[Congressional Record Volume 145, Number 78 (Thursday, May 27, 1999)]
[Senate]
[Pages S6319-S6321]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. McCAIN:
  S. 1168. A bill to eliminate the social security earnings test for 
individuals who have attained retirement age, to protect and preserve 
the social security trust funds, and for other purposes; to the 
Committee on Finance.


                protect social security now legislation

  Mr. McCAIN: Mr. President, today I rise to introduce legislation 
which will give older Americans the freedom to work and protect the 
Social Security system by taking it off budget, putting it in the 
black, and keeping it out of the hands of politicians. Our seniors and 
all working Americans deserve nothing less.
  The promise of Social Security is sacred and must not be broken. 
Millions of Americans count on Social Security to provide the bulk of 
their retirement income, because that is what the system has promised 
them. Allowing the federal government to continue spending the tax 
dollars in the Social Security Trust Fund on more government threatens 
the financial security of our nation's retirement system.
  The legislation I am introducing today will finally stop the 
government from stealing money from Social Security. It will lock up 
the Trust Fund and shore it up with the excess taxes collected by the 
federal government. It will guarantee that today's seniors who have 
worked and invested in the Social Security system will receive the 
benefits they were promised, without placing an unfair burden on 
today's workers.
  The legislation does three simple, but very important things.
  First, it repeals the burdensome and unfair Social Security earnings 
test that penalizes Americans between the ages of 65 and 70 for working 
and remaining productive after retirement. Under the current law, a 
senior citizen loses $1 of Social Security benefits for every $3 earned 
over the established limit, which is $15,500 in 1999.
  Because of this cap on earnings, our senior citizens are burdened 
with a 33.3 percent tax on their Social Security benefits. When this is 
combined with Federal, State, local and other Social Security taxes on 
earned income, it amounts to an outrageous 55 to 65 percent tax bite on 
their total income, and sometimes it can be even higher. An individual 
who is struggling to make ends meet by holding a job where they earn 
just $15,500 a year should not be faced with an effective marginal tax 
rate which exceeds 55 percent.
  What is most disturbing about the earnings test is the tremendous 
burden it places upon low-income senior citizens. Many older Americans 
need to

[[Page S6320]]

work in order to cover their basic expenses: food, housing and health 
care. These lower-income seniors are hit hardest by the earnings test, 
while most wealthy seniors escape unscathed. This is because 
supplemental ``unearned'' income from stocks, investments and savings 
is not affected by the earnings test.
  For too long, many have given lip service to eliminating the earnings 
test, but to no avail. It is time that we finally eliminate this 
ridiculous policy. In his State of the Union speech, President Clinton 
indicated that he may finally be ready to repeal the unfair Social 
Security earnings test, as originally promised during his 1992 
campaign. However, the President did not include repeal of the earnings 
test in his budget proposal for 2000.
  Hard-working senior citizens who need to work to help pay for their 
food, rent, prescription drugs, and daily living expenses are tired of 
empty promises. They are tired of being penalized for working. 
Repealing the unfair earnings test, as proposed in this legislation, is 
the right thing to do.
  Seond, the bill protects the money in the Social Security Trust Funds 
by taking Social Security ``off budget'' and keeping this money out of 
the hands of politicians. This provision is similar to other ``lock 
box'' proposals, except that it eliminates all the loopholes and 
exceptions, and truly locks up the money.
  I support and applaud the efforts of my Republican colleagues to move 
forward on the Social Security Lock Box legislation that has been 
delayed by members of the other party. However, I am concerned that it 
contains loopholes which would allow Social Security funds to be spent 
on items other than retirement benefits for seniors. It includes 
exceptions for emergencies, including economic recession, and allows 
the surpluses to be used to reduce the public debt. While I understand 
the intent of these provisions, I believe that we must stop making 
exceptions and lock up Social Security funds for Social Security 
purposes only.
  For too long, Social Security funds have been used to pay for 
existing federal programs, create new government programs, and to mask 
our nation's deficit. We must stop using Social Security to fund 
general government activities. We must save Social Security to pay 
retirement benefits to hard-working Americans, as promised in the law.
  The legislation I am introducing puts the Social Security trust fund 
surpluses safely away in a ``lock box'' without holes, so that neither 
we nor our successors can spend the people's retirement money on 
anything other than their retirement.
  Finally, the legislation requires that 62 percent of the non-Social 
Security budget surpluses from fiscal year 2001 through 2009 be 
transferred into the Social Security Trust Funds to strengthen and 
extend the solvency of the system. This amounts to $514 billion, based 
on current estimates of the non-Social Security surplus, which would 
shore up the system and ensure the availability of benefits for today's 
seniors and those working and paying into the system today.
  Locking up the Social Security Trust Fund and shoring up the fund 
with $514 billion in new money will extend the solvency of the system 
until about 2057, more than 20 years beyond the date when the system is 
currently expected to be bankrupt. This bill will provide senior 
citizens with the peace of mind that their Social Security checks will 
continue arriving each and every month. It will provide time for the 
Administration, the Congress, and the American people to develop and 
agree upon a structural reform plan which will save Social Security for 
future generations.
  Mr. President, I would like to note that the National Committee to 
Preserve Social Security and Medicare has reviewed this legislation and 
has provided a letter in support of it that I would like to insert in 
the Record at this point.
  Mr. President, this is legislation that will truly preserve and 
protect Social Security for the future, and it will remove the unfair 
tax on working seniors. I urge my colleagues to support the bill and I 
intend to work for its passage this Congress.
  Mr. President, I ask unanimous consent that the bill and additional 
material be printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                                S. 1168

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

         TITLE I--ELIMINATION OF SOCIAL SECURITY EARNINGS TEST

     SEC. 101. SHORT TITLE.

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

     SEC. 102. ELIMINATION OF EARNINGS TEST FOR INDIVIDUALS WHO 
                   HAVE ATTAINED RETIREMENT AGE.

       (a) In General.--Section 203 of the Social Security Act (42 
     U.S.C. 403) is amended--
       (1) in subsection (c)(1), by striking ``the age of 
     seventy'' and inserting ``retirement age (as defined in 
     section 216(l))'';
       (2) in paragraphs (1)(A) and (2) of subsection (d), by 
     striking ``the age of seventy'' each place it appears and 
     inserting ``retirement age (as defined in section 216(l))'';
       (3) in subsection (f)(1)(B), by striking ``was age seventy 
     or over'' and inserting ``was at or above retirement age (as 
     defined in section 216(l))'';
       (4) in subsection (f)(3)--
       (A) by striking ``33\1/3\ percent'' and all that follows 
     through ``any other individual,'' 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
       (B) by striking ``age 70'' and inserting ``retirement age 
     (as defined in section 216(l))'';
       (5) in subsection (h)(1)(A), by striking ``age 70'' each 
     place it appears and inserting ``retirement age (as defined 
     in section 216(l))''; and
       (6) in subsection (j)--
       (A) in the heading, by striking ``Age Seventy'' and 
     inserting ``Retirement Age''; and
       (B) by striking ``seventy years of age'' and inserting 
     ``having attained retirement age (as defined in section 
     216(l))''.
       (b) Conforming Amendments Eliminating the Special Exempt 
     Amount for Individuals Who Have Attained Retirement Age.--
       (1) Uniform exempt amount.--Section 203(f)(8)(A) of the 
     Social Security Act (42 U.S.C. 403(f)(8)(A)) 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''.
       (2) Conforming amendments.--Section 203(f)(8)(B) of the 
     Social Security Act (42 U.S.C. 403(f)(8)(B)) is amended--
       (A) 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'';
       (B) in clauses (i) and (ii), by striking ``corresponding'' 
     each place it appears; and
       (C) in the last sentence, by striking ``an exempt amount'' 
     and inserting ``the exempt amount''.
       (3) Repeal of basis for computation of special exempt 
     amount.--Section 203(f)(8)(D) of the Social Security Act (42 
     U.S.C. (f)(8)(D)) is repealed.
       (c) Additional Conforming Amendments.--
       (1) Elimination of redundant references to retirement 
     age.--Section 203 of the Social Security Act (42 U.S.C. 403) 
     is amended--
       (A) in subsection (c), in the last sentence, 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
       (B) 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,''.
       (2) Conforming amendment to provisions for determining 
     amount of increase on account of delayed retirement.--Section 
     202(w)(2)(B)(ii) of the Social Security Act (42 U.S.C. 
     402(w)(2)(B)(ii)) is amended--
       (A) by striking ``either''; and
       (B) by striking ``or suffered deductions under section 
     203(b) or 203(c) in amounts equal to the amount of such 
     benefit''.
       (3) Provisions relating to earnings taken into account in 
     determining substantial gainful activity of blind 
     individuals.--The second sentence of section 223(d)(4)(A) of 
     the Social Security Act (42 U.S.C. 423(d)(4)(A)) is amended 
     by striking ``if section 102 of the Senior Citizens' Right to 
     Work Act of 1996 had not been enacted'' and inserting the 
     following: ``if the amendments to section 203 made by section 
     102 of the Senior Citizens' Right to Work Act of 1996 and by 
     the Senior Citizens' Freedom to Work Act of 1999 had not been 
     enacted''.
       (d) Effective Date.--The amendments and repeals made by 
     this section shall apply with respect to taxable years ending 
     after December 31, 1998.

  TITLE II--PROTECTING AND PRESERVING THE SOCIAL SECURITY TRUST FUNDS

     SEC. 201. SHORT TITLE.

       This title may be cited as the ``Protecting and Preserving 
     the Social Security Trust Funds Act''.

[[Page S6321]]

     SEC. 202. FINDINGS.

       Congress finds that--
       (1) the $69,246,000,000 unified budget surplus achieved in 
     fiscal year 1998 was entirely due to surpluses generated by 
     the social security trust funds and the cumulative unified 
     budget surpluses projected for subsequent fiscal years are 
     primarily due to surpluses generated by the social security 
     trust funds;
       (2) Congress and the President should not use the social 
     security trust funds surpluses to balance the budget or fund 
     existing or new non-social security programs;
       (3) all surpluses generated by the social security trust 
     funds must go towards saving and strengthening the social 
     security system; and
       (4) at least 62 percent of the on-budget (non-social 
     security) surplus should be reserved and applied to the 
     social security trust funds.

     SEC. 203. PROTECTION OF THE SOCIAL SECURITY TRUST FUNDS.

       (a) Protection by Congress.--
       (1) Reaffirmation of support.--Congress reaffirms its 
     support for the provisions of section 13301 of the Budget 
     Enforcement Act of 1990 that provides that the receipts and 
     disbursements of the social security trust funds shall not be 
     counted for the purposes of the budget submitted by the 
     President, the congressional budget, or the Balanced Budget 
     and Emergency Deficit Control Act of 1985.
       (2) Protection of social security benefits.--Balances in 
     the Federal Old-Age and Survivors Insurance Trust Fund and 
     the Federal Disability Insurance Trust Fund shall be used 
     solely for paying social security benefit payments as 
     promised to be paid by law.
       (b) Points of Order.--Section 301 of the Congressional 
     Budget Act of 1974 is amended by adding at the end the 
     following:
       ``(j) Social Security Point of Order.--It shall not be in 
     order in the Senate to consider a concurrent resolution on 
     the budget, an amendment thereto, or a conference report 
     thereon that violates section 13301 of the Budget Enforcement 
     Act of 1990.
       ``(k) Social Security Surplus Protection Point of Order.--
     It shall not be in order in the Senate to consider a 
     concurrent resolution on the budget, an amendment thereto, or 
     a conference report thereon that would cause or increase an 
     on-budget deficit for any fiscal year.
       ``(l) Subsequent legislation.--
       ``(1) In general.--It shall not be in order in the Senate 
     to consider any bill, joint resolution, amendment, motion, or 
     conference report if--
       ``(A) the enactment of the bill or resolution as reported;
       ``(B) the adoption and enactment of that amendment; or
       ``(C) the enactment of the bill or resolution in the form 
     recommended in the conference report;
     would cause or increase an on-budget deficit for any fiscal 
     year.
       ``(2)  Exception to point of Order.--This subsection shall 
     not apply to social security reform legislation that would 
     protect the social security system from insolvency and 
     preserve benefits as promised to beneficiaries.''.
       (c) Supermajority Waiver and Appeal.--Subsections (c)(1) 
     and (d)(2) of section 904 of the Congressional Budget Act of 
     1974 are amended by striking ``305(b)(2),'' and inserting 
     ``301(j), 301(k), 301(l), 305(b)(2)''.

     SEC. 204. SEPARATE BUDGET FOR SOCIAL SECURITY.

       (a) Exclusion.--The outlays and receipts of the social 
     security program under title II of the Social Security Act, 
     including the Federal Old-Age and Survivors Insurance Trust 
     Fund and the Federal Disability Insurance Trust Fund and the 
     related provisions of the Internal Revenue Code of 1986, 
     shall be excluded from--
       (1) any official documents by Federal agencies regarding 
     the surplus or deficit totals of the budget of the Federal 
     Government as submitted by the President or of the surplus or 
     deficit totals of the congressional budget; and
       (2) any description or reference in any official 
     publication or material issued by any other agency or 
     instrumentality of the Federal Government.
       (b) Separate Budget.--The outlays and receipts of the 
     social security program under title II of the Social Security 
     Act, including the Federal Old-Age and Survivors Insurance 
     Trust Fund and the Federal Disability Insurance Trust Fund 
     and the related provisions of the Internal Revenue Code of 
     1986, shall be submitted as a separate budget.

     SEC. 205. PRESIDENT'S BUDGET.

       Section 1105(f) of title 31, United States Code, is amended 
     by striking ``in a manner consistent'' and inserting ``in 
     compliance''.

                TITLE III--SAVING SOCIAL SECURITY FIRST

     SEC. 301. DESIGNATION OF ON-BUDGET SURPLUS.

       (a) In General.--Notwithstanding any other provision of 
     law, not less than the amount referred to in subsection (b) 
     for a fiscal year shall be reserved for and applied to the 
     social security trust funds for that fiscal year in addition 
     to the Social Security Trust Fund surpluses.
       (b) Amount Reserved.--The amount referred to in this 
     subsection is--
       (1) for fiscal year 2001, $6,820,000,000;
       (2) for fiscal year 2002, $36,580,000,000;
       (3) for fiscal year 2003, $31,620,000,000;
       (4) for fiscal year 2004, $42,160,000,000;
       (5) for fiscal year 2005, $48,980,000,000;
       (6) for fiscal year 2006, $71,920,000,000;
       (7) for fiscal year 2007, $83,080,000,000;
       (8) for fiscal year 2008, $90,520,000,000; and
       (9) for fiscal year 2009, $102,300,000,000.

     SEC. 302. SENSE OF THE SENATE ON DEDICATING ADDITIONAL 
                   SURPLUS AMOUNTS.

       It is the sense of the Senate if the budget surplus in 
     future years is greater than the currently projected surplus, 
     serious consideration should be given to directing more of 
     the surplus to strengthening the social security trust funds.
                                  ____

                                    National Committee to Preserve


                                 Social Security and Medicare,

                                     Washington, DC, May 26, 1999.
     Hon. John McCain,
     Russell Building, U.S. Senate,
     Washington, DC.
       Dear Senator McCain: On behalf of the approximately five 
     million members and supporters of the National Committee, I 
     commend your leadership on the issue of protecting the Social 
     Security trust funds and eliminating the Social Security 
     earnings test.
       The National Committee's members earnestly believe in the 
     future of the Social Security system and its critical 
     importance to America's hard working families.
       Your legislation would not only safe-guard the Social 
     Security surpluses and reaffirm Social Security's off-budget 
     status, but would also strengthen the program's solvency by 
     committing 62 percent of projected off-budget surpluses to 
     Social Security. Using the off-budget surpluses to fortify 
     Social Security is fiscally responsible and will help our 
     nation better meet the challenge of the baby-boom 
     generation's retirement.
       We also commend you for your long commitment to eliminating 
     the earnings test for individuals who have reached normal 
     retirement age. Encouraging seniors to remain in the work 
     force as long as they are willing and able to work 
     strengthens their ability to remain financially independent 
     throughout their retirement years.
           Sincerely,
                                                     Max Richtman,
                                         Executive Vice President.
                                 ______