To amend title II of the Social Security Act to provide for an improved benefit computation formula for workers affected by the changes in benefit computation rules enacted in the Social Security Amendments of 1977 who attain age 65 during the 10-year period after 1981 and before 1992 (and related beneficiaries) and to provide prospectively for increases in their benefits accordingly.

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Notch Baby Act of 2007''.

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

    Section 215(a) of the Social Security Act is amended--
            (1) in paragraph (4)(B), by inserting ``(with or without 
        the application of paragraph (8))'' after ``would be made''; 
        and
            (2) by adding at the end the following:
    ``(8)(A) In the case of an individual described in paragraph (4)(B) 
(subject to subparagraph (F) of this paragraph) who becomes eligible 
for old-age insurance benefits after 1978 and before 1989, 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 or 1980.......................       60 percent 
                  1981 or 1982.......................       35 percent 
                  1983 or 1984.......................       30 percent 
                  1985 or 1986.......................       25 percent 
                  1987 or 1988.......................       10 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.''.

SEC. 3. EFFECTIVE DATE AND RELATED RULES.

    (a) Applicability of Amendments.--
            (1) 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.
            (2) Prospective 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 January 2007.
    (b) Recomputation to Reflect Benefit Increases.--In any case in 
which an individual is entitled to monthly insurance benefits under 
title II of the Social Security Act for December 2006, if such benefits 
are based on a primary insurance amount computed--
            (1) under section 215 of such Act as in effect (by reason 
        of the Social Security Amendments of 1977) after December 1978, 
        or
            (2) 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),
the Commissioner of Social Security (notwithstanding section 215(f)(1) 
of the Social Security Act) shall recompute such primary insurance 
amount so as to take into account the amendments made by this Act.

Summary: Notch Baby Act of 2007 - Amends title II of the Social Security Act with respect to the benefit computation formula for individuals affected by the changes in benefit computation rules enacted in the Social Security Amendments of 1977 who became eligible for old-age insurance benefits after 1978 and before 1989 . Sets forth a schedule of additional benefit increases for such beneficiaries , with percentages declining from 60 to 10 keyed to the year an individual became eligible for benefits between 1978 and 1989.