Safeguarding American Families and Expanding Social Security Act of 2015

Summary: Safeguarding American Families and Expanding Social Security Act of 2015 This bill amends the Internal Revenue Code to prescribe special rules for the determination of taxable wages and self-employment income above the contribution and benefit base after 2015. Title II (Old Age, Survivors and Disability Insurance) (OASDI) of the Social Security Act (SSAct) is amended to include surplus average indexed monthly earnings in the determination of primary OASDI amounts. The Bureau of Labor Statistics of the Department of Labor shall prepare and publish the Consumer Price Index for Elderly Consumers (CPI-EC) that indicates changes over time in expenditures for consumption which are typical for individuals in the United States who have attained early retirement age for purposes of an old-age, wife's, or husband's insurance benefit. SSAct title II is also amended to make the CPI-EC the applicable Consumer Price Index for computation of cost-of-living increases in OASDI benefits for such individuals.

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Safeguarding American Families and 
Expanding Social Security Act of 2015''.

SEC. 2. DETERMINATION OF TAXABLE WAGES AND SELF-EMPLOYMENT INCOME ABOVE 
              CONTRIBUTION AND BENEFIT BASE AFTER 2015.

    (a) Determination of Taxable Wages Above Contribution and Benefit 
Base After 2015.--
            (1) Amendments to the internal revenue code of 1986.--
        Section 3121 of the Internal Revenue Code of 1986 is amended--
                    (A) in subsection (a)(1), by inserting ``the 
                applicable percentage (determined under subsection 
                (c)(1)) of'' before ``that part of the remuneration''; 
                and
                    (B) in subsection (c), by striking ``(c) Included 
                and Excluded Service.--For purposes of this chapter, 
                if'' and inserting the following:
    ``(c) Special Rules for Wages and Employment.--
            ``(1) Applicable percentage of remuneration in determining 
        taxable wages.--For purposes of subsection (a)(1), the 
        applicable percentage for a calendar year shall be equal to--
                    ``(A) for 2016, 80 percent;
                    ``(B) for 2017 through 2019, the applicable 
                percentage under this paragraph for the previous year, 
                decreased by 20 percentage points; and
                    ``(C) for 2020 and each year thereafter, 0 percent.
            ``(2) Included and excluded service.--For purposes of this 
        chapter, if''.
            (2) Amendments to the social security act.--Section 209 of 
        the Social Security Act (42 U.S.C. 409) is amended--
                    (A) in subsection (a)(1)(I)--
                            (i) by inserting ``and before 2016'' after 
                        ``1974''; and
                            (ii) by inserting ``and'' after the 
                        semicolon;
                    (B) in subsection (a)(1), by adding at the end the 
                following new subparagraph:
                    ``(J) The applicable percentage (determined under 
                subsection (l)) of that part of remuneration which, 
                after remuneration (other than remuneration referred to 
                in the succeeding subsections of this section) equal to 
                the contribution and benefit base (determined under 
                section 230) with respect to employment has been paid 
                to an individual during any calendar year after 2015 
                with respect to which such contribution and benefit 
                base is effective, is paid to such individual during 
                such calendar year;''; and
                    (C) by adding at the end the following new 
                subsection:
    ``(l) For purposes of subsection (a)(1)(J), the applicable 
percentage for a calendar year shall be equal to--
            ``(1) for 2016, 80 percent;
            ``(2) for 2017 through 2019, the applicable percentage 
        under this subsection for the previous year, decreased by 20 
        percentage points; and
            ``(3) for 2020 and each year thereafter, 0 percent.''.
            (3) Effective date.--The amendments made by this subsection 
        shall apply with respect to remuneration paid in calendar years 
        after 2015.
    (b) Determination of Taxable Self-Employment Income Above 
Contribution and Benefit Base After 2015.--
            (1) Amendments to the internal revenue code of 1986.--
        Section 1402 of the Internal Revenue Code of 1986 is amended--
                    (A) in subsection (b)(1), by striking ``that part 
                of the net earnings'' and all that follows through 
                ``minus'' and inserting the following: ``an amount 
                equal to the applicable percentage (as determined under 
                subsection (d)(2)) of that part of the net earnings 
                from self-employment which is in excess of the 
                difference (not to be less than zero) between (i) an 
                amount equal to the contribution and benefit base (as 
                determined under section 230 of the Social Security 
                Act) which is effective for the calendar year in which 
                such taxable year begins, and''; and
                    (B) in subsection (d)--
                            (i) by striking ``(d) Employee and Wages.--
                        The term'' and inserting the following:
    ``(d) Rules and Definitions.--
            ``(1) Employee and wages.--The term''; and
                            (ii) by adding at the end the following:
            ``(2) Applicable percentage of net earnings from self-
        employment in determining taxable self-employment income.--For 
        purposes of subsection (b)(1), the applicable percentage for a 
        taxable year beginning in any calendar year referred to in such 
        paragraph shall be equal to--
                    ``(A) for 2016, 80 percent;
                    ``(B) for 2017 through 2019, the applicable 
                percentage under this paragraph for the previous year, 
                decreased by 20 percentage points; and
                    ``(C) for 2020 and each year thereafter, 0 
                percent.''.
            (2) Amendments to the social security act.--Section 211 of 
        the Social Security Act (42 U.S.C. 411) is amended--
                    (A) in subsection (b)--
                            (i) in paragraph (1)(I)--
                                    (I) by striking ``or'' after the 
                                semicolon; and
                                    (II) by inserting ``and before 
                                2016'' after ``1974'';
                            (ii) by redesignating paragraph (2) as 
                        paragraph (3); and
                            (iii) by inserting after paragraph (1) the 
                        following:
            ``(2) For any taxable year beginning in any calendar year 
        after 2015, an amount equal to the applicable percentage (as 
        determined under subsection (l)) of that part of net earnings 
        from self-employment which is in excess of the difference (not 
        to be less than zero) between--
                    ``(A) an amount equal to the contribution and 
                benefit base (as determined under section 230) that is 
                effective for such calendar year, and
                    ``(B) the amount of the wages paid to such 
                individual during such taxable year; or''; and
                    (B) by adding at the end the following:
    ``(l) For purposes of subsection (b)(2), the applicable percentage 
for a taxable year beginning in any calendar year referred to in such 
paragraph shall be equal to--
            ``(1) for 2016, 80 percent;
            ``(2) for 2017 through 2019, the applicable percentage 
        under this subsection for the previous year, decreased by 20 
        percentage points; and
            ``(3) for 2020 and each year thereafter, 0 percent.''.
            (3) Effective date.--The amendments made by this subsection 
        shall apply with respect to taxable years beginning during or 
        after calendar year 2015.

SEC. 3. ADJUSTMENTS TO BEND POINTS IN DETERMINING PRIMARY INSURANCE 
              AMOUNT AND INCLUSION OF SURPLUS EARNINGS FOR BENEFIT 
              DETERMINATIONS.

    (a) Inclusion of Surplus Average Indexed Monthly Earnings in 
Determination of Primary Insurance Amounts.--
            (1) In general.--Section 215(a)(1)(A) of the Social 
        Security Act (42 U.S.C. 415(a)(1)(A)) is amended--
                    (A) in clauses (i), (ii), and (iii), by inserting 
                ``basic'' before ``average indexed monthly earnings'' 
                each place it appears;
                    (B) in clause (ii), by striking ``and'' at the end;
                    (C) in clause (iii), by adding ``and'' at the end; 
                and
                    (D) by inserting after clause (iii) the following 
                new clause:
            ``(iv) 5 percent of the individual's surplus average 
        indexed monthly earnings,''.
            (2) Bend point adjustment.--Section 215(a)(1)(B) of such 
        Act (42 U.S.C. 415(a)(1)(B)) is amended--
                    (A) by redesignating clause (iii) as clause (iv); 
                and
                    (B) by inserting after clause (ii) the following 
                new clause:
            ``(iii) For individuals who initially become eligible for 
        old-age or disability insurance benefits, or who die (before 
        becoming eligible for such benefits) in any calendar year after 
        2020, the amount determined under clause (i) of this 
        subparagraph for purposes of subparagraph (A)(i) for such 
        calendar year shall be increased by--
                    ``(I) for calendar year 2021, 1 percent;
                    ``(II) for each of calendar years 2022 through 
                2034, the percent determined under this clause for the 
                preceding year increased by 1 percentage point; and
                    ``(III) for calendar year 2035 and each year 
                thereafter, 15 percent.''.
    (b) Basic AIME and Surplus AIME.--
            (1) Basic aime.--Section 215(b)(1) of such Act (42 U.S.C. 
        415(b)(1)) is amended--
                    (A) by inserting ``basic'' before ``average''; and
                    (B) in subparagraph (A), by striking ``paragraph 
                (3)'' and inserting ``paragraph (3)(A)'' and by 
                inserting before the comma the following: ``to the 
                extent such total does not exceed the contribution and 
                benefit base for the applicable year''.
            (2) Surplus aime.--
                    (A) In general.--Section 215(b)(1) of such Act (as 
                amended by paragraph (1)) is amended--
                            (i) by redesignating subparagraphs (A) and 
                        (B) as clauses (i) and (ii), respectively;
                            (ii) by inserting ``(A)'' after ``(b)(1)''; 
                        and
                            (iii) by adding at the end the following 
                        new subparagraph:
    ``(B)(i) An individual's surplus average indexed monthly earnings 
shall be equal to the quotient obtained by dividing--
            ``(I) the total (after adjustment under paragraph (3)(B)) 
        of such individual's surplus earnings (determined under clause 
        (ii)) for such individual's benefit computation years 
        (determined under paragraph (2)), by
            ``(II) the number of months in those years.
    ``(ii) For purposes of clause (i) and paragraph (3)(B), an 
individual's surplus earnings for a benefit computation year are the 
total of such individual's wages paid in and self-employment income 
credited to such benefit computation year, to the extent such total 
(before adjustment under paragraph (3)(B)) exceeds the contribution and 
benefit base for such year.''.
                    (B) Conforming amendment.--The heading for section 
                215(b) of such Act is amended by striking ``Average 
                Indexed Monthly Earnings'' and inserting ``Basic 
                Average Indexed Monthly Earnings; Surplus Average 
                Indexed Monthly Earnings''.
            (3) Adjustment of surplus earnings for purposes of 
        determining surplus aime.--Section 215(b)(3) of such Act (42 
        U.S.C. 415(b)(3)) is amended--
                    (A) in subparagraph (A), by striking ``subparagraph 
                (B)'' and inserting ``subparagraph (C)'' and by 
                inserting ``and determination of basic average indexed 
                monthly income'' after ``paragraph (2)'';
                    (B) by redesignating subparagraph (B) as 
                subparagraph (C); and
                    (C) by inserting after subparagraph (A) the 
                following new subparagraph:
    ``(B) For purposes of determining under paragraph (1)(B) an 
individual's surplus average indexed monthly earnings, the individual's 
surplus earnings (described in paragraph (2)(B)(ii)) for a benefit 
computation year shall be deemed to be equal to the product of--
            ``(i) the individual's surplus earnings for such year (as 
        determined without regard to this subparagraph), and
            ``(ii) the quotient described in subparagraph (A)(ii).''.
    (c) Effective Date.--The amendments made by this section shall 
apply with respect to individuals who initially become eligible (within 
the meaning of section 215(a)(3)(B) of the Social Security Act) for 
old-age or disability insurance benefits under title II of the Social 
Security Act, or who die (before becoming eligible for such benefits), 
in any calendar year after 2020.

SEC. 4. CONSUMER PRICE INDEX FOR ELDERLY CONSUMERS.

    (a) In General.--The Bureau of Labor Statistics of the Department 
of Labor shall prepare and publish an index for each calendar month to 
be known as the ``Consumer Price Index for Elderly Consumers'' that 
indicates changes over time in expenditures for consumption which are 
typical for individuals in the United States who have attained early 
retirement age (as defined under section 216(l)(2) of the Social 
Security Act (42 U.S.C. 416(l)(2)) for purposes of an old-age, wife's, 
or husband's insurance benefit).
    (b) Effective Date.--Subsection (a) shall apply with respect to 
calendar months ending on or after June 30 of the calendar year in 
which this Act is enacted.
    (c) Authorization of Appropriations.--There are authorized to be 
appropriated such sums as are necessary to carry out the provisions of 
this section.

SEC. 5. COMPUTATION OF COST-OF-LIVING INCREASES FOR SOCIAL SECURITY 
              BENEFITS.

    (a) In General.--Section 215(i) of the Social Security Act (42 
U.S.C. 415(i)) is amended--
            (1) in paragraph (1)(G), by inserting before the period the 
        following: ``, and, with respect to any monthly insurance 
        benefit payable under this title, effective for adjustments 
        under this subsection to the primary insurance amount on which 
        such benefit is based (or to any such benefit under section 227 
        or 228), the applicable Consumer Price Index shall be deemed to 
        be the Consumer Price Index for Elderly Consumers and such 
        primary insurance amount shall be deemed adjusted under this 
        subsection using such Index''; and
            (2) in paragraph (4), by striking ``and by section 9001'' 
        and inserting ``, by section 9001'', and by inserting after 
        ``1986,'' the following: ``and by section 5(a) of the 
        Safeguarding American Families and Expanding Social Security 
        Act of 2015,''.
    (b) Conforming Amendments in Applicable Former Law.--Section 
215(i)(1)(C) of the Social Security Act, as in effect in December 1978 
and applied in certain cases under the provisions of such Act in effect 
after December 1978, is amended by inserting before the period the 
following: ``, and, with respect to any monthly insurance benefit 
payable under this title, effective for adjustments under this 
subsection to the primary insurance amount on which such benefit is 
based (or to any such benefit under section 227 or 228), the applicable 
Consumer Price Index shall be deemed to be the Consumer Price Index for 
Elderly Consumers and such primary insurance amount shall be deemed 
adjusted under this subsection using such Index''.
    (c) Effective Date.--The amendments made by this section shall 
apply to determinations made by the Commissioner of Social Security 
under section 215(i)(2) of the Social Security Act (42 U.S.C. 
415(i)(2)) with respect to cost-of-living computation quarters ending 
on or after September 30, 2016.