Short title

This Act may be cited as the

Safeguarding American Families and Expanding Social Security Act of 2015

Determination of taxable wages and self-employment income above contribution and benefit base after 2015

(a)

Determination of taxable wages above contribution and benefit base after 2015

(1)

Amendments to the Internal Revenue Code of 1986

Section 3121 of the Internal Revenue Code of 1986 is amended— (A)in subsection (a)(1), by inserting the applicable percentage (determined under subsection (c)(1)) of before that part of the remuneration; and (B)in subsection (c), by striking (c) Included and excluded service.—For purposes of this chapter, if and inserting the following:

(c)

Special rules for wages and employment

(1)

Applicable percentage of remuneration in determining taxable wages

For purposes of subsection (a)(1), the applicable percentage for a calendar year shall be equal to— (A)for 2016, 80 percent; (B)for 2017 through 2019, the applicable percentage under this paragraph for the previous year, decreased by 20 percentage points; and (C)for 2020 and each year thereafter, 0 percent. (2)

Included and excluded service

For purposes of this chapter, if

(2)

Amendments to the Social Security Act

Section 209 of the Social Security Act (42 U.S.C. 409) is amended— (A)in subsection (a)(1)(I)— (i)by inserting and before 2016 after 1974; and (ii)by inserting and after the semicolon; (B)in subsection (a)(1), by adding at the end the following new subparagraph:

(J)The applicable percentage (determined under subsection (l)) of that part of remuneration which, after remuneration (other than remuneration referred to in the succeeding subsections of this section) equal to the contribution and benefit base (determined under section 230) with respect to employment has been paid to an individual during any calendar year after 2015 with respect to which such contribution and benefit base is effective, is paid to such individual during such calendar year;

; and

(C)by adding at the end the following new subsection:

(l)For purposes of subsection (a)(1)(J), the applicable percentage for a calendar year shall be equal to— (1)for 2016, 80 percent; (2)for 2017 through 2019, the applicable percentage under this subsection for the previous year, decreased by 20 percentage points; and (3)for 2020 and each year thereafter, 0 percent.

(3)

Effective date

The amendments made by this subsection shall apply with respect to remuneration paid in calendar years after 2015. (b)

Determination of taxable self-Employment income above contribution and benefit base after 2015

(1)

Amendments to the Internal Revenue Code of 1986

Section 1402 of the Internal Revenue Code of 1986 is amended— (A)in subsection (b)(1), by striking that part of the net earnings and all that follows through minus and inserting the following: an amount equal to the applicable percentage (as determined under subsection (d)(2)) of that part of the net earnings from self-employment which is in excess of the difference (not to be less than zero) between (i) an amount equal to the contribution and benefit base (as determined under section 230 of the Social Security Act) which is effective for the calendar year in which such taxable year begins, and; and (B)in subsection (d)— (i)by striking (d) Employee and wages.—The term and inserting the following:

(d)

Rules and definitions

(1)

Employee and wages

The term

; and

(ii)by adding at the end the following:

(2)

Applicable percentage of net earnings from self-employment in determining taxable self-employment income

For purposes of subsection (b)(1), the applicable percentage for a taxable year beginning in any calendar year referred to in such paragraph shall be equal to— (A)for 2016, 80 percent; (B)for 2017 through 2019, the applicable percentage under this paragraph for the previous year, decreased by 20 percentage points; and (C)for 2020 and each year thereafter, 0 percent.

(2)

Amendments to the Social Security Act

Section 211 of the Social Security Act (42 U.S.C. 411) is amended— (A)in subsection (b)— (i)in paragraph (1)(I)— (I)by striking or after the semicolon; and (II)by inserting and before 2016 after 1974; (ii)by redesignating paragraph (2) as paragraph (3); and (iii)by inserting after paragraph (1) the following:

(2)For any taxable year beginning in any calendar year after 2015, an amount equal to the applicable percentage (as determined under subsection (l)) of that part of net earnings from self-employment which is in excess of the difference (not to be less than zero) between— (A)an amount equal to the contribution and benefit base (as determined under section 230) that is effective for such calendar year, and (B)the amount of the wages paid to such individual during such taxable year; or

; and

(B)by adding at the end the following:

(l)For purposes of subsection (b)(2), the applicable percentage for a taxable year beginning in any calendar year referred to in such paragraph shall be equal to— (1)for 2016, 80 percent; (2)for 2017 through 2019, the applicable percentage under this subsection for the previous year, decreased by 20 percentage points; and (3)for 2020 and each year thereafter, 0 percent.

(3)

Effective date

The amendments made by this subsection shall apply with respect to taxable years beginning during or after calendar year 2015.

Adjustments to bend points in determining primary insurance amount and inclusion of surplus earnings for benefit determinations

(a)

Inclusion of surplus average indexed monthly earnings in determination of primary insurance amounts

(1)

In general

Section 215(a)(1)(A) of the Social Security Act (42 U.S.C. 415(a)(1)(A)) is amended— (A)in clauses (i), (ii), and (iii), by inserting basic before average indexed monthly earnings each place it appears; (B)in clause (ii), by striking and at the end; (C)in clause (iii), by adding and at the end; and (D)by inserting after clause (iii) the following new clause:

(iv)5 percent of the individual’s surplus average indexed monthly earnings,

(2)

Bend point adjustment

Section 215(a)(1)(B) of such Act (42 U.S.C. 415(a)(1)(B)) is amended— (A)by redesignating clause (iii) as clause (iv); and (B)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 2020, the amount determined under clause (i) of this subparagraph for purposes of subparagraph (A)(i) for such calendar year shall be increased by— (I)for calendar year 2021, 1 percent; (II)for each of calendar years 2022 through 2034, the percent determined under this clause for the preceding year increased by 1 percentage point; and (III)for calendar year 2035 and each year thereafter, 15 percent.

(b)

Basic AIME and surplus AIME

(1)

Basic AIME

Section 215(b)(1) of such Act (42 U.S.C. 415(b)(1)) is amended— (A)by inserting basic before average; and (B)in subparagraph (A), by striking paragraph (3) and inserting paragraph (3)(A) and by inserting before the comma the following: to the extent such total does not exceed the contribution and benefit base for the applicable year. (2)

Surplus AIME

(A)

In general

Section 215(b)(1) of such Act (as amended by paragraph (1)) is amended— (i)by redesignating subparagraphs (A) and (B) as clauses (i) and (ii), respectively; (ii)by inserting (A) after (b)(1); and (iii)by adding at the end the following new subparagraph:

(B)(i)An individual’s surplus average indexed monthly earnings shall be equal to the quotient obtained by dividing— (I)the total (after adjustment under paragraph (3)(B)) of such individual’s surplus earnings (determined under clause (ii)) for such individual’s benefit computation years (determined under paragraph (2)), by (II)the number of months in those years. (ii)For purposes of clause (i) and paragraph (3)(B), an individual’s surplus earnings for a benefit computation year are the total of such individual’s wages paid in and self-employment income credited to such benefit computation year, to the extent such total (before adjustment under paragraph (3)(B)) exceeds the contribution and benefit base for such year.

(B)

Conforming amendment

The heading for section 215(b) of such Act is amended by striking Average Indexed Monthly Earnings and inserting Basic Average Indexed Monthly Earnings; Surplus Average Indexed Monthly Earnings. (3)

Adjustment of surplus earnings for purposes of determining surplus AIME

Section 215(b)(3) of such Act (42 U.S.C. 415(b)(3)) is amended— (A)in subparagraph (A), by striking subparagraph (B) and inserting subparagraph (C) and by inserting and determination of basic average indexed monthly income after paragraph (2); (B)by redesignating subparagraph (B) as subparagraph (C); and (C)by inserting after subparagraph (A) the following new subparagraph:

(B)For purposes of determining under paragraph (1)(B) an individual’s surplus average indexed monthly earnings, the individual’s surplus earnings (described in paragraph (2)(B)(ii)) for a benefit computation year shall be deemed to be equal to the product of— (i)the individual’s surplus earnings for such year (as determined without regard to this subparagraph), and (ii)the quotient described in subparagraph (A)(ii).

(c)

Effective date

The amendments made by this section shall apply with respect to individuals who initially become eligible (within the meaning of section 215(a)(3)(B) of the Social Security Act) for old-age or disability insurance benefits under title II of the Social Security Act, or who die (before becoming eligible for such benefits), in any calendar year after 2020.

Consumer Price Index for Elderly Consumers

(a)

In general

The Bureau of Labor Statistics of the Department of Labor shall prepare and publish an index for each calendar month to be known as the Consumer Price Index for Elderly Consumers that indicates changes over time in expenditures for consumption which are typical for individuals in the United States who have attained early retirement age (as defined under section 216(l)(2) of the Social Security Act (42 U.S.C. 416(l)(2)) for purposes of an old-age, wife's, or husband's insurance benefit). (b)

Effective date

Subsection (a) shall apply with respect to calendar months ending on or after June 30 of the calendar year in which this Act is enacted. (c)

Authorization of appropriations

There are authorized to be appropriated such sums as are necessary to carry out the provisions of this section.

Computation of cost-of-living increases for Social Security benefits

(a)

In general

Section 215(i) of the Social Security Act (42 U.S.C. 415(i)) is amended— (1)in paragraph (1)(G), by inserting before the period the following: , and, with respect to any monthly insurance benefit payable under this title, effective for adjustments under this subsection to the primary insurance amount on which such benefit is based (or to any such benefit under section 227 or 228), the applicable Consumer Price Index shall be deemed to be the Consumer Price Index for Elderly Consumers and such primary insurance amount shall be deemed adjusted under this subsection using such Index; and (2)in paragraph (4), by striking and by section 9001 and inserting , by section 9001, and by inserting after 1986, the following: and by section 5(a) of the Safeguarding American Families and Expanding Social Security Act of 2015,. (b)

Conforming amendments in applicable former law

Section 215(i)(1)(C) of the Social Security Act, as in effect in December 1978 and applied in certain cases under the provisions of such Act in effect after December 1978, is amended by inserting before the period the following: , and, with respect to any monthly insurance benefit payable under this title, effective for adjustments under this subsection to the primary insurance amount on which such benefit is based (or to any such benefit under section 227 or 228), the applicable Consumer Price Index shall be deemed to be the Consumer Price Index for Elderly Consumers and such primary insurance amount shall be deemed adjusted under this subsection using such Index. (c)

Effective date

The amendments made by this section shall apply to determinations made by the Commissioner of Social Security under section 215(i)(2) of the Social Security Act (42 U.S.C. 415(i)(2)) with respect to cost-of-living computation quarters ending on or after September 30, 2016.