[Congressional Record Volume 140, Number 21 (Wednesday, March 2, 1994)]
[Senate]
[Page S]
From the Congressional Record Online through the Government Printing Office [www.gpo.gov]


[Congressional Record: March 2, 1994]
From the Congressional Record Online via GPO Access [wais.access.gpo.gov]

 
         SOCIAL SECURITY ADMINISTRATION INDEPENDENT AGENCY ACT

  The PRESIDING OFFICER. The Senate will now proceed to the 
consideration of S. 1560, which the clerk will report.
  The bill clerk read as follows:

       A bill (S. 1560) to establish the Social Security 
     Administration as an independent agency, and for other 
     purposes.

  The Senate proceeded to consider the bill.
  The PRESIDING OFFICER. The Senator from New York is recognized.
  Mr. MOYNIHAN. Mr. President, my distinguished friend and colleague, 
the former chairman of the Committee on Finance, and I have the honor 
to bring to the Senate floor for the first time a bill which has on 
three occasions been reported from the Committee on Finance, I believe 
on one occasion when Senator Packwood was chairman, and once again 
today. This bill was reported on a voice vote with one Senator 
declaring his opposition but otherwise is effectively a unanimous 
measure.
  It has three times passed the U.S. House of Representatives by what 
you might legitimately call overwhelming majorities as, for example, in 
1986 when the vote was 401 to 0.
  The bill is very much in the manner of the moment, called reinventing 
Government, that our good friend and former colleague, now Vice 
President Gore, has been involved with. That notion of reinventing 
suggests going back to earlier good arrangements and that is what we 
propose here.
  The Social Security Administration began as an independent agency in 
the executive branch. The 1935 legislation created it as such. It had 
three Commissioners, one a managing Commissioner. It got off to a very 
good start, almost too good.
  This is perhaps a more complicated idea than I am able to handle, but 
I sometimes think it got off to too good a start. It became the model 
agency. The great civil servants of the New Deal era came to work in 
Social Security and they stayed forever, and they are still here. They 
are here to this day, some of them. I think of the two Bobs as they are 
called, Bob Ball, who early on became an employee of the Social 
Security agency, and who rose to be the Administrator under President 
Kennedy, President Johnson, and President Nixon and is still very 
active in the councils that deliberate issues like this.
  And Robert J. Myers, who, as a young graduate student from the 
University of Wisconsin, came to Washington to work on the Committee on 
Economic Security Staff. That committee was headed by Francis Perkins. 
The head of the professional staff was Edwin J. Witte, a great 
professor of economics in the Wisconsin tradition. Bob Myers went on to 
be chief actuary.
  When we found that the trust funds were in at least temporary 
difficulty in the early 1980's, President Reagan established a National 
Commission on Social Security Reform. The executive director of that 
Commission was none other than Robert J. Myers. Alan Greenspan, the now 
distinguished Chairman of the Federal Reserve Board, was chairman. I 
was a member. I was one of the Senators appointed, along with Bill 
Armstrong, our revered late friend John Heinz, Lane Kirkland, and Bob 
Dole, the Republican leader.
  Not incidentally, I make the point that the report of that 
Commission, whose recommendations Senator Dole and I brought to the 
floor here in the Senate in 1983, and which passed overwhelmingly, that 
report called for an independent agency.
  Now, why are we doing this? Two reasons. One is that the agency began 
to lose some of its distinctive energy and style in administration when 
it fell into a sequence of other agencies and departments, eventually 
Cabinet Departments, that had other missions. And it began to get 
further and further out of focus.
  It was not something the Secretary of Health, Education, and Welfare 
came to work in the morning thinking about. It is not something the 
Secretary of the Health and Human Services comes to work in the morning 
thinking about. At least in the Department of Health, Education, and 
Welfare, created under President Eisenhower, the word ``welfare'' was 
there; the idea of social welfare. That was removed in a change where 
education became a separate department under President Carter.
  The Department of Health and Human Services basically has become a 
department of health. Typically doctors, medical doctors, have been the 
Cabinet officers, and a fine thing, too. A Department of Health is very 
much in order. But in the process, the largest component of the 
Department has gotten lost.
  If you get the Congressional Directory for 1993--and I will point 
this out to my friend, Senator Packwood--where we get to the Secretary 
of Health and Human Services, on page 803, it says: Office of the 
Secretary, Secretary of Health and Human Services, Donna E. Shalala. 
Then, 278 names later, you get to the Social Security Administration--
``Administrator--vacant''--278 names between the Secretary, who is an 
incumbent, and Social Security Administrator--vacant. The job went more 
than a year vacant.
  In my now more than 18 years in the Senate, there have been 12 
administrators. From a period when you had long, stable administration 
and people who knew their work and understood their assignment, knew 
how they had begun, you have come to a time when you get one 
administrator, another administrator, another administrator, no 
administrator, no administrator, another administrator. Nobody is 
minding the store.
  After the 1983 report, in 1984, Congress commissioned a study of the 
best form of governance for the Social Security Administration. Elmer 
Staats, the former Comptroller General, headed the study. He made a 
powerful case, a superb report, with respect to an independent agency.
  The Social Security Administration has independent functions, Mr. 
President. It is the trustee of the Social Security trust funds. It is 
responsible for the integrity of the system. The head of that agency 
has to be able to look the President in the eye and say, ``Mr. 
President, no, I will not do that. If you wish, sir, I will resign, if 
you wish, ma'am, I will resign, but I will not do that. And when I 
resign it will be noticed.''
  Mr. President, I might ask my friend the former chairman of the 
committee, if the incumbent administrator of the Social Security 
Administration resigns, who would know it?
  Mr. PACKWOOD. You and I.
  Mr. MOYNIHAN. We might get a notice somewhere in the mail.
  Mr. PACKWOOD. We would see it in the Federal Register somewhere.
  Mr. MOYNIHAN. Would the Senator care to estimate the last time an 
administrator of the Social Security Administration had a meeting with 
the President in the Oval Office on the business of the Social Security 
Administration? Twenty years?
  Mr. PACKWOOD. 1939?
  Mr. MOYNIHAN. 1939.
  Excepting that Lyndon Johnson would have known who Bob Ball was 
because Wilbur Cohen would have brought him.
  But a long time ago, too long.
  One of the results is that a majority of nonretired adults in the 
United States today do not believe they will get their Social Security. 
Nothing tells them that.
  But we still use that little pasteboard card that we began in the 
1930's. I joined the Social Security system 51 years ago and I got that 
little card. We have enacted a statute saying, turn it into a good 
card, a card with a hologram, a piece of plastic. The statute specified 
a tamperproof card. But the agency gave us back the same little piece 
of cardboard as before, only with invisible hairs in the cardboard 
itself so that it is instantly detectable in an FBI lab.
  There is the card, the same 1935 card.
  Where is our health card? I have a health card right here.
  When President Clinton came to the House to deliver his joint message 
to Congress, his State of the Union, he held up a health card. And it 
is a dandy.
  My golly, it has your name in gold plate, it is plastic, there is a 
Zip Code, they can put it through and know exactly who you are.
  It is very important, incidentally, to American citizens of, say, 
Mexican descent, to have in their hand a piece of plastic which an 
employer can readily use: Good morning, Mr. Lopez--there is Mr. Lopez 
right there--here is your card. We know who you are. And they know who 
you are in Washington. Not this pathetic thing.
  Fifty--51 years now--never a day late or a dollar short; yet the 
majority of the American people--nonretired adults--do not think they 
are going to get their benefits.
  I will grant, it does not really make that much difference what 20-
year-olds think in these matters. And 30-year-olds--well, it is a 
transition. But when 40-year-old Americans with families and college 
coming up think, I am never going to get Social Security, we have 
failed to persuade them of something very important to them.
  We could give them an annual report. I have been 51 years in the 
system, save for my present work. I would never have any evidence that 
the Social Security Administration ever got my name right, spelled it 
right, recorded my address--entered any contributions I made--never.
  It is not hard to do. The stamp is the largest single cost. They can 
send out, once a year, a report. This is mine. It goes back to 1937. In 
the period 1937 to 1950, my taxable earnings were $1,615, and I paid 
$16 in tax. But the tax rate was very, very small then.
  They do not, as a matter of fact, have me credited with 3 years of 
Navy time. I could ask them to fix it up. They would be happy to learn 
about it.
  This report tells you what you will get at retirement age, in round 
terms. It tells you exactly what your survivor's benefit would be, what 
your child would receive if you died, what your spouse would receive if 
you died.
  These are the papers that, as I say, you throw away in your 20's and 
lose in your 30's. In your 40's you find a desk drawer to put them in, 
and you would take them out once in awhile and look at them. I find, 
for example, if I wait until 70 to receive benefits, my monthly benefit 
will be $1,470--not bad.
  Important to note: One of the reasons we want to have this 
information out is that rather suddenly we have reached a point where 
the Social Security retirement benefits just about give you back what 
you put in. It is a form of Federal savings. It is not the bonanza it 
was for that wonderful lady in Vermont--Ida May Fuller--who contributed 
about $27 and retired in 1940. I can remember from my youth, the annual 
photograph of the gentleman from the Social Security Administration 
presenting Ida May with her first check of the year. She did very well 
off her $27. Most of us will get back what we put in, and it is a good 
form of saving.
  People need to know that. It is their money being held in trust. It 
is not general revenue. We have a surplus in place. We put it in place 
in the 1977 Social Security amendments, as Senator Packwood will 
recall. The surplus accumulated from the year 1977 to the year 2015 
would buy the stock exchange. But not a penny has been put aside. And 
the only way it can be put aside is to have a balanced budget and 
reduce the privately held public debt, thereby increasing private 
savings. We have not done that.
  There are going to be a lot of people around here asking, ``Why have 
you not done it,'' with greater vehemence. One of the ways in which we 
could restore a sense of confidence, imbue a sense of confidence--would 
be to send this earnings statement out to everybody. I authored a 
statute that will require the Social Security Administration to start 
doing it in 1995. But it had to be put in statute, and it applies only 
to people over 60. They are good people up in Baltimore, but with no 
direction.
  I will give an example and then I will yield, with the patience of my 
friend from Oregon, if he can just give me another 5 minutes.
  One of the things we learned when the new administration began--is 
something which we should have known. I have been the chairman of the 
Subcommittee on Social Security. I should have known it and I did not. 
But the Social Security Administration should have known it with a 
great deal more sense of urgency than I: The system for payment of 
Social Security taxes, Federal Insurance Contribution Act, FICA, for 
domestic servants, was not working. We had set an amount of $50 a 
quarter back in the 1950's and never increased it for inflation, with 
the result that Social Security taxes were owed on the babysitter. That 
is something you do not want to do.
  Babysitting is sort of a right of passage for young women in our 
society. It is a good one. The first time you are asked next door to 
look after the two kids while the parents go off for a movie: Put her 
to bed at 10 o'clock; here is where we are if you need us. It is a 
nice, trusting relationship. You learn responsibility. You get a little 
money. That is fine.
  But there is another category of adult worker, cleaning women. Women, 
sir--I do not wish to give any offense--women who clean other people's 
toilets and are day laborers. We looked up and we found that, because 
of the very complex quarterly returns that had to be filled out, as if 
you were running a machine tool plant and had an accountant--and I know 
there are many professional couples who just hire an accountant to do 
it for them now--only a quarter of these women--they are not all 
women--but only a quarter of these persons were getting the Social 
Security contributions made on their behalf that were due them under 
the law.
  Did anybody in the Social Security Administration ever come to us and 
say this is a problem, we have to solve this? We have a good solution 
in the Committee on Finance. I think my colleague agrees on that. 
Senator Packwood and I have agreed on it, I think. We have worked it 
out. But we never heard from them.
  Then, without any sense of recrimination, our administration came to 
office, the present one, and very early on in the nomination of an 
Attorney General, this issue arose. The Attorney General had to 
withdraw at the beginning of 1993. At the end of 1993, Admiral Inman, 
expected to be nominated as Secretary of Defense, had this problem. In 
an announcement explaining why he was leaving, he spoke at some length 
about it, and said he was going to be in touch with us. He had been 
speaking with the head of the National Organization of Women about it.
  The whole year went by and we never got a note from the 
administration about what they wanted to do about this problem. Frances 
Perkins would have been in to see the President to say: ``These are day 
laborers. They are women. What they need is 40 quarters of coverage.''
  Anyone who is paid $620 a year would have taxes owed on their behalf 
and we would have them paid on the 1040. Easily done. We have never 
heard a word.
  Now, Mr. President, why have we not heard from them? For one thing, 
the job of the Administrator was vacant until November. Somebody might 
have thought this is kind of a serious thing; we better get that job 
filled. But it was not.
  And so we are here. An independent agency will address these issues 
and address the issue of confidence. If the majority of nonretired 
American adults do not think they will get Social Security, why, Mr. 
President, do we think they will believe this health care will always 
be there? What are they saying to us? I think they are saying something 
we ought to pay attention to and address.
  I can say, in closing, what Senator Packwood will, I am sure, say as 
well; that there is no significant organization that we are aware of 
concerned with these matters in the Nation that does not support this 
measure: The American Association of Retired Persons, the largest 
membership organization in America, at least 35 million members, 
including my wife; the AFL-CIO; the National Council of Senior Citizens 
all have supported this. The House has repeatedly passed the measure, 
and we hope to do so today.
  Mr. President, my good friend has been patient with me, and I yield 
the floor.
  Mr. PACKWOOD addressed the Chair.
  The PRESIDING OFFICER. The Senator from Oregon [Mr. Packwood] is 
recognized.
  Mr. PACKWOOD. Mr. President, I am delighted to join my good friend, 
the chairman of the Finance Committee, in supporting all of the 
measures for all of the reasons he said, but I will touch just a moment 
on why the public has a sense of uneasiness about Social Security, and 
perhaps the creation of an independent Social Security agency can 
alleviate that sense of fear a bit.
  The chairman of the committee indicated that, at the moment, we are 
collecting more in taxes than we pay out. That was a deliberate choice, 
because the Chair will recall that around 1979, 1980, and 1981, we had 
high rates of inflation. The Social Security benefits were tied to the 
cost of living, and they were going up with that high rate of 
inflation--10, 12, 13, 14 percent.
  But the tax base, the revenues to produce the money to pay the Social 
Security benefits, was not indexed to any kind of cost of living. So we 
finally got to the place, in the early eighties, where we had a surplus 
of barely, as I recall, 2 to 3 months. If the revenue ceased to come 
in, we could pay benefits for 2 or 3 months, and that is it--gone. In 
fact, even with a bad recession and the revenues falling, we were very 
near to a touch-and-go situation.
  So we changed the system to make it more like a private insurance 
actuarial system in which we said we will collect more money now and 
set it aside so that we will have the money to pay off the baby boom 
when it starts to retire. You have this immense population group moving 
through the 30 to 40 to 50 age group, and they were the ones born from 
1945 to 1965. Let us assume they retire at 65. They will start to 
retire in about the year 2010. The first of them will be 65 then.
  Over the next 20 years, from 2010 to 2030, you have an immense group 
of retirees, and the extra money we are collecting now is designed to 
be held to pay them off when they retire. A prudent insurance company 
does the same thing. You buy an insurance policy from Metropolitan 
Life, Prudential, or any other insurance company, and they take a look 
at the demographics of all the policyholders they have. They figure how 
many are age 20, 30, or 40; how much they are going to need in the year 
2010, 2020, 2030 to pay off their beneficiaries. We decided to do the 
same thing they did.
  It is important to understand, however, that there is not a separate 
pot of money for each Social Security recipient. All of the money comes 
in and it goes, in essence, to the U.S. Treasury. As I recall, the 
Social Security actuaries once estimated that it is about $70 billion 
more we collect than we pay out. In comes $70 billion more from my 
wages, your wages, everybody's wages--your employer pays half, you pay 
half, we collect it and we pay out the benefits, and we have $70 
billion left over. We take that $70 billion--the Social Security 
Administration is entitled to it--in essence, Treasury takes it and it 
gives to the Social Security Administration a bond, an IOU: The U.S. 
Government owes you, the Social Security Administration, $70 billion.
  This process continues for about the next 15 to 20 years--more money 
coming in than going out. Then, depending upon the estimates, what we 
call optimistic or intermediate or pessimistic estimates, more money 
starts to flow out of the fund than comes into it. Let us just pick a 
year. Let us pick about 2012 or 2013. We start to pay out more benefits 
than we take in.
  At that stage, the Social Security Administration, depending upon the 
assumptions--I hate to be cavalier in talking in terms of trillions--
but the Social Security Administration will hold anywhere from $3 
trillion to $6 trillion or $7 trillion in bonds of the U.S. 
Government--IOU's.
  I want to emphasize, this is no different than what an insurance 
company does. Insurance companies invest heavily.
  Mr. MOYNIHAN. It is $4.5 trillion.
  Mr. PACKWOOD. The chairman says it is $4.5 trillion; $4.5 trillion in 
IOU's. Insurance companies do the same thing except they do not invest 
solely in Government bonds. They have a lot of Government bonds, and 
they may invest in some real estate. They try to spread their portfolio 
in such a way that they cannot get hurt too much because they know they 
have benefits to pay out, whereas we prohibit the Social Security 
Administration from investing in anything but Government bonds.
  On occasion, the suggestion has been raised that we should let Social 
Security cut loose and invest in things other than Government bonds 
where they might get a better return, because Government bonds are a 
very secure investment and, therefore, the percentage of return on them 
is lower than a riskier investment.
  I hate to think, however, what the situation would have been in about 
1977 or 1978 had we said to the Social Security Administration, ``Go 
ahead and invest in what you want,'' and they had invested in Texas 
real estate. We would have been bailing out Social Security from about 
1981 on perpetually, and there would have been a tendency to say, 
``Why, if we can get a 10- or 12-percent return instead of the 
Government bond 8 percent return, let us invest in real estate.''
  So we prohibit them from investing in anything but Government bonds. 
When we take in this extra $70 billion, we give the Social Security 
Administration a bond, an IOU. We take the $70 billion and we spend it. 
We spend it on education; we spend it on welfare; we spend it on 
defense. We spend it on all the things Government spends money on.
  The fear I think the people have is that when, 20 years hence, the 
Social Security Administrator takes his or her IOU to the Treasury and 
says, ``Madam Treasurer, will you please give me some money so I can 
pay the benefits?'' The Treasurer will say, ``Give you money? We spent 
that money 20 years ago. We don't have any money.''
  That scenario is only true if the U.S. Government reneges on its 
promise to redeem the bonds. We have never failed to redeem bonds in 
the 200-plus-year history of this country. And if we were to fail to 
redeem the Social Security bonds, it is not just Social Security; it is 
the bonds that Metropolitan Life has, Prudential has, General Motors 
holds. It means the country has gone bankrupt if we fail to redeem the 
bonds.
  But I think that is the fear of Social Security recipients. They 
think their money is being spent now and they have nothing in exchange 
for security. Indeed, what they do have is still what the world regards 
as the single best security in the world--U.S. Government bonds. They 
sell at a better premium than any other Government bonds and are 
regarded as more secure, practically, than gold or anything else.
  If the creation of this administration as an independent 
administration--and I think it should be--will help make the public 
aware that, indeed, the Social Security Administration is not holding 
IOU's you cannot fine and levy on, but is, indeed, holding a Government 
bond, they will feel a bit more secure.
  I am frank to say, when the year 2015 or 2012 comes, if we are still 
running a $200 billion deficit, we are going to be running bigger 
deficits because we will have to pay off the Social Security bonds. I 
understand that.
  But all I can say is this country has never reneged on redeeming a 
bond in its 200 years.
  Mr. MOYNIHAN. Will my friend yield----
  Mr. PACKWOOD. Yes.
  Mr. MOYNIHAN. Just for a question to which I know he knows the answer 
but just to put it in the Record at this point. As my friend knows, the 
bonds that Treasury issues to the Social Security Administration have a 
special provision; they can never sell below par, as the Senator well 
knows.
  Mr. PACKWOOD. That is correct. They cannot sell below par. They 
cannot be sold below what they were sold for. That is a good protection 
because there are bonds, a fair number of bonds, in the market that go 
up and down. You sometimes have to sell your bond at less than what we 
call par value, but that is the marketplace. You have a $1,000 bond. 
You want to sell it. You can only get $900 for it. That is not true of 
Social Security bonds. So the Government has promised to redeem them at 
least at what they call par value.
  So I support this, Mr. President. I think it is a good provision. I 
think it will heighten the awareness of the Social Security 
Administration and let people know that even though the money they are 
now paying in is spent for things they probably like--education, 
environment, Forest Service, Coast Guard--indeed, their money is safe 
so long as the Government is safe. And if the Government is not safe, 
it is not just Social Security that is in trouble; it is everybody that 
has any investment in any State in this country.
  I thank the Chair and I hope we will pass the bill.
  Mr. MOYNIHAN. Mr. President, I suggest the absence of a quorum.
  The PRESIDING OFFICER. The absence of a quorum has been suggested. 
The clerk will call the roll.
  The assistant legislative clerk proceeded to call the roll.
  Mr. MOYNIHAN. Mr. President, I ask unanimous consent that the order 
for the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. MOYNIHAN. Mr. President, Washington is a place that pays a lot of 
attention to polls. And not every poll is of great interest. But I 
might say that as I was speaking earlier, and as Senator Packwood was 
speaking, I noted that the very able young professional persons who are 
here in the Senate as Senate staff employees were listening in a manner 
that they do not always listen. Maybe because the hour is early enough 
for them to be attentive, but I think the subject is of interest.
  So I just took an unscientific, informal poll of five persons, each 
of whom has graduated from college, I do not doubt; most of whom have 
law degrees; they are parliamentarians; they are people we depend 
absolutely on for the working of this institution. If they did not get 
things right, we would not have any record about what we had done.
  I can report the results of my survey. Of the five samples, I asked, 
``Do you think you will get your Social Security? Two said no; two said 
not all of it; and one trusting young citizen said yes. But that is not 
reassuring.
  Mr. PACKWOOD. Can we have name, rank, and Social Security number of 
those four who are not trusting?
  Mr. MOYNIHAN. If they will give it to me, I will get them a copy of 
their chart. So you will know at least that you will continue to get 
your retirement; you will know that you are covered for disability 
benefits. Not everyone knows that. You do know that, those of you who 
are married, it is altogether likely that in the event you should die 
your spouse will receive benefits; your children will receive benefits.
  Still you do not trust us. After 18 years in which I have been on 
this floor asking you to trust the Social Security Administration, it 
has not sunk it; not you. As a matter of fact, the two senior most 
Members are the ones that absolutely believe they will not receive 
their Social Security.
  I simply make the point that they are attentive. I think they respect 
the public confidence. And we ought to be attentive.
  With that, Mr. President, I see the Senator from Maine has risen, if 
he wishes to proceed, to offer an amendment.
  Mr. COHEN. I thank my friend for yielding.
  The PRESIDING OFFICER. The Senator from Maine is recognized.
  Mr. COHEN. Mr. President, I might inform my friends that I have a 
technical bill on the way over to the floor. I would like to begin 
speaking about the measure that I intend to offer, and perhaps that 
will save some time rather than going into an extended quorum call.
  Mr. President, we have a program that is designed to deal with a 
serious problem in this country; namely, that of drug and alcohol 
addiction.
  There are two programs under the Social Security Administration's 
jurisdiction. One is the Supplemental Security Income Program, which is 
designed to assist the very poorest poor that we have in this country, 
and the second is the Social Security Disability Insurance Program. 
Under these programs, those individuals who are in fact disabled by 
virtue of an addiction to either drugs or alcohol are required to do 
two things. They are required to seek treatment. That is one of the 
conditions that we impose in order to assure the taxpayers that the 
money is going for the purpose of which it was intended. Second, in 
order to ensure the safeguarding of taxpayer dollars, the SSI Program 
requires that the benefits are paid to a responsible third party. 
Obviously, the person who is addicted is not a responsible individual, 
and we require payments to go to a representative payee.
  A recent investigation conducted by my minority staff on the Senate 
Special Committee on Aging and the GAO found that the SSI and SSDI 
programs are out of control and are, in effect, subsidizing drug and 
alcohol abuse, with little enforcement of treatment requirements. Out 
of the estimated 250,000 addicts on the rolls through either heroin, 
alcohol, or other drugs, however, only 78,000 are required to seek 
treatment. Of that 78,000, only approximately 9 percent seek treatment. 
So the calculations are that out of the total of 250,000 that we know 
are addicted, only about 3 percent get any kind of treatment at all. 
Similarly, only a portion of the estimated 250,000 drug addicts and 
alcoholics now on the disability rolls have their checks go to a 
representative payee.
  So we have a situation in which money is going directly to 
individuals who are addicted. They are, in fact, using the money to 
further their addiction. They are going out and buying drugs with the 
money supplied by the taxpayers. They are buying alcohol to achieve the 
same end. And the taxpayer throws his or her hands up in despair.
  Mr. President, $1.1 billion basically is going directly to fuel 
addiction. What this amounts to is revenue sharing for addicts. The 
public, I think, is justifiably concerned. When they find, for example, 
that these third-party payees who are getting the money from the 
individuals can even be tavern owners, the public is outraged. For 
example, we know of a case in Denver where a liquor store owner is 
getting $160,000 a year to, in effect, run a tab for the recipients, 
the beneficiaries, who end up spending their benefits on booze and 
drinking away taxpayers' money.
  The amendment that I am proposing, cosponsored by Senators Dole and 
Kassebaum, and others, would go far in correcting this problem. This 
amendment would insist that whether one is receiving payments through 
the SSI Program or the Disability Insurance Program, if they are 
impaired as a result of drug or alcohol addiction, that they must seek 
treatment as a condition of receiving, and continuing to receive, those 
benefits.
  This amendment also prohibits retroactive lump sum payments from 
being paid directly to an individual who receives benefits in whole or 
in part due to substance abuse. Today we have retroactive payments 
being given to people who are addicted to drugs or alcohol in amounts 
as high as $15,000 to $20,000. That $15,000 and $20,000 payment then is 
made directly to that individual or a third party, who in turn gives 
the money over to the addict. They go out and either buy more drugs--
and we have had cases of people who bought large amounts of drugs with 
their lump sum benefits and died from overdoses. One individual took 
his lump sum and bought a van and two cars, each of which he 
demolished, and then ended up in a hospital addicted again.
  Mr. President, the nature of the problem is escalating. We have seen, 
for example, a 150-percent increase in those going onto the disability 
rolls on the basis of drug addiction and alcoholism from 1989-1992. We 
added 22,634 to the rolls in 1989; we added another roughly 29,000 in 
1990; an additional 38,000 in 1991; then 58,000 in 1992. It is going up 
exponentially.
  There is a reason I assume. Some of that may be because more and more 
people are becoming addicted but also more and more people are becoming 
aware of the program. For example, the word on the street among addicts 
and alcoholics is that the SSI and SSDI programs are easy sources of 
cash. In a recent example, one person called my office and said her 
brother was getting out of prison. He found out about the SSI program, 
and he is going immediately to apply on the basis of drug addiction. 
Coming out of prison he was addicted and he was ``thrilled to learn'' 
that SSI would pay him for his addiction, and he had no intention of 
going to treatment.
  We have more people becoming aware of this. The word is out that this 
is an easy way to get some sort of sustenance during the course of a 
month. So more and more people are applying for it.
  The purpose of this amendment is not to see treatment stopped. We 
want to see treatment really enhanced, increased, and force those 
individuals who have a problem to get the kind of treatment that they 
need.
  But right now, as I pointed out, they are getting the money without 
the treatment. They are getting it in lump-sum payments, and I think 
the program's objectives are being completely ignored.
  The situation gets even worse. I recently offered an amendment which 
was accepted unanimously when the emergency supplemental appropriations 
bill came to the floor. That had to do with a situation that came down 
as a result of a Ninth Circuit Court of Appeals' opinion. We had an 
individual who was on disability. He is an addict, addicted to heroin. 
He would, in the course of a day, help three other addicts acquire 
significant amounts of heroin. He, of course, would be compensated by 
getting several grams of heroin for himself, or about $150 a day. So 
while he is receiving disability payments, he is also engaged in a 
little bit of dealing to further his own habit of $150 a day. It went 
to court. The ninth circuit ruled that that individual was not engaged 
in substantial gainful activity; that he was not engaged in substantial 
gainful activity because his work really only took about 20 to 30 
minutes a day. ``No heavy lifting involved'' is essentially what they 
are saying. He was not initiating the telephone calls. The individuals 
were calling him saying, ``Can you help us out by buying heroin for us, 
and we will give you a little piece of the action,'' so to speak. In 
this case, the court essentially ruled that SSA would continue his 
disability payments, while he nurtured his habit through this illegal 
activity.

  The amendment we passed, which was dropped in conference, and which 
is also part of the amendment I am offering here today, specifies that 
any proceeds derived from criminal activity to support substance abuse 
will constitute substantial gainful activity. The amendment we are 
offering today also requires everyone who receives SSI or disability 
insurance payments based on substance abuse must, as a condition of 
receiving those payments, seek treatment. The Social Security 
Administration must establish agencies for each State to refer and 
monitor the treatment of substance abusers receiving SSI or SSDI 
benefits. As of the beginning of this year, only 18 States had this 
sort of monitoring agency within their State. We have almost half of 
our States without any sort of authorized monitoring center. So we do 
not know how the money is being spent or whether there is treatment 
being given.
  So we would require the Social Security Administration to in fact do 
what we all want; namely, provide for the monitoring of the treatment 
of these individuals receiving the money. In addition, the amendment 
prohibits benefits and retroactive payments to be paid directly to 
those who are addicted. They must be paid to the representative payee, 
who under our amendment would be required to be an institution, agency, 
or treatment center.
  In addition, our amendment provides a cutoff period of 3 years of 
benefits for individuals receiving SSI or SSDI on the basis of 
substance abuse. Senator Kassebaum and her staff determined that most 
professionals believe a substance abuser will be treated within that 3-
year period. Those who are not should not be able to receive a lifetime 
of benefits from SSI or SSDI, unless there is another qualifying basis 
for disability.
  I have one other chart to illustrate the negative effects of paying 
cash benefits directly to addicts. It shows the correlation between 
attending treatment and getting lump sum cash benefits. A study of 
those receiving methadone as a substitute for their heroin addiction 
showed that before they receive their disability check, the average 
time someone would miss their treatment would be roughly five times 
before they got their disability checks. As soon as they received their 
checks, absenteeism went up to 18 days. Obviously, they were taking the 
check and going out and buying heroin, since individuals who are 
receiving methadone treatment become violently ill if they miss their 
treatment. When the money runs out, they go back into methadone 
treatment. So there is a direct connection between our system of paying 
out money and not insisting upon the treatment itself.
  So these are the issues we are trying to address, and I want to make 
sure everybody understands we are not trying to discourage treatment or 
take away money from those who need treatment. We want to make sure the 
money is not going into a needle or into a bottle and that the people 
who need the treatment get it and that the taxpayer feels satisfied 
that this program is being monitored, and operates efficiently and 
responsibly. That is not the case today.
  So I offer this amendment.


                           Amendment No. 1474

  Mr. COHEN. Mr. President, I send an amendment to the desk and ask for 
its immediate consideration.
  The PRESIDING OFFICER. The clerk will report.
  The legislative clerk read as follows:

       The Senator from Maine [Mr. Cohen], for himself, Mr. Dole, 
     Mrs. Kassebaum, Mr. Domenici, Mr. Thurmond, Mr. Grassley, Mr. 
     Nickles, Mr. Lieberman, Mr. Danforth, Mr. Lugar, Mr. Kohl, 
     Mr. Warner, Mr. Chafee, Mr. Bennett, Mr. Stevens, Mr. 
     Mathews, Mr. Hollings, Mr. Cochran, and Mrs. Feinstein, 
     proposes an amendment numbered 1474.

  Mr. COHEN. Mr. President, I ask unanimous consent that reading of the 
amendment be dispensed with.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The amendment is as follows:

       At the appropriate place insert:

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Social Security Disability 
     and Rehabilitation Act of 1994''.

     SEC. 2. REFORM OF MONTHLY INSURANCE BENEFITS BASED ON 
                   DISABILITY INVOLVING SUBSTANCE ABUSE.

       (a) Social Security Disability Insurance.--
       (1) In general.--Section 223 of the Social Security Act (42 
     U.S.C. 423) is amended by adding at the end the following new 
     subsection:

    ``Limitation on Payment of Benefits by Reason of Substance Abuse

       ``(j)(1)(A) Notwithstanding any other provision of this 
     title, no individual whose disability is based in whole or in 
     part on a medical determination that the individual is a drug 
     addict or alcoholic shall be entitled to benefits under this 
     title based on such disability with respect to any month, 
     unless such individual--
       ``(i) is undergoing, or on a waiting list for, any medical 
     or psychological treatment that may be appropriate for such 
     individual's condition as a drug addict or alcoholic (as the 
     case may be) and for the stage of such individual's 
     rehabilitation at an institution or facility approved for 
     purposes of this paragraph by the Secretary (so long as 
     access to such treatment is reasonably available, as 
     determined by the Secretary), and
       ``(ii) demonstrates in such manner as the Secretary 
     requires, including at a continuing disability review not 
     later than one year after such determination, that such 
     individual is complying with the terms, conditions, and 
     requirements of such treatment and with the requirements 
     imposed by the Secretary under subparagraph (B).
       ``(B) The Secretary shall provide for the monitoring and 
     testing of all individuals who are receiving benefits under 
     this title and who as a condition of such benefits are 
     required to be undergoing treatment and complying with the 
     terms, conditions, and requirements thereof as described in 
     subparagraph (A), in order to assure such compliance and to 
     determine the extent to which the imposition of such 
     requirements is contributing to the achievement of the 
     purposes of this title. The Secretary may retain jurisdiction 
     in the case of a hearing before the Secretary under this 
     title to the extent the Secretary determines necessary to 
     carry out the preceding sentence. The Secretary shall 
     annually submit to the Congress a full and complete report on 
     the Secretary's activities under this paragraph.
       ``(C) The representative payee and the referral and 
     monitoring agency for any individual described in 
     subparagraph (A) shall report to the Secretary any 
     noncompliance with the terms, conditions, and requirements of 
     the treatment described in subparagraph (A) and with the 
     requirements imposed by the Secretary under subparagraph (B).
       ``(D)(i) If the Secretary finds that an individual is not 
     complying with the terms, conditions, and requirements of the 
     treatment described in subparagraph (A), or with the 
     requirements imposed by the Secretary under subparagraph (B), 
     or both, the Secretary, in lieu of termination, may suspend 
     such individual's benefits under this title until compliance 
     has been reestablished, including compliance with any 
     additional requirements determined to be necessary by the 
     Secretary.
       ``(ii) Any period of suspension under clause (i) shall be 
     taken into account in determining any 24-month period 
     described in subparagraph (E) and shall not be taken into 
     account in determining the 36-month period described in such 
     subparagraph.
       ``(E)(i) Except as provided in clause (ii), no individual 
     described in subparagraph (A) shall be entitled to benefits 
     under this title for any month following the 24-month period 
     beginning with the determination of the disability described 
     in such subparagraph.
       ``(ii) If at the end of the 24-month period described in 
     clause (i), the individual furnishes evidence in accordance 
     with subsection (d)(5) that the individual continues to be 
     under a disability based in whole or in part on a medical 
     determination that the individual is a drug addict or 
     alcoholic, such individual shall continue to be entitled to 
     benefits under this title based on such disability.
       ``(iii) Subject to clause (iv), if such an individual 
     continues to be entitled to such benefits for an additional 
     24-month period following a determination under clause (ii), 
     clauses (i) and (ii) shall apply with regard to any further 
     entitlement to such benefits following the end of such 
     additional period.
       ``(iv) In no event shall such an individual be entitled to 
     benefits under this title for more than a total of 36 months, 
     unless upon the termination of the 36th month such individual 
     furnishes evidence in accordance with subsection (d)(5) that 
     the individual is under a disability which is not related in 
     part to a medical determination that the individual is a drug 
     addict or alcoholic.
       ``(2)(A) Any benefits under this title payable to any 
     individual referred to in paragraph (1), including any 
     benefits payable in a lump sum amount, shall be payable only 
     pursuant to a certification of such payment to a qualified 
     organization acting as a representative payee of such 
     individual pursuant to section 205(j).
       ``(B) For purposes of subparagraph (A) and section 
     205(j)(4), the term `qualified organization'--
       ``(i) shall have the meaning given such term by section 
     205(j)(4)(B), and
       ``(ii) shall mean an agency or instrumentality of a State 
     or a political subdivision of a State.
       ``(3) Monthly insurance benefits under this title which 
     would be payable to any individual (other than the disabled 
     individual to whom benefits are not payable by reason of this 
     subsection) on the basis of the wages and self-employment 
     income of such a disabled individual but for the provisions 
     of paragraph (1), shall be payable as though such disabled 
     individual were receiving such benefits which are not payable 
     under this subsection.''
       (2) Conforming amendments.--
       (A) Section 205(j)(1) of such Act (42 U.S.C. 405(j)(1)) is 
     amended by inserting '', or in the case of any individual 
     referred to in section 223(j)(1)(A)'' after ``thereby''.
       (B) Section 205(j)(2)(D)(ii)(II) of such Act (42 U.S.C. 
     405(j)(2)(D)(ii)(II)) is amended by striking ``legally 
     incompetent or under the age of 15'' and inserting ``legally 
     incompetent, under the age of 15, or a drug addict or 
     alcoholic referred to in section 223(j)(1)(A)''.
       (b) Supplemental Security Income.--Paragraph (3) of section 
     1611(e) of the Social Security Act (42 U.S.C. 1382(e)) is 
     amended to read as follows:
       ``(3)(A)(i) No person who is an aged, blind, or disabled 
     individual solely by reason of disability (as determined 
     under section 1614(a)(3)) shall be an eligible individual or 
     eligible spouse for purposes of this title with respect to 
     any month if such individual's disability is based in whole 
     or in part on a medical determination that the individual is 
     a drug addict or alcoholic, unless such individual--
       ``(I) is undergoing, or on a waiting list for, any medical 
     or psychological treatment that may be appropriate for such 
     individual's condition as a drug addict or alcoholic (as the 
     case may be) and for the stage of such individual's 
     rehabilitation at an institution or facility approved for 
     purposes of this paragraph by the Secretary (so long as 
     access to such treatment is reasonably available, as 
     determined by the Secretary), and
       ``(II) demonstrates in such manner as the Secretary 
     requires, including at a continuing disability review not 
     later than one year after such determination, that such 
     individual is complying with the terms, conditions, and 
     requirements of such treatment and with the requirements 
     imposed by the Secretary under clause (ii).
       ``(ii) The Secretary shall provide for the monitoring and 
     testing of all individuals who are receiving benefits under 
     this title and who as a condition of such benefits are 
     required to be undergoing treatment and complying with the 
     terms, conditions, and requirements thereof as described in 
     clause (i), in order to assure such compliance and to 
     determine the extent to which the imposition of such 
     requirements is contributing to the achievement of the 
     purposes of this title. The Secretary may retain jurisdiction 
     in the case of a hearing before the Secretary under this 
     title to the extent the Secretary determines necessary to 
     carry out the preceding sentence. The Secretary shall 
     annually submit to the Congress a full and complete report on 
     the Secretary's activities under this subparagraph.
       ``(iii) The representative payee and the referral and 
     monitoring agency for any individual described in clause (i) 
     shall report to the Secretary any noncompliance with the 
     terms, conditions, and requirements of the treatment 
     described in clause (i) and with the requirements imposed by 
     the Secretary under clause (ii).
       ``(iv)(I) If the Secretary finds that an individual is not 
     complying with the terms, conditions, and requirements of the 
     treatment described in clause (i), or with the requirements 
     imposed by the Secretary under clause (ii), or both, the 
     Secretary, in lieu of termination, may suspend such 
     individual's benefits under this title until compliance has 
     been reestablished, including compliance with any additional 
     requirements determined to be necessary by the Secretary.
       ``(II) Any period of suspension under subclause (I) shall 
     be taken into account in determining any 24-month period 
     described in clause (v) and shall not be taken into account 
     in determining the 36-month period described in such clause.
       ``(v)(I) Except as provided in subclause (II), no 
     individual described in clause (i) shall be entitled to 
     benefits under this title for any month following the 24-
     month period beginning with the determination of the 
     disability described in such clause.
       ``(II) If at the end of the 24-month period described in 
     subclause (I), the individual furnishes evidence in 
     accordance with section 223(d)(5) that the individual 
     continues to be under a disability based in whole on a 
     medical determination that the individual is a drug addict or 
     alcoholic, such individual shall be entitled to benefits 
     under this title based on such disability for no more than an 
     additional 36 months.
       ``(III) Subject to subclause (IV), if such an individual 
     continues to be entitled to such benefits for an additional 
     24-month period following a determination under subclause 
     (II), subclauses (I) and (II) shall apply with regard to any 
     further entitlement to such benefits following the end of 
     such additional period.
       ``(IV) In no event shall such an individual be entitled to 
     benefits under this title for more than a total of 36 months, 
     unless upon the termination of the 36th month such individual 
     furnishes evidence in accordance with section 223(d)(5) that 
     the individual is under a disability which is not related in 
     part to a medical determination that the individual is a drug 
     addict or alcoholic.
       ``(B)(i) Any benefits under this title payable to any 
     individual referred to in subparagraph (A), including any 
     benefits payable in a lump sum amount, shall be payable only 
     pursuant to a certification of such payment to a qualified 
     organization acting as a representative payee of such 
     individual pursuant to section 1631(a)(2)(A)(ii).
       ``(ii) For purposes of clause (i) and section 
     1631(a)(2)(D), the term `qualified organization'--
       ``(I) shall have the meaning given such term by section 
     1631(a)(2)(D)(ii), and
       ``(II) shall mean an agency or instrumentality of a State 
     or a political subdivision of a State.''
       (c) Effective Dates; Authorizations.--
       (1) In general.--Except as provided in paragraph (2), the 
     amendments made by this section shall apply to benefits 
     payable for determinations of disability made 90 or more days 
     after the date of the enactment of this Act.
       (2) Current determinations.--
       (A) In general.--With respect to any individual described 
     in subparagraph (B), the Secretary of Health and Human 
     Services shall provide during the 3-year period beginning 
     after the date of the enactment of this Act for the 
     application of the amendments made by this section to such 
     individual with the time periods described in such amendments 
     to begin upon such application.
       (B) Individual described.--An individual is described in 
     this subparagraph if such individual is entitled to benefits 
     under title II or XVI of the Social Security Act based on a 
     disability determined before the date described in paragraph 
     (1) to be based in whole or in part on a medical 
     determination that the individual is a drug addict or 
     alcoholic.
       (3) Authorization of appropriations.--There are authorized 
     to be appropriated such sums as may be necessary to carry out 
     the purposes of the provisions of, and the amendments made 
     by, this section.

     SEC. 3. PRIORITY OF TREATMENT.

       The Secretary of Health and Human Services, through the 
     Administrator of the Substance Abuse and Mental Health 
     Services Administration, shall assure that every individual 
     receiving disability benefits under title II or XVI of the 
     Social Security Act based in whole or in part on a medical 
     determination that the individual is a drug addict or 
     alcoholic be given high priority for treatment through 
     entities supported by the various States through any 
     substance abuse block grant authorized under law.

     SEC. 4. ESTABLISHMENT OF REFERRAL MONITORING AGENCIES 
                   REQUIRED IN ALL STATES.

       The Secretary of Health and Human Services shall, within 1 
     year of the date of the enactment of this Act, provide for 
     the establishment of referral and monitoring agencies for 
     each State for the purpose of carrying out the treatment 
     requirements under sections 223(j)(1) and 1611(e)(3)(A) of 
     the Social Security Act (42 U.S.C. 423(j)(1) and 
     1382(e)(3)(A)).

     SEC. 5. PROCEEDS FROM CERTAIN CRIMINAL ACTIVITIES CONSTITUTE 
                   SUBSTANTIAL GAINFUL EMPLOYMENT.

       (a) Social Security Disability Insurance.--Section 
     223(d)(4) of the Social Security Act (42 U.S.C. 423(d)(4)) is 
     amended by inserting the following after the first sentence: 
     ``If an individual engages in a criminal activity to support 
     substance abuse, any proceeds derived from such activity 
     shall demonstrate such individual's ability to engage in 
     substantial gainful activity.''.
       (b) Supplemental Security Income.--Section 1614(a)(3)(D) of 
     the Social Security Act (42 U.S.C. 1382(a)(3)(D)) is amended 
     by inserting the following after the first sentence: ``If an 
     individual engages in a criminal activity to support 
     substance abuse, any proceeds derived from such activity 
     shall demonstrate such individual's ability to engage in 
     substantial gainful activity.''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to disability determinations conducted on or 
     after the date of the enactment of this Act.

     SEC. 6. CONSISTENT PENALTY PROVISIONS FOR SSDI AND SSI 
                   PROGRAMS.

       (a) Felony Penalties for Fraud.--
       (1) In general.--Subsection (a) of section 1631 of the 
     Social Security Act (42 U.S.C. 1383a) is amended by striking 
     ``shall be guilty of a misdemeanor and upon conviction 
     thereof shall be fined not more than $1,000 or imprisoned for 
     not more than one year, or both'' and inserting ``shall be 
     guilty of a felony and upon conviction thereof shall be fined 
     under title 18, United States Code, or imprisoned for not 
     more than five years, or both''.
       (2) Representative payees.--
       (A) Ssdi.--Subsections (b) and (c) of section 208 of such 
     Act (42 U.S.C. 408) are amended to read as follows:
       ``(b)(1) Any person or other entity who is convicted of a 
     violation of any of the provisions of this section, if such 
     violation is committed by such person or entity in his role 
     as, or in applying to become, a certified payee under section 
     205(j) on behalf of another individual (other than such 
     person's spouse or an entity described in section 
     223(j)(2)(B)(ii)), shall be guilty of a felony and upon 
     conviction thereof shall be fined under title 18, United 
     States Code, or imprisoned for not more than five years, or 
     both.
       ``(2) In any case in which the court determines that a 
     violation described in paragraph (1) includes a willful 
     misuse of funds by such person or entity, the court may also 
     require that full or partial restitution of such funds be 
     made to the individual for whom such person or entity was the 
     certified payee.
       ``(3) Any person or entity convicted of a felony under this 
     section or under section 1632(b) may not be certified as a 
     payee under section 205(j).
       ``(c) For the purpose of subsection (a)(7), the terms 
     `social security number' and `social security account number' 
     mean such numbers as are assigned by the Secretary under 
     section 205(c)(2) whether or not, in actual use, such numbers 
     are called social security numbers.''
       (B) Ssi.--Subsection (b)(1) of section 1632 of such Act (42 
     U.S.C. 1383a) is amended by striking ``(other than such 
     person's spouse)'' and all that follows through the period 
     and inserting ``(other than such person's spouse or an entity 
     described in section 1611(e)(3)(B)(ii)(II)), shall be guilty 
     of a felony and upon conviction thereof shall be fined under 
     title 18, United States Code, or imprisoned for not more than 
     five years, or both.''
       (b) Civil Administrative Penalties.--
       (1) Ssdi.--Section 208 of the Social Security Act (42 
     U.S.C. 408) is amended by adding at the end the following new 
     subsections:
       ``(e) For administrative penalties for false claims and 
     statements with respect to which an individual or other 
     entity knows or has reason to know such falsity, see chapter 
     38 of title 31, United States Code.
       ``(f) In the case of the second or subsequent imposition of 
     an administrative or criminal penalty on any person or other 
     entity under this section, the Secretary may exclude such 
     person or entity from participation in any program under this 
     title and titles V, XVI, XVIII, and XX, and may direct that 
     such person or entity be excluded from any State health care 
     program (as defined in section 1128(h)) and any other Federal 
     program as provided by law.''
       (2) Ssi.--
       (A) In general.--Section 1632 of such Act (42 U.S.C. 1383a) 
     is amended by adding at the end the following new 
     subsections:
       ``(c) For administrative penalties for false claims and 
     statements with respect to which an individual or other 
     entity knows or has reason to know such falsity, see chapter 
     38 of title 31, United States Code.
       ``(d) In the case of the second or subsequent imposition of 
     an administrative or criminal penalty on any person or other 
     entity under this section, the Secretary may exclude such 
     person or entity from participation in any program under this 
     title and titles II, V, XVIII, and XX, and may direct that 
     such person or entity be excluded from any State health care 
     program (as defined in section 1128(h)) and any other Federal 
     program as provided by law.''
       (B) Conforming amendment.--The heading for section 1632 of 
     such Act (42 U.S.C. 1383a) is amended by striking ``for 
     fraud''.
       (c) Effective Date.--The amendments made by this section 
     shall be effective on or after the date of the enactment of 
     this Act.

  Mr. MOYNIHAN. Mr. President, I rise to say that on this side of the 
aisle and on that side of the aisle we are happy to accept this 
amendment. But if I could be indulged just a moment to ask the Senator 
from Maine a question. Sir, you had to get the General Accounting 
Office to tell you about this, did you not?
  Mr. COHEN. Yes, but not only the GAO. As a result of the minority 
staff investigation on the Senate Aging Committee, we conducted a year-
long investigation, and we asked for the assistance of the GAO as well.
  Mr. MOYNIHAN. May I ask you this. I am not a lawyer, but I do know 
you are not supposed to ask a question to which you do not know the 
answer. Did the Social Security Administration come to you with this 
question?
  Mr. COHEN. The administration did not directly, no.
  Mr. MOYNIHAN. Did not. This is a problem. Hamilton said, ``energy in 
the executive.'' They have had trouble with the disability program 
since the fifties, during Eisenhower. Martha Derthick, from the 
University of Virginia, has written about this very carefully. It is 
not that they do not cope with their problems; it is that they do not 
share them. It would be all right to come here and say, ``We have a 
problem and we need to know what to do about it.''
  Mr. COHEN. The people responsible for bringing it to our attention 
initially were the administrative law judges, the ones hearing the 
cases, who were saying, ``You should know we have people coming in who 
are addicted, who are continuing their addiction by engaging in illegal 
activity.''
  Mr. MOYNIHAN. I am not surprised. The administrative law judges have 
been appalled by the long waits for disability, and then a $20,000 
check finally comes out. In the southern district of New York, at one 
point, I tell my friend Senator Packwood, who is a proud graduate of 
New York University, when Rudolph Guiliani was the U.S. attorney for 
the southern district of New York, he ceased to defend the U.S. 
Government in disability payments. He would not do it. He thought it 
was indefensible. When a U.S. attorney says, ``I will not defend the 
Government in court,'' that indicates something. Well, there is a 
problem of executive energy, autonomy, and a sense that this is our 
problem; we have to do it.
  I think the Senator from Maine has done a service to us. I have to 
say to him, in the candor that we share on the floor, that the House 
will have a view on this, and I hope it is a positive one. They have a 
structure which is more complicated than ours. But for my part, I am 
happy to accept it.
  Mr. COHEN. I might say to the Senator that as a result of raising 
this issue to this level of notice and notoriety that I have received a 
call from the Commissioner of the Social Security Administration, who 
is coming in to see me at 3 o'clock this afternoon to discuss what the 
Social Security Administration is doing, or proposes to do, and the 
nature of the problems confronting the administration itself.
  Mr. MOYNIHAN. Good.
  Mr. PACKWOOD. Mr. President, let me congratulate the alacrity of the 
Senator from Maine. This is the type of thing he does consistently. He 
pinpoints a problem and brings it to us, and it is identified. I am 
delighted to accept the amendment.
  The PRESIDING OFFICER. Is there further debate?
  Mr. McCAIN. Mr. President, I express my appreciation to the Senator 
from Maine for bringing this information to light. The Senator from 
Maine did a lot of work on this issue of which most Americans were not 
aware of this situation. Due to his efforts, many Americans are now, 
and they are appalled and outraged that moneys should be going to 
liquor stores to pay for the habits of alcoholics. That is not the 
intent of the law nor the intent of the American people.
  The Senator from Maine has, I think, brought to this legislation an 
amendment that is much needed. I have no doubt that the other body will 
approve of this, and I think we will not only save the taxpayers 
dollars but perhaps, in the long run, we will help some of these very 
unfortunate people.
  So I express my strong support for the amendment of the Senator from 
Maine. I think it is typical of his concern for many of our citizens 
who are less well off than we are. I think this is a much-needed remedy 
that will be welcomed even by the recipients, who may be deprived of it 
in some way. Perhaps we can spend these dollars in the much-needed 
treatment area that these very unfortunate people need so badly.
  I yield the floor.
  Mr. COHEN. I thank my friend for his kind comments. I point out also 
that there has been historically--and I know the Senator from New York 
is aware of this--a distinction between the SSI program and the 
disability insurance program. The reasoning or rationale behind it, as 
I understand it, is that those who are on SSI may not have contributed 
enough into the Social Security trust fund as such, or at all.
  Mr. MOYNIHAN. Or at all.
  Mr. COHEN. Yet they are entitled to receive these payments because 
they are very poor and cannot work.
  So the law was set up to say that those individuals who have not 
contributed enough into the system are the ones who must get treatment 
for their addictions. The others do not have to get treatment because 
the theory was, ``Well, they are paying into Social Security and it is 
their money coming out.''
  Mr. MOYNIHAN. Or disabled.
  Mr. COHEN. Exactly.
  As both the Senator from New York and the Senator from Oregon pointed 
out, you get much more out of the Social Security trust fund than you 
put in over the years, assuming you live long enough. During that 
period of time you generally do very well in terms of the amount of 
contribution versus the amount of receipt.
  That is no longer the case, however, in the disability insurance 
fund. My understanding is that by next year that fund will be depleted 
and that it will require an infusion from the Social Security trust 
fund.
  So now we no longer have the argument saying, ``Well, I have 
contributed to it and there is no reason that the Government should 
insist I receive treatment for my addiction.''
  What I seek to do in this amendment is to make sure that anyone who 
receives disability payments or payments because of a disability for 
drugs or alcohol has to receive treatment as the condition of receiving 
SSI or SSDI benefits.
  Mr. MOYNIHAN. Mr. President, could I confirm precisely what the 
Senator from Maine has said.
  The disability benefit program was put in place under President 
Eisenhower with a payroll contribution and a trust fund. That trust 
fund will be exhausted next year, and we will have to move some of the 
surplus from the old age and survivors insurance over. These are 
decimal points we move back and forth from time to time.
  There is no problem of the trust funds as a whole. They are in good 
shape. The disability payments grew at a fast rate in the sixties when 
it became known about, and obviously there has been another spurt.
  I can say the methadone example is a perfectly good one. Methadone is 
a treatment developed by Vincent Dole and Marie Nyswander at 
Rockefeller University. It uses a pain killer developed in Germany in 
World War II when opiants were not available. While it ends a craving 
for opium, there is no pleasure in it, you might say.
  Obviously, when you have money, you slip off, and such like.
  The SSI, supplemental security income, was the one in 1970. In 1969 
President Nixon proposed the family assistance plan that would take all 
of those aspects of Social Security which were not covered by the trust 
fund, aid to families with dependent children, aid to permanently and 
totally disabled, aid to the blind, and old age assistance--these are 
meant to be transitional programs until Social Security covered 
everybody--it took them and covered them. We included everything but 
the children.
  That is the American pattern we have to watch. You surely have to 
watch that.
  But those moneys come from general revenue. There is no trust fund.
  Again, this is an administrative issue, a health issue, and a fiscal 
issue that needs to be addressed.
  I congratulate the Senator from Maine for his doing so and, as we 
have said, Senator Packwood and I are happy to accept the measure.
  The PRESIDING OFFICER. The Chair recognizes the Senator from Maine.
  Mr. COHEN. Mr. President, I would like very much to claim the entire 
credit for this particular legislation. It is not mine to claim, 
however.
  I want to publicly acknowledge the enormous amount of work that Mary 
Gerwin, minority staff director of the Senate Special Committee on 
Aging, Stacey Hughes conducted, because these two members of my staff 
are the ones who really conducted the investigation for a period of a 
year and brought it to my attention. I am just up here articulating the 
basic work they have done. I would also like to thank Priscilla Hanley 
and my entire Aging Committee staff, as well as Marty Sieg-Ross and 
Sally Satel of Senator Kassebaum's staff, for their contributions to 
the investigation and this legislation.
  Mr. MOYNIHAN. And the Senator got the charts on time.
  Mr. COHEN. They got me the charts on time. I ask unanimous consent 
that a summary of my amendment be placed in the Record at this time.
  There being no objection, the summary was ordered to be printed in 
the Record, as follows:

                               amendment

       Discontinues cash disability and SSI benefits to substance 
     abusers, and provides the benefits to institutions, agencies 
     or other payees to manage the money for the addict/alcoholic.
       Prohibits cash lump sum payments to substance abusers. 
     These amounts would be paid to a representative payee 
     (government agency, etc.)
       Extends to the SSDI program the statutory requirements for 
     SSI recipients that addicts and alcoholics have a 
     representative payee and receive treatment as conditions for 
     receiving benefits.
       Requires a good faith compliance with treatment 
     requirements. If non-compliance, there would be tough 
     enforcement of termination of benefits.
       Prohibits SSI and SSDI benefits to persons who use proceeds 
     from criminal activity--such as drug dealing--to support 
     their addictions.
       Requires SSA to approve agencies in every state to refer 
     and monitor addicts in treatment and requires better 
     standards for monitoring treatment.
       Reforms the SSI review process for drug addicts and 
     alcoholics to stress rehabilitation:
       Mandatory review for compliance with treatment at the end 
     of the first year--suspension of benefits for non-compliance;
       Mandatory resubmission of evidence by individual to prove 
     continuing disability as a drug addict and alcoholic upon 
     completion of 2 years in program; Individuals who are 
     considered to still be disabled will be eligible for 1 more 
     year of treatment;
       Maximum of 3 years (cumulative) of eligibility for SSI and 
     SSDI benefits for drug addicts and alcoholics unless there is 
     another qualifying basis for disability.
       Gives priority to SSI and SSDI disability drug addicts and 
     alcoholics in federally funded treatment programs.
       Toughens penalties for fraud against the SSI and SSDI 
     programs by making willful false statements made to 
     fraudulently receive benefits a felony; provides civil fines 
     for lesser offenses and gives authority to the Secretary of 
     HHS to exclude repeat offenders (both recipients and those 
     who help them get benefits fraudulently) from disability and 
     Medicaid/Medicare.

  The PRESIDING OFFICER. Is there any further debate on the amendment?
  If not, the question is on agreeing to the amendment.
  The amendment (No. 1474) was agreed to.
  Mr. COHEN. Mr. President, I move to reconsider the vote.
  Mr. MOYNIHAN. I move to lay that motion on the table.
  The motion to lay on the table was agreed to.
  The PRESIDING OFFICER. The Chair recognizes the Senator from Arizona 
[Mr. McCain].


                           Amendment No. 1475

(Purpose: To amend title II of the Social Security Act to eliminate the 
    earnings test for individuals who have attained retirement age)

  Mr. McCAIN. Mr. President, I have an amendment at the desk and ask 
for its immediate consideration.
  The PRESIDING OFFICER. The clerk will report the amendment.
  The legislative clerk read as follows:

       The Senator from Arizona [Mr. McCain] proposes an amendment 
     numbered 1475.

  Mr. McCAIN. Mr. President, I ask unanimous consent that the reading 
of the amendment be dispensed with.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The amendment is as follows:

       At the appropriate place in the bill, add the following:

                TITLE   --SOCIAL SECURITY EARNINGS TEST

     SECTION   . SHORT TITLE

       This title may be cited as the ``Older Americans' Freedom 
     to Work Act of 1994.''

     SEC.   . ELIMINATION OF EARNINGS TEST FOR INDIVIDUALS WHO 
                   HAVE ATTAINED RETIREMENT AGE.

       Section 203 of the Social Security Act is amended--
       (1) in paragraph (1) of subsection (c) and paragraphs 
     (1)(A) and (2) of subsection (d), by striking ``the age of 
     seventy'' and inserting ``retirement age (as defined in 
     section 216(l))'';
       (2) in subsection (f)(1)(B), by striking ``was age seventy 
     or over'' and inserting ``retirement age (as defined in 
     section 216(l))'';
       (3) in subsection (f)(3), by striking ``33\1/3\ percent'' 
     and inserting ``50 percent of such individual's earnings for 
     such year in excess of the product of the exempt amount as 
     determined under paragraph (8),'' and by striking ``age 70'' 
     and inserting ``retirement age (as defined in section 
     216(l))'';
       (4) in subsection (h)(1)(A), by striking ``age 70'' each 
     place it appears and inserting ``retirement age (as defined 
     in section 216(l))''; and
       (5) in subsection (j), by striking ``Age Seventy'' in the 
     heading and inserting ``Retirement Age'', and by striking 
     ``seventy years of age'' and inserting ``having attained 
     retirement age (as defined in section 216(l))'';

     SEC.   . CONFORMING AMENDMENTS ELIMINATING THE SPECIAL EXEMPT 
                   AMOUNT FOR INDIVIDUALS WHO HAVE ATTAINED 
                   RETIREMENT AGE.

       ``(a) Uniform Exempt Amount.--Section 203(f)(8)(A) of the 
     Social Security Act is amended by striking ``the new exempt 
     amounts (separately stated for individuals described in 
     subparagraph (D) and for other individuals) which are to be 
     applicable'' and inserting ``a new exempt amount which shall 
     be applicable''.
       (b) Conforming Amendments.--Section 203(f)(8)(B) of such 
     Act is amended--
       (1) in the matter preceding clause (i), by striking 
     ``Except'' and all that follows through ``whichever'' and 
     inserting ``The exempt amount which is applicable for each 
     month of a particular taxable year shall be whichever'';
       (2) in clause (i), by striking ``corresponding''; and
       (3) in the last sentence, by striking ``an exempt amount'' 
     and inserting exempt amount''.
       (c) Repeal of Basis for Computation of Special Exempt 
     Amount.--Section 203(f)(8)(D) of such Act is repealed.

     SEC.   . ADDITIONAL CONFORMING AMENDMENTS.

       (a) Elimination of Redundant References to Retirement 
     Age.--Section 203 of the Social Security Act is amended--
       (1) in the last sentence of subsection (c), by striking 
     ``nor shall any deduction'' and all that follows and 
     inserting ``nor shall any deduction be made under this 
     subsection from any widow's or widower's insurance benefit if 
     the widow, surviving divorced wife, widower, or surviving 
     divorced husband involved became entitled to such benefit 
     prior to attaining age 60.''; and
       (2) in subsection (f)(1), by striking clause (D) and 
     inserting the following: ``(D) for which such individual is 
     entitled to widow's or widower's insurance benefits if such 
     individual became so entitled prior to attaining age 60, 
     or''.
       (b) Conforming Amendment to Provisions for Determining 
     Amount of Increase on Account of Delayed Retirement.--Section 
     202(w)(2)(B)(ii) of such Act is amended--
       (1) by striking ``either''; and
       (2) by striking ``or suffered deductions under section 
     203(b) or 203(c) in amounts equal to the amount of such 
     benefit''.
       (c) Continued Application of Rule Governing Entitlement of 
     Blind Beneficiaries.--The second sentence of section 
     223(d)(4) of such Act is amended by inserting after 
     ``subparagraph (D) thereof'' where it first appears the 
     following: ``(or would be applicable to such individuals but 
     for the amendments made by the Older Americans' Freedom to 
     Work Act of 1994)''.

     SEC.   . EFFECTIVE DATE.

       The amendments made by this Act shall apply only with 
     respect to taxable years beginning after December 31, 1994.

  Mr. McCAIN. Mr. President, before I go into my description of the 
amendment, perhaps I could engage in a discussion with the 
distinguished managers of the bill to let them know that I would be 
glad to have a time agreement on this amendment.
  If this amendment fails, which I have reason to believe that it will, 
then I would have another amendment on which I would also have a time 
agreement. And I have a third amendment that I believe is going to be 
worked out.
  So I would say to my friends, the distinguished managers of the bill, 
I would be glad to agree to any time agreement that they would so 
choose. In the meantime, I will begin my remarks to save time.
  Mr. President, I offer an amendment. which I have offered before, and 
I will bring again before this body until this terrible social 
injustice is rectified.
  There is a social injustice in this country today. It directly 
penalizes senior citizens who want to work. It is unfair. It is nearly 
criminal, because what it does is deprive senior citizens who are 
forced to go back into the workforce in their retirement years, of 
needed money they have worked for. They are penalized in the most 
heavy, onerous, and unfair fashion, to the tune for every $3 earned by 
a retiree over an approximately $11,000 limit they lose $1 in Social 
Security benefits. Mr. President, that puts them in the highest tax 
bracket in America.
  The interesting thing about this situation which needs to be 
rectified is, if an individual happens to be wealthy, has investments, 
has a trust fund, has stocks, whatever kind of liquid assets, and is 
not out there in the labor force, they are not subject to this onerous 
Social Security earnings test.
  Mr. PACKWOOD. Mr. President, could I interrupt my friend a moment to 
see if we can get a time agreement that he is agreeable to. Is 30 
minutes on a side agreeable?
  Mr. McCAIN. It certainly is.
  Mr. President, I ask unanimous consent that there be 30 minutes on 
each side of this amendment followed by----
  Mr. MOYNIHAN. The same arrangement on the next?
  Mr. McCAIN. On the two amendments. I take it that my friends are 
considering my third amendment. Would that be agreeable concerning the 
notification on Social Security?
  Mr. PACKWOOD. I think so. I have not seen that amendment.
  Mr. McCAIN. The Senator's staff has.
  Mr. MOYNIHAN. We will get to that in time.
  The PRESIDING OFFICER. Is there objection to the unanimous consent 
request?
  Mr. PACKWOOD. This was the first two amendments; right?
  The PRESIDING OFFICER. That is correct.
  Mr. MOYNIHAN. This would preclude second-degree amendments and only 
vote on the Senator's amendment?
  The PRESIDING OFFICER. The Senator from Arizona made that part of his 
request, to preclude second-degree amendment?
  Mr. McCAIN. I do.
  The PRESIDING OFFICER. Is there objection to the unanimous consent 
request?
  Mr. McCAIN. For the purpose of the Record, I would ask the President 
to repeat the unanimous consent.
  The PRESIDING OFFICER. The Senator from Arizona has proposed 1 hour 
equally divided on both amendments, and no second-degree amendment.
  Mr. MOYNIHAN. No. The Senator from Arizona is to have 30 minutes. The 
time is equally divided.
  Mr. PACKWOOD. Each side.
  Mr. McCAIN. I say to my friends it is not real important, but 30 
minutes to each side on the first one. I think 15 minutes on each side 
is certainly agreeable to the second, because it will be a matter of 
little debate.
  Mr. President, I ask unanimous consent to amend the unanimous consent 
request that the second amendment be 15 minutes on each side.
  The PRESIDING OFFICER. Is there objection?
  Mr. PACKWOOD. Just a moment.
  Mr. MOYNIHAN. Just a second. We need to know the subject of the 
second amendment.
  Mr. McCAIN. The second amendment, I say to my colleagues, would be 
that the U.S. Congress would then be placed--if my first amendment goes 
down--the U.S. Congress would be placed under the exact same rules 
concerning the earnings test.
  Mr. MOYNIHAN. We will have to see that amendment. We will not have a 
time agreement on that amendment now.
  Mr. McCAIN. That is fine with me.
  The PRESIDING OFFICER. The Chair understands the unanimous consent 
request pending for the first amendment, a 1-hour time agreement, 
equally divided, 30 minutes for each side, and the amendment will not 
be subject to a second-degree amendment.
  Is there objection?
  Without objection, it is so ordered.
  Mr. McCAIN. Thank you, Mr. President.
  In regard to the second amendment, I say to my friend, I will be glad 
to argue all day and all night that the Congress of the United States 
should be placed under the same laws concerning their retirement as 
American citizens are. If anyone disagrees with that, I would be more 
than happy to spend considerable amounts of time explaining why there 
is such discontent and anger on the part of the American people with 
Congress because we seem to pass laws that apply to them and not to us. 
That is also the case of the Social Security earnings test.
  If a Member of Congress is retired at age 65 and receives a 
Government-operated congressional pension, there is no earnings test 
placed on any outside limit of his or her income, but there is one for 
Social Security recipients. And, of course, that is patently unfair. I 
may be introducing this amendment as a bill soon.
  But back to the first amendment, Mr. President. This amendment 
repeals the Social Security earnings test. As I said, it is unfair to 
penalize American citizens who, in their retirement years, are either 
forced or choose to return to the work force. They are then placed in 
one of the highest tax brackets there is. These people are 
knowledgeable. They are talented. They are people who can contribute 
enormous amount to American society and our productivity.
  The U.S. Labor Department has warned of shortages in the labor 
market. Employers are having difficulty in hiring experienced, 
dependable workers. By the end of the decade, 1.5 million fewer workers 
between the ages of 16 and 24 will have entered the work force. At the 
same time, 5 million older Americans will be retiring.
  Mr. President, we all know that this earnings limit was created 
during the Depression in order to force older workers out of the labor 
force and create job opportunities for younger workers. Obviously, this 
situation no longer exists and it is time to sunset this Depression-era 
policy.
  I would also like to say to the Senator from New York, who is the 
chairman of the committee that would oversee this issue, that he said 
the last time I brought this up that he would have hearings. I hope he 
will do so. I have not seen any schedule for such a hearing in the 
Finance Committee.
  I hope the Senator also understands that I am willing to compromise 
and phase out this earnings test, if necessary, if that would be 
somehow beneficial. But the fact is, it is wrong. The distinguished 
chairman knows it is wrong. Every American knows it is wrong, and it 
has to be fixed.
  Mr. President, I also comment that it is not just my idea that this 
is wrong. I would like to just give some very brief quotes from various 
leading newspapers around this country, all of which agree with my 
position.
  The Chicago Tribune said:

       The skill and expertise of the elderly could be used to 
     train future workers, while bringing in more tax dollars and 
     helping America stay competitive in the 21st century.

  The Los Angeles Times says:

       As the senior population expands and the younger population 
     shrinks in the decades ahead, there will be an increasing 
     need to encourage older workers to stay on the job to 
     maintain the Nation's productivity.

  The Baltimore Sun says:

       The Social Security landscape is littered with a great 
     irony: While the program was built on the strength of the 
     work ethic, its earnings test actually provides a 
     disincentive to work. * * * One consequence of this skewed 
     policy is the emergence of a gray, underground economy--a 
     cadre of senior citizens forced to work for extremely low 
     wages or with no benefits in exchange for being paid under 
     the table.

  The Dallas Morning News says:

       Both individual citizens and society as a whole would 
     benefit from a repeal of the law that limits what Social 
     Security recipients may earn before their benefits are 
     reduced.

  The San Diego Tribune says:

       The benefit-reaction law made some economic sense when 
     Social Security was established in the 1930's and the 
     Government wanted to encourage the elderly to leave the labor 
     force and open up jobs for younger workers. But with 
     declining birth rates and the Nation's need for more, not 
     fewer, experienced workers, the measure is bad for the Nation 
     as well as its older workers.

  The Wall Street Journal said:

       The punitive taxation of the earnings limit sends the 
     message to seniors that their country doesn't want them to 
     work, or that they are fools if they do.

  The New York Times says:

       It is not wrong to encourage willing older adults to remain 
     in the work force.

  The Orange County Register says:

       Indeed, repealing the tax might actually increase revenues. 
     More people would be working, paying more taxes of all kinds, 
     including the Social Security tax. If our Government 
     bureaucrats want us to keep paying their salaries, the least 
     they can do is to make it possible to work in the first 
     place.

  The Houston Post says:

       Equity and common sense demand that this disincentive to 
     work be scrapped.

  The Cincinnati Enquirer says:

       No American should be discouraged from working, as long as 
     he wants to and is physically able to do so.

  The Indianapolis Star:

       On the face of it, the game appears rigged in favor of 
     those who stop working at 65 and against those who keep 
     working, in favor of well-to-do retirees against middle- and 
     low-income retirees who need a part time job to help with 
     expenses.

  From Forbes:

       Moreover, people are living longer; the economy is hurt 
     when artificial barriers block the full use of our most 
     productive asset, people.

  The Detroit News says:

       Work is important to many of the elderly, who are living 
     together. They shouldn't be faced with a confiscatory tax for 
     remaining productive.

  And it goes on and on and on.
  Mr. President, I remember a few years ago when this body decided that 
we would be able to squeeze additional revenues by passing a tax on 
luxury boats. The same people who will tell this body that repeal of 
the earnings test means a decrease in revenues are the same people who 
told the Congress and the Finance Committee that if we passed a tax on 
luxury boats, we would see an increase in revenues.
  Mr. President, we all know what happened. What happened was we forgot 
to pass a law that said that rich people had to buy boats, and so rich 
people did not buy boats. In fact, they went overseas if they wanted to 
buy a boat, and the boat industry collapsed, and 19,000 Americans lost 
their jobs. There was a dramatic decrease in revenues and taxes to the 
coffers of the United States due to this unwise tax, despite the 
prediction by the same people who will tell you that repeal of the 
earnings tax will cause a decrease in revenues to the Federal coffers.
  So after we saw what happened in the collapse of the boat industry in 
America, we repealed that tax. And I applaud my colleagues for doing 
so.
  The same flawed logic that drove us to raise the luxury boat tax will 
be the same flawed logic that will be used today in an argument against 
repeal of the earnings test. It will be that we will see a decrease in 
revenue, totally discounting the fact that there are tens of thousands, 
hundreds of thousands of seniors out there today who want to work. But 
they do not want to work when the fruits of their labors will be 
confiscated by the Government.
  How in the world can anybody believe that this amendment will result 
in a decrease of Federal revenues, when all they have to do is go out 
into any senior's community in America today and discover that many 
seniors want to work.
  Again, I want to point out, this earnings test does not affect rich 
retirees. This does not affect people who have huge portfolios of 
stocks and bonds and other means that provide them with a continuous 
stream of finances. This affects the poor and the middle-income 
retirees.
  And I would suggest, along with my second amendment that I would 
apply the test to Congress, that at least maybe we ought to include the 
very wealthy, as well as those middle- and low-income people who are 
suffering under this incredible burden.
  The Department of Health and Human Services has stated that beyond 
the year 2000, the estimated annual net cost of the proposal continues 
to decline, reaching zero around the year 2021. Thereafter, the annual 
full financial effect of the proposal is estimated to be a net savings 
to the program. Even using their flawed logic, by somewhere around the 
year 2021, we will stop seeing declines.
  The important fact is that we do not take into consideration, one, 
the social inequities of this law; but, second of all, the fact that 
when people work, they pay taxes. People pay taxes, including Social 
Security taxes.
  So I urge my colleagues to consult with their constituents who are 
senior citizens, whose representation organizations overwhelmingly have 
supported the repeal of this tax. They do so on the basis of fairness, 
but they also do so with a certain knowledge that there will be 
incentives for people to enter the work force.
  We all know the demographic changes that are taking place in America. 
There is an aging population. The baby boomers are getting older.
  They will be leaving the work force. How we can possibly, in good 
conscience, lose that kind of talent and that kind of ability?
  I remember a meeting I had with the president of Disney. The 
president of Disney, at the conclusion of our meeting on another 
matter, came up and said, ``Senator, I want to tell you I support 
strongly the repeal of the earnings tax.''
  I said, ``Why? Every time I go to Disney World, I see young people 
dressed up like Cinderella and Goofy, but I do not see senior 
citizens.''
  He said, ``The reason why you do not see senior citizens is because 
they have no incentive to work at Disney World or Disneyland. But we 
have found that those who will work are our best workers, our best 
workers that relate to the young people who come to Disney World.''
  I have had several experiences like that with major employers in 
America who say let these people work. Let them work. We need them. We 
have not enough trained and talented and knowledgeable labor in our 
country. We have not a large enough pool to draw from. We want to draw 
from these people. They can do the job, they want to do the job, and 
they contribute an enormous amount to the advancement of our businesses 
and our profitability.
  The American Farm Bureau, the American Federation of Small Business, 
the American Health Care Association, Citizens for a Sound Economy, 
Days Inn of America, National Association of Temporary Services, 
National Council of Chain Restaurants, National Restaurant Association, 
National Small Business United, National Society of Public 
Accountants--by the way the National Society of Public Accountants 
strongly disputes the premise that there will be a reduction in 
revenues into the Federal coffers. In fact, the National Society of 
Public Accountants feel exactly the opposite.
  The National Tax Limitation Foundation, National Technical Services 
Association, Retired Police Association, Sears Roebuck, Walgreens, and 
the U.S. Chamber of Commerce all support the repeal of this unfair tax.
  The National Association of Retired Federal Employees, National 
Committee to Preserve Social Security and Medicare which, by the way, 
both of those organizations have been enormously helpful to me, as well 
as the Seniors Coalition, Seniors Cooperative Work Network, United 
Seniors of Washington, Air Force Association, Association of Military 
Surgeons, Association of the Army, Enlisted Association of the National 
Guard, Fleet Reserve, Jewish War Veterans, Marine Corps League, Retired 
Enlisted Association--on and on goes the list and they all believe the 
earnings test is wrong.
  Every organization that is composed--with the exception, I must say, 
Mr. President, of the American Association of Retired Persons who has 
refused to take a stand on this issue, as they did on the catastrophic 
health insurance issue--literally every major seniors association 
strongly supports this legislation.
  It is time. I have been fighting this tax for years now. I would be 
more than ready to accept some kind of compromise. I would be more than 
happy to accept commitments.
  The fact is, nothing has been done by this Congress about a terrible 
social injustice. I intend to bring this issue up before the Senate of 
the United States until something is done about it because it is 
against my duties, it is against my oath to not try to correct an 
injustice when I see it.
  If you do not believe it is an injustice, visit with some of those 
people, visit with the couple I did in Sun City who has experienced 
severe medical bills and must now go out and work; individuals who had 
been retired for 10 years.
  Mr. President, I reserve the remainder of my time.
  The PRESIDING OFFICER. Who seeks recognition? The Chair recognizes 
the Senator from Oregon.
  Mr. PACKWOOD. Mr. President, I feel some ambivalence toward my friend 
from Arizona. As he knows, I have cosponsored this before. Logic is 
totally on his side. Money is not. I know there is a disagreement in 
estimates. There is no question the bill has to lose some money. 
Whether it loses $26.4 billion over 5 years as is estimated, or whether 
there will be a sufficient change of behavior so it loses less than 
that because people go to work and they pay taxes--I do not know. There 
is no question it loses some money.
  But logic and fairness is on the side of the Senator from Arizona. We 
do not say to somebody who has a private pension from an insurance 
company ``You have worked all your life. You retire when you are 65.'' 
The insurance company says ``We will pay you $1,000 a month. And, by 
the way, if you go to work after you have retired at Disney or 
McDonald's, we are going to reduce your insurance company pension a 
bit.'' We do not do that. And there is no reason why we should do it 
with Social Security.
  So, as I say, I come with some ambivalence. I know there is a loss of 
money and we will have to make up the money. But equity is on the side 
of the Senator from Arizona.
  I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The legislative clerk proceeded to call the roll.
  Mr. MOYNIHAN. Mr. President, I ask unanimous consent that the order 
for the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The Senator from New York is recognized.
  Mr. MOYNIHAN. Mr. President, not for the first time do I rise on the 
Senate floor to agree with the distinguished Senator from Arizona on 
this matter. In October 1993, we had the same issue before us. He is 
right. The earnings test for a person 65 to 69 is an obsolete 
arrangement that we associate with the Depression. It has never 
changed.
  It, in fact, does no disservice, in actuarial terms, to the persons 
who are affected because at age 70, or whatever, if you retire, having 
had benefits reduced because of earnings, you get a higher retirement 
benefit. From the actuary's point of view, it is all a wash after a 
while.
  As I say, I have here my benefits statement. If I were to retire, or 
more specifically, if the people of New York were to retire me in 
January 1994, at age 66 and 10 months, I would receive $1,259. I now 
get no benefits because I have a salary that uses them all up. At age 
70, my retirement benefit would be $1,470 per month and no reduction 
whatever for whatever earnings there might be. Even so, the earnings 
test is not understood and it does not seem right.
  When there is something about the social insurance system that is not 
understood and does not seem right, we ought to change it. We can 
change it at no cost to the system over time. You have to make changes 
slowly in a system of this kind.
  The National Commission on Social Security reform made a report in 
January 1983. We proposed that the retirement age be increased to 66 
and then to 67 years. But we go to 66 in the year 2005, and 67 around 
the year 2015. So everybody is on notice; no surprise.
  I do also want to report, and this is something that takes more 
attention, a majority of persons in the Social Security system retire 
at age 62, and by age 65, two-thirds have, in fact, retired. But that 
leaves one-third still working, of which some part is affected by this 
and it makes no sense to them.
  Here on the floor of the Senate, in 1993, October 27, I said to my 
friend from Arizona I would be happy to have hearings on this, and we 
will. At that time we were just about finishing up the first session, 
and recently we have been holding a series of hearings on health care.
  But by May of this year, I want to say to the Senator from Arizona, 
there will be a full hearing on this as long as he wants, within 
endurance, because the number of people who would want to come and say 
they agree with him is a very long list, and it would include the 
Senator from New York, and I think it would include my colleague, the 
former chairman, the Senator from Oregon.
  I say also, which is to the point of the bill we are working on 
today, I would hope that we would see a revised Social Security 
Administration that would take on these subjects and give us views of 
its own. For instance, have a survey of 100,000 persons, the kind of 
thing the Bureau of Labor Statistics does well; find out who is over 
65, working, and is really feeling the effects of that retirement test. 
The lawyer does not feel it, the doctor does not feel it, a university 
professor does not feel it. Someone who is working at Disneyland might 
feel it very well or might be working if it were not for it.
  What about some numbers? I said of the Social Security 
Administration, ``We get no thoughts. The agency has been brain dead, 
in a policy sense, for 15 years. In 17 years, we have had 12 
Commissioners or acting Commissioners. The job has just been empty for 
1 year.''
  The questions the Senator asks, Mr. President, deserve an answer and 
they deserve a Social Security Administration that will answer them.
  Are there people out there who think this arrangement is unjust? 
Well, good, let us find out and see if we cannot fix it. We have not 
heard a word from the Social Security Administration. Not a word. But 
it is an issue of public policy: How do you make people who want to 
work feel the system is fair?
  With respect to another problem, I can report with some pleasure. The 
notch is an issue which causes a lot of people trouble. We established 
in 1992, by statute, a commission to look into it in the usual manner--
appointments from the House side, Senate side and Presidential side. I 
have spent 1 year asking the administration, please appoint members so 
we can get on with this subject. There are 7 million people out there 
who think the Social Security Administration is cheating them. Well, 
they need an answer. We think not, but let an independent commission 
give a hearing on it.
  By the most wonderful of happenstance, Mr. President, I have just 
received a message that the administration will make its appointments 
this very day. I cannot tell you what wonders coincidence will do, and 
very good appointments, too: Alan Campbell will be the Chair. He is 
professor of public policy at Wharton. He has been dean of the Maxwell 
School. Scottie Campbell is a fine student of public administration; an 
old friend; Lindy Boggs, the incomparable Lindy Boggs who the Chair 
knows very well and we all love and admire; Gwendolyn King, who was a 
good commissioner while she was in that job; and Robert Froehlke, who 
is president and CEO of IDS Mutual Funds, a very commendable financial 
firm in Minneapolis. Good. It took a year and this bill coming to the 
floor.
  I want to say that I am obliged, when the time comes, to raise a 
point of order that is simply a budgetary point of order.
  Mr. McCAIN. Will the Senator yield to me for comment?
  Mr. MOYNIHAN. Yes, of course. I yield the floor.
  The PRESIDING OFFICER. The Chair recognizes the Senator from Arizona.
  Mr. McCAIN. Mr. President, I say to the Senator from New York, with 
his very generous commitment on the part of him and Senator Packwood 
that a hearing will be held on this issue, with their expressed belief 
that this is an unfair situation and their willingness to attempt to 
work this out, I do not believe that a recorded vote will be necessary 
at this time.
  I believe that I can withdraw the amendment, of course seeking 
unanimous consent to do so, and then look forward to a hearing on this 
issue, S. 28, in the month of May. I appreciate the generosity of both 
Senator Packwood and Senator Moynihan because I know how very busy 
their committee is.
  Also, Mr. President, a slight caveat. Obviously, as I mentioned many 
times, I will not give up on the issue, but I do have some optimism 
that we can work this out. I think that the comment of the Senator from 
New York that there may have to be some gradualization to this, I 
certainly agree with. I look forward to trying to shape some kind of 
compromise that can give not only the present generation of retired 
seniors some hope, but future people who will face this same dilemma 
and challenge.
  Mr. President, if it is agreeable to the Senator from New York and 
the Senator from Oregon, I will ask unanimous consent to withdraw my 
amendment.
  The PRESIDING OFFICER. Is there objection? The Chair hears none. The 
amendment is withdrawn.
  The amendment (No. 1475) was withdrawn.
  Mr. PACKWOOD. Mr. President, is the Senator going to withdraw the 
second amendment, also?
  Mr. McCAIN. Yes. I have not yet sent the second amendment to the 
desk.
  Mr. MOYNIHAN addressed the Chair.
  The PRESIDING OFFICER. The Senator from New York.
  Mr. MOYNIHAN. May I just thank the Senator, because we can solve 
this, and if he keeps at it we will. I just hope that when May comes we 
have the head of an independent Social Security Administration saying 
we are going to take this on, do it. We want people to feel good about 
this system. It is one of our real achievements, and we do not want 
people going around: ``Why are they doing this? Why aren't they paying 
me?'' No, sir. The Senator shall have this hearing, and we will get 
this thing done. I thank the Senator very much for bringing it up.
  Mr. McCAIN. I thank the Senator from New York deeply for his concern 
and effort on this matter.
  I thank the Chair. I thank the Senator.
  The PRESIDING OFFICER. Who seeks recognition?
  Mr. MOYNIHAN. Mr. President, I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The bill clerk proceeded to call the roll.
  Mr. McCAIN. Mr. President, I ask unanimous consent that the order for 
the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. McCAIN. Mr. President, I would like to engage in a brief colloquy 
with the Senator from Oregon on the issue of the notification of all 
Americans who contribute to the Social Security trust fund and are 
eligible for Social Security upon retirement.
  My concern was the cynicism of many Americans concerning the 
financial sanity of the Social Security trust fund and their ability to 
receive those benefits at retirement time, plus a great deal of 
confusion as to how much money they have contributed, how much they can 
expect to get back, et cetera, et cetera.
  The thrust of the amendment I was going to propose basically required 
the Social Security Administration to provide that information. The 
Senator from Oregon has illuminated me on that issue, and I think that 
what is planned may be satisfactory--and, in fact, may prove to be very 
helpful--to all members of the work force.
  I yield the floor.
  Mr. PACKWOOD addressed the Chair.
  The PRESIDING OFFICER. The Senator from Oregon.
  Mr. PACKWOOD. I might just read into the Record--it is right on point 
with what the Senator from Arizona is suggesting--what is about to be 
started.
  The Social Security Administration is going to send out an 
individual's work life--and I will explain that in a minute--in three 
stages. The trial stage starts next month, April of 1994, and in the 
trial stage, they will send out a work history statement to 600,000 
randomly selected individuals aged 25 or older, and they are using the 
600,000 mailing to gauge how many questions and responses they get, 
problems that may come up when they implement this process fully.
  Based upon that, by October 1994, they will be able to compile a 
report with their findings to be used when they begin the implementing 
stage, and that starts very soon. The implementing stage will start 
next February.
  During what we call the implementing stage, a one-time work history 
statement will be sent out to everybody who is 60 years or older, 
whether or not they have started Social Security or not. Everybody who 
is age 60 or over will get a statement, very similar to what the 
chairman read earlier today, about how long have you worked; how much 
did you pay in; when you paid it in.
  Then, starting in the year 2000, they will send out an annual work 
history to everyone age 25 or older. So I think we are going to 
accomplish what the Senator from Arizona wants, and they are on the 
verge of starting it now.
  Mr. McCAIN. Mr. President, I thank my friend from Oregon. I think 
that is entirely satisfactory, and I certainly hope that the Social 
Security Administration is able to fulfill that commitment.
  I will just make one additional comment. The Senator from New York 
mentioned that finally members of the notch commission have been 
appointed. I think that is a very important step. I am sorry it took so 
long. But there still is an enormous amount of misinformation, 
dissatisfaction, and anger on the part of the so-called notch baby 
population, and I believe that the old adage about a little sunlight 
being a good disinfectant is certainly operative here. We need to have 
people understand exactly what the notch situation is all about, how it 
came into being, and what remedies there are for it, if any. There are 
millions of senior citizens out there today who are convinced that they 
have been deprived of their benefits.
  Now, I am not saying they are right; I am not saying they are wrong; 
but there is a huge number. The Presiding Officer knows, from his 
constituency who visit my State quite often especially at this time of 
year, there is great discontent and dissatisfaction about the notch. 
And I believe this notch commission, particularly with the quality of 
individuals who have been appointed, will perform a valuable service. I 
am hopeful their conclusions and recommendations will have great 
validity and will help us wind our way through an incredibly difficult 
issue which has plagued this body for many years now, and will for many 
more years unless it is resolved.
  I am not often a believer in commissions, but on this particular 
issue I think we needed a commission of qualified experts who will 
provide us with the information and guidance that we need.
  Mr. President, I thank my friend from Oregon again and I yield the 
floor.
  Mr. PACKWOOD addressed the Chair.
  The PRESIDING OFFICER. The Senator from Oregon.
  Mr. PACKWOOD. I am doing this from memory, so if I state it wrong in 
the Record, do not hold me to it, but this is the best I recall about 
the notch. I understand the problem, and we all get it when we go home.
  In 1972, we changed Social Security and went to a readjustment basis. 
As a matter of fact, very few people know this.
  When we went to the cost-of-living adjustment, we did it in the hopes 
of holding Social Security costs down because we were getting 
amendments in the Chamber to increase Social Security above the cost of 
living, and we thought this would be a restraint on the growth. And it 
became a one-upmanship: ``I offer an amendment to increase it 5 
percent.'' ``I move to amend that and increase it to 10 percent.'' So 
we went to the cost-of-living adjustment as a restraint on Social 
Security.
  But in 1972, we made a mistake in the adjustment, and we actually 
overcompensated, so that people who retired got more than the cost-of-
living adjustment.
  We realized that mistake in 1977, and those are the 5 notch years, 
and they basically apply to people who were born between 1917 and 1922. 
And, of course, the Government hates to take away from anybody anything 
we have given them. So when we passed a law in 1977 correcting the 
mistake we made in 1972, we did not attempt to undo the mistake for 
that 5-year period. So, if you were born prior to 1917, you got this 
overcompensated amount. It was a mistake. But we did not take it away.
  Then we said, for those born 1917 to 1922, we would have a 
transition, and they actually get less than people who were born prior 
to 1917. But then after that 5-year period, the people that come after 
the notch years actually get less than the people in the notch years. 
So you have three categories.
  Let us use an example. Before 1916, you get $500 a month. If you are 
born in 1917 to 1922, you get $450 a month. If you are born after 1922, 
you get $400 a month. Well, the people in the 5 years during the notch 
compare themselves to the people born prior to them who get $500, not 
to the people who were born after them who get $400.
  But that is the mistake we made, and if we were to correct it, if we 
were to give everybody a correction for the mistake and say, we made a 
mistake; now, instead of correcting it, we are going to apply the 
mistake to everybody, it is very, very expensive, and, indeed, it is--
you hate to use the word ``unfair,'' but it would compensate everybody 
for increases greater than the cost-of-living adjustment.
  So I understand why the people in the notch think they are being 
treated unfairly. They are being treated differently. But they are 
being treated better than the people that come behind them.
  I thank the Chair. I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The bill clerk proceeded to call the roll.
  Mr. MOYNIHAN. Mr. President, I ask unanimous consent that the order 
for the quorum call be rescinded.
  The PRESIDING OFFICER (Mr. Robb). Without objection, it is so 
ordered.
  Mr. MOYNIHAN. Mr. President, we have had a good debate, the first of 
its kind on the Senate floor concerning an independent agency for the 
Social Security Administration. We have had not a word of opposition 
heard, just as in our Finance Committee, as my friend Senator Packwood 
will agree, the vote was essentially unanimous with one Senator wishing 
to be recorded in opposition.
  The Senator from Arizona came to the floor with some amendments, very 
germane amendments in the field of Social Security on a matter about 
which he feels very strongly, about which I feel and Senator Packwood 
feels should be looked into, but that should not really be carried by 
this particular bill to establish an independent Social Security 
Administration.
  We have reached a very amicable agreement. He withdrew his amendments 
and we are going to follow up with him in a new independent agency, 
which we will want to do. And part of the debate that created that 
independent agency is the debate that said we are going to deal with 
this question of earnings limitations.
  But now, I feel that we have about concluded. No one is on the floor. 
I am going to propose, if it is agreeable to my colleague and friend, 
that there be no more amendments. But we are not binding anybody.
  It would be my view that we should have no more amendments and should 
proceed to third reading very shortly.
  Is that the view of the Senator from Oregon?
  Mr. PACKWOOD. Are you asking unanimous consent for that?
  Mr. MOYNIHAN. I understand there is a Senator coming, but I would 
like it to be on record.
  Mr. PACKWOOD. I agree.
  I suggest the absence of a quorum.
  The PRESIDING OFFICER. The absence of a quorum has been suggested. 
The clerk will call the roll.
  The assistant legislation clerk proceeded to call the roll.
  Mr. MOYNIHAN. Mr. President, I ask unanimous consent that the order 
for the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. RIEGLE. Mr. President, I rise today to once again offer my 
support for this legislation to make the Social Security Administration 
an independent agency.
  The Social Security Program has the confidence and support of the 
American public. In a period of increasing doubts and cynicism about 
government it is absolutely paramount that those of us here in 
Washington do everything we can to maintain the credibility of this 
vital program.
  A brief look at the work of the Social Security Administration points 
out how important this bill is. The Social Security Administration 
includes over half the staff and 60 percent of the expenditures of the 
Department of Health and Human Services. This program serves over 42 
million people. When this administration is not unfairly targeted in 
budget cuts it does its job well under ever increasing work loads.
  I support this bill because over the next several years Social 
Security could become an all to convenient target for those who want to 
balance the budget on the backs of senior citizens and disabled 
Americans. If anyone questions the chance of that happening, I would 
only have to point to the budget actions of the early 1980's. Despite 
an ever increasing number of retirees, increasing numbers of people on 
SSI, and increasing numbers of disabled children, the programs under 
the Social Security Administration experienced a reduction of staffing 
from approximately 80,000 to 63,000 people. As a result we see problems 
in some areas such as disability reviews, the treatment of those 
individuals with an addiction and last, but certainly not least, for 
our elderly in need of basic information.
  This legislation will place the Social Security Administration above 
politics and above interference. Under the bill, a system is set up 
that allows bipartisan leadership. In turn, that leadership can run the 
program in the most efficient and effective way possible. 
Recommendations will be made that will keep staffing at the necessary 
levels. We will not have to worry whether or not the telephones are 
getting answered. And perhaps most important--the citizens of this 
country will know that the program that was established under Franklin 
Roosevelt nearly 60 years ago will continue to serve them in good 
faith.
  I want to thank the senior Senator from New York for his sponsorship 
of this legislation and for guiding it out of the Finance Committee and 
onto the floor. I am pleased to be a cosponsor and pleased that we can 
reassure the senior citizens of this country that Social Security is a 
trust established many decades ago and that we are serious about 
honoring that trust and commitment.
  Ms. MIKULSKI. Mr. President, I rise today to give my enthusiastic 
support to this legislation which will establish the Social Security 
Administration as an independent agency. I have long been a supporter 
of this effort. And I am glad to see its time has finally come.
  As an independent agency, the Social Security Administration would 
have three advantages over the current structure: greater stature 
within the executive branch; greater control over procurement and 
personnel practices; and as an independent agency, a stronger voice in 
its policy decisions.
  An independent agency would also allow the agency head a more direct 
link to the President. He or she would be better able to present its 
needs during policy deliberations within the administration.
  Since 1935, the Social Security Administration has grown to be the 
largest domestic program of the Federal Government. It represents over 
20 percent of Federal spending. And it is the ninth largest agency in 
the Federal Government with an annual budget of over $300 billion.
  I take a very special interest in SSA.
  The Social Security Administration's employees make up more than 50 
percent of the Department of Health and Human Services. It employs 
64,000 people--13,400 are at the headquarters in Maryland alone. This 
means that one out of every five Social Security employees works in 
Maryland.
  SSA has a special mission of caring for and helping people. It is the 
jewel in the crown of our domestic programs. Americans who have worked 
hard and played by the rules, look to the Social Security 
Administration as the agency which will reward their years of 
productivity.
  As the Senator from Maryland and the chair of the Aging Subcommittee 
of the Labor Committee, I have many reasons to support this bill.
  The agency is paying benefits to 42 million recipients and maintains 
earning records for 132 million workers, 73.4 percent of these are 
elderly. One out of every four households receives a check from Social 
Security each month.
  American workers and retirees have a compact with the Social Security 
Administration. When I speak to employed people, both young and old, 
they are concerned about the long-run security of their retirement 
benefits. They want to know that the system is sound and the benefits 
they earned will be available. They would have more confidence in a 
program which could separate the Social Security policymaking from the 
economic and budgetary decisions affecting the rest of Government.
  As we move toward reinventing government, it is important that we 
streamline our organizations and remove unnecessary levels of 
additional administration between SSA and the President.
  It is important to note that my support for an independent Social 
Security Administration is in no way a reflection on the current 
Secretary. I am a great admirer of hers.
  But I supported Senator Moynihan's effort prior to her appointment 
and I support it now. We need a separate agency to meet the needs of 
our aging and disabled population in the 21st century.
  A strong independent agency, autonomous agency, is the only way this 
can be done.
  Mrs. FEINSTEIN. Mr. President, I rise today in support of S. 1560, 
the Social Security Administration Independence Act. In so doing, I 
would first like to acknowledge the efforts of the distinguished 
Senator from New York, and chairman of the Senate Finance Committee. 
Senator Moynihan has been the patient sponsor of this legislation which 
has been approved, three times now, by the Finance Committee. His 
stewardship has brought this legislation to us today, and I am pleased 
to be able to provide my support.
  In 1980, the National Commission on Social Security recommended that 
the Social Security Administration should be restored to its original 
status as an independent agency. And in 1983, the National Commission 
on Social Security Reform made the same recommendation. In 1984, the 
Congressional Panel on Social Security Organization made 
recommendations for establishing an independent agency.
  Now, 10 years later, thanks in no small part to the dogged 
determination of the Senator from New York, those recommendations have 
reached fruition in the form of this legislation.
  The Social Security Administration has the second largest budget in 
the Federal Government. It keeps records on the earnings of 120 million 
American workers, and provides benefits to 42 million beneficiaries.
  I believe the time has come to elevate this agency, to a position 
which is comparable to other Cabinet-level Federal agencies, by 
restoring it to its original status as an independent agency 
accountable directly to the President of the United States.
  There was a time the Social Security Administration, which was 
created in the 1930's as part of the New Deal initiated by President 
Franklin Delano Roosevelt, was considered the model Federal agency.
  It was a time when the American spirit had been challenged, first by 
a great war on distant continents, and then by the Great Depression. It 
was a time when the triumphs of the 20th century were dampened by the 
despair of dust-bowls and depression. And it was a time when the cities 
of our Nation saw breadlines and soup kitchens.
  With the New Deal, a pledge was made by a government to its people. 
And the creation of the Social Security Administration represented the 
foundation of that pledge. That pledge was, if you work hard all of 
your life, and if you pay your taxes, when the time comes for you to 
retire, this Government will see to it that you will be guaranteed a 
modicum of security in your golden years--even if times are hard.
  Well--times are hard now. They're certainly hard in my State, and 
they're hard for our Nation. In California, the times are the worst 
since the Great Depression. Once again we see people, on our Nation's 
streets, who have no home.
  As a society, we have become accustomed to observing, on a daily 
basis, human suffering of once unthinkable proportions. In our cities, 
we step around people lying in urine-soaked doorways. At night, we see 
people huddled in loading docks, over subway grates, or under freeway 
overpasses. For them, hope has all but diminished.
  Their daily lives consist of finding their next meal and locating 
shelter for the night, all the while guarding their sole remaining 
possessions which are stuffed into plastic bags carefully hung around 
the sides of the shopping carts which are their homes. Many of those 
people are our Nation's senior citizens, or veterans who are heroes of 
foreign wars.
  These people have lost their spirit. They have lost confidence that 
the Government, of the greatest nation in the world, can fix the 
problem or provide them with the so-called safety net. Many people are 
fearful that they too could become homeless, and that the Social 
Security check which provides them with the bare essentials of life is 
somehow in jeopardy.
  And the people who sometimes fear the most, are the very people from 
the generation with whom that pact was made back in the 1930's--our 
Nation's senior citizens. They did work hard. They did pay their taxes. 
They did live and serve through foreign wars. They saved their money, 
and now they fear that the promise made to them may not be kept.
  That is why this bill is important. This Nation does keep its 
promises. It can and will meet its obligations. And our senior citizens 
can go to sleep at night knowing that the Government, they have 
supported all of their working lives, will not turn its back on them.
  Clearly, the Social Security trust fund is solid, and that is the 
case for the next three decades. Restoration of the Social Security 
Administration to its original status as an independent agency, I 
believe, will ensure that it remains solid. I also believe this act 
will help in the restoration of the confidence of our Nation's senior 
citizens.
  Mr. SASSER. Mr. President, I rise today in support of S. 1560, which 
would make the Social Security Administration an independent agency. I 
believe this legislation elevates this important Federal agency to its 
proper status and acknowledges the importance of the Social Security 
Program to the working people of this country.
  Social Security is one of the most successful Federal programs ever 
enacted. It touches the lives of virtually every American. As many as 
42 million people currently receive benefits, and millions more are 
paying into the system so that they will receive benefits when they 
retire or if they become disabled. Social Security has helped to 
significantly enhance the financial status of people in their 
retirement years or when they can no longer work. For these reasons, 
the program enjoys tremendous public support.
  But there is also concern about the future of the program. Changing 
demographic conditions, including the impending retirement of the huge 
baby boom generation starting in the next decade, threatens to put 
strains on the system. In 1983, we took important steps to make sure 
that Social Security will be on a strong financial footing well into 
the next century. We have an obligation to the millions of people who 
rely on this program to make sure this system is administered as 
effectively as possible in order to strengthen public confidence.
  I am also concerned about the quality of service provided by the 
Social Security Administration, particularly the growing backlogs in 
disability determinations and reviews, and long processing times. The 
President has acknowledged this problem in his budget and has included 
an increase of $327 million over 1994 levels to improve customer 
service and continue to upgrade automation at the Social Security 
Administration. Despite this effort, however, backlogs and processing 
times are projected to continue to increase. I believe more needs to be 
done in this area.
  Making the Social Security Administration an independent agency, as 
recommended in the 1983 Report of the National Commission on Social 
Security, sends a strong message to the retirees, disabled people, and 
workers who have contributed to the system that we are committed to 
improving services to beneficiaries and that we intend to make sure 
that Social Security is sound and strong well into the future. I look 
forward to working with the Clinton administration to bring about these 
goals.
  Mr. BRYAN. Mr. President, every time I go home to Nevada and talk 
with seniors, the same old fear is poignantly voiced. Whether it is the 
elderly widow, the person just facing retirement, or the baby-boomer 
planning for retirement, the fear-filled question is the same--``Can I 
really depend on my Social Security benefits to be there?''
  Each of us here answers that question with a ``yes,'' but polls 
indicate people continue to believe their Social Security benefits are 
at risk. Our one-on-one meetings with people prove the polls right--
their fear is real.
  The elderly widow whose only income is her Social Security benefit 
faces a daily trial of making ends meet with limited means. She should 
not also face daily worry about whether those benefits will continue to 
be there for her for the rest of her life.
  People still working and planning for their retirement believe they 
cannot depend on Social Security. They see the Social Security 
deduction taken out of their pay checks, and yet they too worry. When 
their retirement date comes, they believe Social Security benefits are 
not going to be there for them.
  As a cosponsor of the Social Security Administration Independence 
Act, I wanted to allay these fears, and hopefully put them to rest.
  This legislation acknowledges first and foremost the importance of 
the Social Security system. This is the system that has grown from its 
initial payment of benefits in 1940 to a program today providing social 
insurance for over 41 million Americans when they retire, become 
disabled, or die.
  Under this bill, Social Security is pulled out of the Department of 
Health and Human Services, and made an independent agency.
  Creation of an independent Social Security agency will protect the 
integrity of the Social Security trust funds. It will improve the 
delivery of Social Security services. It will restore the public's 
confidence in the Social Security System. It will once again show that 
our Government can serve its citizens. It will mean seniors can rest 
assured that Social Security will really always be there for them.
  This independent Social Security agency will be headed by the 
Commissioner appointed by the President and confirmed by the Senate. 
The Commissioner will be assisted by the five-member Board of Trustees 
of the Old Age, Survivors and Disability Insurance Trust Funds.
  A part-time, seven-member bipartisan Social Security advisory board, 
serving staggered terms, will advise the Commissioner and evaluate 
policy options the independent agency seeks to implement. It will 
recommend how the Agency can best ensure the solvency of the Social 
Security system, and economic security for those dependent upon the 
system.
  As an independent agency with an appointed Commissioner, the 
commitment to accurate, prompt, and courteous service to the public 
that used to characterize the Social Security System will be renewed. 
This independence should help assure strong and effective leadership 
for a system millions literally depend upon.
  Is the Social Security System really safe? Passage of this important 
legislation will help ensure the answer continues to be an unequivocal 
``yes.''
  Mr. HATFIELD. Mr. President, the idea of making the Social Security 
Administration an independent agency dates back to the early 1970's 
when Social Security's impact on fiscal policy was made more visible 
through the inclusion of the program in the Federal budget. In the 
early 1980's, when the Social Security Administration was brought up in 
congressional budget discussions, the call for independence became more 
pronounced. Those calling for independence said that because of the 
self-financing nature of the program and the compact it has with the 
Nation's workers to pay earned benefits, independence would insulate 
Social Security from everyday fiscal policy decisions.
  Currently, the Social Security Administration is responsible for 
paying benefits to over 42 million recipients and maintaining earnings 
records for 132 million workers. With approximately 64,000 hard working 
and dedicated employees, a network of 1,300 field offices, and an 
annual budget of over $300 billion, the Social Security Administration 
is the largest agency within the Department of Health and Human 
Services and the ninth largest within the entire Federal Government. 
The shear magnitude as well as the promise this agency must fulfill to 
our Nation's seniors compels us to give it the stature it has deserved 
for far too long.
  Mr. President, I firmly believe that we, as Members of Congress, have 
no greater duty to American seniors and our working men and women that 
to protect and strengthen the Social Security system. And let me say 
this: In the past, we have witnessed attempts to administer the SSA in 
a manner that raises questions as to whether some officials in our 
Government have forgotten this responsibility.
  For example, in recent years, funding requests for administrative 
purposes to process disability applications at SSA were woefully 
inadequate. As the ranking member on the Appropriations Committee, I 
sought to increase funds for disability claims processing to alleviate 
the backlog of disability claims and decrease the waiting time for 
individuals applying for benefits. I did this because the 
administrations' requests were inadequate to allow efficient processing 
of first time claims in and timely review of backlog cases. Although 
SSA had been and still is somewhat overwhelmed by the number of 
disability applications, my committee has provided funding to reduce 
the backlog.
  Being independent will not only improve the actual administration of 
the program and increase public confidence in the system itself, but 
also help assure strong and effective leadership for the program and 
agency. Furthermore, the bill will create a bipartisan, seven-member 
advisory board which will analyze the Nation's retirement and 
disability systems and make recommendations with respect to how the 
programs under SSA can most effectively assure economic security for 
all Americans. Its creation will assist the Administration in avoiding 
policy errors and, I believe, enable an independent SSA to be guided by 
its traditional objective of providing the highest quality service to 
the public.
  The creation of an independent agency will not only increase its 
statute among other agencies and lead to more coherence among top 
management, it will also lead to a better run organization. 
Independence will increase the ability of the SSA to obtain and retain 
the most experienced and capable leadership for the agency, and more 
importantly, allow the administrator to seek the President's ear 
directly. In my mind 42 million people deserve nothing less than the 
President's ear.
  Mr. President, over the years I have been a proud cosponsor of this 
important legislation and would like to congratulate and thank Senator 
Moynihan for moving this bill through the Senate.
  Mr. GORTON. Mr. President, I am pleased to support S. 1560, the 
Social Security Administration Independence Act.
  Very briefly, this bill will remove the Social Security 
Administration from under the Department of Health and Human Services 
and make it an independent agency. The new, independent Social Security 
Administration will continue to administer the OASDI and SSI Programs, 
and will be run by a Commissioner, who is appointed by the President 
and confirmed by the Senate. In addition, S. 1560 creates a Social 
Security advisory board, made up of seven members, to evaluate policy 
alternatives, conduct research on issues and advise the Commissioner.
  This effort is not a new one. Similar bills have been before Congress 
in the past. But the most recent legislative proposal, considered 
during the 102d session, was not brought to the Senate floor after it 
was passed by the House due to time constraints. I am pleased that now 
the Senate has taken up this matter.
  Independence for the Social Security Administration is a productive 
move and gives the system the stature it deserves. It sends a positive 
message that its functions are considered extremely important and will 
increase public confidence in the Social Security system. Independence 
will help clear up some of the administrative and service quality 
problems that have plagued the Administration by creating strong and 
consistent leadership. It will also mean that Social Security will not 
have to compete with the rest of the Department of Health and Human 
Services for valuable, but rare, Federal resources.
  And, most important to this Senator, independence highlights the 
separate, unique nature of Social Security and the sacred contract 
between the Government and the people that it represents. Former Social 
Security Commissioner Robert Ball states it best when he said, in 
testimony before the House Ways and Means Committee, that independence 
``would give emphasis to the fact that in this program the Government 
is acting as a trustee for those who have built up rights under the 
system.''
  Mr. President, I have been listening to the seniors in my home State 
of Washington on this issue. As I travel around the State listening to 
the local concerns and the views of the citizens, people tell me that 
the Social Security Administration needs to become an independent 
agency. They talk about how important the services are that the Social 
Security Agency provides. They say that independence for the 
Administration will increase the confidence of retirees and today's 
workers in the system and ensure quality services for benefit 
recipients.
  I listened to the seniors in my State and agree. They have presented 
well reasoned and rational arguments why this is a good idea. I am 
happy to support it.
  Mr. GRAHAM. Mr. President, far too many individuals do not 
contemplate the financial, health, and social implications and 
consequences of their retirement years. The majority of Americans do 
not plan comprehensively for their retirement; they do not consider the 
potential outcomes of typical decisions made at or before retirement, 
such as: relocating, utilizing Medicare and supplemental insurance, 
living solely on Social Security and/or a pension, and experiencing 
extended periods of leisure time.
  Research shows that Americans only become aware of these issues as a 
reaction to their changed circumstances, when it is too late to alter 
major lifestyle decisions. Many people spend more time and effort 
planning a 2-week vacation than planning the 20-plus years they could 
spend in retirement.
  As the U.S. population ages, persons will live an increasingly 
greater percentage of their lives as retirees. According to the 
National Center for Health Statistics, the average life expectancy for 
a 65-year-old in 1950 was 13.9 additional years, while, in 1990, the 
average 65-year-old could expect to live 17 more years. In this 40-year 
period, the life expectancy has increased 3.1 years.
  As most retirees rely on Federal programs, such as Medicare and 
Social Security for health insurance and retirement income, lack of 
health and retirement planning has substantial long-term costs for the 
Federal Government. Furthermore, the lack of retirement planning can 
impact the quality of life. Persons who anticipate retirement-related 
changes can plan socially and financially, and avoid relocating without 
access to social, community and health services.
  Retirees who do not evaluate retirement-related decisions could 
experience social dislocation and unanticipated financial and health 
needs, causing despair and dependence on Government health and social 
services' programs. It is a sad commentary that one of the highest 
incidents of suicide in our country is among people who have recently 
retired--those who are unable to deal with the new life into which 
retirement has ushered them. Economic issues, health issues, and the 
issue of relocation could be dealt with more effectively if retirement 
planning was more accessible. Organizations such as the American 
Association of Retired Persons [AARP] already conduct retirement 
seminars. Many employers, including the Federal Government, provide 
some retirement services.
  The Social Security Administration is in the midst of fulfilling a 
congressional mandate to distribute annually, a personal earnings and 
benefits estimate statement, which includes estimated benefits should 
the individual retire at 62, 65, or 70 years of age. The agency begins 
its pilot program in April 1994, and will continue to phase-in the 
program so that, by the year 2000, all working Americans will receive 
an estimate statement. I believe it would be appropriate for the Social 
Security Administration to expand this project to inform future 
beneficiaries that retirement planning assistance is often provided 
through local area agencies on aging, other non-government entities, or 
through the workplace.
  In addition, the Social Security Administration is clearly in a good 
position to evaluate existing retirement planning services, to observe 
any gaps, and to determine how the Federal Government can best help to 
facilitate this planning. Certainly no other agency should have a 
greater interest in encouraging Americans to engage in retirement 
planning.
  Retirement can mean embarking on an exciting and vital phase of 
life--to those who are prepared. A successful retirement is largely 
dependent on a process of identifying future needs, developing a plan 
for meeting them, and acting on these plans. In summary, through public 
education efforts, outreach, and direct counseling, Americans can 
prepare for fulfilling and active retirement years. We should encourage 
the Social Security Administration to pursue the issue of improving 
retirement planning for all Americans.
  Mr. President, beginning in April this year, the Social Security 
Administration will begin its pilot program to distribute personal 
earnings and benefits estimate statements to 600,000 workers. Under 
law, all workers must receive a statement by the year 2000. The Social 
Security Administration is preparing to implement this program to meet 
this schedule. In developing and implementing this program, the Social 
Security Administration has a unique opportunity to further investigate 
the Federal Government's role in assisting Americans to better prepare 
for their retirement years. Knowing the Senator from New York has a 
shared interest in promoting retirement security, would he agree that 
the Social Security Administration should review and report to Congress 
on existing and available retirement planning services?
  Mr. MOYNIHAN. Yes, I would agree with the Senator from Florida. The 
Social Security Administration is in a unique position to undertake 
such a study of retirement planning services. This study would 
certainly be consistent with the mission of the Social Security 
Program.
  Mr. GRAHAM. In addition, the SSA personal earnings and benefits 
estimate statement should be expanded to include recommendations that 
workers adequately consider their retirement needs and to provide 
future retirees with the information to facilitate more comprehensive 
retirement planning.
  Mr. MOYNIHAN. Certainly. The Senator from Florida has made a valuable 
suggestion.
  Mr. McCAIN. Mr. President, I strongly support S. 1560 and feel it is 
an important measure that will help protect the Social Security 
Administration's fiscal integrity and program effectiveness. I would 
like to offer a few brief comments regarding what I hope will not be a 
result of this legislation to make the Social Security Administration 
an independent government agency. I am concerned that the newly 
independent agency may lead to a request for massive new construction 
or leasing projects for the Social Security Administration.
  As many Members of this body are well aware, the creation of a new 
government agency or elevation of an existing one can lead to requests 
for new headquarters or expanded agency offices. Already over-burdened 
taxpayers are then further saddled with the cost of paying for tens of 
millions of dollars' worth of bricks, mortar, equipment, and 
furnishings to satisfy the newly empowered agency's desire for more and 
more new office space.
  Let me clearly state that Federal agencies are often not to blame for 
such spending--its the Congress' fault. Year in and year out, many 
Members of the Senate and the House of Representatives make a 
profession out of directing the Federal Government to build new 
buildings that aren't really necessary, or require agencies to change 
locations for the sheer sake of bringing home some more pork for their 
State or congressional district.
  This dubious practice is often obscured with stentorian speeches 
about the need to endlessly accelerate public investment in our 
economy, and the purported merits of a new home-state project. What it 
really is is an inexcusable, multibillion-dollar waste of taxpayer 
dollars. I have introduced numerous bills, amendments, and come to the 
floor of the Senate literally dozens of times in an effort to defeat 
wasteful and unnecessary construction projects, as well as their 
closely related cousins--unauthorized, unrequested, but much-beloved 
demonstration projects.
  In his highly touted and comprehensive National Performance Review of 
the operation of the Federal Government, Vice President Gore citicized 
these practices and recommended a moratorium on Federal funding for new 
building construction. The Vice President also noted that 1993 was a 
record year for line-item requests in congressional appropriation 
bills, a distinction that I'm sorry to say probably won't last very 
long. I strongly support this recommendation and have cosponsored 
legislation in the Senate to do just that. It is estimated that 
temporarily halting new Federal construction programs could save 
taxpayers in excess of $1 billion this year, without causing 
difficulties to vital programs of the Federal Government. With many 
large and medium-sized cities across the country experiencing 
commercial office space vacancy rates of over 25 percent, using scarce 
taxpayer dollars for low-priority Federal construction projects is an 
especially unjustifiable abuse.

  I have strenuously worked to stem the seemingly inexhaustible 
appetite of the Congress to misuse taxpayer dollars in this manner, and 
this includes unnecessary or excessively costly projects that directly 
affect my State of Arizona. An overwhelming majority of the American 
people support an end to the egregious practice of pork barrel 
spending, and I will continue to fight this good fight whenever such 
projects are brought into the light of open congressional 
consideration.
  Mr. President, as the ranking minority member on the Senate's 
subcommittee that has oversight responsibilities for the General 
Services Administration [GSA], I am dedicated to ensuring that the GSA 
is extremely cost-conscious when it comes to evaluating agency requests 
for new construction or leases. To responsibly provide the resources 
that are needed by Federal agencies to serve the public, and to protect 
taxpayer dollars from being misused, it is vital for the Congress and 
the administration to abide by the established process that the GSA 
follows to evaluate requests for new office space. This procedure is 
thorough if it is followed and respected by the relevant authorizing 
and appropriating committees in the Congress. The problem is that this 
process is too often ignored by Members in their zeal to secure line-
item appropriations for undeserving constituencies that may bring 
pressure to bear on them.
  The GSA is required to conduct an economic analysis of all agency 
requests for new office space, and then submit their findings to the 
Office of Management and Budget. The recommendations of GSA and OMB are 
presented to the authorizing committees in each body for their 
approval. The determination of the authorizing committees is then given 
final consideration by the Appropriations Committees.
  I call on my colleagues to abide by this process as a means of 
cutting down on wasteful Federal spending, and to guarantee that any 
major new construction projects or leases that are ultimately funded by 
the taxpayers are forced to survive a rigorous evaluation process. Our 
obligation to taxpayers in times of a $4 trillion debt demands nothing 
less.
  I hope my concerns regarding the passage of this legislation 
pertaining to future requests of the Social Security Administration are 
unfounded. The Social Security Administration has benefited from 
expanded building space acquisition in the recent past, and I hope that 
the eventual enactment of this legislation does not serve as an impetus 
for the Social Security Administration or Members of Congress to seek 
funding for unnecessary building space that results in added costs to 
the taxpayer.
  Mr. MOYNIHAN. Mr. President, I ask for a third reading of the bill.
  The PRESIDING OFFICER. The question is on the engrossment and third 
reading of the bill.
  The bill was ordered to be engrossed for a third reading and was read 
the third time.
  The PRESIDING OFFICER. The bill having been read the third time, the 
question is, Shall it pass?
  So the bill (S. 1560), as amended, was passed, as follows:

                                S. 1560

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

     SECTION 1. SHORT TITLE; AMENDMENT OF SOCIAL SECURITY ACT; 
                   TABLE OF CONTENTS.

       (a) Short Title.--This Act may be cited as the ``Social 
     Security Administration Independence Act of 1994''.
       (b) Amendment of Social Security Act.--Except as otherwise 
     expressly provided, whenever in this Act an amendment is 
     expressed in terms of an amendment to or repeal of, a section 
     or other provision, the reference shall be considered to be 
     made to that section or other provision of the Social 
     Security Act.
       (c) Table of Contents.--The table of contents of this Act 
     is as follows:

Sec. 1. Short title; amendment of Social Security Act; table of 
              contents.

            TITLE I--ESTABLISHMENT OF NEW INDEPENDENT AGENCY

Sec. 101. Establishment of Social Security Administration as a 
              separate, independent agency.
Sec. 102. Commissioner and Deputy Commissioner of Social Security.
Sec. 103. Social Security Advisory Board.
Sec. 104. Personnel; budgetary matters; seal of office.
Sec. 105. Transfers to the new Social Security Administration.
Sec. 106. Transitional rules.
Sec. 107. Effective dates.

                    TITLE II--CONFORMING AMENDMENTS

Sec. 201. Amendments to titles II and XVI of the Social Security Act.
Sec. 202. Other amendments.
Sec. 203. Rules of construction.
Sec. 204. Effective dates.

        TITLE III--SOCIAL SECURITY DISABILITY AND REHABILITATION

Sec. 301. Short title.
Sec. 302. Reform of monthly insurance benefits based on disability 
              involving substance abuse.
Sec. 303. Priority of treatment.
Sec. 304. Establishment of referral monitoring agencies required in all 
              States.
Sec. 305. Proceeds from certain criminal activities constitute 
              substantial gainful employment.
Sec. 306. Consistent penalty provisions for SSDI and SSI programs.
            TITLE I--ESTABLISHMENT OF NEW INDEPENDENT AGENCY

     SEC. 101. ESTABLISHMENT OF SOCIAL SECURITY ADMINISTRATION AS 
                   A SEPARATE, INDEPENDENT AGENCY.

       Section 701 (42 U.S.C. 901) is amended to read as follows:


                    ``SOCIAL SECURITY ADMINISTRATION

       ``Sec. 701. There is hereby established, as an independent 
     agency in the executive branch of the Government, a Social 
     Security Administration (hereafter in this title referred to 
     as the `Administration'). It shall be the duty of the 
     Administration to administer the old-age, survivors, and 
     disability insurance program under title II and the 
     supplemental security income program under title XVI.''.

     SEC. 102. COMMISSIONER AND DEPUTY COMMISSIONER OF SOCIAL 
                   SECURITY.

       Section 702 (42 U.S.C. 902) is amended to read as follows:


                 ``COMMISSIONER AND DEPUTY COMMISSIONER

                   ``Commissioner of Social Security

       ``Sec. 702. (a)(1) There shall be in the Administration a 
     Commissioner of Social Security (hereafter in this title 
     referred to as the `Commissioner') who shall be appointed by 
     the President, with the advice and consent of the Senate.
       ``(2) The Commissioner shall be compensated at the rate 
     provided for level I of the Executive Schedule.
       ``(3) The Commissioner shall be appointed for a term of 4 
     years coincident with the term of the President, or until the 
     appointment of a qualified successor.
       ``(4) The Commissioner shall be responsible for the 
     exercise of all powers and the discharge of all duties of the 
     Administration, and shall have authority and control over all 
     personnel and activities thereof.
       ``(5) The Commissioner may prescribe such rules and 
     regulations as the Commissioner determines necessary or 
     appropriate to carry out the functions of the Administration. 
     The regulations prescribed by the Commissioner shall be 
     subject to the rulemaking procedures established under 
     section 553 of title 5, United States Code.
       ``(6) The Commissioner may establish, alter, consolidate, 
     or discontinue such organizational units or components within 
     the Administration as the Commissioner considers necessary or 
     appropriate, except that this paragraph shall not apply with 
     respect to any unit, component, or provision provided for by 
     this Act.
       ``(7) The Commissioner may assign duties, and delegate, or 
     authorize successive redelegations of, authority to act and 
     to render decisions, to such officers and employees of the 
     Administration as the Commissioner may find necessary. Within 
     the limitations of such delegations, redelegations, or 
     assignments, all official acts and decisions of such officers 
     and employees shall have the same force and effect as though 
     performed or rendered by the Commissioner.
       ``(8) The Commissioner and the Secretary of Health and 
     Human Services (hereafter in this title referred to as the 
     `Secretary') shall consult, on an ongoing basis, to ensure--
       ``(A) the coordination of the programs administered by the 
     Commissioner, as described in section 701, with the programs 
     administered by the Secretary under titles XVIII and XIX of 
     this Act; and
       ``(B) that adequate information concerning benefits under 
     such titles XVIII and XIX shall be available to the public.

                ``Deputy Commissioner of Social Security

       ``(b)(1) There shall be in the Administration a Deputy 
     Commissioner of Social Security (hereafter in this title 
     referred to as the `Deputy Commissioner') who shall be 
     appointed by the President, with the advice and consent of 
     the Senate.
       ``(2) The Deputy Commissioner shall be appointed for a term 
     of 4 years coincident with the term of the Commissioner, or 
     until the appointment of a qualified successor.
       ``(3) The Deputy Commissioner shall be compensated at the 
     rate provided for level II of the Executive Schedule.
       ``(4) The Deputy Commissioner shall perform such duties and 
     exercise such powers as the Commissioner shall from time to 
     time assign or delegate. The Deputy Commissioner shall be 
     Acting Commissioner of the Administration during the absence 
     or disability of the Commissioner and, unless the President 
     designates another officer of the Government as Acting 
     Commissioner, in the event of a vacancy in the office of the 
     Commissioner.''.

     SEC. 103. SOCIAL SECURITY ADVISORY BOARD.

       Section 703 (42 U.S.C. 903) is amended to read as follows:


                    ``Social Security Advisory Board

                        ``Establishment of Board

       ``Sec. 703. (a) There shall be established a Social 
     Security Advisory Board (hereinafter referred to as the 
     `Board').

                        ``Functions of the Board

       ``(b) The Board shall advise the Commissioner on policies 
     related to the old-age, survivors, and disability insurance 
     program under title II and the supplemental security income 
     program under title XVI. Specific functions of the Board 
     shall include--
       ``(1) analyzing the Nation's retirement and disability 
     systems and making recommendations with respect to how the 
     old-age, survivors, and disability insurance program and the 
     supplemental security income program, supported by other 
     public and private systems, can most effectively assure 
     economic security;
       ``(2) studying and making recommendations relating to the 
     coordination of programs that provide health security with 
     programs described in paragraph (1);
       ``(3) making recommendations to the President and to the 
     Congress with respect to policies that will ensure the 
     solvency of the old-age, survivors, and disability insurance 
     program, both in the short-term and the long-term;
       ``(4) making recommendations to the President of candidates 
     to consider in selecting nominees for the position of 
     Commissioner and Deputy Commissioner;
       ``(5) reviewing and assessing the quality of service that 
     the Administration provides to the public;
       ``(6) reviewing and making recommendations with respect to 
     policies and regulations regarding the old-age, survivors, 
     and disability insurance program and the supplemental 
     security income program;
       ``(7) increasing public understanding of the social 
     security system;
       ``(8) in consultation with the Commissioner, reviewing the 
     development and implementation of a long-range research and 
     program evaluation plan for the Administration;
       ``(9) reviewing and assessing any major studies of social 
     security as may come to the attention of the Board; and
       ``(10) conducting such other reviews and assessments that 
     the Board determines to be appropriate.

                ``Structure and Membership of the Board

       ``(c) The Board shall be composed of 7 members who shall be 
     appointed as follows:
       ``(1) 3 members shall be appointed by the President, with 
     the advice and consent of the Senate. Not more than 2 of such 
     members shall be from the same political party.
       ``(2) 2 members (each member from a different political 
     party) shall be appointed by the President pro tempore of the 
     Senate with the advice of the Chairman and the Ranking 
     Minority Member of the Senate Committee on Finance.
       ``(3) 2 members (each member from a different political 
     party) shall be appointed by the Speaker of the House of 
     Representatives, with the advice of the Chairman and the 
     Ranking Minority Member of the House Committee on Ways and 
     Means.

                         ``Terms of Appointment

       ``(d) Each member of the Board shall serve for a term of 6 
     years, except that--
       ``(1) a member appointed to fill a vacancy occurring prior 
     to the expiration of the term for which a predecessor was 
     appointed, shall be appointed for the remainder of such term; 
     and
       ``(2) the terms of service of the members initially 
     appointed under this section shall expire as follows:
       ``(A) The terms of service of the members initially 
     appointed by the President shall expire as designated by the 
     President at the time of nomination, 1 each at the end of--
       ``(i) 2 years;
       ``(ii) 4 years; and
       ``(iii) 6 years.
       ``(B) The terms of service of members initially appointed 
     by the President pro tempore of the Senate shall expire as 
     designated by the President pro tempore of the Senate at the 
     time of nomination, 1 each at the end of--
       ``(i) 4 years; and
       ``(ii) 6 years.
       ``(C) The terms of service of members initially appointed 
     by the Speaker of the House of Representatives shall expire 
     as designated by the Speaker of the House of Representatives 
     at the time of nomination, 1 each at the end of--
       ``(i) 3 years; and
       ``(ii) 5 years.

                               ``Chairman

       ``(e) A member of the Board shall be designated by the 
     President to serve as Chairman for a term of 4 years, 
     coincident with the term of the President, or until the 
     designation of a successor.

                             ``Compensation

       ``(f) Members of the Board shall be compensated as follows:
       ``(1) Members shall be paid at a rate equal to 25 percent 
     of the rate for level III of the Executive Schedule.
       ``(2) For days when the Board or any authorized 
     subcommittee of the Board meets, members who attend meetings 
     on such days (including travel time) shall receive additional 
     compensation in an amount equal to the daily equivalent of 
     the rate for level III of the Executive Schedule.
       ``(3) While serving on business of the Board away from 
     their homes or regular places of business, members may be 
     allowed travel expenses, including per diem in lieu of 
     subsistence, as authorized by section 5703 of title 5, United 
     States Code, for persons in the Government employed 
     intermittently.
       ``(4) Service on the Board shall not be treated as Federal 
     service or employment for purposes of receiving any benefits 
     under chapters 83, 84, and 87 of title 5, United States Code.
       ``(5) A member of the Board may elect coverage of a health 
     benefits plan under chapter 89 of title 5, United States 
     Code. Such a member electing coverage shall have the 
     applicable employee contributions under section 8906 of such 
     title withheld from pay for service as a member of the Board. 
     The Administration shall pay the applicable Government 
     contributions under such section 8906 for such member. The 
     Office of Personnel Management shall promulgate regulations 
     to apply the provisions of chapter 89 of such title to Board 
     members electing coverage as provided under this paragraph.

                               ``Meetings

       ``(g) The Board shall meet not less than 6 times each year 
     to consider a specific agenda of issues, as determined by the 
     Chairman in consultation with the other members of the Board.

                    ``Federal Advisory Committee Act

       ``(h) The Board shall be exempt from the provisions of the 
     Federal Advisory Committee Act (5 U.S.C. App.).

                              ``Personnel

       ``(i)(1) The Board shall, without regard to title 5, United 
     States Code, appoint a Staff Director who shall be paid at a 
     rate equivalent to a rate for the Senior Executive Service.
       ``(2) The Board is authorized, without regard to title 5, 
     United States Code, to appoint and fix the compensation of 
     such additional personnel as the Board determines to be 
     necessary to carry out the functions of the Board.
       ``(3) In fixing the compensation of additional personnel 
     under paragraph (2), the Board shall not authorize that any 
     individual appointed under such paragraph be compensated at a 
     rate that is greater than the rate of compensation of the 
     Staff Director described in paragraph (1).

                    ``Authorization of Appropriation

       ``(j) There are authorized to be made available for 
     expenditure, out of the Federal Disability Insurance Trust 
     Fund, the Federal Old Age and Survivors Insurance Trust Fund, 
     and the general fund in the Treasury, such sums as the 
     Congress may deem appropriate to carry out the purposes of 
     this section.''.

     SEC. 104. PERSONNEL; BUDGETARY MATTERS; SEAL OF OFFICE.

       Section 704 is amended to read as follows:


              ``ADMINISTRATIVE DUTIES OF THE COMMISSIONER

                              ``Personnel

       ``Sec. 704. (a)(1) The Commissioner shall appoint such 
     additional officers and employees as the Commissioner 
     considers necessary to carry out the functions of the 
     Administration under this Act. Except as otherwise provided 
     in any other provision of law, such officers and employees 
     shall be appointed, and their compensation shall be fixed, in 
     accordance with title 5, United States Code.
       ``(2) The Commissioner may procure the services of experts 
     and consultants in accordance with the provisions of section 
     3109 of title 5, United States Code.
       ``(3) Notwithstanding any requirements of section 3133 of 
     title 5, United States Code, the Director of the Office of 
     Personnel Management shall authorize for the Administration a 
     total number of Senior Executive Service positions which is 
     substantially greater than the number of such positions 
     authorized in the Social Security Administration in the 
     Department of Health and Human Services as of immediately 
     before the date of the enactment of the Social Security 
     Administration Independence Act of 1994 to the extent that 
     the greater number of such authorized positions is specified 
     in the comprehensive work force plan as established and 
     revised by the Commissioner under subsection (b)(1). The 
     total number of such positions authorized for the 
     Administration shall not at any time be less than the number 
     of such authorized positions as of immediately before such 
     date.

                           ``Budgetary Matters

       ``(b)(1) Appropriations requests for staffing and personnel 
     of the Administration shall be based upon a comprehensive 
     work force plan, which shall be established and revised from 
     time to time by the Commissioner.
       ``(2) Appropriations for administrative expenses of the 
     Administration are authorized to be provided on a biennial 
     basis.
       ``(3) Funds appropriated for the Administration to be 
     available on a contingency basis shall be apportioned upon 
     the occurrence of the stipulated contingency, as determined 
     by the Commissioner and reported to the Congress.

                        ``Employment Restriction

       ``(c) The number of positions in the Administration which 
     may be excepted from the competitive service, on a temporary 
     or permanent basis, because of the confidential or policy-
     determining character of such positions, may not exceed at 
     any time the equivalent of 10 full-time positions.

                            ``Seal of Office

       ``(d) The Commissioner shall cause a seal of office to be 
     made for the Administration of such design as the 
     Commissioner shall approve. Judicial notice shall be taken of 
     such seal.''.

     SEC. 105. TRANSFERS TO THE NEW SOCIAL SECURITY 
                   ADMINISTRATION.

       (a) Functions.--There are transferred to the Social 
     Security Administration all functions carried out by the 
     Secretary of Health and Human Services with respect to the 
     programs and activities the administration of which is vested 
     in the Social Security Administration by reason of this title 
     and the amendments made thereby. The Commissioner of Social 
     Security shall allocate such functions in accordance with 
     sections 701, 702, 703, and 704 of the Social Security Act 
     (as amended by this title).
       (b) Personnel, Assets, Etc.--(1) There are transferred from 
     the Department of Health and Human Services to the Social 
     Security Administration, for appropriate allocation by the 
     Commissioner of Social Security in the Social Security 
     Administration--
       (A) the personnel employed in connection with the functions 
     transferred by this title and the amendments made thereby; 
     and
       (B) the assets, liabilities, contracts, property, records, 
     and unexpended balance of appropriations, authorizations, 
     allocations, and other funds employed, held, or used in 
     connection with such functions, arising from such functions, 
     or available, or to be made available, in connection with 
     such functions.
       (2) Unexpended funds transferred pursuant to this 
     subsection shall be used only for the purposes for which the 
     funds were originally authorized and appropriated.
       (3) Any individual who is an employee of the Department and 
     who was not employed on the date of the enactment of this 
     title, in connection with functions transferred by this title 
     to the Administration, but who was so employed on the day 
     before the date established pursuant to section 107(a), may 
     be transferred from the Department of Health and Human 
     Services to the Social Security Administration by the 
     Commissioner under subparagraph (A) of paragraph (1), after 
     consultation with the Secretary of Health and Human Services, 
     if the Commissioner determines such transfer to be 
     appropriate.
       (4) Any individual who is an employee of the Department and 
     who was employed on the date of the enactment of this title, 
     solely in connection with functions transferred by this title 
     to the Administration, and who was so employed on the day 
     before the date established pursuant to section 107(a), shall 
     be transferred from the Department of Health and Human 
     Services to the Social Security Administration.
       (c) Abolishment of Office of Commissioner in the Department 
     of Health and Human Services.--Effective upon the appointment 
     of a Commissioner of Social Security pursuant to section 702 
     of the Social Security Act (as amended by this title)--
       (1) the position of Commissioner of Social Security in the 
     Department of Health and Human Services is abolished; and
       (2) section 5315 of title 5, United States Code, is amended 
     by striking the following:
       ``Commissioner of Social Security, Department of Health and 
     Human Services.''.

     SEC. 106. TRANSITIONAL RULES.

       (a) Transition Director.--(1) Within 30 days after the date 
     of the enactment of this Act, a transition director shall be 
     appointed by the President, who shall be selected on the 
     basis of experience and knowledge of the operation of the 
     Government.
       (2) The transition director shall conduct activities 
     necessary to ensure the transition of the Social Security 
     Administration to the status of an independent agency in the 
     executive branch of the Government. In conducting such 
     activities before the appointment of the Commissioner of 
     Social Security, the transition director shall consult 
     regularly with the Director of the Office of Management and 
     Budget. Upon such appointment, the transition director shall 
     conduct such activities at the direction of the Commissioner 
     of Social Security.
       (3) The transition director shall be compensated at the 
     rate provided for level IV of the Executive Schedule.
       (4) Expenditures to carry out the purposes of this 
     subsection shall be made out of the Federal Old Age and 
     Survivors Insurance Trust Fund and the Federal Disability 
     Insurance Trust Fund.
       (b) Interim Authority for Appointment and Compensation.--
       (1) Appointment of commissioner.--Within 60 days of the 
     date of the enactment of this title, the Commissioner of 
     Social Security shall be appointed by the President pursuant 
     to section 702 of the Social Security Act (as amended by this 
     title). If the appointment is made pursuant to such section 
     before the date established pursuant to section 107(a), the 
     Commissioner of Social Security shall also perform the duties 
     assigned to the Commissioner of Social Security in the 
     Department of Health and Human Services.
       (2) Other appointments.--At any time on or after the date 
     of the enactment of this title any of the other officers 
     provided for in sections 702 and 703 of the Social Security 
     Act (as amended by this title) may be nominated and 
     appointed, as provided in such sections.
       (3) Compensation.--Funds available to any official or 
     component of the Department of Health and Human Services, 
     functions of which are transferred to the Commissioner of 
     Social Security or the Social Security Administration by this 
     title, may with the approval of the Director of the Office of 
     Management and Budget, be used to pay the compensation and 
     expenses of any officer appointed pursuant to this subsection 
     until such time as funds for that purpose are otherwise 
     available.
       (c) Continuation of Orders, Determinations, Rules, 
     Regulations, Etc.--All orders, determinations, rules, 
     regulations, permits, contracts, collective bargaining 
     agreements (and ongoing negotiations relating to such 
     collective bargaining agreements), recognitions of labor 
     organizations, certificates, licenses, and privileges--
       (1) which have been issued, made, promulgated, granted, or 
     allowed to become effective, in the exercise of functions (A) 
     which were exercised by the Secretary of Health and Human 
     Services (or the Secretary's delegate), and (B) which relate 
     to functions which, by reason of this title, the amendments 
     made thereby, and regulations prescribed thereunder, are 
     vested in the Commissioner of Social Security; and
       (2) which are in effect immediately before the date 
     established pursuant to section 107(a),

     shall (to the extent that they relate to functions described 
     in paragraph (1)(B)) continue in effect according to their 
     terms until modified, terminated, suspended, set aside, or 
     repealed by such Commissioner, except that any collective 
     bargaining agreement shall remain in effect until the date of 
     termination specified in such agreement.
       (d) Continuation of Proceedings.--The provisions of this 
     title (including the amendments made thereby) shall not 
     affect any proceeding pending before the Secretary of Health 
     and Human Services immediately before the date established 
     pursuant to section 107(a), with respect to functions vested 
     (by reason of this title, the amendments made thereby, and 
     regulations prescribed thereunder) in the Commissioner of 
     Social Security, except that such proceedings, to the extent 
     that such proceedings relate to such functions, shall 
     continue before such Commissioner. Orders shall be issued 
     under any such proceeding, appeals taken therefrom, and 
     payments shall be made pursuant to such orders, in like 
     manner as if this title had not been enacted, and orders 
     issued in any such proceeding shall continue in effect until 
     modified, terminated, superseded, or repealed by such 
     Commissioner, by a court of competent jurisdiction, or by 
     operation of law.
       (e) Continuation of Suits.--Except as provided in this 
     subsection--
       (1) the provisions of this title shall not affect suits 
     commenced before the date established pursuant to section 
     107(a); and
       (2) in all such suits proceedings shall be had, appeals 
     taken, and judgments rendered, in the same manner and effect 
     as if this title had not been enacted.

     No cause of action, and no suit, action, or other proceeding 
     commenced by or against any officer in such officer's 
     official capacity as an officer of the Department of Health 
     and Human Services, shall abate by reason of the enactment of 
     this title. Causes of action, suits, actions, or other 
     proceedings may be asserted by or against the United States 
     and the Social Security Administration, or such official of 
     such Administration as may be appropriate, and, in any 
     litigation pending immediately before the date established 
     pursuant to section 107(a), the court may at any time, on the 
     court's own motion or that of a party, enter an order which 
     will give effect to the provisions of this subsection 
     (including, where appropriate, an order for substitution of 
     parties).
       (f) Continuation of Penalties.--This title shall not have 
     the effect of releasing or extinguishing any criminal 
     prosecution, penalty, forfeiture, or liability incurred as a 
     result of any function which (by reason of this title, the 
     amendments made thereby, and regulations prescribed 
     thereunder) is vested in the Commissioner of Social Security.
       (g) Judicial Review.--Orders and actions of the 
     Commissioner of Social Security in the exercise of functions 
     vested in such Commissioner under this title (and the 
     amendments made thereby) shall be subject to judicial review 
     to the same extent and in the same manner as if such orders 
     had been made and such actions had been taken by the 
     Secretary of Health and Human Services in the exercise of 
     such functions immediately before the date established 
     pursuant to section 107(a). Any statutory requirements 
     relating to notice, hearings, action upon the record, or 
     administrative review that apply to any function so vested in 
     such Commissioner shall continue to apply to the exercise of 
     such function by such Commissioner.
       (h) Exercise of Functions.--In the exercise of the 
     functions vested in the Commissioner of Social Security under 
     this title, the amendments made thereby, and regulations 
     prescribed thereunder, such Commissioner shall have the same 
     authority as that vested in the Secretary of Health and Human 
     Services with respect to the exercise of such functions 
     immediately preceding the vesting of such functions in such 
     Commissioner, and actions of such Commissioner shall have the 
     same force and effect as when exercised by such Secretary.
       (i) Report.--Within 120 days of the date of the enactment 
     of this title, the transition director and the Commissioner 
     of Social Security shall report to the Congress on the status 
     of the transition to an independent Social Security 
     Administration, and on any significant internal restructuring 
     or management improvements that are proposed to be 
     undertaken.

     SEC. 107. EFFECTIVE DATES.

       (a) In General.--Except as provided in subsection (b), this 
     title, and the amendments made by such title shall take 
     effect on the earlier of--
       (1) the date which is 180 days after the date of the 
     enactment of this Act, or
       (2) a date designated by the President.
       (b) Transitional Rules.--Section 106 shall take effect on 
     the date of the enactment of this title.
                    TITLE II--CONFORMING AMENDMENTS

     SEC. 201. AMENDMENTS TO TITLES II AND XVI OF THE SOCIAL 
                   SECURITY ACT.

       (a) In General.--Title II (42 U.S.C. 401 et seq.) (other 
     than section 201, section 218(d), section 231(c), section 
     226, and section 226A) and title XVI (42 U.S.C. 1382 et seq.) 
     (other than sections 1614(f)(2)(B) and 1616(e)(3)) are each 
     amended--
       (1) by striking, wherever it appears therein, ``Secretary 
     of Health and Human Services'' and inserting ``Commissioner 
     of Social Security'';
       (2) by striking, wherever it appears therein, ``Department 
     of Health and Human Services'' and inserting ``Social 
     Security Administration'';
       (3) by striking, wherever it appears therein, 
     ``Department'' (but only if it is not immediately succeeded 
     by the words ``of Health and Human Services'', and only if it 
     is used in reference to the Department of Health and Human 
     Services) and inserting ``Administration'';
       (4) by striking, wherever it appears therein, each of the 
     following words (but, in the case of any such word only if 
     such word refers to the Secretary of Health and Human 
     Services): ``Secretary'', ``Secretary's'', ``his'', ``him'', 
     ``he'', ``her'', and ``she'', and inserting (in the case of 
     the word ``Secretary'') ``Commissioner of Social Security'', 
     (in the case of the word ``Secretary's'') ``Commissioner's'', 
     (in the case of the word ``his'') ``the Commissioner's'', (in 
     the case of the word ``him'') ``the Commissioner'', (in the 
     case of the word ``her'') ``the Commissioner'' or ``the 
     Commissioner's'', as may be appropriate, and (in the case of 
     the words ``she'' or ``he'') ``the Commissioner''; and
       (5) by striking, wherever it appears therein, ``Internal 
     Revenue Code of 1954'' and inserting ``Internal Revenue Code 
     of 1986''.
       (b) Amendments to Section 201.--(1)(A) Sections 201(a)(3), 
     201(a)(4), 201(b)(1), and 201(b)(2) (42 U.S.C. 401(a)(3), 
     401(a)(4), 401(b)(1), and 401(b)(2), respectively) are each 
     amended by striking ``Secretary of Health and Human 
     Services'' each place it appears and inserting ``Commissioner 
     of Social Security''; and
       (B) Sections 201(a)(3) and 201(b)(1) (42 U.S.C. 401(a)(3) 
     and 401(b)(1), respectively) are each amended by striking 
     ``such Secretary'' and inserting ``such Commissioner''.
       (2) Section 201(c) (42 U.S.C. 401(c)) is amended--
       (A) in the first sentence, by striking ``shall be composed 
     of'' and all that follows down through ``ex officio'' and 
     inserting the following: ``shall be composed of the 
     Commissioner of Social Security, the Secretary of the 
     Treasury, and the Secretary of Health and Human Services, all 
     ex officio''; and
       (B) in the fifth sentence, by striking ``The Commissioner 
     of Social Security'' and inserting ``The Deputy Commissioner 
     of Social Security''.
       (3) Section 201(g)(1)(A) (42 U.S.C. 401(g)(1)(A)) is 
     amended--
       (A) in clause (i), by striking ``by him and the Secretary 
     of Health and Human Services'' and inserting ``by him, the 
     Commissioner of Social Security, and the Secretary of Health 
     and Human Services'', and by striking ``by the Department of 
     Health and Human Services and the Treasury Department'' and 
     inserting ``by the Social Security Administration, the 
     Department of Health and Human Services, and the Department 
     of the Treasury'';
       (B) in clause (ii), by striking ``method prescribed by the 
     Board of Trustees under paragraph (4)'' and inserting 
     ``applicable method prescribed under paragraph (4)'', by 
     striking ``the Secretary of Health and Human Services'' and 
     inserting ``the Commissioner of Social Security and the 
     Secretary of Health and Human Services'', and by striking 
     ``the Department of Health and Human Services'' and inserting 
     ``the Social Security Administration and the Department of 
     Health and Human Services''; and
       (C) by striking the last sentence and inserting the 
     following: ``There are hereby authorized to be made available 
     for expenditure, out of any or all of the Trust Funds, such 
     amounts as the Congress may deem appropriate to pay the costs 
     of the part of the administration of this title and title XVI 
     for which the Commissioner of Social Security is responsible, 
     the costs of title XVIII for which the Secretary of Health 
     and Human Services is responsible, and the costs of carrying 
     out the functions of the Social Security Administration, 
     specified in section 232, which relate to the administration 
     of provisions of the Internal Revenue Code of 1986 other than 
     those referred to in clause (i) of the first sentence of this 
     subparagraph.''.
       (4) Section 201(g)(1) (42 U.S.C. 401(g)(1)) is further 
     amended by striking subparagraph (B) and inserting the 
     following new subparagraphs:
       ``(B) After the close of each fiscal year--
       ``(i) the Commissioner of Social Security shall determine 
     (I) the portion of the costs, incurred during such fiscal 
     year, of administration of this title and title XVI and of 
     carrying out the functions of the Social Security 
     Administration, specified in section 232, which relate to the 
     administration of provisions of the Internal Revenue Code of 
     1986 (other than those referred to in clause (i) of the first 
     sentence of subparagraph (A)), which should have been borne 
     by the general fund in the Treasury, (II) the portion of such 
     costs which should have been borne by the Federal Old-Age and 
     Survivors Insurance Trust Fund, and (III) the portion of such 
     costs which should have been borne by the Federal Disability 
     Insurance Trust Fund, and
       ``(ii) the Secretary of Health and Human Services shall 
     determine (I) the portion of the costs, incurred during such 
     fiscal year, of administration of title XVIII which should 
     have been borne by the general fund in the Treasury, (II) the 
     portion of such costs which should have been borne by the 
     Federal Hospital Insurance Trust Fund, and (III) the portion 
     of such costs which should have been borne by the Federal 
     Supplementary Medical Insurance Trust Fund,

     except that the determination of the amounts to be borne by 
     the general fund in the Treasury with respect to expenditures 
     incurred in carrying out such functions specified in section 
     232 shall be made pursuant to the applicable method 
     prescribed under paragraph (4) of this subsection.
       ``(C) After the determinations under subparagraph (B) have 
     been made for any fiscal year, the Commissioner of Social 
     Security and the Secretary of Health and Human Services shall 
     jointly certify to the Managing Trustee the amounts, if any, 
     which should be transferred from one to any of the other of 
     such Trust Funds and the amounts, if any, which should be 
     transferred between the Trust Funds (or one of the Trust 
     Funds) and the general fund in the Treasury, in order to 
     ensure that each of the Trust Funds and the general fund in 
     the Treasury have borne their proper share of the costs, 
     incurred during such fiscal year, for (i) the part of the 
     administration of this title and title XVI for which the 
     Commissioner of Social Security is responsible, (ii) the part 
     of the administration of this title and title XVIII for which 
     the Secretary of Health and Human Services is responsible, 
     and (iii) carrying out the functions of the Social Security 
     Administration, specified in section 232, which relate to the 
     administration of provisions of the Internal Revenue Code of 
     1986 (other than those referred to in clause (i) of the first 
     sentence of subparagraph (A)). The Managing Trustee shall 
     transfer any such amounts in accordance with any 
     certification so made.''.
       (5) Section 201(g)(2) (42 U.S.C. 401(g)(2)) is amended, in 
     the second sentence, by striking ``established and maintained 
     by the Secretary of Health and Human Services'' and inserting 
     ``maintained by the Commissioner of Social Security'', and by 
     striking ``Secretary shall furnish'' and inserting 
     ``Commissioner of Social Security shall furnish''.
       (6) Section 201(g)(4) (42 U.S.C. 401(g)(4)) is amended to 
     read as follows:
       ``(4) The Commissioner of Social Security shall utilize the 
     method prescribed pursuant to this paragraph, as in effect 
     immediately before the date of the enactment of the Social 
     Security Administration Independence Act of 1994 for 
     determining the costs which should be borne by the general 
     fund in the Treasury of carrying out the functions of the 
     Social Security Administration, specified in section 232, 
     which relate to the administration of provisions of the 
     Internal Revenue Code of 1986 (other than those referred to 
     in clause (i) of the first sentence of paragraph (1)(A)). If 
     at any time or times thereafter the Boards of Trustees of 
     such Trust Funds consider such action advisable, such Boards 
     may modify the method of determining such costs.''.
       (7) Section 201(i)(1) (42 U.S.C. 401(i)(1)) is amended to 
     read as follows:
       ``(i)(1) The Managing Trustee may accept on behalf of the 
     United States money gifts and bequests made unconditionally 
     to the Federal Old-Age and Survivors Insurance Trust Fund, 
     the Federal Disability Insurance Trust Fund, the Federal 
     Hospital Insurance Trust Fund, or the Federal Supplementary 
     Medical Insurance Trust Fund or to the Social Security 
     Administration, the Department of Health and Human Services, 
     or any part or officer thereof, for the benefit of any of 
     such Funds or any activity financed through such Funds.''.
       (8) Subsections (j) and (k) of section 201 (42 U.S.C. 401) 
     are each amended by striking ``Secretary'' each place it 
     appears and inserting ``Commissioner of Social Security''.
       (9) Section 201(l)(3)(B)(iii)(II) (42 U.S.C. 
     401(l)(3)(B)(iii)(II)) is amended by striking ``Secretary'' 
     and inserting ``Commissioner of Social Security''.
       (10) Section 201(m)(3) (42 U.S.C. 401(m)(3)) is amended by 
     striking ``Secretary of Health and Human Services'' and 
     inserting ``Commissioner of Social Security''.
       (11) Section 201 (42 U.S.C. 401) is amended by striking 
     ``Internal Revenue Code of 1954'' each place it appears and 
     inserting ``Internal Revenue Code of 1986''.
       (c) Amendments to Section 218.--Section 218(d) (42 U.S.C. 
     418(d)) is amended by striking ``Secretary'' each place it 
     appears in paragraphs (3) and (7) and inserting 
     ``Commissioner of Social Security''.
       (d) Amendment to Section 231.--Section 231(c) (42 U.S.C. 
     431(c)) is amended by striking ``Secretary determines'' and 
     inserting ``Commissioner of Social Security and the Secretary 
     jointly determine''.

     SEC. 202. OTHER AMENDMENTS.

       (a) Amendments to Title VII.--(1) Title VII (42 U.S.C. 901 
     et seq.) is amended by adding at the end the following new 
     section:


                  ``DUTIES AND AUTHORITY OF SECRETARY

       ``Sec. 712. The Secretary shall perform the duties imposed 
     upon the Secretary by this Act. The Secretary is authorized 
     to appoint and fix the compensation of such officers and 
     employees, and to make such expenditures as may be necessary 
     for carrying out the functions of the Secretary under this 
     Act.''.
       (2) Section 706 (42 U.S.C. 907) is amended--
       (A) in subsection (a), by striking ``Advisory Council on 
     Social Security'' and all that follows through ``disability 
     insurance program and'' and inserting ``Advisory Council on 
     Hospital and Supplementary Medical Insurance for the purpose 
     of reviewing the status of the Federal Hospital Insurance 
     Trust Fund and the Federal Supplementary Medical Insurance 
     Trust Fund in relation to the long-term commitments of'';
       (B) in subsection (d), by striking paragraph (1) and by 
     redesignating paragraphs (2) and (3) as paragraphs (1) and 
     (2), respectively, and
       (C) by striking the section heading and inserting the 
     following:


 ``ADVISORY COUNCIL ON HOSPITAL AND SUPPLEMENTARY MEDICAL INSURANCE''.

       (3) Paragraph (2) of section 709(b) (42 U.S.C. 910(b)) is 
     amended by striking ``(as estimated by the Secretary)'' and 
     inserting ``(for amounts which will be paid from the Federal 
     Old-Age and Survivors Insurance Trust Fund and the Federal 
     Disability Insurance Trust Fund, as estimated by the 
     Commissioner, and for amounts which will be paid from the 
     Federal Hospital Insurance Trust and the Federal 
     Supplementary Medical Insurance Trust Fund, as estimated by 
     the Secretary)''.
       (4) Sections 709 and 710 (42 U.S.C. 910 and 911) are 
     amended by striking ``Internal Revenue Code of 1954'' each 
     place it appears and inserting ``Internal Revenue Code of 
     1986''.
       (b) Amendments to Title XI.--(1) Section 1101(a) (42 U.S.C. 
     1301(a)) is amended by adding at the end the following new 
     paragraph:
       ``(10) The term `Administration' means the Social Security 
     Administration, except where the context requires 
     otherwise.''.
       (2) Section 1106(a) (42 U.S.C. 1306(a)) is amended--
       (A) by inserting ``(1)'' after ``(a)'';
       (B) by striking ``Department of Health and Human Services'' 
     each place it appears and inserting ``applicable agency'';
       (C) by striking ``Secretary'' each place it appears and 
     inserting ``head of the applicable agency''; and
       (D) by adding at the end the following new paragraph:
       ``(2) For purposes of this subsection and subsection (b), 
     the term `applicable agency' means--
       ``(A) the Social Security Administration, with respect to 
     matter transmitted to or obtained by such Administration or 
     matter disclosed by such Administration, or
       ``(B) the Department of Health and Human Services, with 
     respect to matter transmitted to or obtained by such 
     Department or matter disclosed by such Department.''.
       (3) Section 1106(b) (42 U.S.C. 1306(b)) is amended--
       (A) by striking ``Secretary'' each place it appears and 
     inserting ``head of the applicable agency''; and
       (B) by striking ``Department of Health and Human Services'' 
     and inserting ``applicable agency''.
       (4) Section 1106(c) (42 U.S.C. 1306(c)) is amended--
       (A) by striking ``the Secretary'' the first place it 
     appears and inserting ``the Commissioner of Social Security 
     or the Secretary''; and
       (B) by striking ``the Secretary'' each subsequent place it 
     appears and inserting ``such Commissioner or Secretary''.
       (5) Section 1107(b) (42 U.S.C. 1307(b)) is amended by 
     striking ``the Secretary of Health and Human Services'' and 
     inserting ``the Commissioner of Social Security or the 
     Secretary''.
       (6) Section 1110 (42 U.S.C. 1310) is amended--
       (A) in subsection (a)(2), by inserting ``(or the 
     Commissioner, with respect to any jointly financed 
     cooperative agreement or grant concerning titles II or XVI)'' 
     after ``Secretary'';
       (B) in subsection (b)--
       (i) by striking ``Secretary'' each place it appears and 
     inserting ``Commissioner'', and
       (ii) by striking ``the Secretary's'' each place it appears 
     and inserting ``the Commissioner's''; and
       (C) by striking ``he'', ``his'', ``him'', and ``himself'' 
     each place they appear (except in subsection (b)(2)(A)) and 
     inserting ``the Commissioner'', ``the Commissioner's'', ``the 
     Commissioner'', and ``himself or herself'', respectively.
       (7) Subsections (b) and (c) of section 1127 (42 U.S.C. 
     1320a-6) are each amended by striking ``Secretary'' and 
     inserting ``Commissioner of Social Security''.
       (8) Section 1128(f) (42 U.S.C. 1320a-7(f)) is amended by 
     inserting after ``section 205(g)'' the following: ``, except 
     that, in so applying such sections and section 205(l), any 
     reference therein to the Commissioner of Social Security or 
     the Social Security Administration shall be considered a 
     reference to the Secretary or the Department of Health and 
     Human Services, respectively''.
       (9) Section 1131 (42 U.S.C. 1320b-1) is amended--
       (A) by striking ``Secretary'' each place it appears and 
     inserting ``Commissioner of Social Security'';
       (B) in subsection (a)(1)(A), by adding ``or'' at the end;
       (C) in subsection (a)(1)(B), by striking ``or'' at the end;
       (D) by striking subsection (a)(1)(C);
       (E) by redesignating subsection (a)(2) as subsection 
     (a)(3);
       (F) by inserting after subsection (a)(1) the following new 
     paragraph:
       ``(2) the Secretary makes a finding of fact and a decision 
     as to the entitlement under section 226 of any individual to 
     hospital insurance benefits under part A of title XVIII, 
     or''; and
       (G) by striking ``he'' in the matter in subsection (a) 
     following paragraph (3) (as so redesignated) and inserting 
     ``the Commissioner of Social Security''.
       (10) Section 1155 (42 U.S.C. 1320c-4) is amended by 
     striking ``(to the same extent as is provided in section 
     205(b))'' and all that follows and inserting ``(to the same 
     extent as beneficiaries under title II are entitled to a 
     hearing by the Commissioner of Social Security under section 
     205(b)). For purposes of the preceding sentence, subsection 
     (l) of section 205 shall apply, except that any reference in 
     such subsection to the Commissioner of Social Security or the 
     Social Security Administration shall be deemed a reference to 
     the Secretary or the Department of Health and Human Services, 
     respectively. Where the amount in controversy is $2,000 or 
     more, such beneficiary shall be entitled to judicial review 
     of any final decision relating to a reconsideration described 
     in this subsection.''.
       (11) Sections 1101, 1106, 1107, and 1137 (42 U.S.C. 1301, 
     1306, 1307, and 1320b-7, respectively) are amended by 
     striking ``Internal Revenue Code of 1954'' each place it 
     appears and inserting ``Internal Revenue Code of 1986''.
       (c) Amendments to Title XVIII.--(1) Subsections (a) and (f) 
     of section 1817 (42 U.S.C. 1395i) are amended by striking 
     ``Secretary of Health and Human Services'' each place it 
     appears and inserting ``Commissioner of Social Security''.
       (2) Section 1840(a) (42 U.S.C. 1395s(a)) is amended--
       (A) in paragraph (1), by striking ``Secretary'' and 
     inserting ``Commissioner of Social Security'', and by adding 
     at the end the following new sentence: ``Such regulations 
     shall be prescribed after consultation with the Secretary.''; 
     and
       (B) in paragraph (2), by striking ``Secretary of Health and 
     Human Services'' and inserting ``Commissioner of Social 
     Security''.
       (3) Section 1872 (42 U.S.C. 1395ii) is amended by inserting 
     after ``title II'' the following: ``, except that, in 
     applying such provisions with respect to this title, any 
     reference therein to the Commissioner of Social Security or 
     the Social Security Administration shall be considered a 
     reference to the Secretary or the Department of Health and 
     Human Services, respectively''.
       (4) Section 1869(b)(1) (42 U.S.C. 1395ff(b)(1)) and the 
     last sentence of section 1876(c)(5)(B) (42 U.S.C. 
     1395mm(c)(5)(B)) are amended by inserting after ``section 
     205(g)'' the following: ``, except that, in so applying such 
     sections and section 205(l), any reference therein to the 
     Commissioner of Social Security or the Social Security 
     Administration shall be considered a reference to the 
     Secretary or the Department of Health and Human Services, 
     respectively''.
       (5) Sections 1817, 1862, and 1886 (42 U.S.C. 1395i, 1395y, 
     and 1395ww, respectively) are amended by striking ``Internal 
     Revenue Code of 1954'' each place it appears and inserting 
     ``Internal Revenue Code of 1986''.
       (d) Amendments to Title XIX.--(1) Section 1905(q)(2) (42 
     U.S.C. 1396d(q)(2)) is amended by striking ``Secretary'' and 
     inserting ``Commissioner of Social Security''.
       (2) Section 1910(b)(2) (42 U.S.C. 1396i(b)(2)) is amended, 
     in the first sentence, by inserting after ``section 205(g)'' 
     the following: ``, except that, in so applying such sections 
     and section 205(l), any reference therein to the Commissioner 
     of Social Security or the Social Security Administration 
     shall be considered a reference to the Secretary or the 
     Department of Health and Human Services, respectively''.
       (e) Amendment to Title XX.--Section 2002(a)(2)(B) (42 
     U.S.C. 1397a(a)(2)(B)) is amended by striking ``Internal 
     Revenue Code of 1954'' and inserting ``Internal Revenue Code 
     of 1986''.
       (f) Amendments to Title 5, United States Code.--Title 5, 
     United States Code, is amended--
       (1) by adding at the end of section 5311 the following new 
     item:
       ``Commissioner, Social Security Administration.'';
       (2) by adding at the end of section 5313 the following new 
     item:
       ``Deputy Commissioner, Social Security Administration.''; 
     and
       (3) by striking ``Secretary of Health Education, and 
     Welfare'' each place it appears in section 8141 and inserting 
     ``Commissioner of Social Security''.
       (g) Amendments to Food Stamp Act of 1977.--(1) Sections 
     6(c)(3) and 8(e)(6) of the Food Stamp Act of 1977 (7 U.S.C. 
     2015(c)(3) and 2017(e)(6)) are each amended by inserting 
     ``the Commissioner of Social Security and'' before ``the 
     Secretary of Health and Human Services''.
       (2) Sections 6(g), 11(j), and 16(e) of such Act (7 U.S.C. 
     2015(g), 2020(j), and 2025(e)) are each amended by striking 
     ``Secretary of Health and Human Services'' each place it 
     appears and inserting ``Commissioner of Social Security''.
       (3) Section 11(i) of such Act (7 U.S.C. 2020(i)) is amended 
     by adding ``, the Commissioner of Social Security'' after 
     ``the Secretary''.
       (h) Amendment to Title 14, United States Code.--Section 
     707(e)(3) of title 14, United States Code, is amended by 
     striking ``Secretary of Health and Human Services'' each 
     place it appears and inserting ``Commissioner of Social 
     Security''.
       (i) Amendments to Internal Revenue Code of 1986.--(1) 
     Subsections (c)(1), (c)(2)(E), (g)(1), (g)(2)(A), and 
     (g)(2)(B) of section 1402 of the Internal Revenue Code of 
     1986 (26 U.S.C. 1402) are amended by striking ``Secretary of 
     Health and Human Services'' each place it appears and 
     inserting ``Commissioner of Social Security''.
       (2) Section 3121(b)(10)(B) of such Code (26 U.S.C. 
     3121(b)(10)(B)) is amended by striking ``Secretary of Health 
     and Human Services'' each place it appears and inserting 
     ``Commissioner of Social Security''.
       (3) Section 3127 of such Code (26 U.S.C. 3127) is amended 
     by striking ``Secretary of Health and Human Services'' each 
     place it appears and inserting ``Commissioner of Social 
     Security''.
       (4) Section 6050F(c)(1)(A) of such Code (26 U.S.C. 
     6050F(c)(1)(A)) is amended by striking ``Secretary of Health 
     and Human Services'' and inserting ``Commissioner of Social 
     Security''.
       (5) Subsections (d) and (f) of section 6057 of such Code 
     (26 U.S.C. 6057) are amended by striking ``Secretary of 
     Health and Human Services'' each place it appears and 
     inserting ``Commissioner of Social Security''.
       (6) Section 6103(l)(5) of such Code (26 U.S.C. 6103(l)(5)) 
     is amended--
       (A) by striking ``Department of Health and Human Services'' 
     and inserting ``Social Security Administration''; and
       (B) by striking ``Secretary of Health and Human Services'' 
     and inserting ``Commissioner of Social Security''.
       (7) Subsections (d)(3)(C) and (e) of section 6402 of such 
     Code (26 U.S.C. 6402) are amended by striking ``Secretary of 
     Health and Human Services'' each place it appears and 
     inserting ``Commissioner of Social Security''.
       (8) Section 6511(d)(5) of such Code (26 U.S.C. 6511(d)(5)) 
     is amended by striking ``Secretary of Health and Human 
     Services'' and inserting ``Commissioner of Social Security''.
       (j) Amendments to Title 31, United States Code.--Section 
     3720A(f) of title 31, United States Code, is amended by 
     striking ``Secretary of Health and Human Services'' each 
     place it appears in and inserting ``Commissioner of Social 
     Security''.
       (k) Amendments to Title 38, United States Code.--Section 
     5105 of title 38, United States Code, is amended--
       (1) by striking ``Secretary of Health and Human Services'' 
     each place it appears and inserting ``Commissioner of Social 
     Security''; and
       (2) by striking the second sentence of subsection (b) and 
     inserting the following new sentence: ``A copy of each such 
     application filed with either the Secretary or the 
     Commissioner, together with any additional information and 
     supporting documents (or certifications thereof) which may 
     have been received by the Secretary or the Commissioner with 
     such application, and which may be needed by the other 
     official in connection therewith, shall be transmitted by the 
     Secretary or the Commissioner receiving the application to 
     the other official.''.
       (l) Amendments to Inspector General Act of 1978.--The 
     Inspector General Act of 1978 (5 U.S.C. App.) is amended--
       (1) in section 9(a)(1), by striking ``and'' at the end of 
     subparagraph (U), and by adding at the end the following new 
     subparagraph:
       ``(V) of the Social Security Administration, the functions 
     of the Inspector General of the Department of Health and 
     Human Services relating to the administration of the old-age, 
     survivors, and disability insurance program under title II of 
     the Social Security Act and of the supplemental security 
     income program under title XVI of such Act; and'';
       (2) in section 11(1), by striking ``or'' after 
     ``Commission'' and inserting a semicolon, and by inserting 
     after ``Board;'' the following: ``or the Commissioner of 
     Social Security;''; and
       (3) in section 11(2), by striking ``or'' after 
     ``Information Agency,'', and by inserting after ``Veterans' 
     Administration'' the following: ``, or the Social Security 
     Administration;''.

     SEC. 203. RULES OF CONSTRUCTION.

       (a) References to the Department of Health and Human 
     Services.--Whenever any reference is made in any provision of 
     law (other than this Act or a provision of law amended by 
     this Act), regulation, rule, record, or document to the 
     Department of Health and Human Services with respect to such 
     Department's functions under the old-age, survivors, and 
     disability insurance program under title II of the Social 
     Security Act or the supplemental security income program 
     under title XVI of such Act, such reference shall be 
     considered a reference to the Social Security Administration.
       (b) References to the Secretary of Health and Human 
     Services.--Whenever any reference is made in any provision of 
     law (other than this Act or a provision of law amended by 
     this Act), regulation, rule, record, or document to the 
     Secretary of Health and Human Services with respect to such 
     Secretary's functions under the old-age, survivors, and 
     disability insurance program under title II of the Social 
     Security Act or the supplemental security income program 
     under title XVI of such Act, such reference shall be 
     considered a reference to the Commissioner of Social 
     Security.
       (c) References to Other Officers and Employees.--Whenever 
     any reference is made in any provision of law (other than 
     this Act or a provision of law amended by this Act), 
     regulation, rule, record, or document to any other officer or 
     employee of the Department of Health and Human Services with 
     respect to such officer or employee's functions under the 
     old-age, survivors, and disability insurance program under 
     title II of the Social Security Act or the supplemental 
     security income program under title XVI of such Act, such 
     reference shall be considered a reference to the appropriate 
     officer or employee of the Social Security Administration.

     SEC. 204. EFFECTIVE DATES.

       (a) In General.--Except as provided in subsection (b), the 
     provisions of this title shall take effect on the date 
     established pursuant to section 107(a).
       (b) Exceptions.--Subsections (f)(1), (f)(2), and (l) of 
     section 202 shall take effect on the date of the enactment of 
     this title.
        TITLE III--SOCIAL SECURITY DISABILITY AND REHABILITATION

     SEC. 301. SHORT TITLE.

       This title may be cited as the ``Social Security Disability 
     and Rehabilitation Act of 1994''.

     SEC. 302. REFORM OF MONTHLY INSURANCE BENEFITS BASED ON 
                   DISABILITY INVOLVING SUBSTANCE ABUSE.

       (a) Social Security Disability Insurance.--
       (1) In general.--Section 223 of the Social Security Act (42 
     U.S.C. 423) is amended by adding at the end the following new 
     subsection:

    ``Limitation on Payment of Benefits by Reason of Substance Abuse

       ``(j)(1)(A) Notwithstanding any other provision of this 
     title, no individual whose disability is based in whole or in 
     part on a medical determination that the individual is a drug 
     addict or alcoholic shall be entitled to benefits under this 
     title based on such disability with respect to any month, 
     unless such individual--
       ``(i) is undergoing, or on a waiting list for, any medical 
     or psychological treatment that may be appropriate for such 
     individual's condition as a drug addict or alcoholic (as the 
     case may be) and for the stage of such individual's 
     rehabilitation at an institution or facility approved for 
     purposes of this paragraph by the Secretary (so long as 
     access to such treatment is reasonably available, as 
     determined by the Secretary), and
       ``(ii) demonstrates in such manner as the Secretary 
     requires, including at a continuing disability review not 
     later than one year after such determination, that such 
     individual is complying with the terms, conditions, and 
     requirements of such treatment and with the requirements 
     imposed by the Secretary under subparagraph (B).
       ``(B) The Secretary shall provide for the monitoring and 
     testing of all individuals who are receiving benefits under 
     this title and who as a condition of such benefits are 
     required to be undergoing treatment and complying with the 
     terms, conditions, and requirements thereof as described in 
     subparagraph (A), in order to assure such compliance and to 
     determine the extent to which the imposition of such 
     requirements is contributing to the achievement of the 
     purposes of this title. The Secretary may retain jurisdiction 
     in the case of a hearing before the Secretary under this 
     title to the extent the Secretary determines necessary to 
     carry out the preceding sentence. The Secretary shall 
     annually submit to the Congress a full and complete report on 
     the Secretary's activities under this paragraph.
       ``(C) The representative payee and the referral and 
     monitoring agency for any individual described in 
     subparagraph (A) shall report to the Secretary any 
     noncompliance with the terms, conditions, and requirements of 
     the treatment described in subparagraph (A) and with the 
     requirements imposed by the Secretary under subparagraph (B).
       ``(D)(i) If the Secretary finds that an individual is not 
     complying with the terms, conditions, and requirements of the 
     treatment described in subparagraph (A), or with the 
     requirements imposed by the Secretary under subparagraph (B), 
     or both, the Secretary, in lieu of termination, may suspend 
     such individual's benefits under this title until compliance 
     has been reestablished, including compliance with any 
     additional requirements determined to be necessary by the 
     Secretary.
       ``(ii) Any period of suspension under clause (i) shall be 
     taken into account in determining any 24-month period 
     described in subparagraph (E) and shall not be taken into 
     account in determining the 36-month period described in such 
     subparagraph.
       ``(E)(i) Except as provided in clause (ii), no individual 
     described in subparagraph (A) shall be entitled to benefits 
     under this title for any month following the 24-month period 
     beginning with the determination of the disability described 
     in such subparagraph.
       ``(ii) If at the end of the 24-month period described in 
     clause (i), the individual furnishes evidence in accordance 
     with subsection (d)(5) that the individual continues to be 
     under a disability based in whole or in part on a medical 
     determination that the individual is a drug addict or 
     alcoholic, such individual shall continue to be entitled to 
     benefits under this title based on such disability.
       ``(iii) Subject to clause (iv), if such an individual 
     continues to be entitled to such benefits for an additional 
     24-month period following a determination under clause (ii), 
     clauses (i) and (ii) shall apply with regard to any further 
     entitlement to such benefits following the end of such 
     additional period.
       ``(iv) In no event shall such an individual be entitled to 
     benefits under this title for more than a total of 36 months, 
     unless upon the termination of the 36th month such individual 
     furnishes evidence in accordance with subsection (d)(5) that 
     the individual is under a disability which is not related in 
     part to a medical determination that the individual is a drug 
     addict or alcoholic.
       ``(2)(A) Any benefits under this title payable to any 
     individual referred to in paragraph (1), including any 
     benefits payable in a lump sum amount, shall be payable only 
     pursuant to a certification of such payment to a qualified 
     organization acting as a representative payee of such 
     individual pursuant to section 205(j).
       ``(B) For purposes of subparagraph (A) and section 
     205(j)(4), the term `qualified organization'--
       ``(i) shall have the meaning given such term by section 
     205(j)(4)(B), and
       ``(ii) shall mean an agency or instrumentality of a State 
     or a political subdivision of a State.
       ``(3) Monthly insurance benefits under this title which 
     would be payable to any individual (other than the disabled 
     individual to whom benefits are not payable by reason of this 
     subsection) on the basis of the wages and self-employment 
     income of such a disabled individual but for the provisions 
     of paragraph (1), shall be payable as though such disabled 
     individual were receiving such benefits which are not payable 
     under this subsection.''
       (2) Conforming amendments.--
       (A) Section 205(j)(1) of such Act (42 U.S.C. 405(j)(1)) is 
     amended by inserting '', or in the case of any individual 
     referred to in section 223(j)(1)(A)'' after ``thereby''.
       (B) Section 205(j)(2)(D)(ii)(II) of such Act (42 U.S.C. 
     405(j)(2)(D)(ii)(II)) is amended by striking ``legally 
     incompetent or under the age of 15'' and inserting ``legally 
     incompetent, under the age of 15, or a drug addict or 
     alcoholic referred to in section 223(j)(1)(A)''.
       (b) Supplemental Security Income.--Paragraph (3) of section 
     1611(e) of the Social Security Act (42 U.S.C. 1382(e)) is 
     amended to read as follows:
       ``(3)(A)(i) No person who is an aged, blind, or disabled 
     individual solely by reason of disability (as determined 
     under section 1614(a)(3)) shall be an eligible individual or 
     eligible spouse for purposes of this title with respect to 
     any month if such individual's disability is based in whole 
     or in part on a medical determination that the individual is 
     a drug addict or alcoholic, unless such individual--
       ``(I) is undergoing, or on a waiting list for, any medical 
     or psychological treatment that may be appropriate for such 
     individual's condition as a drug addict or alcoholic (as the 
     case may be) and for the stage of such individual's 
     rehabilitation at an institution or facility approved for 
     purposes of this paragraph by the Secretary (so long as 
     access to such treatment is reasonably available, as 
     determined by the Secretary), and
       ``(II) demonstrates in such manner as the Secretary 
     requires, including at a continuing disability review not 
     later than one year after such determination, that such 
     individual is complying with the terms, conditions, and 
     requirements of such treatment and with the requirements 
     imposed by the Secretary under clause (ii).
       ``(ii) The Secretary shall provide for the monitoring and 
     testing of all individuals who are receiving benefits under 
     this title and who as a condition of such benefits are 
     required to be undergoing treatment and complying with the 
     terms, conditions, and requirements thereof as described in 
     clause (i), in order to assure such compliance and to 
     determine the extent to which the imposition of such 
     requirements is contributing to the achievement of the 
     purposes of this title. The Secretary may retain jurisdiction 
     in the case of a hearing before the Secretary under this 
     title to the extent the Secretary determines necessary to 
     carry out the preceding sentence. The Secretary shall 
     annually submit to the Congress a full and complete report on 
     the Secretary's activities under this subparagraph.
       ``(iii) The representative payee and the referral and 
     monitoring agency for any individual described in clause (i) 
     shall report to the Secretary any noncompliance with the 
     terms, conditions, and requirements of the treatment 
     described in clause (i) and with the requirements imposed by 
     the Secretary under clause (ii).
       ``(iv)(I) If the Secretary finds that an individual is not 
     complying with the terms, conditions, and requirements of the 
     treatment described in clause (i), or with the requirements 
     imposed by the Secretary under clause (ii), or both, the 
     Secretary, in lieu of termination, may suspend such 
     individual's benefits under this title until compliance has 
     been reestablished, including compliance with any additional 
     requirements determined to be necessary by the Secretary.
       ``(II) Any period of suspension under subclause (I) shall 
     be taken into account in determining any 24-month period 
     described in clause (v) and shall not be taken into account 
     in determining the 36-month period described in such clause.
       ``(v)(I) Except as provided in subclause (II), no 
     individual described in clause (i) shall be entitled to 
     benefits under this title for any month following the 24-
     month period beginning with the determination of the 
     disability described in such clause.
       ``(II) If at the end of the 24-month period described in 
     subclause (I), the individual furnishes evidence in 
     accordance with section 223(d)(5) that the individual 
     continues to be under a disability based in whole on a 
     medical determination that the individual is a drug addict or 
     alcoholic, such individual shall be entitled to benefits 
     under this title based on such disability for no more than an 
     additional 36 months.
       ``(III) Subject to subclause (IV), if such an individual 
     continues to be entitled to such benefits for an additional 
     24-month period following a determination under subclause 
     (II), subclauses (I) and (II) shall apply with regard to any 
     further entitlement to such benefits following the end of 
     such additional period.
       ``(IV) In no event shall such an individual be entitled to 
     benefits under this title for more than a total of 36 months, 
     unless upon the termination of the 36th month such individual 
     furnishes evidence in accordance with section 223(d)(5) that 
     the individual is under a disability which is not related in 
     part to a medical determination that the individual is a drug 
     addict or alcoholic.
       ``(B)(i) Any benefits under this title payable to any 
     individual referred to in subparagraph (A), including any 
     benefits payable in a lump sum amount, shall be payable only 
     pursuant to a certification of such payment to a qualified 
     organization acting as a representative payee of such 
     individual pursuant to section 1631(a)(2)(A)(ii).
       ``(ii) For purposes of clause (i) and section 
     1631(a)(2)(D), the term `qualified organization'--
       ``(I) shall have the meaning given such term by section 
     1631(a)(2)(D)(ii), and
       ``(II) shall mean an agency or instrumentality of a State 
     or a political subdivision of a State.''
       (c) Effective Dates; Authorizations.--
       (1) In general.--Except as provided in paragraph (2), the 
     amendments made by this section shall apply to benefits 
     payable for determinations of disability made 90 or more days 
     after the date of the enactment of this Act.
       (2) Current determinations.--
       (A) In general.--With respect to any individual described 
     in subparagraph (B), the Secretary of Health and Human 
     Services shall provide during the 3-year period beginning 
     after the date of the enactment of this Act for the 
     application of the amendments made by this section to such 
     individual with the time periods described in such amendments 
     to begin upon such application.
       (B) Individual described.--An individual is described in 
     this subparagraph if such individual is entitled to benefits 
     under title II or XVI of the Social Security Act based on a 
     disability determined before the date described in paragraph 
     (1) to be based in whole or in part on a medical 
     determination that the individual is a drug addict or 
     alcoholic.
       (3) Authorization of appropriations.--There are authorized 
     to be appropriated such sums as may be necessary to carry out 
     the purposes of the provisions of, and the amendments made 
     by, this section.

     SEC. 303. PRIORITY OF TREATMENT.

       The Secretary of Health and Human Services, through the 
     Administrator of the Substance Abuse and Mental Health 
     Services Administration, shall assure that every individual 
     receiving disability benefits under title II or XVI of the 
     Social Security Act based in whole or in part on a medical 
     determination that the individual is a drug addict or 
     alcoholic be given high priority for treatment through 
     entities supported by the various States through any 
     substance abuse block grant authorized under law.

     SEC. 304. ESTABLISHMENT OF REFERRAL MONITORING AGENCIES 
                   REQUIRED IN ALL STATES.

       The Secretary of Health and Human Services shall, within 1 
     year of the date of the enactment of this Act, provide for 
     the establishment of referral and monitoring agencies for 
     each State for the purpose of carrying out the treatment 
     requirements under sections 223(j)(1) and 1611(e)(3)(A) of 
     the Social Security Act (42 U.S.C. 423(j)(1) and 
     1382(e)(3)(A)).

     SEC. 305. PROCEEDS FROM CERTAIN CRIMINAL ACTIVITIES 
                   CONSTITUTE SUBSTANTIAL GAINFUL EMPLOYMENT.

       (a) Social Security Disability Insurance.--Section 
     223(d)(4) of the Social Security Act (42 U.S.C. 423(d)(4)) is 
     amended by inserting the following after the first sentence: 
     ``If an individual engages in a criminal activity to support 
     substance abuse, any proceeds derived from such activity 
     shall demonstrate such individual's ability to engage in 
     substantial gainful activity.''.
       (b) Supplemental Security Income.--Section 1614(a)(3)(D) of 
     the Social Security Act (42 U.S.C. 1382(a)(3)(D)) is amended 
     by inserting the following after the first sentence: ``If an 
     individual engages in a criminal activity to support 
     substance abuse, any proceeds derived from such activity 
     shall demonstrate such individual's ability to engage in 
     substantial gainful activity.''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to disability determinations conducted on or 
     after the date of the enactment of this Act.

     SEC. 306. CONSISTENT PENALTY PROVISIONS FOR SSDI AND SSI 
                   PROGRAMS.

       (a) Felony Penalties for Fraud.--
       (1) In general.--Subsection (a) of section 1631 of the 
     Social Security Act (42 U.S.C. 1383a) is amended by striking 
     ``shall be guilty of a misdemeanor and upon conviction 
     thereof shall be fined not more than $1,000 or imprisoned for 
     not more than one year, or both'' and inserting ``shall be 
     guilty of a felony and upon conviction thereof shall be fined 
     under title 18, United States Code, or imprisoned for not 
     more than five years, or both''.
       (2) Representative payees.--
       (A) Ssdi.--Subsections (b) and (c) of section 208 of such 
     Act (42 U.S.C. 408) are amended to read as follows:
       ``(b)(1) Any person or other entity who is convicted of a 
     violation of any of the provisions of this section, if such 
     violation is committed by such person or entity in his role 
     as, or in applying to become, a certified payee under section 
     205(j) on behalf of another individual (other than such 
     person's spouse or an entity described in section 
     223(j)(2)(B)(ii)), shall be guilty of a felony and upon 
     conviction thereof shall be fined under title 18, United 
     States Code, or imprisoned for not more than five years, or 
     both.
       ``(2) In any case in which the court determines that a 
     violation described in paragraph (1) includes a willful 
     misuse of funds by such person or entity, the court may also 
     require that full or partial restitution of such funds be 
     made to the individual for whom such person or entity was the 
     certified payee.
       ``(3) Any person or entity convicted of a felony under this 
     section or under section 1632(b) may not be certified as a 
     payee under section 205(j).
       ``(c) For the purpose of subsection (a)(7), the terms 
     `social security number' and `social security account number' 
     mean such numbers as are assigned by the Secretary under 
     section 205(c)(2) whether or not, in actual use, such numbers 
     are called social security numbers.''
       (B) SSI.--Subsection (b)(1) of section 1632 of such Act (42 
     U.S.C. 1383a) is amended by striking ``(other than such 
     person's spouse)'' and all that follows through the period 
     and inserting ``(other than such person's spouse or an entity 
     described in section 1611(e)(3)(B)(ii)(II)), shall be guilty 
     of a felony and upon conviction thereof shall be fined under 
     title 18, United States Code, or imprisoned for not more than 
     five years, or both.''
       (b) Civil Administrative Penalties.--
       (1) SSDI.--Section 208 of the Social Security Act (42 
     U.S.C. 408) is amended by adding at the end the following new 
     subsections:
       ``(e) For administrative penalties for false claims and 
     statements with respect to which an individual or other 
     entity knows or has reason to know such falsity, see chapter 
     38 of title 31, United States Code.
       ``(f) In the case of the second or subsequent imposition of 
     an administrative or criminal penalty on any person or other 
     entity under this section, the Secretary may exclude such 
     person or entity from participation in any program under this 
     title and titles V, XVI, XVIII, and XX, and may direct that 
     such person or entity be excluded from any State health care 
     program (as defined in section 1128(h)) and any other Federal 
     program as provided by law.''
       (2) SSI.--
       (A) In general.--Section 1632 of such Act (42 U.S.C. 1383a) 
     is amended by adding at the end the following new 
     subsections:
       ``(c) For administrative penalties for false claims and 
     statements with respect to which an individual or other 
     entity knows or has reason to know such falsity, see chapter 
     38 of title 31, United States Code.
       ``(d) In the case of the second or subsequent imposition of 
     an administrative or criminal penalty on any person or other 
     entity under this section, the Secretary may exclude such 
     person or entity from participation in any program under this 
     title and titles II, V, XVIII, and XX, and may direct that 
     such person or entity be excluded from any State health care 
     program (as defined in section 1128(h)) and any other Federal 
     program as provided by law.''
       (B) Conforming amendment.--The heading for section 1632 of 
     such Act (42 U.S.C. 1383a) is amended by striking ``for 
     fraud''.
       (c) Effective Date.--The amendments made by this section 
     shall be effective on or after the date of the enactment of 
     this Act.
  Mr. MOYNIHAN. Mr. President, I move to reconsider the vote by which 
the bill was passed.
  Mr. PACKWOOD. I move to lay that motion on the table.
  The motion to lay on the table was agreed to.
  Mr. MOYNIHAN. Mr. President, we thank all concerned. I know on my 
side, Ed Lopez and Margaret Malone were hugely helpful on this measure 
that is 15 years past due. Its time has finally come.
  Mr. PACKWOOD. Mr. President, on my side, Kathy Tobin who has worked 
long and hard on this, and Lindy Paull.
  Mr. MOYNIHAN. Mr. President, this is a momentous act. We will now go 
to conference with the House which has on one occasion passed this 
measure unanimously, as we have just done, and we hope to see a new era 
in Social Security in consequence. We thank the cooperation of 
everybody.

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