[Congressional Bills 105th Congress]
[From the U.S. Government Publishing Office]
[H.R. 4256 Introduced in House (IH)]







105th CONGRESS
  2d Session
                                H. R. 4256

To amend title II of the Social Security Act to provide for individual 
   security 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 HOUSE OF REPRESENTATIVES

                             July 16, 1998

   Mr. Kolbe (for himself, Mr. Stenholm, Mr. Campbell, Mr. Smith of 
  Michigan, and Mr. Sanford) introduced the following bill; which was 
  referred to the Committee on Ways and Means, and in addition to the 
 Committee on Rules, 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 title II of the Social Security Act to provide for individual 
   security 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 ``21st Century 
Retirement Act of 1998''.
    (b) Table of Contents.--The table of contents of this Act is as 
follows:

Sec. 1. Short title; table of contents.
Sec. 2. Individual security accounts.
Sec. 3. Minimum social security benefit.
Sec. 4. Elimination of earnings test for individuals who have attained 
                            retirement age.
Sec. 5. Reduction in the amount of certain transfers to Medicare Trust 
                            Fund.
Sec. 6. Coverage of newly hired State and local employees.
Sec. 7. Gradual increase in number of benefit computation years; use of 
                            all years in computation.
Sec. 8. Actuarial adjustment for retirement.
Sec. 9. Improvements in process for cost-of-living adjustments.
Sec. 10. Phased reduction in spousal benefits other than survivor's 
                            benefits to 33 percent of primary insurance 
                            amount.
Sec. 11. Adjustments to bend point amounts.
Sec. 12. Phased-in increase in social security retirement ages.
Sec. 13. Mechanism for remedying unforeseen deterioration in social 
                            security solvency.

SEC. 2. INDIVIDUAL SECURITY ACCOUNTS.

    (a) Establishment and Maintenance of Individual Security 
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 Security Accounts

                     ``individual security accounts

    ``Sec. 251. (a) Establishment.--The Commissioner of Social 
Security, within 30 days of the receipt of the first contribution 
received pursuant to subsection (b) with respect to any individual, 
shall establish in the name of such individual an individual security 
account. The individual security account shall be identified to the 
account holder by means of the account holder's Social Security account 
number.
    ``(b) Contributions.--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 
security account of an 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.
    ``(c) Designation of Investment Type of Individual Security 
Account.--
            ``(1) Designation.--Each individual who is employed or 
        self-employed shall designate the investment type of individual 
        security 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 1999.--Not later than January 1, 
        1999, any 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 
        individual.--In any case in which no designation of the 
        individual security account is made, the Commissioner of Social 
        Security shall make the designation of the individual security 
        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.

   ``definition of individual security account; treatment of accounts

    ``Sec. 252. (a) Individual Security Account.--In this part, the 
term `individual security account' means any individual security 
account in the Individual Security Fund (established under section 254) 
which is administered by the Individual Security Fund Board.
    ``(b) Treatment of Account.--Except as otherwise provided in this 
part, any individual security account described in paragraph (1)(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 security account distributions

    ``Sec. 253. (a) Date of Initial Distribution.--Except as provided 
in subsection (c), distributions may only be made from an individual 
security account of an individual on and after the earliest of--
            ``(1) the date the 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 individual's 
        individual security account are sufficient to provide a monthly 
        payment over the life expectancy of the individual (determined 
        under reasonable actuarial assumptions) which, when added to 
        the 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 a 
        family of the size involved) 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 security 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 Security Fund 
        Board), by means of the purchase of annuities or otherwise in 
        accordance with requirements (which shall be provided in 
        regulations of the Board) similar to the requirements 
        applicable to annuities under section 8434 of title 5, United 
        States Code (relating to annuities; methods of payment; 
        election; purchase) and section 8435 of such title (relating to 
        protections for spouses and former spouses) and providing for 
        indexing for inflation.
            ``(2) Payment of excess funds.--To the extent funds remain 
        in an individual's individual security account after the 
        application of paragraph (1), such funds shall be payable to 
        the individual in such manner and in such amounts as determined 
        by the individual, subject to the provisions of subchapter III 
        of chapter 84 of title 5, United States Code.
    ``(c) Distribution in the Event of Disability or Death Before the 
Date of Initial Distribution.--If the individual becomes disabled or 
dies before the date determined under subsection (a), the balance in 
such individual's individual security account shall be distributed 
under the provisions of subchapter III of chapter 84 of title 5, United 
States Code.

                       ``individual security fund

    ``Sec. 254. (a) Establishment.--There is established and maintained 
in the Treasury of the United States an Individual Security Fund in the 
same manner as the Thrift Savings Fund under sections 8437, 8438, and 
8439 of title 5, United States Code.
    ``(b) Individual Security Fund Board.--
            ``(1) In general.--There is established and operated in the 
        Social Security Administration an Individual Security 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 Security Fund 
                Board shall manage and report on the activities of the 
                Individual Security Fund and the individual security 
                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 Security Fund 
                        Board shall conduct a study regarding ways to 
                        increase an individual's investment options 
                        with respect to such individual's individual 
                        security account and with respect to rollovers 
                        or distributions from such account.
                            ``(ii) Report.--Not later that 5 years 
                        after the date of enactment of the 21st Century 
                        Retirement Act of 1998, the Individual Security 
                        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 security fund and accounts

    ``Sec. 255. The receipts and disbursements of the Individual 
Security 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.--In addition to other taxes, there is 
        hereby imposed on the income of every 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 
        security accounts.--
                    ``(A) In general.--In addition to other taxes, 
                there is hereby imposed on the income of every 
                individual an individual security 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 1999, 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 1998' 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.--In addition to other taxes, there is 
        hereby imposed for each taxable year, on the self-employment 
        income of every 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 
        security 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 security 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 1999, 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 1998' 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) Effective dates.--
                    (A) Employees.--The amendment made by paragraph (1) 
                applies to remuneration paid after December 31, 1998.
                    (B) Self-employed individuals.--The amendment made 
                by paragraph (2) applies to taxable years beginning 
                after December 31, 1998.

SEC. 3. MINIMUM SOCIAL SECURITY BENEFIT.

    Section 215 of the Social Security Act (42 U.S.C. 415) is amended 
by adding at the end the following:

                  ``Minimum Monthly Insurance Benefit

    ``(j)(1) Notwithstanding the preceding provisions of this section--
            ``(A) the primary insurance amount of a qualified 
        individual shall be equal to the greater of--
                    ``(i) the primary insurance amount determined under 
                this section (without regard to this subsection), or
                    ``(ii) \1/12\ of the applicable percentage of the 
                applicable poverty line, and
            ``(B) any recomputation of the primary insurance amount of 
        a qualified individual shall not result in a primary insurance 
        amount less than the primary insurance amount as in effect 
        immediately prior to such recomputation.
    ``(2) For purposes of this subsection--
            ``(A) The term `qualified individual' means an individual--
                    ``(i) who initially becomes eligible for old-age or 
                disability insurance benefits, or dies (before becoming 
                eligible for such benefits) for a month beginning after 
                December 31, 2005 (or whose primary insurance amount is 
                recomputed under this section for a month beginning 
                after such date), and
                    ``(ii) who has, as of such individual's initial 
                month of eligibility or month of death, at least 80 
                quarters of coverage.
            ``(B) The term `applicable poverty line' means, in 
        connection with an individual, the poverty line (as defined in 
        section 673(2) of the Community Services Block Grant Act (42 
        U.S.C. 9902(2)), including any revision required by such 
        section) for a family of the size of such individual's family.
            ``(C)(i) The term `applicable percentage' means, for 
        computations and recomputations of a qualified individual's 
        primary insurance amount under this section occurring in any 
        calendar year specified in the table under clause (ii), the sum 
        of--
                    ``(I) the applicable base percentage specified in 
                such table in connection with such year, plus
                    ``(II) the product derived by multiplying the 
                applicable percentage increment specified in such table 
                in connection with such year by \1/4\ of the number of 
                such individual's quarters of coverage (if any) in 
                excess of 80 but not in excess of 160.
            ``(ii) For purposes of clause (i), the applicable base 
        percentages and applicable percentage increments are set forth 
        in connection with calendar years in the following table:

      

``If the calendar year is:             The applicable base      And the applicable percentage increment is:     
                                        percentage is:                                                          
2006.................................  12 percent.............                     0.4 percent                  
2007.................................  24 percent.............                     0.8 percent                  
2008.................................  36 percent.............                     1.2 percent                  
2009.................................  48 percent.............                     1.6 percent                  
After 2009...........................  60 percent.............                   2.0 percent.''                 
                                                                                                                

SEC. 4. ELIMINATION OF EARNINGS TEST FOR INDIVIDUALS WHO HAVE ATTAINED 
              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 ``the age of 
        seventy'' and inserting ``retirement age (as defined in section 
        216(l))'';
            (2) in paragraphs (1)(A) and (2) of subsection (d), by 
        striking ``the age of seventy'' each place it appears and 
        inserting ``retirement age (as defined in section 216(l))'';
            (3) in subsection (f)(1)(B), by striking ``was age seventy 
        or over'' and inserting ``was at or above retirement age (as 
        defined in section 216(l))'';
            (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 ``age 70'' and inserting 
                ``retirement age (as defined in section 216(l))'';
            (5) in subsection (h)(1)(A), by striking ``age 70'' each 
        place it appears and inserting ``retirement age (as defined in 
        section 216(l))''; and
            (6) in subsection (j)--
                    (A) in the heading, by striking ``Age Seventy'' and 
                inserting ``Retirement Age''; and
                    (B) by striking ``seventy years of age'' and 
                inserting ``having attained retirement age (as defined 
                in section 216(l))''.
    (b) Conforming Amendments Eliminating the Special Exempt Amount for 
Individuals Who Have Attained Retirement Age.--
            (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 such 
        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.--Section 203(f)(8)(D) of such Act (42 U.S.C. 
        403(f)(8)(D)) is 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 subparagraph 
                (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) Conforming amendment to provisions for determining 
        amount of increase on account of delayed retirement.--Section 
        202(w)(2)(B)(ii) of such Act (42 U.S.C. 402(w)(2)(B)(ii)) is 
        amended--
                    (A) by striking ``either''; and
                    (B) by striking ``or suffered deductions under 
                section 203(b) or 203(c) in amounts equal to the amount 
                of such benefit''.
            (3) 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 21st Century Retirement 
        Act of 1998 had not been enacted''.
    (d) Effective Date.--The amendments and repeals made by this 
section shall apply with respect to taxable years ending after December 
31, 1997.

SEC. 5. 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, 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 2009.''.

SEC. 6. COVERAGE OF NEWLY HIRED STATE AND LOCAL EMPLOYEES.

    (a) Amendments to the Social Security Act.--
            (1) 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 (s));''.
            (2) Excluded state or local government employment.--
                    (A) In general.--Section 210 of such Act (42 U.S.C. 
                410) is amended by adding at the end the following:

            ``Excluded State or Local Government Employment

    ``(s)(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 1 
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 on December 31, 1999, 
        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, 2000,
                            ``(II) who is a bona fide employee of that 
                        employer on December 31, 1999, 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, 
                1999.
            ``(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 subdivision 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 2000, 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 2000, 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, 1997 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 $50, shall be rounded to the nearest 
                multiple of $50.
        The Commissioner of Social Security 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.''.
                    (B) Conforming amendments.--
                            (i) Subsection (k) of section 210 of such 
                        Act (42 U.S.C. 410(k)) (relating to covered 
                        transportation service) is repealed.
                            (ii) 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 
                                (s)(3)(A).''; and
                                    (II) in paragraph (3)(A), by 
                                inserting ``under subsection (a)(7) as 
                                in effect on December 31, 1999'' after 
                                ``section''.
                            (iii) Section 218(c)(6) of such Act (42 
                        U.S.C. 418(c)(6)) is amended--
                                    (I) by striking subparagraph (C);
                                    (II) by redesignating subparagraphs 
                                (D) and (E) as subparagraphs (C) and 
                                (D), respectively; and
                                    (III) by striking subparagraph (F) 
                                and inserting the following:
            ``(E) service which is included as employment under section 
        210(a).''.
    (b) Amendments to the Internal Revenue Code of 1986.--
            (1) 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));''.
            (2) Excluded state or local government employment.--Section 
        3121 of such Code is amended by inserting after subsection (s) 
        the following:
    ``(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 1 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 on 
                December 31, 1999, 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, 2000,
                                    ``(II) who is a bona fide employee 
                                of that employer on December 31, 1999, 
                                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, 1999.
                    ``(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 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 subdivision 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 2000, and 
                        the adjusted amount determined under section 
                        210(s)(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.''.
            (3) Conforming amendments.--
                    (A) Subsection (j) of section 3121 of such Code 
                (relating to covered transportation service) is 
                repealed.
                    (B) Paragraph (2) of section 3121(u) of such Code 
                (relating to application of hospital insurance tax to 
                Federal, State, and local employment) is amended--
                            (i) 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
                            (ii) in subparagraph (C)(i), by inserting 
                        ``under subsection (b)(7) as in effect on 
                        December 31, 1999'' after ``chapter''.
    (c) Effective Date.--Except as otherwise provided in this section, 
the amendments made by this section shall apply with respect to service 
performed after December 31, 1999.

SEC. 7. 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.
Clause (ii),''.
    (b) Use of All Years in Computation.--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''.
    (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, 1999.

SEC. 8. 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 1999.
    (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 2010;''; 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 2009 and before 
        2012;
            ``(F) \3/4\ of 1 percent in the case of an individual who 
        attains the age of 62 in a calendar year after 2011 and before 
        2014;
            ``(G) \19/24\ of 1 percent in the case of an individual who 
        attains the age of 62 in a calendar year after 2013 and before 
        2016; and
            ``(H) \5/6\ of 1 percent in the case of an individual who 
        attains the age of 62 in a calendar year after 2015.''.

SEC. 9. IMPROVEMENTS IN PROCESS FOR COST-OF-LIVING ADJUSTMENTS.

    (a) Annual Declarations of Achieved Substitution Bias Correction 
and Persisting Upper Level Substitution Bias.--
            (1) Achieved substitution bias correction.--Not later than 
        October 1, 1998, and annually thereafter, the Commissioner of 
        the Bureau of Labor Statistics shall publish in the Federal 
        Register an estimate of the number of percentage points by 
        which the Consumer Price Index is reduced below the level it 
        would otherwise have attained by reason of adjustments in the 
        determination of such index instituted by the Bureau after 
        December 31, 1997.
            (2) Upper level substitution bias.--Not later than August 
        1, 1999, 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 
        retained in the Consumer Price Index, expressed in terms of 
        percentage points determined through the use of a superlative 
        index that accounts for changes that consumers make in the 
        quantities of goods and services consumed in response to 
        changes in relative prices.
    (b) 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 1998, 1999, and 2000, $30,000,000 for use by the 
        Bureau for the following purposes:
                    (A) Research, evaluation, and implementation of a 
                superlative index to estimate upper level substitution 
                bias in the Consumer Price Index.
                    (B) Expansion of the Consumer Expenditure Survey 
                and the Point of Purchase Survey.
                    (C) Implementation of revisions to the Consumer 
                Price Index with respect to programs under title II of 
                the Social Security Act (42 U.S.C. 401 et seq.).
            (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 Representative and the Committee 
        on Appropriations of the Senate upon the request of each 
        Committee.
    (c) 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.
    (d) 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.
    (e) Modifications to Cost-of-Living Indexing of Benefits.--
            (1) In general.--Section 215(i)(1) of the Social Security 
        Act (42 U.S.C. 415(i)(1)) is amended--
                    (A) by striking ``Consumer Price Index'' each place 
                it occurs and inserting ``Social Security Consumer 
                Price Index'';
                    (B) in subparagraph (D), by striking ``(as prepared 
                by the Department of Labor)''; and
                    (C) in subparagraph (G), by striking the period at 
                the end and inserting ``; and''; and
            (4) by adding at the end the following:
            ``(H)(i) the term `Social Security Consumer Price Index', 
        for a month in any year, means the Consumer Price Index for 
        such month (as prepared by the Department of Labor), reduced by 
        the greater of--
                    ``(I) the excess of 0.5 percentage points over the 
                achieved bias correction (as last published by the 
                Secretary of Labor pursuant to section 211(a)(1) of the 
                21st Century Retirement Act of 1998), or
                    ``(II) the upper level substitution bias (as last 
                published by the Secretary of Labor pursuant to section 
                211(a)(2) of the 21st Century Retirement Act of 
                1998).''.

SEC. 10. PHASED REDUCTION IN SPOUSAL BENEFITS OTHER THAN SURVIVOR'S 
              BENEFITS TO 33 PERCENT OF PRIMARY INSURANCE AMOUNT.

    (a) Wife's Insurance Benefits.--Section 202(b)(2) of the Social 
Security Act (42 U.S.C. 402(b)(2)) is amended to read as follows:
    ``(2)(A) Except as provided in subsection (q) and paragraph (4) of 
this subsection, such wife's insurance benefit for each month shall be 
equal to the applicable percentage of the primary insurance amount of 
her husband (or, in the case of a divorced wife, her former husband) 
for the calendar year in which such individual becomes eligible for 
such benefit.
    ``(B) For purposes of subparagraph (A), the applicable percentage 
for any calendar year shall be equal to 50 percent, reduced (but not 
below 33 percent) by 1 percentage point for each year after 1999.
    ``(C) For purposes of subparagraph (A)--
            ``(i) an individual shall be treated as eligible for a 
        wife's insurance benefit if such individual meets the 
        requirements of subparagraphs (B), (C), and (D) of paragraph 
        (1), and
            ``(ii) in determining when an individual becomes eligible 
        for a wife's insurance benefit, any break in eligibility of 
        less than 12 consecutive months shall not be taken into 
        account.''.
    (b) Husband's Insurance Benefits.--Section 202(c)(3) of the Social 
Security Act (42 U.S.C. 402(c)(3)) is amended to read as follows:
    ``(3)(A) Except as provided in subsection (q) and paragraph (2) of 
this subsection, such husband's insurance benefit for each month shall 
be equal to the applicable percentage (as determined under subsection 
(b)(2)(B)) of the primary insurance amount of his wife (or, in the case 
of a divorced husband, his former wife) for the calendar year in which 
such individual becomes eligible for such benefit.
    ``(B) For purposes of subparagraph (A)--
            ``(i) an individual shall be treated as eligible for a 
        husband's insurance benefit if such individual meets the 
        requirements of subparagraphs (B), (C), and (D) of paragraph 
        (1), and
            ``(ii) in determining when an individual becomes eligible 
        for a husband's insurance benefit, any break in eligibility of 
        less than 12 consecutive months shall not be taken into 
        account.''.

SEC. 11. ADJUSTMENTS TO BEND POINT AMOUNTS.

    Section 215(a)(1)(B) of the Social Security Act (42 U.S.C. 
415(a)(1)(B)) is amended--
            (1) in clause (ii), by inserting ``and before 2003'' after 
        ``1979'' the first place it appears, and by striking ``by 
        dividing--'' and all that follows and inserting ``under clause 
        (viii) of this subparagraph.'';
            (2) by redesignating clause (iii) as clause (ix);
            (3) 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 2002, the amount 
established for purposes of clause (i) of subparagraph (A) shall be an 
amount equal to the product of--
            ``(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 (viii) 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 2002 and before 2023, the 
amount established for purposes of clause (ii) of subparagraph (A) 
shall be an amount equal to the product of--
            ``(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 (viii) of this 
        subparagraph, and
            ``(III) 0.98.
    ``(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 2022, the amount established 
for purposes of clause (ii) of subparagraph (A) shall be an amount 
equal to the product of--
            ``(I) the amount established with respect to the calendar 
        year 2022 under clause (iv) of this subparagraph for purposes 
        of clause (ii) of subparagraph (A), and
            ``(II) the quotient obtained under clause (viii) 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 any calendar year after 2002 and before 2023, the 
amount established for purposes of clause (iii) of subparagraph (A) 
shall be an amount equal to the product of--
            ``(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 (viii) of this 
        subparagraph, and
            ``(III) 0.98.
    ``(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 2022, the amount 
established for purposes of clause (iii) of subparagraph (A) shall be 
an amount equal to the product of--
            ``(I) the amount established with respect to calendar year 
        2022 under clause (vii) of this subparagraph for purposes of 
        clause (iii) of subparagraph (A), and
            ``(II) the quotient obtained under clause (viii) of this 
        subparagraph.
    ``(viii) The quotient obtained under this clause is the quotient 
obtained by dividing--
            ``(I) the national average wage index (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 national average wage index (as so defined) for 
        1977.''; and
            (4) in clause (ix) (as redesignated), by striking ``clause 
        (ii)'' and inserting ``the preceding clauses of this 
        subparagraph''.

SEC. 12. PHASED-IN INCREASE IN SOCIAL SECURITY RETIREMENT AGES.

    (a) Normal Retirement Age.--Section 216(l) of the Social Security 
Act (42 U.S.C. 416(l)) is amended--
            (1) in paragraph (1), by striking subparagraphs (B), (C), 
        (D), and (E) and inserting the following:
                    ``(B)(i) with respect to an individual who attains 
                early retirement age after December 31, 1999, and 
                before January 1, 2029, 65 years of age plus \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,
                    ``(ii) with respect to an individual who attains 
                early retirement age after December 31, 2028, 70 years 
                of age, and
                    ``(iii) with respect to an individual who attains 
                early retirement age after December 31, 2029, 70 years 
                of age plus \1/18\ of the number of months in the 
                period beginning with January 2030 and ending with 
                December of the year in which the individual attains 
                early retirement age (rounded down to a full month).''; 
                and
            (2) by striking paragraph (3).
    (b) Early Retirement Age.--Section 216(l)(2) of the Social Security 
Act (42 U.S.C. 416(l)(2)) is amended to read as follows:
    ``(2) The term `early retirement age' means--
                    ``(A) except as otherwise provided in this 
                paragraph, age 62 in the case of an old-age, wife's, or 
                husband's insurance benefit, and age 60 in the case of 
                a widow's or widower's insurance benefit;
                    ``(B)(i)(I) except as provided in clause (ii), with 
                respect to an individual who attains age 62 after 
                December 31, 2011, and before January 1, 2029, 62 years 
                of age plus \2/12\ of the number of months in the 
                period beginning with January 2012 and ending with 
                December of the year in which the individual attains 
                age 62,
                    ``(II) with respect to an individual who attains 
                age 62 after December 31, 2028, 65 years of age, and
                    ``(III) with respect to an individual who attains 
                age 62 after December 31, 2029, 65 years of age plus 
                \1/18\ of the number of months in the period beginning 
                with January 2030 and ending with December of the year 
                in which the individual attains age 62 (rounded down to 
                a full month); and
                    ``(ii)(I) in the case of widow's and widower's 
                insurance benefits, with respect to an individual who 
                attains age 60 after December 31, 2011, and before 
                January 1, 2029, 60 years of age plus \2/12\ of the 
                number of months in the period beginning with January 
                2012 and ending with December of the year in which the 
                individual attains age 60,
                    ``(II) with respect to such an individual who 
                attains age 60 after December 31, 2028, 63 years of 
                age, and
                    ``(III) with respect to such an individual who 
                attains age 60 after December 31, 2029, 63 years of age 
                plus \1/18\ of the number of months in the period 
                beginning with January 2030 and ending with December of 
                the year in which the individual attains age 60 
                (rounded down to a full month).''.

SEC. 13. 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 
for any calendar year during the succeeding period of 75 calendar years 
will be 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 21st Century Retirement Act of 
1998 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 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 
        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 such Act (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 (as redesignated by 
        subsection (a) of this section) is amended by inserting ``or 
        (b)'' after ``subsection (a)''.
                                 <all>