[Congressional Record Volume 149, Number 105 (Wednesday, July 16, 2003)]
[Senate]
[Pages S9497-S9499]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. REID:
  S. 1418. 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 benefits computation rules enacted in the 
Social Security Amendments of 1977, and for other purposes; to the 
Committee on Finance.
  Mr. REID. Mr. President, I believe Social Security is one of the 
greatest success stories of our government.
  Social Security is the only program in the history of our Nation that 
has provided dignity and respect for our senior citizens, regardless of 
their income or backgrounds.
  For almost 70 years, Social Security has been there for our citizens 
when they need it. It has provided seniors with independence and 
economic security in their retirement years.
  In addition to helping millions of senior citizens, Social Security 
has provided economic security for surviving spouses and children and 
to countless Americans with disabilities.
  It is easy to see why people believe Social Security is the most 
successful social program our country has ever adopted.
  I rise today to reintroduce legislation that would correct a problem 
that plagues a special population of Social Security recipients. I am 
speaking on behalf of those affected by Social Security notch.
  The Social Security notch causes more than nine million Social 
Security recipients born between the years of 1917 and 1926 to receive 
fewer Social Security benefits than Americans born outside the notch 
years due to changes made in 1977 to the Social Security benefit 
formula.
  I have continued to speak out on this issue and the injustice it 
imposes on millions of seniors. The notch issue has been discussed, 
studied and reviewed, yet to date, Congress has not corrected this 
wrong. Because of this, many older Americans born during this period 
cannot afford the most basic necessities.
  Congress must accept responsibility for any error that was made. We 
should not ask notch Seniors to accept less because of our mistake. 
While we must preserve and protect Social Security for future 
generations, 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 and after the notch period.
  The notch situation has its origins in 1972, when Congress decided to 
create automatic cost-of-living-adjustments to help Social Security 
keep pace with inflation. Prior to 1972, 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.
  Unfortunately, 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 rapid increases in benefits.

  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.

[[Page S9498]]

  We have an obligation to convey to our constituents that Social 
Security is a fair system. Notch Babies in Nevada 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. Let us fix the notch problem and restore the confidence of the 
nine million notch babies across this land. Government has an 
obligation to be fair. My support of notch babies is longstanding. I 
sponsored numerous pieces of legislation over the years to address this 
issue. With this legislation, my effort continues.
  It is unfortunate that these measures have not seen the light of day. 
Many who have written to me think Congress is waiting for notch babies 
to die rather than honor this debt. I must tell you it concerns me when 
our constituents have this perception of their elected representatives.
  We have to do something to make sure Americans believe that Social 
Security is a fair system. Passage of my legislation provides us that 
chance.
  My legislation is intended to make good on what this government 
should have done long ago. I propose that workers who attain the age of 
65 after 1981 and before 1992 be allowed to choose either lump sum 
payment 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.
  It is time to put these dollars into the hands of those who earned 
them. It is time to show our support for notch reform.
  I am introducing this legislation because actions speak louder than 
words. The `Notch Fairness Act of 2003' that I am introducing on behalf 
of notch victims today, is intended to put my words into action. I ask 
all my colleagues to join me in support of this important and long 
overdue legislation.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 1418

       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 
     2003''.

     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, 2003, 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 2004 not 
     later than July 1, 2004, 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, 
     2003, 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 2004 not later than July 1, 2004, 
     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 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 2004.
       (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 2004; and
       (B) such benefits are based on a primary insurance amount 
     computed--

[[Page S9499]]

       (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).
                                 ______