[Congressional Bills 104th Congress]
[From the U.S. Government Publishing Office]
[H.R. 491 Introduced in House (IH)]







104th CONGRESS
  1st Session
                                H. R. 491

 To amend titles II and XVIII of the Social Security Act to ensure the 
  integrity of the social security trust funds by reconstituting the 
Boards of Trustees of such trust funds and the Managing Trustee of such 
  trust funds to increase their independence, by providing for annual 
 investment plans to guide investment of amounts in such trust funds, 
      and by removing unnecessary restrictions on investment and 
             disinvestment of amounts in such trust funds.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                            January 11, 1995

 Mr. Solomon  introduced the following bill; which was referred to the 
   Committee on Ways and Means and, in addition, to the Committee on 
Commerce, for a period to be subsequently determined by the Speaker, in 
   each case for consideration of such provisions as fall within the 
                jurisdiction of the committee concerned

_______________________________________________________________________

                                 A BILL


 
 To amend titles II and XVIII of the Social Security Act to ensure the 
  integrity of the social security trust funds by reconstituting the 
Boards of Trustees of such trust funds and the Managing Trustee of such 
  trust funds to increase their independence, by providing for annual 
 investment plans to guide investment of amounts in such trust funds, 
      and by removing unnecessary restrictions on investment and 
             disinvestment of amounts in such trust funds.

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

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Social Security Trust Funds 
Integrity Act of 1995''.

SEC. 2. INDEPENDENT MANAGING TRUSTEE AND BOARD OF TRUSTEES.

    (a) In General.--Section 201(c) of the Social Security Act is 
amended--
            (1) in the seventh sentence, by redesignating paragraphs 
        (1), (2), (3), (4), and (5) as subparagraphs (A), (B), (C), 
        (D), and (E), respectively, and
            (2) by striking ``(c) With respect to'' and all that 
        follows through ``It shall be the duty'' in the seventh 
        sentence and inserting the following:
    ``(c)(1) With respect to the Federal Old-Age and Survivors 
Insurance Trust Fund and the Federal Disability Insurance Trust Fund 
(hereinafter in this title referred to as the `Trust Funds') there is 
hereby created a body to be known as the Board of Trustees of the Trust 
Funds (hereinafter in this title called the `Board of Trustees'). The 
Board of Trustees shall be composed of--
            ``(A) 10 members appointed by the President, by and with 
        the advice and consent of the Senate, as follows:
                    ``(i) 2 shall be appointed after taking into 
                account recommendations by the Speaker of the House of 
                Representatives;
                    ``(ii) 2 shall be appointed after taking into 
                account recommendations by the President pro tempore of 
                the Senate;
                    ``(iii) 2 shall be appointed after taking into 
                account recommendations by the Minority Leader of the 
                House of Representatives;
                    ``(iv) 2 shall be appointed after taking into 
                account recommendations by the Minority Leader of the 
                Senate; and
                    ``(v) 2 shall be appointed after taking into 
                account recommendations by private organizations 
                determined by the President to consist of the 5 largest 
                such organizations representing the interests of senior 
                citizens in the United States; and
            ``(B) the Managing Trustee of the Social Security Trust 
        Funds appointed under paragraph (3) (hereinafter in this title 
        referred to as the `Managing Trustee').
The Managing Trustee shall serve as Chair of the Board of Trustees. The 
Commissioner of Social Security shall serve as Secretary of the Board 
of Trustees. The Board of Trustees shall meet not less frequently than 
once each calendar year.
    ``(2)(A) Of the members of the Board of Trustees appointed under 
paragraph (1)(A), not more than 5 shall be of the same political party.
    ``(B) The members of the Board of Trustees appointed under 
paragraph (1)(A) shall serve for a term of 6 years, except that, of the 
first individuals appointed, one individual appointed under each of 
clauses (i), (ii), (iii), (iv), and (v) of paragraph (1)(A) shall serve 
for a term ending December 31, 1996, and the other individual appointed 
under each of such clauses shall serve for a term ending December 31, 
1999, as designated by the President at the time of appointment. An 
individual may serve as such a member of the Board of Trustees after 
the expiration of his or her term until his or her successor has taken 
office. An individual appointed to fill a vacancy occurring other than 
by the expiration of a term of office shall be appointed only for the 
unexpired term of the individual he or she succeeds. An individual may 
be removed as such a member of the Board of Trustees only for cause and 
only after such cause has been reported in writing to the Speaker of 
the House of Representatives and the President pro tempore of the 
Senate.
    ``(C) Each member of the Board of Trustees appointed under 
paragraph (1)(A) shall receive compensation at the daily equivalent of 
the rate payable for level IV of the Executive Schedule under section 
5314 of title 5, United States Code, for each day on which such member 
is engaged in the performance of his or her duties on the Board of 
Trustees, and shall in addition be reimbursed for the actual and 
necessary expenses incurred by him or her in the performance of his or 
her duties.
    ``(3)(A) The Managing Trustee shall be appointed by the President, 
by and with the advice and consent of the Senate.
    ``(B) The Managing Trustee shall serve for a term of four years, 
except that the first individual appointed as Managing Trustee under 
this paragraph shall serve for a term ending December 31, 1997. An 
individual may serve as Managing Trustee after the expiration of his or 
her term until his or her successor has taken office as Managing 
Trustee. An individual appointed to fill a vacancy occurring other than 
by the expiration of a term of office shall be appointed only for the 
unexpired term of the individual he or she succeeds. An individual may 
be removed as Managing Trustee only for cause and only after such cause 
has been reported in writing to the Speaker of the House of 
Representatives and the President pro tempore of the Senate.
    ``(C) The Managing Trustee shall not engage in any other business, 
vocation, or employment. Any individual who is engaging in any other 
business, vocation, or employment at the time of his or her appointment 
as Managing Trustee shall terminate or liquidate such activity no later 
than 90 days after such appointment.
    ``(D) The Managing Trustee shall receive compensation at the rate 
payable for level III of the Executive Schedule under section 5314 of 
title 5, United States Code, and shall in addition be reimbursed for 
the actual and necessary expenses incurred by him or her in the 
performance of his or her duties.
    ``(4) The Managing Trustee and the other members of the Board of 
Trustees shall be chosen, on the basis of their integrity, 
impartiality, and good judgment, from among individuals who, by reason 
of their education, experience, and attainments, are exceptionally 
qualified to perform their duties prescribed under this Act and who 
have no conflicting interest which would hinder the performance of 
disinterested public service either in the investment of either of the 
Trust Funds, the Federal Hospital Insurance Trust Fund, or the Federal 
Supplementary Medical Insurance Trust Fund or in the other functions 
and duties vested in them under this Act.
    ``(5)(A) The Commissioner of Social Security shall make available 
to the Managing Trustee and the Board of Trustees, from the personnel, 
facilities, and services of the Social Security Administration, such 
secretarial, clerical, technical, and other assistance as may be 
necessary or appropriate to the performance of their duties.
    ``(B) The Commissioner of Social Security and the Secretary of the 
Treasury shall make available to the Managing Trustee and the Board of 
Trustees such information and data held by their respective agencies as 
may be necessary or appropriate to the performance of the duties of the 
Managing Trustee and the Board of Trustees.
    ``(6) It shall be the duty''.
    (b) Conforming Amendments.--
            (1) Federal hospital insurance trust fund.--Section 1817(b) 
        of such Act is amended--
                    (A) in the seventh sentence, by redesignating 
                paragraphs (1), (2), (3), and (4) as subparagraphs (A), 
                (B), (C), and (D), respectively, and
                    (B) by striking ``(b) With respect to'' and all 
                that follows through ``It shall be the duty'' in the 
                seventh sentence and inserting the following:
    ``(b)(1) With respect to the Trust Fund, there is hereby created a 
body to be known as the Board of Trustees of the Trust Fund 
(hereinafter in this section referred to as the `Board of Trustees'). 
The Board of Trustees shall be composed of--
            ``(A) the individuals serving as members of the Board of 
        Trustees of the Federal Old-Age and Survivors Insurance Trust 
        Fund and the Federal Disability Insurance Trust Fund under 
        section 201(c)(1)(A), and
            ``(B) the Managing Trustee of the Social Security Trust 
        Funds (hereinafter in this section referred to as the `Managing 
        Trustee') appointed under section 201(c)(2).
The Managing Trustee shall serve as Chair of the Board of Trustees. The 
Commissioner of Social Security shall serve as Secretary of the Board 
of Trustees. The Board of Trustees shall meet not less frequently than 
once each calendar year. The Managing Trustee and the other members of 
the Board of Trustees shall serve under this subsection without 
compensation in addition to compensation received for their service 
under section 201(c).
    ``(3) It shall be the duty''.
            (2) Federal supplementary medical insurance trust fund.--
        Section 1841(b) of such Act is amended--
                    (A) in the seventh sentence, by redesignating 
                paragraphs (1), (2), (3), and (4) as subparagraphs (A), 
                (B), (C), and (D), respectively, and
                    (B) by striking ``(b) With respect to'' and all 
                that follows through ``It shall be the duty'' in the 
                seventh sentence and inserting the following:
    ``(b)(1) With respect to the Trust Fund, there is hereby created a 
body to be known as the Board of Trustees of the Trust Fund 
(hereinafter in this section referred to as the `Board of Trustees'). 
The Board of Trustees shall be composed of--
            ``(A) the individuals serving as members of the Board of 
        Trustees of the Federal Old-Age and Survivors Insurance Trust 
        Fund and the Federal Disability Insurance Trust Fund under 
        section 201(c)(1)(A), and
            ``(B) the Managing Trustee of the Social Security Trust 
        Funds (hereinafter in this section referred to as the `Managing 
        Trustee') appointed under section 201(c)(2).
The Managing Trustee shall serve as Chair of the Board of Trustees. The 
Commissioner of Social Security shall serve as Secretary of the Board 
of Trustees. The Board of Trustees shall meet not less frequently than 
once each calendar year. The Managing Trustee and the other members of 
the Board of Trustees shall serve under this subsection without 
compensation in addition to compensation received for their service 
under section 201(c).
    ``(3) It shall be the duty''.
    (c) Effective Date and Transitional Rules.--The amendments made by 
this section shall take effect on the date of the enactment of this 
Act, except that the Secretary of the Treasury shall continue to serve 
as Managing Trustee of the Social Security Trust Funds and the members 
of the Board of Trustees under sections 201(c), 1817(b), and 1841(b) of 
the Social Security Act (as in effect immediately before such date) 
shall continue to serve as the members of such Boards, until the date 
on which all individuals initially appointed under section 201(c) of 
such Act (as amended by this section) take office.

SEC. 3. INVESTMENT OF THE SOCIAL SECURITY TRUST FUNDS PURSUANT TO 
              ANNUAL INVESTMENT PLAN.

    (a) Federal Old-Age and Survivors Insurance Trust Fund and Federal 
Disability Insurance Trust Fund.--Section 201(d) of the Social Security 
Act is amended by striking ``(d) It shall be the duty'' and all that 
follows through ``The purposes for which'' and inserting the following:
    ``(d)(1)(A) It shall be the duty of the Managing Trustee to invest 
such amounts in the Trust Funds as are not necessary to meet current 
withdrawals in such manner and to such extent as is determined by the 
Managing Trustee to be in accordance with the annual investment plan 
submitted by the Board of Trustees pursuant to this paragraph.
    ``(B) The Board of Trustees shall conduct a continuing study and 
actuarial analysis of the status of the investments made by the 
Managing Trustee pursuant to this subsection, and, on the basis of such 
study and analysis shall, on or before August 1 of each calendar year, 
formulate and submit to the President and each House of the Congress an 
investment plan to govern the investments of the Trust Funds during the 
fiscal year beginning with October 1 of such calendar year. The Board 
of Trustees may, from time to time thereafter, submit amendments to the 
annual investment plan in the manner in which original annual 
investment plans are submitted, except that each such amendment shall 
not be effective before 60 days after its submission.
    ``(C) Each annual investment plan shall set forth standards 
governing the investment and disinvestment of the Trust Funds which are 
appropriate to ensure that the insurance program under this title will 
to the maximum extent possible fulfill its intended purposes and meet 
the needs for which it is designed in a fiscally and actuarially sound 
manner, without being influenced or characterized by budgetary or 
fiscal considerations irrelevant to the Trust Funds or by partisan or 
political considerations. Such plan shall be accompanied by any 
recommendations of the Board of Trustees regarding the investment of 
the Trust Funds, including appropriate technical legislative language 
for any necessary modifications in the provisions of this title 
relating to matters covered by such recommendations.
    ``(D) The annual investment plan submitted to each House of the 
Congress (and any amendment thereto), together with accompanying 
recommendations of the Board of Trustees, shall be incorporated in a 
special message to each House. Such message shall be delivered to the 
Clerk of the House of Representatives if the House of Representatives 
is not in session and to the Secretary of the Senate if the Senate is 
not in session. Each such message shall be printed as a document for 
each House.
    ``(E) For purposes of making investments under this paragraph, 
obligations may be acquired (i) at original issue at the issue price, 
or (ii) by purchase of outstanding obligations at the market price.
    ``(2) The purposes for which''.
    (b) Federal Hospital Insurance Trust Fund.--Section 1817(c) of such 
Act is amended by striking ``(c) It shall be the duty'' and all that 
follows through ``The purposes for which'' and inserting the following:
    ``(c)(1)(A) It shall be the duty of the Managing Trustee to invest 
such amounts in the Trust Fund as are not necessary to meet current 
withdrawals in such manner and to such extent as is determined by the 
Managing Trustee to be in accordance with the annual investment plan 
submitted by the Board of Trustees pursuant to this paragraph.
    ``(B) The Board of Trustees shall conduct a continuing study and 
actuarial analysis of the status of the investments made by the 
Managing Trustee pursuant to this subsection, and, on the basis of such 
study and analysis shall, on or before August 1 of each calendar year, 
formulate and submit to the President and each House of the Congress an 
investment plan to govern the investments of the Trust Fund during the 
fiscal year beginning with October 1 of such calendar year. The Board 
of Trustees may, from time to time thereafter, submit amendments to the 
annual investment plan in the manner in which original annual 
investment plans are submitted, except that each such amendment shall 
not be effective before 60 days after its submission.
    ``(C) Each annual investment plan shall set forth standards 
governing the investment and disinvestment of the Trust Fund which are 
appropriate to ensure that the insurance program under this title will 
to the maximum extent possible fulfill its intended purposes and meet 
the needs for which it is designed in a fiscally and actuarially sound 
manner, without being influenced or characterized by budgetary or 
fiscal considerations irrelevant to the Trust Fund or by partisan or 
political considerations. Such plan shall be accompanied by any 
recommendations of the Board of Trustees regarding the investment of 
the Trust Fund, including appropriate technical legislative language 
for any necessary modifications in the provisions of this title 
relating to matters covered by such recommendations.
    ``(D) The annual investment plan submitted to each House of the 
Congress (and any amendment thereto), together with accompanying 
recommendations of the Board of Trustees, shall be incorporated in a 
special message to each House. Such message shall be delivered to the 
Clerk of the House of Representatives if the House of Representatives 
is not in session and to the Secretary of the Senate if the Senate is 
not in session. Each such message shall be printed as a document for 
each House.
    ``(E) For purposes of making investments under this paragraph, 
obligations may be acquired (i) at original issue at the issue price, 
or (ii) by purchase of outstanding obligations at the market price.
    ``(2) The purposes for which''.
    (c) Federal Supplementary Medical Insurance Trust Fund.--Section 
1841(c) of such Act is amended by striking ``(c) It shall be the duty'' 
and all that follows through ``The purposes for which'' and inserting 
the following:
    ``(c)(1)(A) It shall be the duty of the Managing Trustee to invest 
such amounts in the Trust Fund as are not necessary to meet current 
withdrawals in such manner and to such extent as is determined by the 
Managing Trustee to be in accordance with the annual investment plan 
submitted by the Board of Trustees pursuant to this paragraph.
    ``(B) The Board of Trustees shall conduct a continuing study and 
actuarial analysis of the status of the investments made by the 
Managing Trustee pursuant to this subsection, and, on the basis of such 
study and analysis shall, on or before August 1 of each calendar year, 
formulate and submit to the President and each House of the Congress an 
investment plan to govern the investments of the Trust Fund during the 
fiscal year beginning with October 1 of such calendar year. The Board 
of Trustees may, from time to time thereafter, submit amendments to the 
annual investment plan in the manner in which original annual 
investment plans are submitted, except that each such amendment shall 
not be effective before 60 days after its submission.
    ``(C) Each annual investment plan shall set forth standards 
governing the investment and disinvestment of the Trust Fund which are 
appropriate to ensure that the insurance program under this title will 
to the maximum extent possible fulfill its intended purposes and meet 
the needs for which it is designed in a fiscally and actuarially sound 
manner, without being influenced or characterized by budgetary or 
fiscal considerations irrelevant to the Trust Fund or by partisan or 
political considerations. Such plan shall be accompanied by any 
recommendations of the Board of Trustees regarding the investment of 
the Trust Fund, including appropriate technical legislative language 
for any necessary modifications in the provisions of this title 
relating to matters covered by such recommendations.
    ``(D) The annual investment plan submitted to each House of the 
Congress (and any amendment thereto), together with accompanying 
recommendations of the Board of Trustees, shall be incorporated in a 
special message to each House. Such message shall be delivered to the 
Clerk of the House of Representatives if the House of Representatives 
is not in session and to the Secretary of the Senate if the Senate is 
not in session. Each such message shall be printed as a document for 
each House.
    ``(E) For purposes of making investments under this paragraph, 
obligations may be acquired (i) at original issue at the issue price, 
or (ii) by purchase of outstanding obligations at the market price.
    ``(2) The purposes for which''.

SEC. 4. GREATER DISCRETION IN INVESTMENT OF THE SOCIAL SECURITY TRUST 
              FUNDS.

    (a) Federal Old-Age and Survivors Insurance Trust Fund and Federal 
Disability Insurance Trust Fund.--Section 201(d) of the Social Security 
Act (as amended by section 3 of this Act) is further amended by 
striking the last sentence and inserting the following: ``The Managing 
Trustee may purchase such obligations and other interest-bearing 
obligations, on original issue or at the market price, and sell such 
obligations, if the Managing Trustee determines that such purchase or 
sale is in the public interest and in accordance with the annual 
investment plan of the Board of Trustees.''.
    (b) Federal Hospital Insurance Trust Fund.--Section 1817(c) of such 
Act (as amended by section 3 of this Act) is further amended by 
striking the last sentence and inserting the following: ``The Managing 
Trustee may purchase such obligations and other interest-bearing 
obligations, on original issue or at the market price, and sell such 
obligations, if the Managing Trustee determines that such purchase or 
sale is in the public interest and in accordance with the annual 
investment plan of the Board of Trustees.''.
    (c) Federal Supplementary Medical Insurance Trust Fund.--Section 
1841(c) of such Act (as amended by section 3 of this Act) is further 
amended by striking the last sentence and inserting in lieu thereof the 
following: ``The Managing Trustee may purchase such obligations and 
other interest-bearing obligations, on original issue or at the market 
price, and sell such obligations, if the Managing Trustee determines 
that such purchase or sale is in the public interest and in accordance 
with the annual investment plan of the Board of Trustees.''.
    (d) Effective Date.--The amendments made by this section shall take 
effect October 1, 1995.
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HR 491 IH----2