[Congressional Bills 106th Congress]
[From the U.S. Government Publishing Office]
[H.R. 5659 Introduced in House (IH)]







106th CONGRESS
  2d Session
                                H. R. 5659

   To amend title II of the Social Security Act provide for personal 
 Social Security accounts and to maintain the solvency of the old-age, 
              survivors, and disability insurance program.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                           December 14, 2000

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

_______________________________________________________________________

                                 A BILL


 
   To amend title II of the Social Security Act provide for personal 
 Social Security accounts and to maintain the solvency of the old-age, 
              survivors, and disability insurance program.

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

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Personal Social Security Account Act 
of 2000''.

               TITLE I--PERSONAL SOCIAL SECURITY ACCOUNTS

SEC. 101. PERSONAL SOCIAL SECURITY ACCOUNTS.

    Title II of the Social Security Act is amended--
            (1) by inserting before section 201 the following:

                    ``Part A--Insurance Benefits'';

        and
            (2) by adding at the end the following new part:

              ``Part B--Personal Social Security Accounts

                ``personal social security account fund

    ``Sec. 251. (a) Establishment.--There is established in the 
Treasury of the United States a Personal Social Security Account Fund. 
Subject to, and to the extent consistent with, the provisions of this 
part, the Commissioner of Social Security shall exercise the same 
powers, duties, and responsibilities with respect to the Fund as the 
powers, duties and responsibilities exercised by the Executive Director 
with respect to the Thrift Savings Fund.
    ``(b) Amounts Held by Fund.--The Personal Social Security Account 
Fund consists of the sum of all amounts transferred to the Fund under 
section 252, increased by the total net earnings from investments of 
sums held in the Fund or reduced by the total net losses from 
investments of sums held in the Fund, and reduced by the total amount 
of payments made from the Fund (including payments for administrative 
expenses).
    ``(c) Use of Fund.--
            ``(1) In general.--The sums in the Personal Social Security 
        Account Fund are appropriated and shall remain available 
        without fiscal year limitation--
                    ``(A) to invest under section 253,
                    ``(B) to make distributions under section 254,
                    ``(C) to pay the administrative expenses of this 
                part, and
                    ``(D) to purchase insurance as provided in section 
                255(c)(2).
            ``(2) Exclusive purposes.--The sums in the Personal Social 
        Security Account Fund shall not be appropriated for any purpose 
        other than the purposes specified in this section and may not 
        be used for any other purpose.

                  ``personal social security accounts

    ``Sec. 252. (a) Establishment of Personal Social Security Plus 
Accounts.--As soon as practicable after the submission by an eligible 
individual of the request referred to in subsection (b)(3), the 
Commissioner of Social Security shall establish in the Personal Social 
Security Account Fund a personal social security account for such 
eligible individual. Each account shall be identified to its account 
holder by means of the account holder's social security account number.
    ``(b) Eligible Individual.--For purposes of this part, the term 
`eligible individual' means an individual who--
            ``(1) was born after December 31, 1945,
            ``(2) has been credited for any calendar year with 4 
        quarters of coverage, and
            ``(3) has submitted to the Commissioner of Social Security 
        a written request for the establishment of a personal social 
        security account for such individual.
    ``(c) Form of Written Request.--The request described in subsection 
(b)(3) shall be made in such form and manner as the Commissioner of 
Social Security may prescribe by regulation in order to ensure ease of 
administration.
    ``(d) Account Balance.--The balance in an individual's personal 
social security account at any time is the excess of--
            ``(1) the sum of--
                    ``(A) all deposits made to the Personal Social 
                Security Account Fund and credited to the account under 
                subsection (e), and
                    ``(B) the total amount of allocations made to and 
                reductions made in the account pursuant to subsection 
                (f),
        over
            ``(2) the amounts paid out of the account with respect to 
        such individual under this part.
    ``(e) Amounts Transferred From the Federal Old-Age and Survivors 
Insurance Trust Fund.--
            ``(1) In general.--Not later than 9 months after each 
        calendar year after 2000, the Secretary of the Treasury shall 
        transfer from the Federal Old-Age and Survivors Insurance Trust 
        Fund to the Personal Social Security Account Fund, for 
        crediting by the Commissioner of Social Security to each 
        personal social security account established in the Personal 
        Social Security Account Fund for such individual as of the end 
        of such calendar year, an amount equal to the product derived 
        by multiplying--
                    ``(A) such individual's wages paid, and self-
                employment income derived, in such calendar year, by
                    ``(B) such individual's transfer percentage for 
                such calendar year.
        Proper adjustments shall be made in amounts transferred for 
        subsequent calendar years to the extent that amounts 
        transferred for prior calendar years were greater or less than 
        the proper amounts.
            ``(2) Transfer percentage.--For purposes of paragraph 
        (1)(B), the term `transfer percentage' of an individual for a 
        calendar year means the excess (not less than zero) of--
                    ``(A) 3.5 percent, over
                    ``(B) the product derived by multiplying 2.5 
                percent by a fraction--
                            ``(i) the numerator of which is the amount 
                        of such individual's wages paid, and self-
                        employment income derived, in such calendar 
                        year (as certified to the Secretary of the 
                        Treasury by the Commissioner of Social 
                        Security), and
                            ``(ii) the denominator of which is the 
                        contribution and benefit base (determined under 
                        section 230) for such calendar year.
    ``(f) Allocation of Earnings and Losses.--Pursuant to regulations 
which shall be prescribed by the Commissioner, the Commissioner shall 
allocate to each personal social security account an amount equal to 
the net earnings and net losses from each investment of sums in the 
Social Security Account Fund which are attributable, on a pro rata 
basis, to sums credited to such account, reduced by an appropriate 
share of the administrative expenses paid out of the net earnings, as 
determined by the Commissioner.

    ``rules governing personal social security accounts relating to 
            investment, accounting, reporting, and taxation

    ``Sec. 253. (a) In General.--Under regulations which shall be 
prescribed by the Commissioner of Social Security, and subject to the 
provisions of this part, the provisions of--
            ``(1) section 8438 of title 5, United States Code (relating 
        to investment of the Thrift Savings Fund),
            ``(2) section 8439(b) of such title (relating to engagement 
        of independent qualified public accountant),
            ``(3) section 8439(c) of such title (relating to periodic 
        statements and summary descriptions of investment options),
            ``(4) section 8439(d) of such title (relating to assumption 
        of risk), and
            ``(5) section 8440 of such title (relating to tax treatment 
        of the Thrift Savings Fund), other than subsection (c) thereof,
shall apply with respect to the Personal Social Security Fund and 
accounts maintained in such Fund in the same manner and to the same 
extent as such provisions relate to the Thrift Savings Fund and 
personal social security accounts maintained in such Fund.
    ``(b) Related Rules.--For purposes of subsection (a)--
            ``(1) the Board of Trustees shall exercise with respect to 
        the Personal Social Security Fund the same powers, duties, and 
        responsibilities as are required to be exercised by the Federal 
        Retirement Thrift Investment Board under the provisions 
        referred to in subsection (a) with respect to the Thrift 
        Savings Fund,
            ``(2) the Commissioner of Social Security shall exercise 
        with respect to the Personal Social Security Fund the same 
        powers, duties, and responsibilities as are required to be 
        exercised by the Executive Director under the provisions 
        referred to in subsection (a) with respect to the Thrift 
        Savings Fund, and
            ``(3) references in such sections 8438 and 8439 to an 
        employee, Member, former employee, or former Member shall be 
deemed references to an account holder of a social security account in 
the Personal Social Security Fund.

         ``distributions from personal social security accounts

    ``Sec. 254. (a) In General.--Except as provided in subsections (b) 
and (c), the balance in a personal social security account--
            ``(1) shall be distributed to the account holder commencing 
        with the date of the commencement of such account holder's 
        entitlement to old-age insurance benefits under section 202(a), 
        and
            ``(2) shall be paid, as elected by the account holder (in 
        such form and manner as shall be prescribed in regulations of 
        the Commissioner of Social Security) in the form of--
                    ``(A) equal annual installments over the life 
                expectancy of the account holder (determined as of the 
                date of the distribution under reasonable actuarial 
                assumptions), or
                    ``(B) otherwise in the form of an immediate annuity 
                (as shall be prescribed in regulations of the 
                Commissioner of Social Security).
    ``(b) Disability Beneficiaries.--Upon application made to the 
Commissioner under this subsection (in such form and manner as shall be 
prescribed by the Commissioner) by an individual who is entitled to 
disability insurance benefits under section 223, the balance in such 
individual's personal social security account shall be paid to such 
individual in the form of equal monthly installments over the life 
expectancy of the individual (determined as of the date of the 
commencement of such payments under reasonable actuarial assumptions), 
except that such payments shall be payable under this subsection only 
for months for which such individual is entitled to such benefits.
    ``(c) Lump Sum Distributions of Minimal Amounts.--
            ``(1) In general.--Notwithstanding subsections (a) and (b), 
        if distributions from an individual's personal social security 
        account would otherwise commence under subsection (a) or (b), 
        and the balance in the account is $3,500 or less, the 
        Commissioner of Social Security shall pay the balance to the 
        account holder in a single payment.
            ``(2) Cost-of-living adjustments.--Under regulations of the 
        Commissioner of Social Security, effective January 1 of each 
        calendar year after 2000, the dollar amount referred to in 
        paragraph (1) shall be adjusted annually by the same percentage 
        change as the percentage change then taking effect under 
        section 230.

                      ``fiduciary responsibilities

    ``Sec 255. (a) In General.--Under regulations of the Secretary of 
Labor, the provisions of sections 8477 and 8478 of title 5, United 
States Code, shall apply in connection with the Personal Social 
Security Fund and the personal social security accounts maintained in 
such Fund in the same manner and to the same extent as such provisions 
apply in connection with the Thrift Savings Fund and accounts 
maintained in the Thrift Savings Fund.
    ``(b) Investigative Authority.--Any authority available to the 
Secretary of Labor under section 504 of the Employee Retirement Income 
Security Act of 1974 is hereby made available to the Secretary of 
Labor, and any officer designated by the Secretary of Labor, to 
determine whether any person has violated, or is about to violate, any 
provision applicable under subsection (a).
    ``(c) Exculpatory Provisions; Insurance.--
            ``(1) In general.--Any provision in an agreement or 
        instrument which purports to relieve a fiduciary from 
        responsibility or liability for any responsibility, obligation, 
        or duty under this part shall be void.
            ``(2) Insurance.--Amounts in the Personal Social Security 
        Fund available for administrative expenses shall be available 
        and may be used at the discretion of the Commissioner of Social 
        Security to purchase insurance to cover potential liability of 
        persons who serve in a fiduciary capacity with respect to the 
        Fund and personal social security accounts maintained therein, 
        without regard to whether a policy of insurance permits 
        recourse by the insurer against the fiduciary in the case of a 
        breach of a fiduciary obligation.

    ``assignment, alienation, and treatment of deceased individuals

    ``Sec. 256. (a) Assignment and Alienation.--Under regulations which 
shall be prescribed by the Commissioner of Social Security, rules 
relating to assignment and alienation applicable under chapter 84 of 
title 5, United States Code, with respect to amounts held in accounts 
in the Thrift Savings Fund shall apply with respect to amounts held in 
personal social security accounts in the Personal Social Security Fund.
    ``(b) Treatment of Accounts of Deceased Individuals.--In the case 
of a deceased individual who is the account holder with respect to a 
personal social security account and who dies before distributions from 
the account have commenced under section 254, upon receipt of 
notification of such individual's death, the Commissioner of Social 
Security shall close the account and shall transfer the balance in such 
account to the personal social security account of such account 
holder's surviving spouse or, if there is no such account of a 
surviving spouse, to the duly appointed legal representative of the 
estate of the deceased account holder, or if there is no such 
representative, to the person or persons determined to be entitled 
thereto under the laws of the domicile of the deceased account 
holder.''.

   TITLE II--MAINTAINING THE SOLVENCY OF THE OLD-AGE, SURVIVORS, AND 
                      DISABILITY INSURANCE PROGRAM

SEC. 201. MODIFICATION OF INDEXATION OF INITIAL BENEFITS.

    Section 215(a)(1)(B) of the Social Security Act (42 U.S.C. 
415(a)(1)(B)) is amended--
            (1) by redesignating clause (iii) as clause (vi);
            (2) in clause (ii), by striking ``For individuals'' and 
        inserting ``Subject to clause (iii), for individuals'';
            (3) by inserting after clause (ii) the following new 
        clauses:
    ``(iii) For individuals who were born after December 31, 1945, and 
who either initially meet all requirements for entitlement to old-age 
insurance benefits or disability insurance benefits (other than 
applying therefor), or die (before meeting such requirements for such 
benefits), in any calendar year after 2002, each of the amounts so 
established under the preceding provisions of this subparagraph shall 
be equal to the product derived by multiplying such amount (as 
determined before the application of this clause) by the quotient 
derived by dividing--
            ``(I) the applicable change in the CPI for the first of the 
        2 preceding calendar years, by
            ``(II) applicable change in the national average wage index 
        for the first of the 2 preceding calendar years.
    ``(iv) For purposes of clause (iii)(I), the term `applicable change 
in the CPI' for a calendar year means the excess of--
            ``(I) the arithmetical mean of the Consumer Price Index for 
        Urban Wage Earners and Clerical Workers (issued by the Bureau 
        of Labor Statistics) for the 12 months in such calendar year, 
        over
            ``(II) the arithmetical mean of such Consumer Price Index 
        for the 12 months in calendar year 2000.
    ``(v) For purposes of clause (iii)(II), the term `applicable change 
in the national average wage index' for a calendar year means the 
excess of--
            ``(I) the national average wage index (as defined in 
        section 209(k)(1)) for such calendar year, over
            ``(II) the national average wage index (as so defined) for 
        calendar year 2000.''; and
            (4) in clause (vi) (as redesignated), by striking ``under 
        clause (ii)'' and inserting ``under the preceding provisions of 
        this subparagraph''.

SEC. 202. BENEFIT REDUCTION BY REASON OF TRANSFER TO PERSONAL SOCIAL 
              SECURITY ACCOUNT.

    Subparagraph (A) of section 215(a)(1) of the Social Security Act 
(42 U.S.C. 415(a)(1)(A)) is amended, in the matter following clause 
(iii), by striking ``rounded'' and inserting the following:
``reduced by a percentage equal to the product derived by multiplying 
\1/36\ percent by the number of months beginning with or after the 
first month in which occurs a transfer to the individual's personal 
social security account pursuant to section 252(e)(1) and ending before 
the first month for which such individual is entitled to old-age or 
disability insurance benefits (or in which such individual dies before 
becoming so entitled). The amount determined under this subparagraph 
shall be rounded''.

SEC. 203. BORROWING AUTHORITY FOR THE SOCIAL SECURITY TRUST FUNDS 
              TAKING INTO ACCOUNT PRESENT VALUE OF FUTURE BENEFIT 
              REDUCTIONS.

    Section 201(l) of the Social Security Act (42 U.S.C. 401(l)) is 
amended--
            (1) in paragraph (1), by striking ``January 1988'' and 
        inserting ``January 2050'', and by striking ``the other such 
        Trust Fund, or, subject to paragraph (5), from the Federal 
        Hospital Insurance Trust Fund established under section 1817,'' 
        and inserting ``the general fund of the Treasury, subject to 
        paragraph (5),'';
            (2) in paragraph (2), by striking ``the lending Trust 
        Fund'' and inserting ``the general fund'', and by striking ``a 
        rate'' and all that follows and inserting ``the rate equal to 
        the average market yield (computed by the Managing Trustee on 
        the basis of market quotations as of the end of the calendar 
        month next preceding the date of the loan) on all marketable 
        interest-bearing obligations of the United States then forming 
        a part of the public debt which are not due or callable until 
        after the expiration of four years from the end of such 
        calendar month; except that where such average market yield is 
        not a multiple of one-eighth of 1 per centum, the rate of 
        interest of such loan shall be the multiple of one-eighth of 1 
        per centum nearest such market yield.'';
            (3) in paragraph (3)(B)(i), in the matter preceding 
        subclause (I), by striking ``Federal Hospital Insurance Trust 
        Fund'' each place it appears and inserting ``general fund'', 
        and by striking ``15 percent'' and inserting ``100 percent'';
            (4) in paragraph (3)(B)(i)(I), by striking ``together 
        with'' and all that follows through ``year,'', and by striking 
        ``15 percent'' and inserting ``100 percent'';
            (5) in paragraph (3)(B)(iii)(II), by striking ``other than 
        payments of interest on, and repayments of loans from the 
        Federal Hospital Insurance Trust Fund under paragraph (1),'';
            (6) in paragraph (3)(C)(i), by striking ``(i)'', by 
        striking ``(whether made before or after January 1, 1983)'', 
        and by striking ``and in any event no later than December 31, 
        1989'';
            (7) by striking paragraph (3)(C)(ii); and
            (8) by amending paragraph (5) to read as follows:
    ``(5) The amounts borrowed from the general fund of the Treasury 
under paragraph (1) shall not exceed the discounted present value of 
the future reductions in benefits payable from such trust funds by 
reason of the amendments made by section 202 of the Personal Social 
Security Account Act of 2000.''.
                                 <all>