[Congressional Record Volume 145, Number 22 (Monday, February 8, 1999)]
[Senate]
[Pages S1374-S1376]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. REID:
  S. 390. A bill to amend title II of the Social Security Act to allow 
workers who attain age 65 after 1981 and before 1992 to choose either 
lump sum payments over four years totaling $5,000 or an improved 
benefit computation formula under a new 10-year rule governing the 
transition to the changes in benefit computation rules enacted in the 
Social Security Amendments of 1977, and for other purposes; to the 
Committee on Finance.
 Mr. REID. Mr. President, I rise today to introduce legislation 
that would correct a problem that plagues a special group of older 
Americans. I am speaking on behalf of those affected by the Social 
Security notch.
  For my colleagues who may not be aware, the Social Security notch 
causes 11 million Americans born between the years 1917-1926 to receive 
less in Social Security benefits than Americans born outside the notch 
years due to changes made in the 1977 Social Security benefit formula.
  I have felt compelled over the years to speak out about this issue 
and the injustice it imposes on millions of Americans. The notch issue 
has been debated and debated, studied and studied, yet to date, no 
solution to it has been found. Because of this, many older Americans 
born during this period must scrimp to afford the most basic of 
necessities.
  Mr. President, I am the first to acknowledge that with any projected 
budget surplus we must save Social Security. In many ways, my 
legislation does just this. It restores confidence to the many notch 
victims around the country and will show them that we in Congress will 
accept responsibility for any error that was made. We should not ask 
them to accept less as a result of our mistake. While we must save 
Social Security for the future, we have an obligation to those, who 
through no fault of their own, receive less than those that were 
fortunate enough to be born just days before or after the notch period.
  I believe we owe a debt to notch babies. Like any American family, we 
must first pay the bills before we invest in the future. We have the 
resources to make good on our debt to notch babies. We should come 
forward and honor our commitment.

[[Page S1375]]

  Mr. President, the ``notch'' situation had its origins in 1972, when 
Congress decided to create automatic cost-of-living adjustments to help 
Social Security benefits keep pace with inflation. Previously, each 
adjustment had to await legislation, causing beneficiaries' monthly 
payments to lag behind inflation. When Congress took this action, it 
was acting under the best of intentions.
  Unfortuately, this new benefit adjustment method was flawed. To 
function properly, it required that the economy behave in much the same 
fashion that it had in the 1950s and 1960s, with annual wage increases 
outpacing prices, and inflation remaining relatively low. As we all 
know, that did not happen. The rapid inflation and high unemployment of 
the 1970s generated increases in benefits. In an effort to end this 
problem, in 1977 Congress revised the way that benefits were computed. 
In making its revisions, Congress decided that it was not proper to 
reduce benefits for persons already receiving them; it did, however, 
decide that benefits for all future retirees should be reduced. As a 
result, those born after January 1, 1917 would, by design, receive 
benefits that were, in many cases, far less. In an attempt to ease the 
transition to the new, lower benefit levels, Congress designed a 
special `transitional computation method' for use by beneficiaries born 
between 1917 and 1921.

  Mr. President, we have an obligation to convey to our constituents 
that Social Security is a fair system. In town hall meetings back home 
in Nevada, I have a hard time trying to tell that to a notch victim. 
They feel slighted by their government and if I were in their 
situation, I would too. Through no fault of their own, they receive 
less, sometimes as much as $200 less, than their neighbors.
  The legislation I am offering today is my proposal to right the 
wrong. I propose using any projected budget surplus to pay the lump sum 
benefit to notch babies. While we have a surplus, let's fix the notch 
problem once and for all and restore the confidence of the ten million 
notch babies across this land.
  Government has an obligation to be fair. I don't think we have been 
in the case of notch babies. My support of notch babies is 
longstanding. I introduced the only notch amendment in April 1991 that 
ever passed in Congress as part of the fiscal year 1992 Budget 
Resolution. Unfortunately, it did not become the law of the land as it 
was dropped in Conference with the House of Representatives. I have 
cosponsored numerous pieces of legislation over the years to address 
this issue. With this legislation, my effort continues.
  Mr. President, I ask unanimous consent that the text of the bill be 
printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 390

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

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Notch Fairness Act of 
     1999''.

     SEC. 2. NEW GUARANTEED MINIMUM PRIMARY INSURANCE AMOUNT WHERE 
                   ELIGIBILITY ARISES DURING TRANSITIONAL PERIOD.

       (a) In General.--Section 215(a) of the Social Security Act 
     (42 U.S.C. 415(a)) is amended--
       (1) in paragraph (4)(B)--
       (A) by inserting ``(with or without the application of 
     paragraph (8))'' after ``would be made''; and
       (B) in clause (i), by striking ``1984'' and inserting 
     ``1989''; and
       (2) by adding at the end the following:
       ``(8)(A) In the case of an individual described in 
     paragraph (4)(B) (subject to subparagraphs (F) and (G) of 
     this paragraph), the amount of the individual's primary 
     insurance amount as computed or recomputed under paragraph 
     (1) shall be deemed equal to the sum of--
       ``(i) such amount, and
       ``(ii) the applicable transitional increase amount (if 
     any).
       ``(B) For purposes of subparagraph (A)(ii), the term 
     `applicable transitional increase amount' means, in the case 
     of any individual, the product derived by multiplying--
       ``(i) the excess under former law, by
       ``(ii) the applicable percentage in relation to the year in 
     which the individual becomes eligible for old-age insurance 
     benefits, as determined by the following table:

      ``If the individual                                              
    becomes eligible for                                 The applicable
    such benefits in:                                    percentage is:
      1979..................................................55 percent 
      1980..................................................45 percent 
      1981..................................................35 percent 
      1982..................................................32 percent 
      1983..................................................25 percent 
      1984..................................................20 percent 
      1985..................................................16 percent 
      1986..................................................10 percent 
      1987...................................................3 percent 
      1988...................................................5 percent.
       ``(C) For purposes of subparagraph (B), the term `excess 
     under former law' means, in the case of any individual, the 
     excess of--
       ``(i) the applicable former law primary insurance amount, 
     over
       ``(ii) the amount which would be such individual's primary 
     insurance amount if computed or recomputed under this section 
     without regard to this paragraph and paragraphs (4), (5), and 
     (6).
       ``(D) For purposes of subparagraph (C)(i), the term 
     `applicable former law primary insurance amount' means, in 
     the case of any individual, the amount which would be such 
     individual's primary insurance amount if it were--
       ``(i) computed or recomputed (pursuant to paragraph 
     (4)(B)(i)) under section 215(a) as in effect in December 
     1978, or
       ``(ii) computed or recomputed (pursuant to paragraph 
     (4)(B)(ii)) as provided by subsection (d),

     (as applicable) and modified as provided by subparagraph (E).
       ``(E) In determining the amount which would be an 
     individual's primary insurance amount as provided in 
     subparagraph (D)--
       ``(i) subsection (b)(4) shall not apply;
       ``(ii) section 215(b) as in effect in December 1978 shall 
     apply, except that section 215(b)(2)(C) (as then in effect) 
     shall be deemed to provide that an individual's `computation 
     base years' may include only calendar years in the period 
     after 1950 (or 1936 if applicable) and ending with the 
     calendar year in which such individual attains age 61, plus 
     the 3 calendar years after such period for which the total of 
     such individual's wages and self-employment income is the 
     largest; and
       ``(iii) subdivision (I) in the last sentence of paragraph 
     (4) shall be applied as though the words `without regard to 
     any increases in that table' in such subdivision read 
     `including any increases in that table'.
       ``(F) This paragraph shall apply in the case of any 
     individual only if such application results in a primary 
     insurance amount for such individual that is greater than it 
     would be if computed or recomputed under paragraph (4)(B) 
     without regard to this paragraph.
       ``(G)(i) This paragraph shall apply in the case of any 
     individual subject to any timely election to receive lump sum 
     payments under this subparagraph.
       ``(ii) A written election to receive lump sum payments 
     under this subparagraph, in lieu of the application of this 
     paragraph to the computation of the primary insurance amount 
     of an individual described in paragraph (4)(B), may be filed 
     with the Commissioner of Social Security in such form and 
     manner as shall be prescribed in regulations of the 
     Commissioner. Any such election may be filed by such 
     individual or, in the event of such individual's death before 
     any such election is filed by such individual, by any other 
     beneficiary entitled to benefits under section 202 on the 
     basis of such individual's wages and self-employment income. 
     Any such election filed after December 31, 1999, shall be 
     null and void and of no effect.
       ``(iii) Upon receipt by the Commissioner of a timely 
     election filed by the individual described in paragraph 
     (4)(B) in accordance with clause (ii)--
       ``(I) the Commissioner shall certify receipt of such 
     election to the Secretary of the Treasury, and the Secretary 
     of the Treasury, after receipt of such certification, shall 
     pay such individual, from amounts in the Federal Old-Age and 
     Survivors Insurance Trust Fund, a total amount equal to 
     $5,000, in 4 annual lump sum installments of $1,250, the 
     first of which shall be made during fiscal year 2000 not 
     later than July 1, 2000, and
       ``(II) subparagraph (A) shall not apply in determining such 
     individual's primary insurance amount.
       ``(iv) Upon receipt by the Commissioner as of December 31, 
     1999, of a timely election filed in accordance with clause 
     (ii) by at least one beneficiary entitled to benefits on the 
     basis of the wages and self-employment income of a deceased 
     individual described in paragraph (4)(B), if such deceased 
     individual has filed no timely election in accordance with 
     clause (ii)--
       ``(I) the Commissioner shall certify receipt of all such 
     elections received as of such date to the Secretary of the 
     Treasury, and the Secretary of the Treasury, after receipt of 
     such certification, shall pay each beneficiary filing such a 
     timely election, from amounts in the Federal Old-Age and 
     Survivors Insurance Trust Fund, a total amount equal to 
     $5,000 (or, in the case of 2 or more such beneficiaries, such 
     amount distributed evenly among such beneficiaries), in 4 
     equal annual lump sum installments, the first of which shall 
     be made during fiscal year 2000 not later than July 1, 2000, 
     and
       ``(II) solely for purposes of determining the amount of 
     such beneficiary's benefits, subparagraph (A) shall be deemed 
     not to apply in determining the deceased individual's primary 
     insurance amount.''.
       (b) Effective Date and Related Rules.--
       (1) Applicability of amendments.--
       (A) In general.--Except as provided in paragraph (2), the 
     amendments made by this Act shall be effective as though they 
     had

[[Page S1376]]

     been included or reflected in section 201 of the Social 
     Security Amendments of 1977.
       (B) Applicability.--No monthly benefit or primary insurance 
     amount under title II of the Social Security Act shall be 
     increased by reason of such amendments for any month before 
     July 2000. The amendments made this section shall apply with 
     respect to benefits payable in months in any fiscal year 
     after fiscal year 2003 only if the corresponding decrease in 
     adjusted discretionary spending limits for budget authority 
     and outlays under section 3 of this Act for fiscal years 
     prior to fiscal year 2004 is extended by Federal law to such 
     fiscal year after fiscal year 2003.
       (2) Recomputation to reflect benefit increases.--
     Notwithstanding section 215(f)(1) of the Social Security Act, 
     the Commissioner of Social Security shall recompute the 
     primary insurance amount so as to take into account the 
     amendments made by this Act in any case in which--
       (A) an individual is entitled to monthly insurance benefits 
     under title II of such Act for June 2000; and
       (B) such benefits are based on a primary insurance amount 
     computed--
       (i) under section 215 of such Act as in effect (by reason 
     of the Social Security Amendments of 1977) after December 
     1978, or
       (ii) under section 215 of such Act as in effect prior to 
     January 1979 by reason of subsection (a)(4)(B) of such 
     section (as amended by the Social Security Amendments of 
     1977).

     SEC. 3. OFFSET PROVIDED BY PROJECTED FEDERAL BUDGET 
                   SURPLUSES.

       Amounts offset by this Act shall not be counted as direct 
     spending for purposes of the budgetary limits provided in the 
     Congressional Budget Act of 1974 and the Balanced Budget and 
     Emergency Deficit Control Act of 1985.
                                 ______