[Congressional Bills 103th Congress]
[From the U.S. Government Publishing Office]
[H.R. 4245 Introduced in House (IH)]

103d CONGRESS
  2d Session
                                H. R. 4245

 To amend title II of the Social Security Act and the Internal Revenue 
  Code of 1986 to provide for the long-range solvency of the old-age, 
              survivors, and disability insurance program.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                             April 19, 1994

 Mr. Rostenkowski introduced the following bill; which was referred to 
                    the Committee on Ways and Means

_______________________________________________________________________

                                 A BILL


 
 To amend title II of the Social Security Act and the Internal Revenue 
  Code of 1986 to provide for the long-range solvency of the old-age, 
              survivors, and disability insurance program.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE AND TABLE OF CONTENTS.

    This Act may be cited as the ``Social Security Long-Range Solvency 
Act of 1994''.

                           TABLE OF CONTENTS

Sec. 1. Short title and table of contents.
          TITLE I--PROVISIONS RELATING TO FUTURE ENTITLEMENTS

Sec. 101. Adjustments in formula for determining primary insurance 
                            amount.
Sec. 102. Gradual increase in retirement age to age 67 by the year 
                            2011.
    TITLE II--PROVISIONS RELATING TO CURRENT AND FUTURE ENTITLEMENTS

Sec. 201. Reduction in cost-of-living adjustment payable in 1995.
Sec. 202. Thresholds for income taxation of social security benefits.
      TITLE III--COVERAGE OF NEWLY HIRED STATE AND LOCAL EMPLOYEES

Sec. 301. Amendments to the Social Security Act.
Sec. 302. Amendments to the Internal Revenue Code of 1986.
Sec. 303. Effective date of title.
                 TITLE IV--SOCIAL SECURITY PAYROLL TAX

Sec. 401. Level of OASDI tax.
Sec. 402. Level of self-employment tax.

          TITLE I--PROVISIONS RELATING TO FUTURE ENTITLEMENTS

SEC. 101. ADJUSTMENTS IN FORMULA FOR DETERMINING PRIMARY INSURANCE 
              AMOUNT.

    (a) Additional Earnings Bracket.--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'';
            (2) in clause (iii), by striking ``clause (ii),'' and 
        inserting the following: ``clause (ii), but, in the case of an 
        individual who initially becomes eligible for old-age or 
        disability insurance benefits, or who dies (before becoming 
        eligible for such benefits), after calendar year 2001, do not 
        exceed the amount established for purposes of this clause by 
        subparagraph (B), and''; and
            (3) by inserting after clause (iii) the following new 
        clause:
            ``(iv) in the case of an individual who initially becomes 
        eligible for old-age or disability insurance benefits, or who 
        dies (before becoming eligible for such benefits), after 
        calendar year 2001, 10 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) Bend Point Amounts.--Section 215(a)(1)(B) of such Act (42 
U.S.C. 415(a)(1)(B)) is amended--
            (1) in clause (ii), by inserting ``and before 2002'' after 
        ``1979'' the first place it appears, and by striking ``by 
        dividing--'' and all that follows and inserting ``under clause 
        (ix) of this subparagraph.'';
            (2) by redesignating clause (iii) as clause (xii);
            (3) by inserting after clause (ii) the following new 
        clauses:
    ``(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 2001, the amount 
established for purposes of clause (i) of subparagraph (A) shall be an 
amount equal to the product of the following factors:
            ``(I) the amount established with respect to calendar year 
        1979 under clause (i) of this subparagraph for purposes of 
        clause (i) of subparagraph (A), and
            ``(II) the quotient obtained under clause (ix) of this 
        subparagraph.
    ``(iv) 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 2001 and before 2052, the 
amount established for purposes of clause (ii) of subparagraph (A) 
shall be an amount equal to the product of the following factors:
            ``(I) the amount established with respect to the preceding 
        calendar year under this subparagraph for purposes of clause 
        (ii) of subparagraph (A),
            ``(II) the quotient obtained under clause (x) of this 
        subparagraph, and
            ``(III) 0.99.
    ``(v) 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 2051, the amount established 
for purposes of clause (ii) of subparagraph (A) shall be an amount 
equal to the product of the following factors:
            ``(I) the amount established with respect to the calendar 
        year 2051 under clause (iv) of this subparagraph for purposes 
        of clause (ii) of subparagraph (A), and
            ``(II) the quotient obtained under clause (xi) of this 
        subparagraph.
    ``(vi) For individuals who initially become eligible for old-age or 
disability insurance benefits, or who die (before becoming eligible for 
such benefits), in the calendar year 2002, the amount established for 
purposes of clause (iii) of subparagraph (A) shall be an amount equal 
to the quotient derived by dividing--
            ``(I) the amount established with respect to the calendar 
        year 2002 under clause (iv) of this subparagraph for purposes 
        of clause (ii) of subparagraph (A), by
            ``(II) 0.99<SUP>50.
    ``(vii) 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 2002 and before 2052, 
the amount established for purposes of clause (iii) of subparagraph (A) 
shall be an amount equal to the product of the following factors:
            ``(I) the amount established with respect to the preceding 
        calendar year under this subparagraph for purposes of clause 
        (iii) of subparagraph (A),
            ``(II) the quotient obtained under clause (x) of this 
        subparagraph, and
            ``(III) 0.99.
    ``(viii) 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 2051, the amount 
established for purposes of clause (iii) of subparagraph (A) shall be 
an amount equal to the product of the following factors:
            ``(I) the amount established with respect to calendar year 
        2051 under clause (vii) of this subparagraph for purposes of 
        clause (iii) of subparagraph (A), and
            ``(II) the quotient obtained under clause (xi) of this 
        subparagraph.
    ``(ix) The quotient obtained under this clause is the quotient 
obtained by dividing--
            ``(I) the deemed average total wages (as defined in section 
        209(k)(1)) for the second calendar year preceding the calendar 
        year for which the determination is made, by
            ``(II) the average of the total wages (as defined in 
        regulations of the Secretary and computed without regard to the 
        limitations specified in section 209(a)(1)) reported to the 
        Secretary of the Treasury or his delegate for the calendar year 
        1977.
    ``(x) The quotient obtained under this clause is the quotient 
obtained by dividing--
            ``(I) the deemed average total wages (as defined in section 
        209(k)(1)) for the second calendar year preceding the calendar 
        year for which the determination is made, by
            ``(II) the deemed average total wages (as defined in 
        section 209(k)(1)) for the third calendar year preceding the 
        calendar year for which the determination is made.
    ``(xi) The quotient obtained under this clause is the quotient 
obtained by dividing--
            ``(I) the deemed average total wages (as defined in section 
        209(k)(1)) for the second calendar year preceding the calendar 
        year for which the determination is made, by
            ``(II) the average of the total wages (as defined in 
        regulations of the Secretary and computed without regard to the 
        limitations specified in section 209(a)(1)) reported to the 
        Secretary of the Treasury or his delegate for the calendar year 
        2049.''; and
            (4) in clause (xii) (as redesignated), by striking ``clause 
        (ii)'' and inserting ``the preceding clauses of this 
        subparagraph''.
    (c) 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 2001.

SEC. 102. GRADUAL INCREASE IN RETIREMENT AGE TO AGE 67 BY THE YEAR 
              2011.

    (a) In General.--Section 216(l) of the Social Security Act (42 
U.S.C. 416(l)) is amended--
            (1) by striking subparagraphs (C) and (D) of paragraph (1) 
        and by redesignating subparagraph (E) as subparagraph (C);
            (2) in subparagraph (B) of paragraph (1), by striking 
        ``January 1, 2005,'' and inserting ``January 1, 2011,'';
            (3) in subparagraph (C) of paragraph (1) (as redesignated), 
        by striking ``December 31, 2021,'' and inserting ``December 31, 
        2010,''; and
            (4) by striking paragraph (3) and inserting the following:
    ``(3) The age increase factor for any individual who attains early 
retirement age in the 11-year period consisting of calendar years 2000 
through 2010 shall be equal to \2/12\ of the number of months in the 
period beginning with January 2000 and ending with December of the year 
in which the individual attains early retirement age.''.
    (b) Effective Date.--The amendments made by this section shall 
apply with respect to benefits of individuals attaining early 
retirement age (as defined in section 216(l)(2) of the Social Security 
Act) after 1999.

    TITLE II--PROVISIONS RELATING TO CURRENT AND FUTURE ENTITLEMENTS

SEC. 201. REDUCTION IN COST-OF-LIVING ADJUSTMENT PAYABLE IN 1995.

    (a) In General.--For purposes of determining any increase described 
in section 215(i)(2)(A)(ii) of the Social Security Act (42 U.S.C. 
415(i)(2)(A)(ii)) which is effective for December 1994, the applicable 
increase percentage (as defined in section 215(i)(1)(C) of such Act (42 
U.S.C. 415(i)(1)(C))) shall be deemed to be the difference (not less 
than zero) derived by subtracting 0.5 percent from the applicable 
increase percentage (as so defined).
    (b) Inapplicability to Provisions Not Relating to OASDI Benefits or 
Tier I Railroad Retirement Benefits.--Subsection (a) shall apply only 
with respect to adjustments to social security benefits (as defined in 
section 86(d) of the Internal Revenue Code of 1986) and primary 
insurance amounts determined under title II of the Social Security Act. 
For purposes of provisions of law otherwise referring to section 215(i) 
of the Social Security Act or otherwise basing adjustments on 
adjustments made under such section 215(i), such section 215(i) shall 
be applied as if this section had not been enacted.

SEC. 202. THRESHOLDS FOR INCOME TAXATION OF SOCIAL SECURITY BENEFITS.

    (a) Uniform Applicability of Tax.--Subsection (a) of section 86 of 
the Internal Revenue Code of 1986 (relating to social security and tier 
1 railroad retirement benefits) is amended--
            (1) by striking paragraph (2);
            (2) by striking ``(a) In General.--'' and all that follows 
        through ``paragraph (2), gross'' in paragraph (1) and inserting 
        ``(a) In General.--Gross''; and
            (3) by redesignating subparagraphs (A) and (B) of such 
        subsection (as so amended) as paragraphs (1) and (2), 
        respectively.
    (b) Conforming Amendments.--Subsection (c) of such section 86 
(relating to base amount and adjusted base amount) is amended--
            (1) in the heading, by striking ``and Adjusted Base 
        Amount'';
            (2) by striking paragraph (2);
            (3) by striking ``section--'' and all that follows through 
        ``The term'' in paragraph (1) and inserting ``section, the 
        term'';
            (4) by redesignating subparagraphs (A), (B), and (C) of 
        such subsection (as so amended) as paragraphs (1), (2), and 
        (3), respectively; and
            (5) by redesignating clauses (i) and (ii) of paragraph (3) 
        of such subsection (as so redesignated) as subparagraphs (A) 
        and (B), respectively.
    (c) Effective Date.--The amendments made by this section shall 
apply with respect to taxable years beginning after December 31, 1994.

      TITLE III--COVERAGE OF NEWLY HIRED STATE AND LOCAL EMPLOYEES

SEC. 301. AMENDMENTS TO THE SOCIAL SECURITY ACT.

    (a) In General.--Paragraph (7) of section 210(a) of the Social 
Security Act (42 U.S.C. 410(a)(7)) is amended to read as follows:
            ``(7) Excluded State or local government employment (as 
        defined in subsection (r));''.
    (b) Excluded State or Local Government Employment.--
            (1) In general.--Section 210 of such Act (42 U.S.C. 410) is 
        amended by adding at the end the following new subsection:

            ``Excluded State or Local Government Employment

    ``(r)(1) In general.--The term `excluded State or local government 
employment' means any service performed in the employ of a State, of 
any political subdivision thereof, or of any instrumentality of any one 
or more of the foregoing which is wholly owned thereby, if--
            ``(A)(i) such service would be excluded from the term 
        `employment' for purposes of this title if the preceding 
        provisions of this section as in effect in March 1994 had 
        remained in effect, and (ii) the requirements of paragraph (2) 
        are met with respect to such service, or
            ``(B) the requirements of paragraph (3) are met with 
        respect to such service.
    ``(2) Exception for current employment which continues.--
            ``(A) In general.--The requirements of this paragraph are 
        met with respect to service for any employer if--
                    ``(i) such service is performed by an individual--
                            ``(I) who was performing substantial and 
                        regular service for remuneration for that 
                        employer before January 1, 1995,
                            ``(II) who is a bona fide employee of that 
                        employer on December 31, 1994, and
                            ``(III) whose employment relationship with 
                        that employer was not entered into for purposes 
                        of meeting the requirements of this 
                        subparagraph, and
                    ``(ii) the employment relationship with that 
                employer has not been terminated after December 31, 
                1994.
            ``(B) Treatment of multiple agencies and 
        instrumentalities.--For purposes of subparagraph (A), under 
        regulations (consistent with regulations established under 
        section 3121(t)(2)(B) of the Internal Revenue Code of 1986)--
                    ``(i) all agencies and instrumentalities of a State 
                (as defined in section 218(b)) or of the District of 
                Columbia shall be treated as a single employer, and
                    ``(ii) all agencies and instrumentalities of a 
                political subdivision of a State (as so defined) shall 
                be treated as a single employer and shall not be 
                treated as described in clause (i).
    ``(3) Exception for certain services.--
            ``(A) In general.--The requirements of this paragraph are 
        met with respect to service if such service is performed--
                    ``(i) by an individual who is employed by a State 
                or political subdivison thereof to relieve such 
                individual from unemployment,
                    ``(ii) in a hospital, home, or other institution by 
                a patient or inmate thereof as an employee of a State 
                or political subdivision thereof or of the District of 
                Columbia,
                    ``(iii) by an individual, as an employee of a State 
                or political subdivision thereof or of the District of 
                Columbia, serving on a temporary basis in case of fire, 
                storm, snow, earthquake, flood, or other similar 
                emergency,
                    ``(iv) by any individual as an employee included 
                under section 5351(2) of title 5, United States Code 
                (relating to certain interns, student nurses, and other 
                student employees of hospitals of the District of 
                Columbia Government), other than as a medical or dental 
                intern or a medical or dental resident in training,
                    ``(v) by an election official or election worker if 
                the remuneration paid in a calendar year for such 
                service is less than $1,000 with respect to service 
                performed during 1995, and the adjusted amount 
                determined under subparagraph (C) for any subsequent 
                year with respect to service performed during such 
                subsequent year, except to the extent that service by 
                such election official or election worker is included 
                in employment under an agreement under section 218, or
                    ``(vi) by an employee in a position compensated 
                solely on a fee basis which is treated pursuant to 
                section 211(c)(2)(E) as a trade or business for 
                purposes of inclusion of such fees in net earnings from 
                self-employment.
            ``(B) Definitions.--As used in this paragraph, the terms 
        `State' and `political subdivision' have the meanings given 
        those terms in section 218(b).
            ``(C) Adjustments to dollar amount for election officials 
        and election workers.--For each year after 1995, the Secretary 
        shall adjust the amount referred to in subparagraph (A)(v) at 
        the same time and in the same manner as is provided under 
        section 215(a)(1)(B)(ii) with respect to the amounts referred 
        to in section 215(a)(1)(B)(i), except that--
                    ``(i) for purposes of this subparagraph, 1993 shall 
                be substituted for the calendar year referred to in 
                section 215(a)(1)(B)(ii)(II), and
                    ``(ii) such amount as so adjusted, if not a 
                multiple of $100, shall be rounded to the next higher 
                multiple of $100 where such amount is a multiple of $50 
                and to the nearest multiple of $100 in any other case.
        The Secretary shall determine and publish in the Federal 
        Register each adjusted amount determined under this 
        subparagraph not later than November 1 preceding the year for 
        which the adjustment is made.''.
            (2) Conforming amendments.--
                    (A) Subsection (k) of section 210 of such Act (42 
                U.S.C. 410(k)) (relating to covered transportation 
                service) is repealed.
                    (B) Section 210(p) of such Act (42 U.S.C. 410(p)) 
                is amended--
                            (i) in paragraph (2), by striking ``service 
                        is performed'' and all that follows and 
                        inserting ``service is service described in 
                        subsection (r)(3)(A).''; and
                            (ii) in paragraph (3)(A), by inserting 
                        ``under subsection (a)(7) as in effect in March 
                        1994'' after ``section''.
    (c) Additional Amendments Relating to Coverage Agreements.--
            (1) Authorization for all states to extend coverage to 
        state and local policemen and firemen under existing coverage 
        agreements.--
                    (A) In general.--Section 218(l) of such Act (42 
                U.S.C. 418(l)) is amended--
                            (i) in paragraph (1), by striking ``(1)'' 
                        after ``(l)'', and by striking ``the State of'' 
                        and all that follows through ``prior to the 
                        date of enactment of this subsection'' and 
                        inserting ``a State entered into pursuant to 
                        this section''; and
                            (ii) by striking paragraph (2).
                    (B) Conforming amendment.--Section 218(d)(8)(D) of 
                such Act (42 U.S.C. 418(d)(8)(D)) is amended by 
                striking ``agreements with the States named in'' and 
                inserting ``State agreements modified as provided in''.
                    (C) Effective date.--The amendments made by this 
                paragraph shall apply with respect to modifications 
                filed by States after the date of the enactment of this 
                Act.
            (2) Conforming amendments.--Section 218(c)(6) of such Act 
        (42 U.S.C. 418(c)(6)) is amended--
                    (A) by striking subparagraph (C);
                    (B) by redesignating subparagraphs (D) and (E) as 
                subparagraphs (C) and (D), respectively; and
                    (C) by striking subparagraph (F) and inserting the 
                following:
            ``(E) service which is included as employment under section 
        210(a).''
    (d) Authority for States to Modify Coverage Agreements with Respect 
to Election Officials and Election Workers.--Section 218(c)(8) of such 
Act (42 U.S.C. 418(c)(8)) is amended--
            (1) by striking ``on or after January 1, 1968,'' and 
        inserting ``at any time'';
            (2) by striking ``$100'' and inserting ``$1,000 with 
        respect to service performed during 1995, and the adjusted 
        amount determined under section 210(r)(3)(C) for any subsequent 
        year with respect to service performed during such subsequent 
        year''; and
            (3) by striking the last sentence and inserting the 
        following new sentence: ``Any modification of an agreement 
        pursuant to this paragraph shall be effective with respect to 
        services performed in and after the calendar year in which the 
        modification is mailed or delivered by other means to the 
        Secretary.''.

SEC. 302. AMENDMENTS TO THE INTERNAL REVENUE CODE OF 1986.

    (a) In General.--Paragraph (7) of section 3121(b) of the Internal 
Revenue Code of 1986 (relating to employment) is amended to read as 
follows:
            ``(7) excluded State or local government employment (as 
        defined in subsection (t));''.
    (b) Excluded State or Local Government Employment.--Section 3121 of 
such Code is amended by inserting after subsection (s) the following 
new subsection:
    ``(t) Excluded State or Local Government Employment.--
            ``(1) In general.--For purposes of this chapter, the term 
        `excluded State or local government employment' means any 
        service performed in the employ of a State, of any political 
        subdivision thereof, or of any instrumentality of any one or 
        more of the foregoing which is wholly owned thereby, if--
                    ``(A)(i) such service would be excluded from the 
                term `employment' for purposes of this chapter if the 
                provisions of subsection (b)(7) as in effect in March 
                1994 had remained in effect, and (ii) the requirements 
                of paragraph (2) are met with respect to such service, 
                or
                    ``(B) the requirements of paragraph (3) are met 
                with respect to such service.
            ``(2) Exception for current employment which continues.--
                    ``(A) In general.--The requirements of this 
                paragraph are met with respect to service for any 
                employer if--
                            ``(i) such service is performed by an 
                        individual--
                                    ``(I) who was performing 
                                substantial and regular service for 
                                remuneration for that employer before 
                                January 1, 1995,
                                    ``(II) who is a bona fide employee 
                                of that employer on December 31, 1994, 
                                and
                                    ``(III) whose employment 
                                relationship with that employer was not 
                                entered into for purposes of meeting 
                                the requirements of this subparagraph, 
                                and
                            ``(ii) the employment relationship with 
                        that employer has not been terminated after 
                        December 31, 1994.
                    ``(B) Treatment of multiple agencies and 
                instrumentalities.--For purposes of subparagraph (A), 
                under regulations--
                            ``(i) all agencies and instrumentalities of 
                        a State (as defined in section 218(b) of the 
                        Social Security Act) or of the District of 
                        Columbia shall be treated as a single employer, 
                        and
                            ``(ii) all agencies and instrumen- talities 
                        of a political subdivision of a State (as so 
                        defined) shall be treated as a single employer 
                        and shall not be treated as described in clause 
                        (i).
            ``(3) Exception for certain services.--
                    ``(A) In general.--The requirements of this 
                paragraph are met with respect to service if such 
                service is performed--
                            ``(i) by an individual who is employed by a 
                        State or political subdivison thereof to 
                        relieve such individual from unemployment,
                            ``(ii) in a hospital, home, or other 
                        institution by a patient or inmate thereof as 
                        an employee of a State or political subdivision 
                        thereof or of the District of Columbia,
                            ``(iii) by an individual, as an employee of 
                        a State or political subdivision thereof or of 
                        the District of Columbia, serving on a 
                        temporary basis in case of fire, storm, snow, 
                        earthquake, flood, or other similar emergency,
                            ``(iv) by any individual as an employee 
                        included under section 5351(2) of title 5, 
                        United States Code (relating to certain 
                        interns, student nurses, and other student 
                        employees of hospitals of the District of 
                        Columbia Government), other than as a medical 
                        or dental intern or a medical or dental 
                        resident in training,
                            ``(v) by an election official or election 
                        worker if the remuneration paid in a calendar 
                        year for such service is less than $1,000 with 
                        respect to service performed during 1995, and 
                        the adjusted amount determined under section 
                        210(r)(3)(C) of the Social Security Act for any 
                        subsequent year with respect to service 
                        performed during such subsequent year, except 
                        to the extent that service by such election 
                        official or election worker is included in 
                        employment under an agreement under section 218 
                        of the Social Security Act, or
                            ``(vi) by an employee in a position 
                        compensated solely on a fee basis which is 
                        treated pursuant to section 1402(c)(2)(E) as a 
                        trade or business for purposes of inclusion of 
                        such fees in net earnings from self-employment.
                    ``(B) Definitions.--As used in this paragraph, the 
                terms `State' and `political subdivision' have the 
                meanings given those terms in section 218(b) of the 
                Social Security Act.''.
    (c) Conforming Amendments.--
            (1) Subsection (j) of such section 3121 (relating to 
        covered transportation service) is repealed.
            (2) Paragraph (2) of section 3121(u) of such Code (relating 
        to application of hospital insurance tax to Federal, State, and 
        local employment) is amended--
                    (A) in subparagraph (B), by striking ``service is 
                performed'' in clause (ii) and all that follows through 
                the end of such subparagraph and inserting ``service is 
                service described in subsection (t)(3)(A).''; and
                    (B) in subparagraph (C)(i), by inserting ``under 
                subsection (b)(7) as in effect in March 1994'' after 
                ``chapter''.

SEC. 303. EFFECTIVE DATE OF TITLE.

    Except as otherwise provided in this title, the amendments made by 
this title shall apply with respect to service performed after December 
31, 1994.

                 TITLE IV--SOCIAL SECURITY PAYROLL TAX

SEC. 401. LEVEL OF OASDI TAX.

    (a) Tax on Employees.--Subsection (a) of section 3101 of the 
Internal Revenue Code of 1986 (relating to tax on employees for old-
age, survivors, and disability insurance) is amended in the table--
            (1) by striking the following:

    ``1990 or thereafter..........................      6.2 percent.'';
        and
            (2) by inserting the following:

    ``1990 through 2019...........................          6.2 percent
     2020.........................................         6.43 percent
     2021.........................................         6.66 percent
     2022.........................................         6.89 percent
     2023.........................................         7.12 percent
     2024 through 2054............................         7.35 percent
     2055.........................................         7.55 percent
     2056.........................................         7.75 percent
     2057.........................................         7.95 percent
     2058 or thereafter...........................      8.15 percent.''
    (b) Tax on Employers.--Subsection (a) of section 3111 of such Code 
(relating to tax on employers for old-age, survivors, and disability 
insurance) is amended in the table--
            (1) by striking the following:

    ``1990 or thereafter..........................      6.2 percent.'';
        and
            (2) by inserting the following:

    ``1990 through 2019...........................          6.2 percent
     2020.........................................         6.43 percent
     2021.........................................         6.66 percent
     2022.........................................         6.89 percent
     2023.........................................         7.12 percent
     2024 through 2054............................         7.35 percent
     2055.........................................         7.55 percent
     2056.........................................         7.75 percent
     2057.........................................         7.95 percent
     2058 or thereafter...........................      8.15 percent.''
    (c) Effective Date.--The amendments made by this section shall 
apply with respect to remuneration paid after December 31, 1994.

SEC. 402. LEVEL OF SELF-EMPLOYMENT TAX.

    (a) In General.--Subsection (a) of section 1401 of the Internal 
Revenue Code of 1986 (relating to rate of tax on self-employment income 
for old-age, survivors, and disability insurance) is amended in the 
table--
            (1) by striking the following:


``December 31, 1989.......  ..........................      12.40'';    
                                                                        

        and
            (2) by inserting the following:


``December 31, 1989.......  January 1, 2020...........       12.40    
 December 31, 2019........  January 1, 2021...........       12.86    
 December 31, 2020........  January 1, 2022...........       13.32    
 December 31, 2021........  January 1, 2023...........       13.78    
 December 31, 2022........  January 1, 2024...........       14.24    
 December 31, 2023........  January 1, 2055...........       14.70    
 December 31, 2054........  January 1, 2056...........       15.10    
 December 31, 2055........  January 1, 2057...........       15.50    
 December 31, 2056........  January 1, 2058...........       15.90    
 December 31, 2057........  ..........................      16.30.''    
                                                                        

    (b) Effective Date.--The amendments made by this section shall 
apply with respect to taxable years beginning after December 31, 1994.

                                 <all>

HR 4245 IH----2
HR 4245 IH----3