To reform Social Security by establishing a Personal Social Security Savings Program.

S.

    (a) Contents of Congressional Budget Resolutions.--Section 301(a) 
of the Congressional Budget Act of 1974 is amended by adding at the end 
the following new sentence: ``The concurrent resolution on the budget 
for fiscal year 2006 or for any ensuing fiscal year shall be consistent 
with the spending limitation specified in section 1105(i) of title 31, 
United States Code.''.
    (b) Spending Limitation Point of Order.--Section 312 of the 
Congressional Budget Act of 1974 is amended by adding at the end the 
following new subsection:
    ``(g) Spending Limitation Point of Order.--(1) It shall not be in 
order in the House of Representatives or the Senate to consider any 
concurrent resolution on the budget for fiscal year 2006 or for any 
fiscal year thereafter, or any amendment thereto or conference report 
thereon, that is not consistent with the spending limitation specified 
in section 1105(i) of title 31, United States Code.
    ``(2) Paragraph (1) may be waived or suspended in the House of 
Representatives or the Senate only by the affirmative vote of two-
thirds of the Members, duly chosen and sworn. An affirmative vote of 
two-thirds of the Members, duly chosen and sworn, shall be required in 
the Senate to sustain an appeal of the ruling of the chair on such 
point of order. Appeals in the Senate from the decisions of the chair 
relating to paragraph (1) shall be limited to one hour, to be equally 
divided between, and controlled by, the mover and the manager of the 
concurrent resolution.''.

SEC. 13. REDUCTION OF FICA RATES RESULTING FROM PERSONAL SOCIAL 
              SECURITY SAVINGS PROGRAM.

    (a) Employee Contribution.--Section 3101 of the Internal Revenue 
Code of 1986 (relating to tax on employees) is amended by adding at the 
end the following new subsection:
    ``(d) Reduction in Old-Age, Survivors, and Disability Insurance Tax 
Rate.--
            ``(1) In general.--In any year which follows a reduction 
        year and each year thereafter, the rate of tax imposed under 
        subsection (a) shall be reduced by the reduction percentage.
            ``(2) Reduction year.--For purposes of this section--
                    ``(A) In general.--The term `reduction year' means 
                any year after the transition year in which the OASDI 
                rate ratio exceeds 125 percent.
                    ``(B) Transition year.--The term `transition year' 
                means the first full calendar year following the 
                termination year (as defined in section 4(b)(2) of the 
                Social Security Personal Savings Guarantee and 
                Prosperity Act of 2004).
            ``(3) Reduction percentage.--For purposes of this section, 
        the term `reduction percentage' means the excess of--
                    ``(A) the rate in effect under subsection (a) for 
                the reduction year, over
                    ``(B) the rate (rounded up to the nearest one tenth 
                of a percent) under which the OASDI rate ratio for the 
                reduction year would have been 125 percent if--
                            ``(i) such rate had been applicable under 
                        subsection (a) and section 3111(a) during such 
                        year, and
                            ``(ii) the rate under section 1401(a) 
                        during such year were twice such rate.
            ``(4) OASDI rate ratio.--The term `OASDI rate ratio' means, 
        with respect to any calendar year, the ratio--
                    ``(A) the numerator of which is the combined 
                balance in the Old-Age and Survivors Insurance Trust 
                Fund and the Federal Disability Insurance Trust Fund, 
                as of the last day of such calendar year, and
                    ``(B) the denominator of which is the amount paid 
                from such Trust Funds during such calendar year for all 
                purposes authorized by section 201 of the Social 
                Security Act (excluding any transfer payments between 
                such Trust Funds and reducing the amount of any 
                transfer to the Railroad Retirement Account by the 
                amount of any transfers into either such Trust Fund 
                from such Account).
            ``(5) Limitation on reduction.--Paragraph (1) shall not 
        apply to any reduction to the extent that such reduction would 
        cause the rate of tax imposed under subsection (a) to be less 
        than 4.95 percent.''.
    (b) Employer Contribution.--Section 3111 of the Internal Revenue 
Code of 1986 (relating to tax on employers) is amended by adding at the 
end the following new subsection:
    ``(d) Reduction in Old-Age, Survivors, and Disability Insurance Tax 
Rate.--
            ``(1) In general.--In any year which follows a reduction 
        year and each year thereafter, the rate of tax imposed under 
        subsection (a) shall be reduced by the reduction percentage.
            ``(2) Reduction year; reduction percentage.--For purposes 
        of this section, the terms `reduction year' and `reduction 
        percentage' have the meanings given such terms by section 
        3101(d).
            ``(3) Limitation on reduction.--Paragraph (1) shall not 
        apply to any reduction to the extent that such reduction would 
        cause the rate of tax imposed under subsection (a) to be less 
        than 4.95 percent.''.
    (c) Self-Employment Contribution.--Section 1401 of the Internal 
Revenue Code of 1986 (relating to tax on self-employment income) is 
amended by adding at the end the following new subsection:
    ``(d) Reduction in Old-Age, Survivors, and Disability Insurance Tax 
Rate.--
            ``(1) In general.--In any year which follows a reduction 
        year and each year thereafter, the rate of tax imposed under 
        subsection (a) shall be reduced by the reduction percentage.
            ``(2) Reduction year; reduction percentage.--For purposes 
        of this section, the terms `reduction year' and `reduction 
        percentage' have the meanings given such terms by section 
        3101(d).
            ``(3) Limitation on reduction.--Paragraph (1) shall not 
        apply to any reduction to the extent that such reduction would 
        cause the rate of tax imposed under subsection (a) to be less 
        than 9.9 percent.''.

Summary: Social Security Personal Savings Guarantee and Prosperity Act of 2004 - Amends title II (OASDI) of the Social Security Act to provide for the establishment of a voluntary, personal Social Security investment program under a new part B where a participating individual is able to invest in tax free personal accounts in a way that is similar to the way Federal employees invest in the Thrift Savings Program. Establishes in the Treasury the Social Security Personal Savings Fund, with personal Social Security savings accounts for deposit of the redirected Social Security contributions of participating individuals as mechanisms for crediting to such individuals amounts held in the Tier I Investment Fund, the Tier II Investment Fund, and Tier III Investment Options, also hereby established. Prescribes rules for personal Social Security savings annuity and other distributions. Establishes in the executive branch of the Government a Personal Social Security Savings Account Board to administer the new part B program. Amends title II (OASDI) of the Social Security Act (SSA) to provide for adjustment of primary insurance amounts in relation to deposits made to personal Social Security accounts. Directs the Secretary of the Treasury to transfer to the Federal Old-Age and Survivors Insurance Trust Fund amounts equal to the recapture of corporate tax on account yields and of Government savings over baseline. Amends the Internal Revenue Code to exempt the Social Security Personal Savings Fund and each Tier III Investment Option from income taxation. Subjects a personal Social Security savings account to taxes imposed on unrelated business income of charitable, etc. organizations. Excludes from a distributee's gross income any qualified distribution from amounts credited to a personal Social Security savings account from the Social Security Personal Savings Fund or held in a Tier III Investment Option. Creates in the Treasury the Self-Liquidating Social Security Transition Fund for the deposit of OASDI trust fund surplus for the preceding year. Amends SSA to provide for accounting for the OASDI program and the individual Social Security investment program. Amends SSA title VII to prescribe the budgetary treatment of the Social Security trust funds, the Social Security Personal Savings Fund, and taxes on self-employment income and FICA taxes.