[Congressional Bills 110th Congress]
[From the U.S. Government Publishing Office]
[H.R. 4664 Introduced in House (IH)]







110th CONGRESS
  1st Session
                                H. R. 4664

    To provide for investment and protection of the Social Security 
                                surplus.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                           December 13, 2007

Mr. Kuhl of New York introduced the following bill; which was referred 
 to the Committee on Ways and Means, and in addition to the Committees 
on the Budget and 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 provide for investment and protection of the Social Security 
                                surplus.

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

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Social Security Surplus Protection 
Act of 2007''.

SEC. 2. INVESTMENT OF THE ANNUAL SURPLUS OF THE FEDERAL OLD-AGE AND 
              SURVIVORS INSURANCE TRUST FUND AND THE FEDERAL DISABILITY 
              INSURANCE TRUST FUND.

    (a) In General.--Section 201(d) of the Social Security Act (42 
U.S.C. 401(d)) is amended--
            (1) by inserting ``(1)'' after ``(d)'';
            (2) by striking ``Such investments may be made only'' and 
        inserting the following: ``Except as provided in paragraph (2), 
        such investments may be made only'';
            (3) by striking the last sentence; and
            (4) by adding at the end the following new paragraph:
    ``(2)(A) The Managing Trustee shall, in accordance with policies 
prescribed in regulations of the Social Security Surplus Investment 
Board prescribed under subsection (o), ensure that amounts in each of 
the Trust Funds equivalent to the annual surplus for such Trust Fund 
for any calendar year are made available to the Board on a timely basis 
for purposes of investment in accordance with subsection (o). Such 
amounts shall be made available in at least monthly installments and 
shall be determined on the basis of estimates, by the Commissioner and 
certified to the Secretary of the Treasury, and proper adjustments 
shall be made in amounts subsequently made available to the extent 
prior estimates were in excess of or were less than actual amounts.
    ``(B) For purposes of this paragraph, the `annual surplus' for 
either of the Trust Funds for a calendar year is the excess (if any) 
of--
            ``(i) the sum of--
                    ``(I) in the case of the Federal Old-Age and 
                Survivors Insurance Trust Fund, the amounts 
                appropriated to such Trust Fund under paragraphs (3) 
                and (4) of subsection (a) and attributable to such 
                calendar year,
                    ``(II) in the case of the Federal Disability 
                Insurance Trust Fund, the amounts appropriated to such 
                Trust Fund under paragraphs (1) and (2) of subsection 
                (b) and attributable to such calendar year, and
                    ``(III) in either case, the amount appropriated to 
                such Trust Fund under section 121(e) of the Social 
                Security Amendments of 1983 and attributable to such 
                calendar year, and any amounts otherwise credited to or 
                deposited in such Trust Fund under this title 
                attributable to such calendar year, over
            ``(ii) the amount estimated by the Commissioner to be the 
        total amount to be paid from such Trust Fund during such 
        calendar year for all purposes authorized by section 201 (other 
        than payments of interest on, and repayments of, loans from the 
        Federal Hospital Insurance Trust Fund under section 201(l)(1), 
        and excluding any transfer payments between the Trust Funds and 
        reducing the amount of any transfer from either of the Trust 
        Funds to the Railroad Retirement Account by the amount of any 
        transfer into such Trust Fund from such Account).
    ``(C) Amounts of either Trust Fund made available to the Social 
Security Surplus Investment Board under subparagraph (A) for purposes 
of investment under subsection (o), and any proceeds from such 
investment, shall continue to be treated as assets of such Trust Fund, 
and the Managing Trustee shall ensure that such assets are available as 
necessary for payment of benefits pursuant to subsection (h).''.
    (b) Effective Date.--The amendments made by this section shall 
apply with respect to annual surpluses for calendar years beginning on 
or after January 1, 2009.

SEC. 3. SOCIAL SECURITY SURPLUS INVESTMENT BOARD.

    Section 201 of the Social Security Act (42 U.S.C. 401) is amended 
by adding at the end the following new subsection:
    ``(o) Social Security Surplus Investment Board.--
            ``(1) Establishment of the board.--
                    ``(A) Establishment.--There is established in the 
                Executive branch of the Government a Social Security 
                Surplus Investment Board.
                    ``(B) Number and appointment.--The Board shall be 
                composed of 7 members as follows:
                            ``(i) 3 members appointed by the President, 
                        of whom 1 shall be designated by the President 
                        as Chairman; and
                            ``(ii) 4 members appointed by the 
                        President, of whom--
                                    ``(I) 2 shall be appointed by the 
                                President after taking into 
                                consideration the recommendations made 
                                by the Speaker of the House of 
                                Representatives in consultation with 
                                the minority leader of the House of 
                                Representatives; and
                                    ``(II) 2 shall be appointed by the 
                                President after taking into 
                                consideration the recommendations made 
                                by the majority leader of the Senate in 
                                consultation with the minority leader 
                                of the Senate.
                    ``(C) Membership requirements.--Members of the 
                Board shall have substantial experience, training, and 
                expertise in the management of financial investments 
                and pension benefit plans. No more than 4 of the 
                members of the Board may be of the same political 
                party.
                    ``(D) Terms.--Each member of the Board shall be 
                appointed for a term of 4 years, except that of the 
                members first appointed--
                            ``(i) the Chairman shall be appointed for a 
                        term of 4 years;
                            ``(ii) the remaining members appointed 
                        under subsection (B)(i) shall be appointed for 
                        terms of 3 years;
                            ``(iii) one of the members appointed under 
                        subsection (B)(ii)(I) shall be appointed for a 
                        term of 4 years and the other for a term of two 
                        years; and
                            ``(iv) one of the members appointed under 
                        subsection (B)(ii)(II) shall be appointed for a 
                        term of 4 years and the other for a term of 2 
                        years.
                    ``(E) Vacancies.--A vacancy on the Board shall be 
                filled in the manner in which the original appointment 
                was made and shall be subject to any conditions which 
                applied with respect to the original appointment. An 
                individual chosen to fill a vacancy shall be appointed 
                for the unexpired term of the member replaced. The term 
                of any member shall not expire before the date on which 
                the member's successor takes office.
            ``(2) Powers and duties of the board.--
                    ``(A) In general.--The Board shall have powers and 
                duties solely as provided in this subsection. The Board 
                shall by regulation provide for investment of amounts 
                in the Federal Old-Age and Survivors Insurance Trust 
                Fund and the Federal Disability Insurance Trust Fund 
                made available to the Board under subsection (d)(2)(A) 
                for purposes of investment, including policies to be 
                followed in allocating investments among different 
                forms of investment and meeting the requirements of 
                subparagraph (F) of this paragraph and of paragraph 
                (4).
                    ``(B) Budgetary requirements.--The Board shall 
                prepare and submit to the President and to the 
                appropriate committees of Congress an annual budget of 
                the expenses and other items relating to the Board 
                which shall be included as a separate item in the 
                budget required to be transmitted to the Congress under 
                section 1105 of title 31, United States Code. The Board 
                shall provide for low administrative costs such that, 
                to the extent practicable, overall administrative costs 
                of the Board in connection with investments made 
                pursuant to subparagraph (A) do not exceed 30 basis 
                points per year in relation to assets under management 
                by the Board.
                    ``(C) Additional authorities of the board.--The 
                Board may--
                            ``(i) adopt, alter, and use a seal;
                            ``(ii) establish policies under this 
                        subsection with which the Commissioner shall 
                        comply; and
                            ``(iii) appoint and remove the Executive 
                        Director, as provided in paragraph (2).
                    ``(D) Meetings of the board.--The Board shall meet 
                at the call of the Chairman or upon the request of a 
                quorum of the Board. The Board shall perform the 
                functions and exercise the powers of the Board on a 
                majority vote of a quorum of the Board. Four members of 
                the Board shall constitute a quorum for the transaction 
                of business.
                    ``(E) Compensation of board members.--
                            ``(i) In general.--Each member of the Board 
                        who is not an officer or employee of the 
                        Federal Government shall be compensated at the 
                        daily rate of basic pay for level IV of the 
                        Executive Schedule for each day during which 
                        such member is engaged in performing a function 
                        of the Board. Any member who is such an officer 
                        or employee shall not suffer any loss of pay or 
                        deduction from annual leave on the basis of any 
                        time used by such member in performing such a 
                        function.
                            ``(ii) Travel, per diem, and expenses.--A 
                        member of the Board shall be paid travel, per 
                        diem, and other necessary expenses under 
                        subchapter I of chapter 57 of title 5, United 
                        States Code, while traveling away from such 
                        member's home or regular place of business in 
                        the performance of the duties of the Board.
                    ``(F) Standard for board's discharge of 
                responsibilities.--The members of the Board shall 
                discharge their responsibilities solely in the interest 
                of the Federal Old-Age and Survivors Insurance Trust 
                Fund and the Federal Disability Insurance Trust Fund.
                    ``(G) Annual report.--The Board shall submit an 
                annual report to the President, to each House of the 
                Congress, and to the Board of Trustees of the Federal 
                Old-Age and Survivors Insurance Trust Fund and the 
                Federal Disability Insurance Trust Fund regarding the 
                exercise of its duties under this subsection. Such 
                report shall include a comparison, for the year covered 
                by the report, of the rate of return on investments of 
                assets of the Trust Funds made pursuant to subsection 
                (d)(2) to the rate of return on investments of assets 
                of the Trust Funds otherwise made under subsection (d).
                    ``(H) Public accountant.--
                            ``(i) Definition.--For purposes of this 
                        subparagraph, the term `qualified public 
                        accountant' shall have the same meaning as 
                        provided in section 103(a)(3)(D) of the 
                        Employee Retirement Income Security Act of 1974 
                        (29 U.S.C. 1023(a)(3)(D)).
                            ``(ii) Engagement.--The Executive Director, 
                        in consultation with the Board, shall annually 
                        engage an independent qualified public 
                        accountant, who shall conduct an examination of 
                        all records maintained in the administration of 
                        the requirements of this subsection that the 
                        public accountant considers necessary.
                            ``(iii) Duties.--The public accountant 
                        conducting an examination under clause (ii) 
                        shall determine whether the records referred to 
                        in such clause have been maintained in 
                        conformity with generally accepted accounting 
                        principles. The public accountant shall 
                        transmit to the Board a report on his 
                        examination.
                            ``(iv) Reliance on certified actuarial 
                        matters.--In making a determination under 
                        clause (iii), a public accountant may rely on 
                        the correctness of any actuarial matter 
                        certified by an enrolled actuary if the public 
                        accountant states his reliance in the report 
                        transmitted to the Board under such clause.
            ``(3) Executive director.--
                    ``(A) Appointment and removal.--The Board shall 
                appoint, without regard to the provisions of law 
                governing appointments in the competitive service, an 
                Executive Director by action agreed to by a majority of 
                the members of the Board. The Executive Director shall 
                have substantial experience, training, and expertise in 
                the management of financial investments and pension 
                benefit plans. The Board may, with the concurrence of 4 
                members of the Board, remove the Executive Director 
                from office for good cause shown.
                    ``(B) Powers and duties of executive director.--The 
                Executive Director shall--
                            ``(i) carry out the policies established by 
                        the Board,
                            ``(ii) administer the provisions of this 
                        subsection in accordance with the policies of 
                        the Board, and
                            ``(iii) meet from time to time with the 
                        Board upon request of the Board.
                    ``(C) Administrative authorities of executive 
                director.--The Executive Director may--
                            ``(i) appoint such personnel as may be 
                        necessary to carry out the provisions of this 
                        subsection,
                            ``(ii) subject to approval by the Board, 
                        procure the services of experts and consultants 
                        under section 3109 of title 5, United States 
                        Code,
                            ``(iii) secure directly from any agency or 
                        instrumentality of the Federal Government on a 
                        reimbursable basis any information which, in 
                        the judgment of the Executive Director, is 
                        necessary to carry out the provisions of this 
                        subsection and the policies of the Board, and 
                        which shall be provided by such agency or 
                        instrumentality upon the request of the 
                        Executive Director,
                            ``(iv) pay the compensation, per diem, and 
                        travel expenses of individuals appointed under 
                        clauses (i), (ii), and (v) of this 
                        subparagraph, subject to such limits as may be 
                        established by the Board,
                            ``(v) accept and use the services of 
                        individuals employed intermittently in the 
                        Government service and reimburse such 
                        individuals for travel expenses, as authorized 
                        by section 5703 of title 5, United States Code, 
                        including per diem as authorized by section 
                        5702 of such title, and
                            ``(vi) except as otherwise expressly 
                        prohibited by law or the policies of the Board, 
                        delegate any of the Executive Director's 
                        functions to such employees under the Board as 
                        the Executive Director may designate and 
                        authorize such successive redelegations of such 
                        functions to such employees under the Board as 
                        the Executive Director may consider to be 
                        necessary or appropriate.
            ``(4) Fiduciary responsibilities.--
                    ``(A) In general.--Rules similar to the provisions 
                of section 8477 of title 5, United States Code 
                (relating to fiduciary responsibilities; liability and 
                penalties) shall apply in connection with assets placed 
                under the control of the Board for purposes of 
                investment, in accordance with regulations which shall 
                be issued by the Board. The Board shall issue 
                regulations with respect to the investigative authority 
                of appropriate Federal agencies in cases involving such 
                assets.
                    ``(B) Exculpatory provisions voided.--Any provision 
                in an agreement or instrument which purports to relieve 
                a fiduciary from responsibility or liability for any 
                responsibility, obligation, or duty under this 
                subsection shall be void.
            ``(5) Civil actions by board.--If any person fails to meet 
        any requirement of this subsection or regulations prescribed 
        thereunder or of any contract entered into under this 
        subsection, the Board 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, without regard to the amount in 
        controversy, for appropriate relief to redress the violation or 
        enforce the requirement, and process in such an action may be 
        served in any district.
            ``(6) Authorization of appropriations.--There are 
        authorized to be appropriated to the Board, for fiscal years 
        beginning on or after October 1, 2008, such sums as are 
        necessary to carry out the Board's duties under this 
        subsection.''.

SEC. 4. PROTECTION OF SOCIAL SECURITY SURPLUSES.

    (a) Protection of Social Security Surpluses.--Title III of the 
Congressional Budget Act of 1974 is amended by adding at the end the 
following new section:

                ``safeguarding social security surpluses

    ``Sec. 316.  (a) In General.--
            ``(1) Concurrent resolutions on the budget.--It shall not 
        be in order in the House of Representatives or the Senate to 
        consider any concurrent resolution on the budget, or an 
        amendment thereto or conference report thereon, that would set 
        forth a deficit for any fiscal year for which there is a 
        projected net surplus in the Federal Old-Age and Survivors 
        Insurance Trust Fund and the Federal Disability Insurance Trust 
        Fund.
            ``(2) Spending and tax legislation.--It shall not be in 
        order in the House of Representatives or the Senate to consider 
        any bill, joint resolution, amendment, motion, or conference 
        report if--
                    ``(A) the enactment of that bill or resolution, as 
                reported;
                    ``(B) the adoption and enactment of that amendment; 
                or
                    ``(C) the enactment of that bill or resolution in 
                the form recommended in that conference report,
        would cause a deficit for any fiscal year for which there is a 
        projected net surplus in the Federal Old-Age and Survivors 
        Insurance Trust Fund and the Federal Disability Insurance Trust 
        Fund.
    ``(b) Enforcement.--
            ``(1) Budgetary levels with respect to concurrent 
        resolutions on the budget.--For purposes of enforcing any point 
        of order under subsection (a)(1), the extent to which there is 
        a deficit for any fiscal year shall be determined on the basis 
        of budgetary aggregates set forth in the later of the 
        concurrent resolution on the budget, as reported, or in the 
        conference report on the concurrent resolution on the budget, 
        adjusted to the maximum extent allowable under all procedures 
        that allow budgetary aggregates to be adjusted for legislation 
        that would cause a decrease in any surplus or an increase in 
        any deficit for any fiscal year covered by the concurrent 
        resolution on the budget (other than procedures described in 
        paragraph (2)(A)(ii)).
            ``(2) Current levels with respect to spending and tax 
        legislation.--
                    ``(A) In general.--For purposes of enforcing 
                subsection (a)(2), the extent to which there is a 
                deficit for any fiscal year shall be--
                            ``(i) calculated using the following 
                        assumptions--
                                    ``(I) direct spending and revenue 
                                levels at the baseline levels 
                                underlying the most recently agreed to 
                                concurrent resolution on the budget; 
                                and
                                    ``(II) for the budget year, 
                                discretionary spending levels at 
                                current law levels and, for outyears, 
                                discretionary spending levels at the 
                                baseline levels underlying the most 
                                recently agreed to concurrent 
                                resolution on the budget; and
                            ``(ii) adjusted for changes in the surplus 
                        or deficit levels set forth in the most 
                        recently agreed to concurrent resolution on the 
                        budget pursuant to procedures in such 
                        resolution that authorize adjustments in 
                        budgetary aggregates for updated economic and 
                        technical assumptions in the mid-session report 
                        of the Director of the Congressional Budget 
                        Office.
                Such revisions shall be included in the first current 
                level report on the congressional budget submitted for 
                publication in the Congressional Record after the 
                release of such mid-session report.
    ``(c) Waiver and Appeal.--Subsection (a) may be waived or suspended 
in the Senate only by an affirmative vote of three-fifths of the 
Members, duly chosen and sworn. An affirmative vote of three-fifths of 
the Members of the Senate, duly chosen and sworn, shall be required in 
the Senate to sustain an appeal of the ruling of the Chair on a point 
of order raised under this section.''.
    (b) Conforming Amendment.--The item relating to section 316 in the 
table of contents set forth in section 1(b) of the Congressional Budget 
and Impoundment Control Act of 1974 is amended to read as follows:

``Sec. 316. Safeguarding social security surpluses.''.
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