[Congressional Bills 107th Congress]
[From the U.S. Government Publishing Office]
[H.R. 2771 Introduced in House (IH)]
107th CONGRESS
1st Session
H. R. 2771
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
August 2, 2001
Mr. Kolbe (for himself, Mr. Stenholm, Mr. Smith of Michigan, Mr. Dooley
of California, and Mr. Toomey) 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 Security Act''.
(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. Reduction in the amount of certain transfers to Medicare Trust
Fund.
Sec. 5. Increase in number of years taken into account in determining
average indexed monthly earnings.
Sec. 6. Actuarial adjustment for retirement.
Sec. 7. Improvements in process for cost-of-living adjustments.
Sec. 8. Adjustment to benefit formula factors.
Sec. 9. Adjustments to bend points in determining primary insurance
amounts.
Sec. 10. Modification to PIA formula to reflect changes in life
expectancy.
Sec. 11. Treatment of disabled beneficiaries.
Sec. 12. Maintenance of benefit and contribution base.
Sec. 13. Phased-in increase in Social Security retirement ages.
Sec. 14. Mechanism for remedying unforeseen deterioration in Social
Security solvency.
SEC. 2. INDIVIDUAL SECURITY ACCOUNTS.
(a) Establishment and Maintenance of Individual Security
Accounts.--
(1) In general.--Title II of the Social Security Act (42
U.S.C. 401 et seq.) is amended--
(A) by inserting before section 201 the following:
``Part A--Insurance Benefits'';
and
(B) by adding at the end the following:
``Part B--Individual Security System
``Subpart 1--Individual Security Accounts
``federally-administered individual security account
``Sec. 251. (a) Establishment.--
``(1) In general.--Within 30 days after receiving the first
contribution under subsection (b) with respect to an eligible
individual, the Commissioner of Social Security shall establish
an individual security account for such individual in the
Individual Security Fund. Each account shall be identified to
its account holder by means of the account holder's Social
Security account number.
``(2) Eligible individual.--For purposes of this part, the
term `eligible individual' means any individual born after
December 31, 1946.
``(b) Contributions.--
``(1) In general.--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
the individual security account of an eligible individual, an
amount equal to the sum of any amount received by such
Secretary on behalf of such individual under section 3101(a)(2)
or 1401(a)(2) of the Internal Revenue Code of 1986.
``(2) Other contributions.--For provisions relating to
additional contributions credited to individual security
accounts, see sections 532(c)(2) and 6402(l) of the Internal
Revenue Code of 1986.
``(c) Crediting Requirements.--Except as otherwise provided in
section 252, contributions under subsection (b) on behalf of an
eligible individual shall be credited--
``(1) to the individual security account established for
such individual under subsection (a); and
``(2) in accordance with the allocation in effect with
respect to such individual under subsection (d).
``(d) Allocation and Other Designations.--
``(1) In general.--The Commissioner of Social Security
shall prescribe regulations in accordance with which any
eligible individual who is employed or self-employed may
designate--
``(A) in the event that 2 or more investment
options are available in the Individual Security Fund--
``(i) the option or options to which such
individual wishes to have such individual's
contributions under subsection (b) credited;
and
``(ii) if such individual designates more
than 1 option under clause (i), how such
individual wishes for those contributions to be
allocated; and
``(B) the amount of wages or self-employment income
such individual wishes to designate for purposes of
section 3101(a)(2)(C) or 1401(a)(2)(C) of the Internal
Revenue Code of 1986 (as applicable), if any.
``(2) Default allocation.--In the absence of a required
designation under paragraph (1)(A), contributions on behalf of
the individual involved shall be allocated in such manner as
the Commissioner of Social Security shall prescribe, taking
into account the competing objectives of maximizing returns on
investments and minimizing the risk involved with such
investments.
``(3) Form of designation.--Any designation under 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 to avoid creating an undue
burden on employers.
``(4) Special rule for 2003.--Not later than January 1,
2003, any eligible individual who is employed or self-employed
as of such date shall execute all designations required under
paragraph (1).
``(e) Periodic Statements to Account Holder.--
``(1) In general.--The Individual Security Fund Board shall
prescribe regulations under which each individual for whom an
individual security account is maintained under this section
shall be furnished with--
``(A) a periodic statement relating to the
individual's account, including, for any reporting
period as of the end of which the individual's account
balance is at least equal to the minimum balance amount
(within the meaning of section 252), clear and
conspicuous notice to that effect;
``(B) a summary description of any investment
options or other choices which may be available to such
individual under this section or under section 252 (as
applicable); and
``(C) any forms and information necessary to make a
designation under subsection (d) or section 252 (as
applicable).
``(2) Informed decisionmaking.--All information, materials,
and other matter furnished under this subsection shall be
furnished to the account holder at such times and in such
manner as the Board considers appropriate in order to permit
informed decisionmaking.
``privately-administered individual security account
``Sec. 252. (a) Definitions.--For purposes of this part--
``(1) Minimum deposit amount.--
``(A) In general.--The term `minimum deposit
amount' means an amount equal to $7,500, as adjusted
under subparagraph (B).
``(B) Adjustment.--The Secretary of the Treasury
shall adjust annually (effective for periods beginning
after December 2003) the dollar amount set forth in
subparagraph (A) under procedures providing for
adjustments in the same manner and to the same extent
as adjustments are provided for under the procedures
used to adjust benefit amounts under section
215(i)(2)(A), except that any amount so adjusted that
is not a multiple of $10 shall be rounded to the
nearest multiple of $10.
``(2) Federally-administered individual security account.--
The term `Federally-administered individual security account'
means an individual security account maintained, in accordance
with applicable provisions of this part, in the Individual
Security Fund.
``(3) Privately-administered individual security account.--
The term `privately-administered individual security account'
means an individual security account maintained, in accordance
with applicable provisions of this part, by a certified
institution.
``(4) Certified institution.--The term `certified
institution' refers to an investment firm, credit union,
insurance company, or other certified institution under subpart
3.
``(b) Option To Designate a Privately-Administered Individual
Security Account.--
``(1) In general.--Under regulations prescribed by the
Individual Security Fund Board, whenever the balance in an
individual's Federally-administered individual security account
is at least equal to the minimum deposit amount, such
individual shall be eligible to designate a privately-
administered individual security account (established and
maintained on such individual's behalf) to serve as such
individual's individual security account under this part, in
lieu of such individual's Federally-administered individual
security account.
``(2) Effect of designation.--If an individual makes a
designation under paragraph (1)--
``(A) the entire balance in the individual's
Federally-administered individual security account
shall be promptly transferred to the privately-
administered individual security account specified by
such individual in such designation; and
``(B) that privately-administered individual
security account shall, for all purposes, be treated as
the electing individual's individual security account,
subject to paragraph (4).
``(3) Information required to be included.--A designation
under this subsection shall not be effective unless it is made
in such time, form, and manner as the Individual Security Fund
Board prescribes.
``(4) Subsequent designations.--The Securities and Exchange
Commission shall provide by regulation opportunity for
subsequent designation, from time to time, of another
individual security account in lieu of the account previously
designated under this section, subject to the following:
``(A) Options available.--The account designated
under this paragraph may be either within--
``(i) another certified institution,
subject to subparagraph (B); or
``(ii) the Individual Security Fund.
``(B) Minimum balance.--In order to make a
designation referred to in subparagraph (A)(i), the
balance in the individual's individual security account
must be at least equal to the minimum deposit amount.
No minimum balance requirement under this subparagraph
shall apply in the case of a designation referred to in
subparagraph (A)(ii).
``(C) Only 1 account permitted at any time.--An
individual may not, at any time, concurrently
maintain--
``(i) a privately-administered individual
security account with each of 2 or more
certified institutions; or
``(ii) a privately-administered and a
Federally-administered individual security
account.
``(D) Effect.--A designation under this paragraph
has (with respect to the individual's respective
accounts, before and after such designation) the same
effect as results following a designation under
paragraph (2) (with respect to the Federally-
administered and privately-administered accounts involved).
``distributions from individual security accounts
``Sec. 253. (a) Date of Earliest Distribution.--Except as provided
in subsection (c), distributions may not be made from the Federally-
administered or privately-administered individual security account of
an eligible individual (as the case may be) before the earlier of--
``(1) the date the eligible individual attains normal
retirement age, as determined under section 216 (or early
retirement age, as so determined, if elected by such
individual), or
``(2) the date on which funds in the eligible individual's
account are sufficient to provide a monthly payment over the
life expectancy of the eligible individual (determined under
reasonable actuarial assumptions) which, when added to the
eligible individual's monthly benefit under part A (if any), is
at least equal to an amount equal to \1/12\ of 185 percent 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 as of the date distributions begin to
be made in accordance with subsection (a), the balance in the
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 or the Securities and Exchange
Commission, as applicable), by means of the purchase of
annuities or equal monthly payments over the life expectancy of
the eligible individual (determined under reasonable actuarial
assumptions) in accordance with requirements (which shall be
provided in regulations of the Board or Commission, as
applicable) similar to the requirements applicable to payments
of benefits under subchapter III of chapter 84 of title 5,
United States Code.
``(2) Payment of excess funds.--To the extent funds remain
in an eligible individual's Federally-administered or
privately-administered individual security account (as the case
may be) after the application of paragraph (1) and to the
extent not inconsistent with the provisions of subchapter III
of chapter 84 of title 5, United States Code, such funds shall
be payable to the eligible individual in such manner and in
such amounts as determined by the eligible individual.
``(c) Distribution in the Event of Death Before the Date of Initial
Distribution.--If the eligible individual dies before the date
determined under subsection (a), the balance in such individual's
individual security account shall be distributed to the individual's
heirs under rules established by the Individual Security Fund Board or
the Securities and Exchange Commission, as applicable.
``Subpart 2--Individual Security Fund; Individual Security Fund Board
``individual security fund
``Sec. 261. There shall be 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 (excluding
paragraphs (4) and (5) of subsection (c) thereof), 8438, and 8439 of
title 5, United States Code.
``individual security fund board
``Sec. 262. (a) Establishment.--There shall be established and
maintained 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.
``(b) Specific Investment and Reporting Duties.--The Individual
Security Fund Board shall manage and report on the activities of the
Individual Security Fund and on Federally-administered individual
security accounts 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.
``(c) Budgetary Treatment of Individual Security Fund and Accounts
``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.
``(d) Commissioner of Social Security as Executive Director.--The
Commissioner of Social Security shall have, with respect to the
Individual Security Fund and accounts within such Fund, the same duties
and responsibilities as does the Executive Director (appointed under
section 8474(a) of title 5, United States Code) with respect to the
Thrift Savings Fund and accounts within such Fund.
``Subpart 3--Certified Institutions
``certification of institutions by securities and exchange commission
``Sec 271. (a) In General.--For purposes of meeting the
requirements of section 532 of the Internal Revenue Code of 1986
(relating to trusteeship of individual security accounts), any
institution that is engaged, in a fiduciary capacity, in the business
of maintaining accounts for individuals for purposes of investment may
apply to the Securities and Exchange Commission (in such form and
manner as the Commission shall by regulation require) for certification
under this subpart.
``(b) Review Requirements.--In reviewing any application for
certification under this subpart and determining whether to approve the
application for certification, the Commission shall consider the
following factors:
``(1) The financial history and condition of the
institution.
``(2) The adequacy of the institution's capital structure.
``(3) The future earnings prospects of the institution.
``(4) The general character and fitness of the management
of the institution.
``(5) The convenience and needs of individuals who are
account holders with respect to personal retirement accounts
for which the institution is to serve as trustee.
``(6) Whether the institution's corporate powers are
consistent with the purposes of this part.
``(7) The institution's disclosure policies, including with
respect to its administrative fees, investment policies, and
investment activities.
``(8) The appropriateness of--
``(A) the fund or funds that such institution
proposes to offer for purposes of this part, and
``(B) the criteria by which such institution will
make future decisions regarding the selection of new
funds or the making of any other modifications in the
investment options offered by such institution for
purposes of this part,
as determined based on guidelines established by the Commission
for purposes of this paragraph.
``(c) Notice of Denial of Application for Certification.--If the
Commission votes to deny any application for certification by any
institution, the Commission shall promptly notify the institution of
the denial of such application, giving specific reasons in writing for
the Commission's determination with reference to the factors described
in subsection (b).
``(d) Nondelegation Requirement.--The authority of the Commission
to make any determination to deny any application under this section
may not be delegated by the Commission.
``revocation of certification
``Sec. 272. (a) In General.--The Securities and Exchange Commission
shall prescribe regulations in accordance with which the certified
status of an institution may be voluntarily or involuntarily revoked.
``(b) Judicial Review.--Any party to any involuntary revocation
proceeding under this section to which an institution is a party may
obtain a review of any order served pursuant to this section by the
filing in the court of appeals of the United States for the circuit in
which the home office of the institution is located, or in the United
States Court of Appeals for the District of Columbia Circuit, within 30
days after the date of service of such order, a written petition
praying that the order of the Commission be modified, terminated, or
set aside. A copy of such petition shall be forthwith transmitted by
the clerk of the court to the Commission, and thereupon the Commission
shall file in the court the record in the proceeding, as provided in
section 2112 of title 28, United States Code. Upon the filing of such
petition, such court shall have jurisdiction, which upon the filing of
the record shall be exclusive, to affirm, modify, terminate, or set
aside, in whole or in part, the order of the Commission. Review of such
proceedings shall be had as provided in chapter 7 of title 5, United
States Code. The judgment and decree of the court shall be final,
except that the judgment and decree shall be subject to review by the
Supreme Court upon certiorari, as provided in section 1254 of title 28,
United States Code. The commencement of proceedings for judicial review
under this subsection shall not, unless specifically ordered by the
court, operate as a stay of any order issued by the Commission.
``fiduciary duties
``Sec. 273. (a) In General.--In the case of a privately-
administered individual security account which does not form part of an
individual account plan covered under part 4 of subtitle B of title I
of the Employee Retirement Income Security Act of 1974, rules similar
to the rules of such part 4 applicable to individual account plans
covered under such part 4 shall apply with respect to a privately-
administered individual security account and the terms of any
arrangement under which such account is maintained.
``(b) General Requirements.--In applying under subsection (a) the
rules of part 4 of subtitle B of title I of the Employee Retirement
Income Security Act of 1974 in the case of a privately-administered
individual security account, references in such part to the Secretary
of Labor shall be deemed to be references to the Securities and
Exchange Commission, references in such part to a participants or
beneficiary in connection with an individual account plan covered under
such part shall be deemed to be references to the account holder with
respect to the privately-administered individual security account, and
references in such part to the plan administrator or plan sponsor in
connection with an individual account plan covered under such part
shall be deemed to be references to the trustee of the privately-
administered individual security account.
``(c) Limitation on Liability.--Any account holder who issues an
instruction to the trustee of the account directing an investment of
funds held in the account shall sign an acknowledgement prescribed by
the Securities and Exchange Commission which states that the account
holder understands that an investment of any amount in the account is
made at the account holder's risk, that the account holder is not
protected by the Government or by the trustee against any loss on such
investment, and that a return on such investment is not guaranteed by
the Government or by the trustee. Notwithstanding the preceding
provisions of this section and any other provision of Federal or State
law, the trustee of a privately-administered individual security
account shall not be liable for losses suffered in connection with any
investment of assets held in the account unless it is shown by clear
and convincing evidence that the trustee did not act in the manner in
which a reasonable trustee would act under the circumstances then
prevailing in evaluating the risk and reward properties of the
investment option involved.
``Subpart 4--Enforcement
``cause of action
``Sec. 281. The account holder with respect to a privately-
administered individual security account who is adversely affected by
an act or practice of any party (other than the Securities and Exchange
Commission, the Social Security Administration, the Department of the
Treasury, or any officer or employee of any of the foregoing) in
violation of any provision of this part, may bring an action--
``(1) to enjoin such act or practice, or
``(2) to obtain other appropriate equitable relief (A) to
redress such violation or (B) to enforce such provision.
``jurisdiction and venue
``Sec. 282. Civil actions under this subpart may be brought in the
district courts of the United States in the district where the
privately-administered individual security account is administered,
where the violation took place, or where a defendant resides or may be
found, and process may be served in any district where a defendant
resides or may be found. The district courts of the United State shall
have jurisdiction, without regard to the amount in controversy or the
citizenship of the parties, to grant the relief provided for in section
281 in any action.
``right of securities and exchange commission to intervene
``Sec. 283. A copy of the complaint or notice of appeal in any
action under this subpart shall be served upon the Securities and
Exchange Commission by certified mail. The Commission shall each have
the right to intervene in any action.
``awards of costs and expenses
``Sec. 284. In any action brought under this subpart, the court in
its discretion may award all or a portion of the costs and expenses
incurred in connection with such action, including reasonable
attorney's fees, to any party who prevails or substantially prevails in
such action.
``limitation on actions
``Sec. 285. (a) In General.--Except as provided in subsection (c),
an action under this subpart may not be brought after the later of--
``(1) 6 years after the date on which the cause of action
arose, or
``(2) 3 years after the applicable date specified in
subsection (b).
``(b) Applicable Date.--The applicable date specified in this
subsection is the earliest date on which the plaintiff acquired or
should have acquired actual knowledge of the existence of such cause of
action.
``(c) Cases of Fraud or Concealment.--In the case of fraud or
concealment, the period described in subsection (a)(2) shall be
extended to 6 years after the applicable date specified in subsection
(b).
``penalty for failure to timely provide required information
``Sec. 286. The Securities and Exchange Commission may assess a
penalty, payable to it, against any person who fails to provide any
notice or other material information required under this part or any
regulations prescribed under this part within the applicable time limit
specified therein. Such penalty shall not exceed $1,000 for each day
for which such failure continues.
``actions by securities and exchange commission
``Sec. 287. If any person is assessed under this subpart and fails
to pay the assessment when due, or any person otherwise fails to meet
any requirement of this part, the Securities and Exchange Commission
may bring a civil action in any district court of the United States
within the jurisdiction of which such person's assets are located or in
which such person resides or is found for the recovery of the amount of
the assessment or for appropriate equitable relief to redress the
violation or enforce the provisions of this part, and process may be
served in any other district. The district courts of the United States
shall have jurisdiction over actions brought under this section by the
Commission without regard to the amount in controversy.
``criminal penalty for fraud or intentional misrepresentation in
connection with investment options
``Sec. 288. Any person who makes, or causes to be made, a statement
or representation of a material fact for use in selecting an investment
option that the person knows or should know is false or misleading or
knows or should know omits a material fact or makes such a statement
with knowing disregard for the truth shall upon conviction be fined not
more than $500,000 or imprisoned for not more than 5 years, or both.''.
(2) Implementation.--
(A) Provisions relating to federally-administered
individual security accounts.--The Individual Security
Fund Board, in consultation with the Commissioner of
Social Security and the Secretary of the Treasury,
shall establish an expedited procedure to ensure timely
implementation of the amendments made by this
subsection, to the extent that they relate to
Federally-administered individual security accounts.
The Board shall submit to each House of the Congress a
report on the status of such implementation not later
than March 1, 2003. All measures necessary to prepare
for--
(i) the implementation of such amendments,
to the extent necessary to provide for at least
the option described in section 251(d)(2) of
the Social Security Act (as amended by this
section), shall be completed by the Board, the
Commissioner, and the Secretary not later than
January 1, 2003; and
(ii) full implementation of such amendments
(as they relate to Federally-administered
individual security accounts) shall be
completed by the Commission, the Commissioner,
and the Secretary not later than January 1,
2005.
(B) Provisions relating to privately-administered
individual security accounts.--The Securities and
Exchange Commission, in consultation with the
Commissioner of Social Security and the Secretary of
the Treasury, shall establish an expedited procedure to
ensure timely implementation of the amendments made by
this section, to the extent that they relate to
privately-administered individual security accounts.
The Commission shall submit to each House of the
Congress a report on the status of such implementation
not later than March 1, 2003. All measures necessary to
prepare for full implementation of such amendments (as
they relate to privately-administered individual
security accounts) shall be completed by the
Commission, the Commissioner, and the Secretary not
later than January 1, 2005.
(C) Definitions.--For purposes of this paragraph,
the terms ``Individual Security Fund Board'',
``Federally-administered individual security account'',
and ``privately-administered individual security
account'' have the meanings given them under part B of
title II of the Social Security Act (as amended by this
subsection).
(b) Modification of FICA Rates.--
(1) Employees.--Section 3101(a) of the Internal Revenue
Code of 1986 (relating to tax on employees) is amended to read
as follows:
``(a) Old-Age, Survivors, and Disability Insurance.--
``(1) In general.--
``(A) Individuals covered under part a of title ii
of the social security act.--In addition to other
taxes, there is hereby imposed on the income of every
individual who is not a part B eligible individual a
tax equal to 6.2 percent of the wages received by him
with respect to employment.
``(B) Individuals covered under part b of title ii
of the social security act.--
``(i) In general.--In addition to other
taxes, there is hereby imposed on the income of
every part B eligible individual a tax equal to
the applicable percentage of the wages received
by such individual with respect to employment.
``(ii) Applicable percentage.--For purposes
of clause (i), the term `applicable percentage'
means the excess of 6.2 percent, over
``(I) 3 percent, in the case of the
first $10,000 of such wages received in
the calendar year, and
``(II) 2 percent, in the case of
any additional such wages received in
the calendar year.
``(2) Contribution of oasdi tax reduction to individual
security accounts.--In addition to other taxes, there is hereby
imposed on the income of every part B eligible individual for
the calendar year an individual security account contribution
equal to the sum of--
``(A) 3 percent of so much of the wages as does not
exceed the first $10,000 received in such calendar year
by such individual with respect to employment,
``(B) 2 percent of the excess of--
``(i) such wages, over
``(ii) the wages taken into account under
subparagraph (A), plus
``(C) so much of such wages (not to exceed $5,000)
as designated by the individual in the same manner as
described in section 251(c) of the Social Security Act.
``(3) Inflation adjustment based on wage index.--
``(A) In general.--In the case of any calendar year
beginning after 2003, the $10,000 amount in paragraphs
(1) and (2) shall be increased by an amount equal to--
``(i) such dollar amount, multiplied by
``(ii) the percentage increase (if any) for
such year determined under section 215(i) of
the Social Security Act.
``(B) Designated contributions.--In the case of any
calendar year beginning after 2008, the $5,000 amount
in paragraph (2)(C) shall be increased by an amount
equal to--
``(i) such dollar amount, multiplied by
``(ii) the percentage increase (if any) for
such year determined under section 215(i) of
the Social Security Act.
``(C) Rounding.--If any dollar amount after being
increased under subparagraph (A) or (B) is not a
multiple of $10, such dollar amount shall be rounded to
the nearest multiple of $10.
``(4) Definitions.--For purposes of this subsection--
``(A) Wages.--The term `wages' shall have the
meaning given to such term by section 3121(a).
``(B) Employment.--The term `employment' shall have
the meaning given to such term by section 3121(b).''.
(2) Self-employed.--Section 1401(a) of the Internal Revenue
Code of 1986 (relating to tax on self-employment income) is
amended to read as follows:
``(a) Old-Age, Survivors, and Disability Insurance.--
``(1) In general.--
``(A) Individuals covered under part a of the
social security act.--In addition to other taxes, there
shall be imposed for each taxable year, on the self-
employment income of every individual who is not a part
B eligible individual for the calendar year ending with
or during such taxable year, a tax equal to 12.40
percent of the amount of the self-employment income for
such taxable year.
``(B) Individuals covered under part b of title ii
of the social security act.--
``(i) In general.--In addition to other
taxes, there is hereby imposed for each taxable
year, on the self-employment income of every
part B eligible individual, a tax equal to the
applicable percentage of the amount of the
self-employment income for such taxable year.
``(ii) Applicable percentage.--For purposes
of clause (i), the term `applicable percentage'
means the excess of 12.4 percent, over
``(I) 3 percent, in the case of the
first $10,000 of self-employment income
received in the calendar year, and
``(II) 2 percent, in the case of
any additional self-employment income
received in the calendar year.
``(2) Contribution of oasdi tax reduction to individual
security accounts.--In addition to other taxes, there is hereby
imposed for each taxable year, on the self-employment income of
every part B eligible individual for the calendar year, an
individual security account contribution equal to the sum of--
``(A) 3 percent of self-employment income as does
not exceed the first $10,000 of such income derived
during the taxable year by such individual,
``(B) 2 percent of self-employment income in the
case of any additional self-employment income derived
by such individual during the taxable year, and
``(C) so much of such self-employment income (not
to exceed $5,000) as designated by the individual in
the same manner as described in section 251(c) of the
Social Security Act.
``(3) Inflation adjustment based on wage index.--
``(A) In general.--In the case of any calendar year
beginning after 2003, the $10,000 amount in paragraphs
(1) and (2) shall be increased by an amount equal to--
``(i) such dollar amount, multiplied by
``(ii) the percentage increase (if any) for
such year determined under section 215(i) of
the Social Security Act.
``(B) Designated contributions.--In the case of any
calendar year beginning after 2008, the $5,000 amount
in paragraph (2)(C) shall be increased by an amount
equal to--
``(i) such dollar amount, multiplied by
``(ii) the percentage increase (if any) for
such year determined under section 215(i) of
the Social Security Act.
``(C) Rounding.--If any dollar amount after being
increased under subparagraph (A) or (B) is not a
multiple of $10, such dollar amount shall be rounded to
the nearest multiple of $10.
(3) Part b eligible individual.--
(A) Taxes on employees.--Section 3121 of such Code
(relating to definitions) is amended by inserting after
subsection (s) the following new subsection:
``(t) Part B Eligible Individual.--For purposes of this chapter,
the term `part B eligible individual' means, for any calendar year, an
individual who is an eligible individual (as defined in section
251(a)(2) of the Social Security Act) for such calendar year.''.
(B) Self-employment tax.--Section 1402 of such Code
(relating to definitions) is amended by adding at the
end the following new subsection:
``(k) Part B Eligible Individual.--The term `part B eligible
individual' means, for any calendar year, an individual who is an
eligible individual (as defined in section 251(a)(2) of the Social
Security Act) for such calendar year.''.
(4) Effective dates.--
(A) Employees.--The amendments made by paragraphs
(1) and (3)(A) apply to remuneration paid after
December 31, 2002.
(B) Self-employed individuals.--The amendments made
by paragraphs (2) and (3)(B) apply to taxable years
beginning after December 31, 2002.
(c) Matching Contributions.--
(1) In general.--Part IV of subchapter A of chapter 1 of
the Internal Revenue Code of 1986 (relating to credits against
tax) is amended by adding at the end the following new subpart:
``Subpart H--Individual Security Account Credits
``Sec. 54. Individual security account credit.''.
``SEC. 54. INDIVIDUAL SECURITY ACCOUNT CREDIT.
``(a) Allowance of Credit.--Each part B eligible individual is
entitled to a credit for the taxable year in an amount equal to the sum
of--
``(1) $150,
``(2) 50 percent of the designated wages of such individual
for the taxable year,
``(3) 50 percent of the designated self-employment income
of such individual for the taxable year, and
``(4) 50 percent of the designated earned income credit.
``(b) Limitations.--
``(1) Amount.--The amount determined under paragraphs (2)
and (3) of subsection (a) with respect to such individual for
any taxable year may not exceed the excess (if any) of--
``(A) $600, over
``(B) the sum of the amounts received by the
Secretary on behalf of such individual under
subparagraphs (A) and (B) of section 3101(a)(2) and
subparagraphs (A) and (B) of 1401(a)(2) for the taxable
year.
``(2) Failure to make voluntary contributions.--In the case
of a part B eligible individual with respect to whom the amount
of wages designated under section 3101(a)(2)(C) plus the amount
self-employment income designated under section 1401(a)(2)(C)
for the taxable year is zero, the credit to which such
individual is entitled under this section shall be equal to
zero.
``(c) Definitions.--For purposes of this section--
``(1) Part b eligible individual.--The term `part B
eligible individual' means, for any calendar year, an
individual who is an eligible individual (as defined in section
251(a)(2) of the Social Security Act) for such calendar year.
``(2) Designated wages.--The term `designated wages' means
with respect to any taxable year the amount designated under
section 3101(a)(2)(C).
``(3) Designated self-employment income.--The term
`designated self-employment income' means with respect to any
taxable year the amount designated under section 1401(a)(2)(C)
for such taxable year.
``(4) Designated earned income credit.--The term
`designated earned income credit' means the amount of the
credit allowed under section 32 for the taxable year that is
designated by the part B eligible individual in the same manner
as described in section 251(c) of the Social Security Act.
``(d) Credit Used Only for Individual Security Account.--For
purposes of this title, the credit allowed under this section with
respect to any part B eligible individual--
``(1) shall not be treated as a credit allowed under this
part, but
``(2) shall be treated as an overpayment of tax under
section 6401(b)(3) which may, in accordance with section
6402(l), only be transferred to an individual security account
established under part B of title II of the Social Security Act
with respect to such individual.''.
(2) Contribution of eitc amounts to individual security
accounts.--Section 32 of such Code (relating to earned income)
is amended by adding at the end the following new subsection:
``(n) Contribution to Individual Security Account.--
``(1) In general.--An eligible part B individual who is
allowed a credit under this section may designate all or a
portion of such credit as a contribution to the individual
security account established on behalf of such individual.
``(2) Credit used only for individual security account.--
For purposes of this title, the amount designated under
paragraph (1) with respect to any part B eligible individual--
``(A) shall not be treated as a credit allowed
under this section, but
``(B) shall be treated as an overpayment of tax
under section 6401(b)(3) which may, in accordance with
section 6402(l), only be transferred to an individual
security account established under part B of title II
of the Social Security Act with respect to such
individual.''.
(3) Contribution of credited amounts to individual security
account.--
(A) Credited amounts treated as overpayment of
tax.--Subsection (b) of section 6401 (relating to
excessive credits) is amended by adding at the end the
following new paragraph:
``(3) Special rule for credit under sections 32 and 54.--
Subject to the provisions of section 6402(l), the following sum
shall be considered an overpayment--
``(A) Section 54 credit.--The amount of any credit
allowed under section 54 for any taxable year, plus
``(B) Section 32 designated earned income credit
contribution.--The amount of the earned income credit
designated as a contribution to an individual security
account under section 32(n) for the taxable year.''.
(B) Transfer of credit amount to individual
security account.--Section 6402 of such Code (relating
to authority to make credits or refunds) is amended by
adding at the end the following new subsection:
``(l) Overpayments Attributable to Individual Security Account
Credit.--In the case of any overpayment described in section 6401(b)(3)
with respect to any individual, the Secretary shall transfer for
crediting by the Commissioner of Social Security to the individual
security account of an such individual, an amount equal to the amount
of such overpayment.''.
(4) Notice to eitc recipients of matching contributions to
individual security accounts.--In connection with information
and tax forms relating to the credit allowed under section 32
of the Internal Revenue Code of 1986, the Secretary of the
Treasury shall provide notice of the availability of matching
contributions pursuant to section 54 of such Code (as added by
subsection (a) of this section) to individual security accounts
under part B of title II of the Social Security Act.
(5) Conforming amendments.--
(A) Section 1324(b)(2) of title 31, United States
Code, is amended by inserting before the period at the
end ``, or enacted by the 21st Century Retirement
Act''.
(B) The table of subparts for part IV of subchapter
A of chapter 1 of the Internal Revenue Code of 1986 is
amended by adding at the end the following new item:
``Subpart H. Individual Security Account Credits.''.
(6) Effective date.--The amendments made by this subsection
shall apply to refunds payable after December 31, 2002.
(d) Tax Treatment of Individual Security System.--
(1) In general.--Subchapter F of chapter 1 of the Internal
Revenue Code of 1986 (relating to exempt organizations) is
amended by adding at the end the following new part:
``PART IX--INDIVIDUAL SECURITY SYSTEM
``Sec. 531. Individual security fund.
``Sec. 532. Individual security accounts.
``SEC. 531. INDIVIDUAL SECURITY FUND AND FEDERALLY-ADMINISTERED
INDIVIDUAL SECURITY ACCOUNTS.
``The Individual Security Fund established under section 261 of the
Social Security Act shall be exempt from taxation under this subtitle.
``SEC. 532. INDIVIDUAL SECURITY ACCOUNTS.
``(a) In General.--For purposes of this section, the term
`individual security account' means a Federally-administered individual
security account and a privately-administered security account.
``(b) Individual Security Accounts Defined.--For purposes of
subsection (a)--
``(1) Federally-administered security account.--The term
`Federally-administered individual security account' means the
account established under section 251 of the Social Security
Act.
``(2) Privately-administered security account.--The term
`privately-administered individual security account' means a
trust created or organized in the United States exclusively for
the benefit of an individual or his beneficiaries, but only if
the written governing instrument creating the trust meets the
following requirements:
``(A) Except in the case of rollover contributions
from another individual security account of such
individual--
``(i) no contribution will be accepted
unless it is in cash,
``(ii) contributions will not be accepted
for the taxable year in excess of the sum of--
``(I) the amounts collected with
respect to such beneficiary under
sections 3101(a)(2) and 1401(a)(2), and
``(II) the amounts transferred to
such account under section 6402(l), and
``(iii) any contributions with respect to
an account holder which are not accepted
pursuant to this paragraph are promptly
refunded directly to the account holder.
``(B) The trustee is a institution which is
certified under subpart 3 of subtitle B of title II of
the Social Security Act.
``(C) No part of the trust funds will be invested
in life insurance contracts.
``(D) The interest of an individual in the balance
in his account is nonforfeitable.
``(E) The assets of the trust will not be
commingled with other property except in a common trust
fund or common investment fund.
``(c) Contributions.--
``(1) In general.--No deduction shall be allowed for
contributions credited to an individual security account under
part B of title II of the Social Security Act or amounts
transferred to such account under section 6402(l).
``(2) Rollovers.--
``(A) Rollover from privately-administered
individual security account.--The entire balance of an
individual security account of the account holder may
be rolled over to another individual security account
of the account holder.
``(B) Rollover of inheritance.--Any portion of a
distribution to an heir from a Federally-administered
individual security account made by reason of the death
of the beneficiary of such account may be rolled over
to the individual security account of the heir.
``(d) Tax Treatment of Accounts.--
``(1) Exemption from tax.--An individual security account
is exempt from taxation under this subtitle unless such account
has ceased to be an individual security account by reason of
paragraph (2). Notwithstanding the preceding sentence, any such
account is subject to the taxes imposed by section 511
(relating to imposition of tax on unrelated business income of
charitable, etc. organizations).
``(2) Account terminations.--Rules similar to the rules of
paragraphs (2) and (4) of section 408(e) shall apply to
privately-administered individual security accounts, and any
amount treated as distributed under such rules shall be
includible in gross income and shall not be treated as a social
security benefit for purposes of section 86.
``(3) Rollover contribution.--An amount is described in
this paragraph as a rollover contribution if it meets the
requirements of subparagraphs (A) and (B).
``(A) In general.--The requirements of this
subparagraph are met with respect to an amount paid or
distributed from an individual security account to the
account holder only if the entire amount in such
account is received by the account holder and is paid
into another individual security account for the
benefit of such holder not later than the 60th day
after the day on which the holder receives the payment
or distribution.
``(B) Limitation.--This paragraph shall not apply
to any amount described in subparagraph (A) received by
an individual from a privately-administered individual
security account if, at any time during the 1-year
period ending on the day of such receipt, such
individual received on 3 other occasions any other
amount described in subparagraph (A) from an individual
security account which was not includible in the
individual's gross income because of the application of
this paragraph.
``(e) Distributions.--
``(1) In general.--The portion of any distribution from an
individual security account under section 253 of the Social
Security Act which is attributable to amounts contributed to
such account under section 3101(a)(2) (other than subparagraph
(C) thereof) and section 1401(a)(2) (other than subparagraph
(C) thereof), together with earnings thereon, shall be
includible in gross income as a social security benefit for
purposes of section 86.
``(2) Voluntary contributions.--The portion of any
distribution from an individual security account under section
253 of the Social Security Act which is attributable to amounts
contributed to such account under section 3101(a)(2)(C),
section 1401(a)(2)(C), and section 6402(l), together with
earnings thereon, shall not be includible in gross income.
``(3) Period in which distributions must be made from
account of decedent.--In the case of amounts remaining in an
individual security account from which distributions began
before the death of the beneficiary, rules similar to the rules
of section 401(a)(9)(B) shall apply to distributions of such
remaining amounts.
``(4) Rollovers.--Paragraph (1) shall not apply to amounts
rolled over under subsection (c)(2) in a direct transfer by the
Commissioner of Social Security, under regulations which the
Commissioner shall prescribe.
``(f) Account Beneficiary.--For purposes of this section, the
account beneficiary is the individual for whose benefit the individual
security account is established.''.
(2) Clerical amendment.--The table of parts for subchapter
F of chapter 1 of the Internal Revenue Code of 1986 is amended
by adding after the item relating to part VIII the following
new item:
``Part IX. Individual security system.''.
(3) Effective date.--The amendments made by this subsection
shall apply to taxable years beginning after December 31, 2002.
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 amount, 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, 2009, and
``(ii) who has at least 80 quarters of coverage.
``(B) The term `applicable amount' means, in connection
with an individual, $8,259 adjusted annually--
``(i)(I) with respect to an individual whose
initial month of eligibility occurs in a year prior to
2011, by the CPI increase percentage determined under
section 215(i) for 1996 through the year prior to such
year of eligibility; and
``(II) with respect to an individual whose initial
month of eligibility occurs in a year after 2010, by
the CPI increase percentage determined under such
section for 1996 through 2009, and by the wage increase
percentage determined under such section for 2009
through the second year prior to the year of such
eligibility; and
``(ii) by the CPI increase percentage determined
under such section for all years beginning with the
year of an individual's initial eligibility.
``(C)(i) The term `applicable percentage' means, for
computations and recomputations of a qualified individual's
primary insurance amount under this section whose initial
eligibility occurs 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 the ratio of the number
of such individual's quarters of coverage (if any) in
excess of the minimum number of quarters required under
subparagraph (A)(ii) but not in excess of twice such
minimum, to such minimum.
``(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............. 8 percent
2007................................. 24 percent............. 16 percent
2008................................. 36 percent............. 24 percent
2009................................. 48 percent............. 32 percent
After 2009........................... 60 percent............. 40 percent.''
SEC. 4. REDUCTION IN THE AMOUNT OF CERTAIN TRANSFERS TO MEDICARE TRUST
FUND.
Subparagraph (A) of section 121(e)(1) of the Social Security
Amendments of 1983 (42 U.S.C. 401 note), as amended by section
13215(c)(1) of the Omnibus Budget Reconciliation Act of 1993, is
amended--
(1) in clause (ii), by striking ``the amounts'' and
inserting ``the applicable percentage of the amounts''; and
(2) by adding at the end the following: ``For purposes of
clause (ii), the applicable percentage for a year is equal to
100 percent, reduced (but not below zero) by 10 percentage points for
each year after 2009.''.
SEC. 5. INCREASE IN NUMBER OF YEARS TAKEN INTO ACCOUNT IN DETERMINING
AVERAGE INDEXED MONTHLY EARNINGS.
(a) In General.--Section 215(b) of the Social Security Act (42
U.S.C. 415(b)(1)) is amended--
(1) by striking subparagraph (B) of paragraph (1) and
inserting the following:
``(B) the product derived by multiplying--
``(i) the number of elapsed years, reduced (in any
case to which paragraph (2)(A)(i) applies) to the
extent provided in paragraph (2)(C), by
``(ii) 12.'';
(2) in subparagraph (A) of paragraph (2), by striking all
of such subparagraph as precedes ``Clause (ii),'' and inserting
the following:
``(2)(A) The number of an individual's benefit computation years
equals--
``(i) in the case of an individual who is entitled to old-
age insurance benefits (except as provided in the second
sentence of this subparagraph), or who has died, the number of
his computation base years, and
``(ii) in the case of an individual who is entitled to
disability insurance benefits, the number of elapsed years
reduced by the number of years equal to one-fifth of the number
of elapsed years (disregarding any resulting fractional part of
a year), but not by more than 5 years.''; and
(3) by adding at the end of paragraph (2) the following new
subparagraph:
``(C)(i) For purposes of clause (i) of paragraph (1)(B), the number
of elapsed years shall be reduced pursuant to such clause by the number
of years specified in connection with the calendar year in which such
individual becomes eligible for old-age insurance benefits, or dies
(before becoming eligible for such benefits), as set forth in the
following table:
``If such calendar year is: The applicable number of years is:
2000 or 2001........................................... 5
2002 or 2003........................................... 4
2004 or 2005........................................... 3
2006 or 2007........................................... 2
2008 or 2009........................................... 1
After 2009............................................. 0.
``(ii) The reduction provided in clause (i) of paragraph
(1)(B) shall not apply in any case in which--
``(I) the individual is married at the time the
individual becomes eligible for old-age insurance
benefits or dies (before becoming eligible for such
benefits), and
``(II) the total of the wages paid in and self-
employment income credited to the preceding calendar
year with respect to the individual is less than the
total of the wages paid in and self-employment income
credited to such year with respect to the individual's
spouse.''.
(c) Effective Date.--The amendments made by this section shall
apply with respect to individuals attaining early retirement age (as
defined in section 216(l)(2) of the Social Security Act) or dying after
December 31, 2001.
SEC. 6. 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 2002, is \5/9\;
``(B) 2002, is \7/12\;
``(C) 2003, is \11/18\;
``(D) 2004, is \23/36\;
``(E) 2005, is \2/3\; and
``(F) 2006 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 2002, is \5/12\;
``(B) 2002, is \16/36\;
``(C) 2003, is \16/36\;
``(D) 2004, is \17/36\;
``(E) 2005, is \17/36\; and
``(F) 2006 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 2001.
(b) Delayed Retirement.--Section 202(w)(6) of the Social Security
Act (42 U.S.C. 402(w)(6)) is amended--
(1) in subparagraph (C), by striking ``and'' at the end;
(2) in subparagraph (D), by striking ``2004.'' and
inserting ``2004 and before 2007;''; and
(3) by adding at the end the following:
``(E) \17/24\ of 1 percent in the case of an individual who
attains the age of 62 in a calendar year after 2006 and before
2009;
``(F) \3/4\ of 1 percent in the case of an individual who
attains the age of 62 in a calendar year after 2008 and before
2011;
``(G) \19/24\ of 1 percent in the case of an individual who
attains the age of 62 in a calendar year after 2010 and before
2013; and
``(H) \5/6\ of 1 percent in the case of an individual who
attains the age of 62 in a calendar year after 2012.''.
SEC. 7. IMPROVEMENTS IN PROCESS FOR COST-OF-LIVING ADJUSTMENTS.
(a) Annual Declarations of Achieved Substitution Bias Correction
and Retained Upper Level Substitution Bias.--
(1) Achieved substitution bias correction.--Not later than
October 1, 2002, 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 annual rate of change in the Consumer Price Index is
reduced below the rate it would otherwise have attained by
reason of adjustments in the determination of such index
instituted by the Bureau after January 31, 2001.
(2) Upper level substitution bias.--Not later than August
1, 2002, 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 a
percentage point effect on the annual rate of change in the
Consumer Price Index for the preceding calendar year determined
through the use of a superlative index that accounts for
changes that consumers make in the quantities of goods and
services consumed.
(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 2002, 2003, and 2004, $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)(D) of the Social
Security Act (42 U.S.C. 415(i)(1)(D)) is amended to read as
follows:
``(D) the term `CPI increase percentage', with respect to a
base quarter or cost-of-living computation quarter in any
calendar year, means--
``(i) the percentage (rounded to the nearest one-
hundredth of 1 percent) by which the Consumer Price
Index for that quarter (as prepared by the Department
of Labor) exceeds such index for the most recent prior
calendar quarter which was a base quarter under
subparagraph (A)(ii) or, if later, the most recent
cost-of-living computation quarter under subparagraph
(B),
``(ii) reduced (but not below zero) by the upper
level substitution bias (rounded to the nearest one-
hundredth of 1 percent) retained in such index (as
published by the Secretary of Labor pursuant to section
8(a)(2) of the 21st Century Retirement Security Act in
connection with the annual rate of change in the
Consumer Price Index for the preceding calendar year),
to the extent applicable to such percentage, and
``(iii) reduced further (but not below zero) by the
excess (if any) of 0.33 percentage points over the sum
of--
``(I) the reduction in percentage points
undergone by the percentage described in clause
(i) pursuant to clause (ii), and
``(II) the reduction in percentage points
undergone by the percentage described in clause
(i) (rounded to the nearest one-hundredth of 1
percent) attributable to the achieved
substitution bias correction (as last published
by the Secretary of Labor pursuant to section
8(a)(1) of the 21st Century Retirement Security
Act), to the extent applicable to such
percentage.''.
(2) Effective date.--The amendment made by paragraph (1)
shall apply with respect to increases under section 215(i) of
the Social Security Act effective with the month of December of
years after 2001.
(f) Consumer Price Index Adjustments Applicable to Internal Revenue
Code Provisions.--
(1) In general.--Paragraph (3) of section 1(f) of the
Internal Revenue Code of 1986 (defining cost-of-living
adjustment) is amended by striking the period at the end and
inserting a comma and by inserting at the end the following
flush material:
``reduced (but not below zero) by the number of
percentage points determined under paragraph (9) for
the calendar year for which such adjustment is being determined.''.
(2) Limitation on increases.--Subsection (f) of section 1
of such Code is amended by adding at the end the following new
paragraph:
``(9) Limitation on increases in cpi.--
``(A) In general.--The number of percentage points
determined under this paragraph for any calendar year
is--
``(i) the upper level substitution bias, to
the extent applicable to the percentage
adjustment under paragraph (3), plus
``(ii) the excess (if any) of 0.33
percentage points over the sum of--
``(I) such upper level substitution
bias, and
``(II) the achieved substitution
bias correction, to the extent
applicable to the percentage adjustment
under paragraph (3).
``(B) Computation of base to reflect limitation.--
The Secretary shall adjust the number taken into
account under paragraph (3)(B) so that any increase
which is not taken into account by reason of
subparagraph (A) shall not be taken into account at any
time so as to allow such increase for any period.
``(C) Definitions.--For purposes of this paragraph,
the terms `achieved substitution bias correction' and
`upper level substitution bias' mean, with respect to
any 12-month period ending on August 31 of a calendar
year, the achieved substitution bias correction and
upper level substitution bias most recently published
by the Secretary of Labor pursuant to section 8(a) of
the 21st Century Retirement Security Act for a period
ending on or before August 31 of such calendar year.''.
(g) Corresponding Amendments to Other Provisions Utilizing the
Consumer Price Index.--
(1) In general.--For purposes of determining the amount of
any cost-of-living adjustment which takes effect for benefits
payable after December 31, 2002, with respect to any benefit
described in paragraph (5)--
(A) any increase in the relevant index (determined
without regard to this subsection) shall be reduced by
the number of percentage points determined under
paragraph (2), and
(B) the amount of the increase in such benefit
shall be equal to the product of--
(i) the increase in the relevant index (as
reduced under subparagraph (A)), and
(ii) the average such benefit for the
preceding calendar year under the program
described in paragraph (5) which provides such
benefit.
(2) Limitation on increases.--
(A) In general.--The number of percentage points
determined under this paragraph for any calendar year
is--
(i) the upper level substitution bias, to
the extent applicable to the percentage
adjustment under the relevant index, plus
(ii) the excess (if any) of 0.33 percentage
points over the sum of--
(I) such upper level substitution
bias, and
(II) the achieved substitution bias
correction, to the extent applicable to
the percentage adjustment under the
relevant index,.
(B) Computation of base to reflect limitation.--Any
increase which is not taken into account by reason of
subparagraph (A) shall not be taken into account at any
time so as to allow such increase for any period.
(3) Paragraph (1) to apply only to computation of benefit
amounts.--Paragraph (1) shall apply only for purposes of
determining the amount of benefits and not for purposes of
determining--
(A) whether a threshold increase in the relevant
index has been met, or
(B) increases in amounts under other provisions of
law not described in paragraph (5) which operate by
reference to increases in such benefits.
(4) Definitions.--For purposes of this subsection--
(A) Cost-of-living adjustment.--The term ``cost-of-
living adjustment'' means any adjustment in the amount
of benefits described in paragraph (5) which is
determined by reference to changes in an index.
(B) Index.--
(i) Index.--The term ``index'' means the
Consumer Price Index and any other index of
price or wages.
(ii) Relevant index.--The term ``relevant
index'' means the index on the basis of which
the amount of the cost-of-living adjustment is
determined.
(C) Achieved substitution bias correction; upper
level substitution bias.--The terms `achieved
substitution bias correction' and `upper level
substitution bias' mean, with respect to the applicable
12-month period preceding a cost-of-living adjustment,
the achieved substitution bias correction and upper
level substitution bias most recently published by the
Secretary of Labor pursuant to section 8(a) of the 21st
Century Retirement Security Act.
(5) Benefits to which subsection applies.--For purposes of
this subsection, the benefits described in this paragraph are--
(A) retired and retainer pay subject to adjustment
under section 1401a of title 10, United States Code;
(B) civil service retirement benefits under section
8340 of title 5, United States Code, foreign service
retirement benefits under section 826 of the Foreign
Service Act of 1980, Central Intelligence Agency
retirement benefits under part J of the Central Intelligence Agency
Retirement Act of 1964 for certain employees, and any other benefits
under any similar provision under any retirement system for employees
of the government of the United States;
(C) Federal workers' compensation under section
8146a of title 5, United States Code;
(D) benefits under section 3(a), 4(a), or 4(f) of
the Railroad Retirement Act of 1974; and
(E) benefits and expenditure limits under title
XVIII or XIX of the Social Security Act.
(6) Benefit.--For purposes of this section, the term
``benefit'' includes a payment.
(h) Recapture to Federal Old-Age and Survivors Insurance Trust
Fund.--Section 201 of the Social Security Act (42 U.S.C. 401) is
amended by adding at the end the following new subsection:
``(n) On July 1 of each calendar year specified in the following
table, the Secretary of the Treasury shall transfer, from the general
fund of the Treasury to the Federal Old-Age and Survivors Insurance
Trust Fund, an amount equal to the applicable percentage for such year,
specified in such table, of the total wages paid in and self-employment
income credited to such year.
``For a calendar year-- The applicable percentage for the
year is--
After 2001 and before 2003.....
0.13 percent
After 2002 and before 2004.....
0.15 percent
After 2003 and before 2005.....
0.20 percent
After 2004 and before 2006.....
0.24 percent
After 2005 and before 2007.....
0.28 percent
After 2006 and before 2008.....
0.32 percent
After 2007 and before 2009.....
0.35 percent
After 2008 and before 2010.....
0.38 percent
After 2009 and before 2016.....
0.47 percent
After 2015 and before 2040.....
0.55 percent
After 2039 and before 2060.....
0.66 percent
After 2059.....................
0.80 percent.''.
SEC. 8. ADJUSTMENT TO BENEFIT FORMULA FACTORS.
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); and
(2) by inserting after clause (ii) the following:
``(iii) For an individual who initially becomes eligible for old-
age or disability insurance benefits, or who dies (before becoming
eligible for such benefits), in any calendar year after 2008, each of
the amounts otherwise established for purposes of clauses (i), (ii),
and (iii) of subparagraph (A) under this subparagraph shall be
substituted with the product derived by successively multiplying, once
for each year of the factoring period for such individual--
``(I) such amount (after applying this clause for earlier
years of the factoring period), by
``(II) the designated factor for such year.
``(iv) For purposes of clause (iii), the term `factoring period'
means, for an individual, the period beginning with 2012 and ending
with the earlier of--
``(I) the year of the individual's initial eligibility or
death, or
``(II) 2060.
``(v) For purposes of clause (iii), the term `designated factor'
means--
``(I) for a year prior to 2031, 0.975, except that, for any
such year, such factor shall be 1.000 with respect to amounts
otherwise established for purposes of clause (i) of
subparagraph (A) under this subparagraph, and
``(II) for a year after 2030, 0.985.''.
SEC. 9. ADJUSTMENTS TO BEND POINTS IN DETERMINING PRIMARY INSURANCE
AMOUNTS.
(a) Additional Bend Point.--Section 215(a)(1)(A) of the Social
Security Act (42 U.S.C. 415(a)(1)(A)) is amended--
(1) in clause (ii)--
(A) by striking ``32 percent'' and inserting ``70
percent''; and
(B) by striking ``and'' at the end;
(2) in clause (iii)--
(A) by striking ``15 percent'' and inserting ``20
percent''; and
(B) by striking ``clause (ii),'' and inserting the
following: ``clause (ii) but do not exceed the amount
established for purposes of this clause by subparagraph
(B), and''; and
(3) by inserting after clause (iii) the following:
``(iv) 15 percent of the individual's average indexed
monthly earnings to the extent that such earnings exceed the
amount established for purposes of clause (iii),''.
(b) Initial Level of Additional Bend Point.--Section 215(a)(1)(B)
of such Act (42 U.S.C. 415(a)(1)(B)) is amended--
(1) by redesignating clause (iii) as clause (iv);
(2) by inserting after clause (ii) the following new
clause:
``(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 2008, the amount
established for purposes of clause (ii) of subparagraph (A) for such
calendar year after 2008 shall be 196 percent of the amount established
for purposes of clause (i) for such calendar year.''; and
(3) in clause (iv) (as redesignated by paragraph (1)), by
striking ``clause (ii)'' and inserting ``clauses (ii) and
(iii)''.
SEC. 10. MODIFICATION TO PIA FORMULA TO REFLECT CHANGES TO LIFE
EXPECTANCY.
(a) In General.--Section 215(a)(1) of the Social Security Act (42
U.S.C. 415(a)(1)(B)) is amended by redesignating subparagraph (C) and
(D) as subparagraphs (D) and (E), respectively, and by inserting after
subparagraph (B) the following new subparagraph:
``(C)(i) 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 2011, the primary
insurance amount computed under this paragraph shall be the product
derived by multiplying such amount as computed under the preceding
subparagraphs of this paragraph by the life expectancy ratio for such
calendar year.
``(ii) The Commissioner of Social Security, using generally
accepted actuarial principles, shall determine and publish in the
Federal Register on or before November 1 of each calendar year the life
expectancy ratio for the following calendar year.
``(iii) For purposes of clause (ii), the life expectancy ratio for
any calendar year is the ratio of--
``(I) the period life expectancy of an individual attaining
age 62 on January 1, 2010, to
``(II) the period life expectancy of an individual
attaining age 62 on January 1 of the third calendar year
preceding the calendar year in which the determination under
clause (ii) is made.''.
(b) Study of the Effect of Increases in Life Expectancy.--
(1) Study plan.--Not later than February 15, 2003, the
Commissioner of Social Security shall submit to Congress a
detailed study plan for evaluating the effects of increases in
life expectancy on the expected level of retirement income from
social security, pensions, and other sources. The study plan
shall include a description of the methodology, data, and
funding that will be required in order to provide to the
Congress not later than February 15, 2008--
(A) an evaluation of trends in mortality and their
relationship to trends in health status, among
individuals approaching eligibility for old-age
insurance benefits under title II of the Social
Security Act;
(B) an evaluation of trends in labor force
participation among individuals approaching eligibility
for such benefits and among individuals receiving such
benefits, and of the factors that influence the choice
between retirement and participation in the labor
force;
(C) an evaluation of changes, if any, in the
disability insurance program under title II of the
Social Security Act that would reduce the impact of
changes in the retirement income of workers in poor
health or physically demanding occupations;
(D) an evaluation of the methodology used to
develop projections for trends in mortality, health
status, and labor force participation among individuals
approaching eligibility for old-age insurance benefits
and among individuals receiving such benefits; and
(E) an evaluation of such other matters as the
Commissioner deems appropriate for evaluating the
effects of increases in life expectancy.
(2) Report on results of study.--Not later than February
15, 2008, the Commissioner of Social Security shall provide to
the Congress an evaluation of the implications of the trends
studied under paragraph (1), along with recommendations, if
any, of the extent to which the conclusions of such evaluations
indicate that projected increases in life expectancy require
modification in the disability insurance program under title II
of the Social Security Act and other income support programs.
SEC. 11. TREATMENT OF DISABLED BENEFICIARIES.
Section 215(a) of the Social Security Act (42 U.S.C. 415(a)) is
amended by adding at the end the following new paragraph:
``(8)(A) Notwithstanding the preceding provisions of this
subsection, in the case of an individual who has or has had a period of
disability and becomes entitled to old-age insurance benefits under
section 202(a) (or dies) in or after 2006, the primary insurance amount
of such individual shall be the sum of--
``(i) the amount determined under subparagraph (B), and
``(ii) the product derived by multiplying--
``(I) the excess of the amount determined under
subparagraph (C) over the amount determined under
subparagraph (B), by
``(II) the adjustment factor for such individual
determined under subparagraph (D).
``(B) The amount determined under this subparagraph is the amount
of such individual's primary insurance amount as determined under this
section without regard to this paragraph.
``(C) The amount determined under this subparagraph is the amount
of such individual's primary insurance amount as determined under this
section as in effect with respect to individuals becoming eligible for
old-age or disability insurance benefits under section 202(a) in 2001.
``(D) The adjustment factor determined under this subparagraph for
any individual is the ratio (not greater than 1) of--
``(i) the number of months, preceding the earlier of such
individual's first month of entitlement to old-age insurance
benefits under section 202(a) or the month of such individual's
death, which occurred during a period of disability of such
individual, to
``(ii) 480.''.
SEC. 12. MAINTENANCE OF BENEFIT AND CONTRIBUTION BASE.
(a) In General.--Section 230 of the Social Security Act (42 U.S.C.
430) is amended to read as follows:
maintenance of the contribution and benefit base
``Sec. 230. (a) The Commissioner of Social Security shall determine
and publish in the Federal Register on or before November 1 of each
calendar year the contribution and benefit base determined under
subsection (b) which shall be effective with respect to remuneration
paid after such calendar year and taxable years beginning after such
year.
``(b) For purposes of this section, for purposes of determining
wages and self-employment income under sections 209, 211, 213, and 215
of this Act and sections 54, 1402, 3121, 3122, 3125, 6413, and 6654 of
the Internal Revenue Code of 1986, and for purposes of section
4022(b)(3)(B) of Public Law 93-406, the contribution and benefit base
is--
``(1) with respect to remuneration paid in (and taxable
years beginning in) 2002, $90,800,
``(2) with respect to remuneration paid in (and taxable
years beginning in) 2003, $101,200,
``(3) with respect to remuneration paid in (and taxable
years beginning in) 2004, $111,600, and
``(4) with respect to remuneration paid in (and taxable
years beginning in) any calendar year after 2004, an amount
equal to 86 percent of the quotient derived by dividing--
``(A) the total wages paid in the calendar year
preceding the calendar year in which the determination
is made under subsection (a), by
``(B) the number of individuals credited with wages
paid during the calendar year preceding the calendar
year in which the determination is made under
subsection (a),
rounded (if not a multiple of $100) to the nearest multiple of
$100.''.
(b) Effective Date.--The amendment made by this section shall apply
to remuneration paid in (and taxable years beginning in) any calendar
year after 2001.
SEC. 13. PHASED-IN INCREASE IN SOCIAL SECURITY RETIREMENT AGES.
Section 216(l) of the Social Security Act (42 U.S.C. 416(l) is
amended--
(1) in paragraph (1), by striking subparagraphs (A), (B),
(C), (D), and (E) and inserting the following:
``(A) with respect to an individual who attains early
retirement age (as defined in paragraph (2)) before January 1,
2000, 65 years of age; and
``(B) with respect to an individual who attains early
retirement age after December 31, 1999, and before January 1,
2012, 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; and
``(C) with respect to an individual who attains early
retirement age after December 31, 2011, 67 years of age.''; and
(2) by striking paragraph (3).
SEC. 14. 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
Security Act without reducing the balance ratio of the Federal
Disability Insurance Trust Fund. The Board shall develop such
recommendations in consultation with the National Council on
Disability, taking into consideration the adequacy of benefits under
the program, the relationship of such program with old age benefits
under such title, and changes in the process for determining initial
eligibility and reviewing continued eligibility for benefits under such
program.
``(2)(A) The President shall, no later than 30 days after the
submission of the report to the President, transmit to the Board and to
the Congress a report containing the President's approval or
disapproval of the Board's recommendations.
``(B) If the President approves all the recommendations of the
Board, the President shall transmit a copy of such recommendations to
the Congress as the President's recommendations, together with a
certification of the President's adoption of such recommendations.
``(C) If the President disapproves the recommendations of the
Board, in whole or in part, the President shall transmit to the Board
and the Congress the reasons for that disapproval. The Board shall then
transmit to the Congress and the President, no later than 60 days after
the date of the submission of the original report to the President, a
revised list of recommendations.
``(D) If the President approves all of the revised recommendations
of the Board transmitted to the President under subparagraph (C), the
President shall transmit a copy of such revised recommendations to the
Congress as the President's recommendations, together with a
certification of the President's adoption of such recommendations.
``(E) If the President disapproves the revised recommendations of
the Board, in whole or in part, the President shall transmit to the
Board and the Congress the reasons for that disapproval, together with
such revisions to such recommendations as the President determines are
necessary to bring such recommendations within the President's
approval. The President shall transmit a copy of such recommendations,
as so revised, to the Board and the Congress as the President's
recommendations, together with a certification of the President's
adoption of such recommendations.
``(3)(A) This paragraph is enacted by Congress--
``(i) as an exercise of the rulemaking power of the Senate
and the House of Representatives, respectively, and as such it
is deemed a part of the rules of each House, respectively, but
applicable only with respect to the procedure to be followed in
that House in the case of a joint resolution described in subparagraph
(B), and it supersedes other rules only to the extent that it is
inconsistent with such rules; and
``(ii) with full recognition of the constitutional right of
either House to change the rules (so far as relating to the
procedure of that House) at any time, in the same manner, and
to the same extent as in the case of any other rule of that
House.
``(B) For purposes of this paragraph, the term `joint resolution'
means only a joint resolution which is introduced within the 10-day
period beginning on the date on which the President transmits the
President's recommendations, together with the President's
certification, to the Congress under subparagraph (B), (D), or (E) of
paragraph (2), and--
``(i) which does not have a preamble;
``(ii) the matter after the resolving clause of which is as
follows: `That the Congress approves the recommendations of the
President as transmitted on ____ pursuant to section 709(a) of
the Social Security Act, as follows: ________', the first blank
space being filled in with the appropriate date and the second
blank space being filled in with the statutory adjustments
contained in the recommendations; and
``(iii) the title of which is as follows: `Joint resolution
approving the recommendations of the President regarding social
security.'.
``(C) A joint resolution described in subparagraph (B) that is
introduced in the House of Representatives shall be referred to the
Committee on Ways and Means of the House of Representatives. A joint
resolution described in subparagraph (B) introduced in the Senate shall
be referred to the Committee on Finance of the Senate.
``(D) If the committee to which a joint resolution described in
subparagraph (B) is referred has not reported such joint resolution (or
an identical joint resolution) by the end of the 20-day period
beginning on the date on which the President transmits the
recommendation to the Congress under paragraph (2), such committee
shall be, at the end of such period, discharged from further
consideration of such joint resolution, and such joint resolution shall
be placed on the appropriate calendar of the House involved.
``(E)(i) On or after the third day after the date on which the
committee to which such a joint resolution is referred has reported, or
has been discharged (under subparagraph (D)) from further consideration
of, such a joint resolution, it is in order (even though a previous
motion to the same effect has been disagreed to) for any Member of the
respective House to move to proceed to the consideration of the joint
resolution. A Member may make the motion only on the day after the
calendar day on which the Member announces to the House concerned the
Member's intention to make the motion, except that, in the case of the
House of Representatives, the motion may be made without such prior
announcement if the motion is made by direction of the committee to
which the joint resolution was referred. All points of order against
the joint resolution (and against consideration of the joint
resolution) are waived. The motion is highly privileged in the House of
Representatives and is privileged in the Senate and is not debatable.
The motion is not subject to amendment, or to a motion to postpone, or
to a motion to proceed to the consideration of other business. A motion
to reconsider the vote by which the motion is agreed to or disagreed to
shall not be in order. If a motion to proceed to the consideration of
the joint resolution is agreed to, the respective House shall
immediately proceed to consideration of the joint resolution without
intervening motion, order, or other business, and the joint resolution
shall remain the unfinished business of the respective House until
disposed of.
``(ii) Debate on the joint resolution, and on all debatable motions
and appeals in connection therewith, shall be limited to not more than
2 hours, which shall be divided equally between those favoring and
those opposing the joint resolution. An amendment to the joint
resolution is not in order. A motion further to limit debate is in
order and not debatable. A motion to postpone, or a motion to proceed
to the consideration of other business, or a motion to recommit the
joint resolution is not in order. A motion to reconsider the vote by
which the joint resolution is agreed to or disagreed to is not in
order.
``(iii) Immediately following the conclusion of the debate on a
joint resolution described in subparagraph (B) and a single quorum call
at the conclusion of the debate if requested in accordance with the
rules of the appropriate House, the vote on final passage of the joint
resolution shall occur.
``(iv) Appeals from the decisions of the Chair relating to the
application of the rules of the Senate or the House of Representatives,
as the case may be, to the procedure relating to a joint resolution
described in subparagraph (B) shall be decided without debate.
``(F)(i) If, before the passage by one House of a joint resolution
of that House described in subparagraph (B), that House receives from
the other House a joint resolution described in subparagraph (B), then
the following procedures shall apply:
``(I) The joint resolution of the other House shall not be
referred to a committee and may not be considered in the House
receiving it except in the case of final passage as provided in
subclause (II).
``(II) With respect to a joint resolution described in
subparagraph (B) of the House receiving the joint resolution,
the procedure in that House shall be the same as if no joint
resolution had been received from the other House, but the vote
on final passage shall be on the joint resolution of the other
House.
``(ii) Upon disposition of the joint resolution received from the
other House, it shall no longer be in order to consider the joint
resolution that originated in the receiving House.
``(b) If the Board of Trustees of the Federal Hospital Insurance
Trust Fund or the Federal Supplementary Medical Insurance Trust Fund
determines at 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>