund; and
(D) the relationship between the effect of
substantial gainful activity limits on blind
individuals receiving disability insurance benefits and
other individuals receiving disability insurance
benefits.
(3) Consultation.--The analysis under paragraph (2)(C)
shall be done in consultation with the Administrator of the
Health Care Financing Administration.
(e) Effective Date.--The amendments and repeals made by subsections
(a), (b), and (c) shall apply with respect to taxable years ending
after December 31, 2002.
SEC. 204. GRADUAL INCREASE IN NUMBER OF BENEFIT COMPUTATION YEARS; USE
OF ALL YEARS IN COMPUTATION.
(a) In General.--Section 215(b)(2)(A) of the Social Security Act
(42 U.S.C. 415(b)(2)(A)) is amended--
(1) in clause (i), by striking ``5 years'' and inserting
``the applicable number of years for purposes of this clause'';
and
(2) by striking ``Clause (ii),'' in the matter following
clause (ii) and inserting the following:
``For purposes of clause (i), the applicable number of years is the
number of years specified in connection with the year in which such
individual reaches early retirement age (as defined in section
216(l)(2)), or, if earlier, the calendar year in which such individual
dies, as set forth in the following table:
``If such calendar year is: The applicable number of years is:
2002................................................... 4
2003................................................... 4
2004................................................... 3
2005................................................... 3
2006................................................... 2
2007................................................... 2
2008................................................... 1
2009................................................... 1
After 2009............................................. 0.
Notwithstanding the preceding sentence, the applicable number of years
is 5, in the case of any individual who is entitled to old-age
insurance benefits, and has a spouse who is also so entitled (or who
died without having become so entitled) who has greater total wages and
self-employment income credited to benefit computation years than the
individual. Clause (ii),''.
(b) Use of All Years in Computation.--
(1) In general.--Section 215(b)(2)(B) of the Social
Security Act (42 U.S.C. 415(b)(2)(B)) is amended by striking
clauses (i) and (ii) and inserting the following:
``(i)(I) for calendar years after 2001 and before 2010, the
term `benefit computation years' means those computation base
years equal in number to the number determined under
subparagraph (A) plus the applicable number of years determined
under subclause (III), for which the total of such individual's
wages and self-employment income, after adjustment under
paragraph (3), is the largest;
``(II) for calendar years after 2009, the term `benefit
computation years' means all of the computation base years; and
``(III) for purposes of subclause (I), the applicable
number of years is the number of years specified in connection
with the year in which such individual reaches early retirement
age (as defined in section 216(l)(2)), or, if earlier, the
calendar year in which such individual dies, as set forth in
the following table:
``If such calendar year is: The applicable number of years is:
Before 2002............................................ 0
2002................................................... 1
2003................................................... 1
2004................................................... 2
2005................................................... 2
2006................................................... 3
2007................................................... 3
2008................................................... 4
2009................................................... 4;
``(ii) the term `computation base years' means the calendar
years after 1950, except that such term excludes any calendar
year entirely included in a period of disability; and''.
(2) Conforming amendment.--Section 215(b)(1)(B) of the
Social Security Act (42 U.S.C. 415(b)(1)(B)) is amended by
striking ``in those years'' and inserting ``in an individual's
computation base years determined under paragraph (2)(A)''.
(c) Effective Date.--
(1) Subsection (a).--The amendments made by subsection (a)
shall apply with respect to individuals attaining early
retirement age (as defined in section 216(l)(2) of the Social
Security Act) after December 31, 2001.
(2) Subsection (b).--The amendment made by subsection (b)
shall apply to benefit computation years beginning after
December 31, 2000.
SEC. 205. MAINTENANCE OF BENEFIT AND CONTRIBUTION BASE.
(a) In General.--Section 230 of the Social Security Act (42 U.S.C.
430) is amended to read as follows:
maintenance of the contribution and benefit base
``Sec. 230. (a) The Commissioner of Social Security shall determine
and publish in the Federal Register on or before November 1 of each
calendar year the contribution and benefit base determined under
subsection (b) which shall be effective with respect to remuneration
paid after such calendar year and taxable years beginning after such
year.
``(b) For purposes of this section, for purposes of determining
wages and self-employment income under sections 209, 211, 213, and 215
of this Act and sections 54, 1402, 3121, 3122, 3125, 6413, and 6654 of
the Internal Revenue Code of 1986, and for purposes of section
4022(b)(3)(B) of Public Law 93-406, the contribution and benefit base
with respect to remuneration paid in (and taxable years beginning in)
any calendar year is an amount equal to 84.5 percent of the total wages
and self-employment income for the preceding calendar year (within the
meaning of section 209).''.
(b) Effective Date.--The amendment made by this section shall apply
to remuneration paid in (and taxable years beginning in) any calendar
year after 2000.
SEC. 206. REDUCTION IN THE AMOUNT OF CERTAIN TRANSFERS TO MEDICARE
TRUST FUND.
Subparagraph (A) of section 121(e)(1) of the Social Security
Amendments of 1983 (42 U.S.C. 401 note), as amended by section
13215(c)(1) of the Omnibus Budget Reconciliation Act of 1993, is
amended--
(1) in clause (ii), by striking ``the amounts'' and
inserting ``the applicable percentage of the amounts''; and
(2) by adding at the end the following: ``For purposes of
clause (ii), the applicable percentage for a year is equal to
100 percent, reduced (but not below zero) by 10 percentage
points for each year after 2004.''.
SEC. 207. ACTUARIAL ADJUSTMENT FOR RETIREMENT.
(a) Early Retirement.--
(1) In general.--Section 202(q) of the Social Security Act
(42 U.S.C. 402(q)) is amended--
(A) in paragraph (1)(A), by striking ``\5/9\'' and
inserting ``the applicable fraction (determined under
paragraph (12))''; and
(B) by adding at the end the following:
``(12) For purposes of paragraph (1)(A), the `applicable fraction'
for an individual who attains the age of 62 in--
``(A) any year before 2001, is \5/9\;
``(B) 2001, is \7/12\;
``(C) 2002, is \11/18\;
``(D) 2003, is \23/36\;
``(E) 2004, is \2/3\; and
``(F) 2005 or any succeeding year, is \25/36\.''.
(2) Months beyond first 36 months.--Section 202(q) of such
Act (42 U.S.C. 402(q)(9)) (as amended by paragraph (1)) is
amended--
(A) in paragraph (9)(A), by striking ``five-
twelfths'' and inserting ``the applicable fraction
(determined under paragraph (13))''; and
(B) by adding at the end the following:
``(13) For purposes of paragraph (9)(A), the `applicable fraction'
for an individual who attains the age of 62 in--
``(A) any year before 2001, is \5/12\;
``(B) 2001, is \16/36\;
``(C) 2002, is \16/36\;
``(D) 2003, is \17/36\;
``(E) 2004, is \17/36\; and
``(F) 2005 or any succeeding year, is \1/2\.''.
(3) Effective date.--The amendments made by paragraphs (1)
and (2) shall apply to individuals who attain the age of 62 in
years after 2000.
(b) Delayed Retirement.--Section 202(w)(6) of the Social Security
Act (42 U.S.C. 402(w)(6)) is amended--
(1) in subparagraph (C), by striking ``and'' at the end;
(2) in subparagraph (D), by striking ``2004.'' and
inserting ``2004 and before 2007;''; and
(3) by adding at the end the following:
``(E) \17/24\ of 1 percent in the case of an individual who
attains the age of 62 in a calendar year after 2006 and before
2009;
``(F) \3/4\ of 1 percent in the case of an individual who
attains the age of 62 in a calendar year after 2008 and before
2011;
``(G) \19/24\ of 1 percent in the case of an individual who
attains the age of 62 in a calendar year after 2010 and before
2013; and
``(H) \5/6\ of 1 percent in the case of an individual who
attains the age of 62 in a calendar year after 2012.''.
SEC. 208. IMPROVEMENTS IN PROCESS FOR COST-OF-LIVING ADJUSTMENTS.
(a) Annual Declarations of Persisting Upper Level Substitution
Bias, Quality-Change Bias, and New-Product Bias.--Not later than
December 1, 2000, and annually thereafter, the Commissioner of the
Bureau of Labor Statistics shall publish in the Federal Register an
estimate of the upper level substitution bias, quality-change bias, and
new-product bias retained in the Consumer Price Index, expressed in
terms of a percentage point effect on the annual rate of change in the
Consumer Price Index determined through the use of a superlative index
that accounts for changes that consumers make in the quantities of
goods and services consumed.
(b) Modification of Cost-of-Living Adjustment.--
(1) In general.--Notwithstanding any other provision of
law, for each calendar year after 2000 any cost-of-living
adjustment described in subsection (f) shall be further
adjusted by the greater of--
(A) the applicable percentage point, or
(B) the correction for the upper level substitution
bias, quality-change bias, and new-product bias (as
last published by the Commissioner of the Bureau of
Labor Statistics pursuant to subsection (a)).
(2) Applicable percentage point.--For purposes of paragraph
(1)(A), the applicable percentage point shall be determined in
accordance with the following table:
Applicable
Calendar year: Percentage Point:
2001.......................................... 0.1
2002.......................................... 0.2
2003.......................................... 0.3
2004 and thereafter........................... 0.33.
(c) Funding for CPI Improvements.--
(1) In general.--There is hereby appropriated to the Bureau
of Labor Statistics in the Department of Labor, for each of
fiscal years 2001, 2002, and 2003, $60,000,000 for use by the
Bureau for the following purposes:
(A) Research, evaluation, and implementation of a
superlative index to estimate upper level substitution
bias, quality-change bias, and new-product bias in the
Consumer Price Index.
(B) Expansion of the Consumer Expenditure Survey
and the Point of Purchase Survey.
(2) Reports.--The Commissioner of the Bureau of Labor
Statistics shall submit reports regarding the use of
appropriations made under paragraph (1) to the Committee on
Appropriations of the House of Representatives and the
Committee on Appropriations of the Senate upon the request of
each Committee.
(d) Information Sharing.--The Commissioner of the Bureau of Labor
Statistics may secure directly from the Secretary of Commerce
information necessary for purposes of calculating the Consumer Price
Index. Upon request of the Commissioner of the Bureau of Labor
Statistics, the Secretary of Commerce shall furnish that information to
the Commissioner.
(e) Administrative Advisory Committee.--The Bureau of Labor
Statistics shall, in consultation with the National Bureau of Economic
Research, the American Economic Association, and the National Academy
of Statisticians, establish an administrative advisory committee. The
advisory committee shall periodically advise the Bureau of Labor
Statistics regarding revisions of the Consumer Price Index and conduct
research and experimentation with alternative data collection and
estimating approaches.
(f) Cost-of-Living Adjustment Described.--A cost-of-living
adjustment described in this subsection is any cost-of-living
adjustment for a calendar year after 2000 determined by reference to a
percentage change in a consumer price index or any component thereof
(as published by the Bureau of Labor Statistics of the Department of
Labor and determined without regard to this section) and used in any of
the following:
(1) The Internal Revenue Code of 1986.
(2) The provisions of this Act (other than programs under
title XVI and any adjustment in the case of an individual who
attains early retirement age before January 1, 2001).
(3) Any other Federal program.
(g) Recapture of CPI Reform Revenues Deposited Into the Federal
Old-Age and Survivors Insurance Trust Fund.--Section 201 of the Social
Security Act (42 U.S.C. 401) is amended by adding at the end the
following:
``(n) On July 1 of each calendar year specified in the following
table, the Secretary of the Treasury shall transfer, from the general
fund of the Treasury to the Federal Old-Age and Survivors Insurance
Trust Fund, an amount equal to the applicable percentage for such year,
specified in such table, of the total wages paid in and self-employment
income credited to such year.
``For a calendar year-- The applicable percentage for the
year is--
After 2001 and before 2020.....
0.4 percent
After 2019 and before 2040.....
0.53 percent
After 2039 and before 2060.....
0.67 percent
After 2059.....................
0.8 percent.''.
SEC. 209. MODIFICATION OF PIA FACTORS TO REFLECT CHANGES IN LIFE
EXPECTANCY.
(a) Modification of PIA Factors.--Section 215(a)(1) of the Social
Security Act (42 U.S.C. 415(a)(1)(B)) is amended by redesignating
subparagraph (D) as subparagraph (F) and by inserting after
subparagraph (C) the following:
``(D)(i) For individuals who initially become eligible for old-age
insurance benefits in any calendar year after 2005, each of the
percentages under clauses (i), (ii), (iii), and (iv) of subparagraph
(A) shall be multiplied the applicable number of times by the
applicable factor.
``(ii) For purposes of clause (i)--
``(I) the term `applicable number of times' means a number
equal to the sum of--
``(aa) the number of years beginning with 2006 and
ending with the earlier of 2016 or the year of initial
eligibility; plus
``(bb) if the year of initial eligibility has not
occurred, the number of years beginning with 2023 and
ending with the earlier of 2053 or the year of initial
eligibility; and
``(II) the term `applicable factor' means .988 with respect
to the first 6 applicable number of times and .997 with respect
to the applicable number of times in excess of 6.
``(E) For any individual who initially becomes eligible for
disability insurance benefits in any calendar year after 2005, the
primary insurance amount for such individual shall be equal to the
greater of--
``(i) such amount as determined under this paragraph, or
``(ii) such amount as determined under this paragraph
without regard to subparagraph (D) thereof.''.
(b) Study of the Effect of Increases in Life Expectancy.--
(1) Study plan.--Not later than February 15, 2001, the
Commissioner of Social Security shall submit to Congress a
detailed study plan for evaluating the effects of increases in
life expectancy on the expected level of retirement income from
social security, pensions, and other sources. The study plan
shall include a description of the methodology, data, and
funding that will be required in order to provide to Congress
not later than February 15, 2006--
(A) an evaluation of trends in mortality and their
relationship to trends in health status, among
individuals approaching eligibility for social security
retirement benefits;
(B) an evaluation of trends in labor force
participation among individuals approaching eligibility
for social security retirement benefits and among
individuals receiving retirement benefits, and of the
factors that influence the choice between retirement
and participation in the labor force;
(C) an evaluation of changes, if any, in the social
security disability program that would reduce the
impact of changes in the retirement income of workers
in poor health or physically demanding occupations;
(D) an evaluation of the methodology used to
develop projections for trends in mortality, health
status, and labor force participation among individuals
approaching eligibility for social security retirement
benefits and among individuals receiving retirement
benefits; and
(E) an evaluation of such other matters as the
Commissioner deems appropriate for evaluating the
effects of increases in life expectancy.
(2) Report on results of study.--Not later than February
15, 2006, the Commissioner of Social Security shall provide to
Congress an evaluation of the implications of the trends
studied under paragraph (1), along with recommendations, if
any, of the extent to which the conclusions of such evaluations
indicate that projected increases in life expectancy require
modification in the social security disability program and
other income support programs.
SEC. 210. MECHANISM FOR REMEDYING UNFORESEEN DETERIORATION IN SOCIAL
SECURITY SOLVENCY.
(a) In General.--Section 709 of the Social Security Act (42 U.S.C.
910) is amended--
(1) by redesignating subsection (b) as subsection (c); and
(2) by striking ``Sec. 709. (a) If the Board of Trustees''
and all that follows through ``any such Trust Fund'' and
inserting the following:
``Sec. 709. (a)(1)(A) If the Board of Trustees of the Federal Old-
Age and Survivors Insurance Trust Fund and the Federal Disability
Insurance Trust Fund determines at any time, using intermediate
actuarial assumptions, that the balance ratio of either such Trust Fund
during any calendar year within the succeeding period of 75 calendar
years will attain zero, the Board shall promptly submit to each House
of the Congress and to the President a report setting forth its
recommendations for statutory adjustments affecting the receipts and
disbursements of such Trust Fund necessary to maintain the balance
ratio of such Trust Fund at not less than 20 percent, with due regard
to the economic conditions which created such inadequacy in the balance
ratio and the amount of time necessary to alleviate such inadequacy in
a prudent manner. The report shall set forth specifically the extent to
which benefits would have to be reduced, taxes under section 1401,
3101, or 3111 of the Internal Revenue Code of 1986 would have to be
increased, or a combination thereof, in order to obtain the objectives
referred to in the preceding sentence.
``(B) In addition to any reports under subparagraph (A), the Board
shall, not later than May 30, 2001, prepare and submit to Congress and
the President recommendations for statutory adjustments to the
disability insurance program under title II of this Act to modify the
changes in disability benefits under the Bipartisan Social Security
Reform Act of 2000 without reducing the balance ratio of the Federal
Disability Insurance Trust Fund. The Board shall develop such
recommendations in consultation with the National Council on
Disability, taking into consideration the adequacy of benefits under
the program, the relationship of such program with old age benefits
under such title, and changes in the process for determining initial
eligibility and reviewing continued eligibility for benefits under such
program.
``(2)(A) The President shall, no later than 30 days after the
submission of the report to the President, transmit to the Board and to
the Congress a report containing the President's approval or
disapproval of the Board's recommendations.
``(B) If the President approves all the recommendations of the
Board, the President shall transmit a copy of such recommendations to
the Congress as the President's recommendations, together with a
certification of the President's adoption of such recommendations.
``(C) If the President disapproves the recommendations of the
Board, in whole or in part, the President shall transmit to the Board
and the Congress the reasons for that disapproval. The Board shall then
transmit to the Congress and the President, no later than 60 days after
the date of the submission of the original report to the President, a
revised list of recommendations.
``(D) If the President approves all of the revised recommendations
of the Board transmitted to the President under subparagraph (C), the
President shall transmit a copy of such revised recommendations to the
Congress as the President's recommendations, together with a
certification of the President's adoption of such recommendations.
``(E) If the President disapproves the revised recommendations of
the Board, in whole or in part, the President shall transmit to the
Board and the Congress the reasons for that disapproval, together with
such revisions to such recommendations as the President determines are
necessary to bring such recommendations within the President's
approval. The President shall transmit a copy of such recommendations,
as so revised, to the Board and the Congress as the President's
recommendations, together with a certification of the President's
adoption of such recommendations.
``(3)(A) This paragraph is enacted by Congress--
``(i) as an exercise of the rulemaking power of the Senate
and the House of Representatives, respectively, and as such it
is deemed a part of the rules of each House, respectively, but
applicable only with respect to the procedure to be followed in
that House in the case of a joint resolution described in
subparagraph (B), and it supersedes other rules only to the
extent that it is inconsistent with such rules; and
``(ii) with full recognition of the constitutional right of
either House to change the rules (so far as relating to the
procedure of that House) at any time, in the same manner, and
to the same extent as in the case of any other rule of that
House.
``(B) For purposes of this paragraph, the term `joint resolution'
means only a joint resolution which is introduced within the 10-day
period beginning on the date on which the President transmits the
President's recommendations, together with the President's
certification, to the Congress under subparagraph (B), (D), or (E) of
paragraph (2), and--
``(i) which does not have a preamble;
``(ii) the matter after the resolving clause of which is as
follows: `That the Congress approves the recommendations of the
President as transmitted on ____ pursuant to section 709(a) of
the Social Security Act, as follows: ________', the first blank
space being filled in with the appropriate date and the second
blank space being filled in with the statutory adjustments
contained in the recommendations; and
``(iii) the title of which is as follows: `Joint resolution
approving the recommendations of the President regarding social
security.'.
``(C) A joint resolution described in subparagraph (B) that is
introduced in the House of Representatives shall be referred to the
Committee on Ways and Means of the House of Representatives. A joint
resolution described in subparagraph (B) introduced in the Senate shall
be referred to the Committee on Finance of the Senate.
``(D) If the committee to which a joint resolution described in
subparagraph (B) is referred has not reported such joint resolution (or
an identical joint resolution) by the end of the 20-day period
beginning on the date on which the President transmits the
recommendation to the Congress under paragraph (2), such committee
shall be, at the end of such period, discharged from further
consideration of such joint resolution, and such joint resolution shall
be placed on the appropriate calendar of the House involved.
``(E)(i) On or after the third day after the date on which the
committee to which such a joint resolution is referred has reported, or
has been discharged (under subparagraph (D)) from further consideration
of, such a joint resolution, it is in order (even though a previous
motion to the same effect has been disagreed to) for any Member of the
respective House to move to proceed to the consideration of the joint
resolution. A Member may make the motion only on the day after the
calendar day on which the Member announces to the House concerned the
Member's intention to make the motion, except that, in the case of the
House of Representatives, the motion may be made without such prior
announcement if the motion is made by direction of the committee to
which the joint resolution was referred. All points of order against
the joint resolution (and against consideration of the joint
resolution) are waived. The motion is highly privileged in the House of
Representatives and is privileged in the Senate and is not debatable.
The motion is not subject to amendment, or to a motion to postpone, or
to a motion to proceed to the consideration of other business. A motion
to reconsider the vote by which the motion is agreed to or disagreed to
shall not be in order. If a motion to proceed to the consideration of
the joint resolution is agreed to, the respective House shall
immediately proceed to consideration of the joint resolution without
intervening motion, order, or other business, and the joint resolution
shall remain the unfinished business of the respective House until
disposed of.
``(ii) Debate on the joint resolution, and on all debatable motions
and appeals in connection therewith, shall be limited to not more than
2 hours, which shall be divided equally between those favoring and
those opposing the joint resolution. An amendment to the joint
resolution is not in order. A motion further to limit debate is in
order and not debatable. A motion to postpone, or a motion to proceed
to the consideration of other business, or a motion to recommit the
joint resolution is not in order. A motion to reconsider the vote by
which the joint resolution is agreed to or disagreed to is not in
order.
``(iii) Immediately following the conclusion of the debate on a
joint resolution described in subparagraph (B) and a single quorum call
at the conclusion of the debate if requested in accordance with the
rules of the appropriate House, the vote on final passage of the joint
resolution shall occur.
``(iv) Appeals from the decisions of the Chair relating to the
application of the rules of the Senate or the House of Representatives,
as the case may be, to the procedure relating to a joint resolution
described in subparagraph (B) shall be decided without debate.
``(F)(i) If, before the passage by one House of a joint resolution
of that House described in subparagraph (B), that House receives from
the other House a joint resolution described in subparagraph (B), then
the following procedures shall apply:
``(I) The joint resolution of the other House shall not be
referred to a committee and may not be considered in the House
receiving it except in the case of final passage as provided in
subclause (II).
``(II) With respect to a joint resolution described in
subparagraph (B) of the House receiving the joint resolution,
the procedure in that House shall be the same as if no joint
resolution had been received from the other House, but the vote
on final passage shall be on the joint resolution of the other
House.
``(ii) Upon disposition of the joint resolution received from the
other House, it shall no longer be in order to consider the joint
resolution that originated in the receiving House.
``(b) If the Board of Trustees of the Federal Hospital Insurance
Trust Fund or the Federal Supplementary Medical Insurance Trust Fund
determines as any time that the balance ratio of either such Trust
Fund.''.
(b) Conforming Amendments.--
(1) Section 709(b) of the Social Security Act (42 U.S.C.
910(b)) (as amended by subsection (a) of this section) is
amended by striking ``any such'' and inserting ``either such''.
(2) Section 709(c) of such Act (42 U.S.C. 910(c)) (as
redesignated by subsection (a) of this section) is amended by
inserting ``or (b)'' after ``subsection (a)''.
<all>
Introduced in Senate
Read twice and referred to the Committee on Finance. (text of meassure as introduced: CR S5669-5676)
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