I 

108TH CONGRESS 

1ST SESSION H. R. 177

To strengthen and protect Social Security. 

IN THE HOUSE OF REPRESENTATIVES 

JANUARY 7, 2003

Mr. ROYCE introduced the following bill; which was referred to the Committee 

on Ways and Means 

A BILL

To strengthen and protect Social Security.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Social Security 

5 Strengthening and Protection Act of 2003’’. 

6 SEC. 2. INVESTMENT OF THE FEDERAL OLD-AGE AND SUR7 VIVORS INSURANCE TRUST FUND AND THE 

8 FEDERAL DISABILITY INSURANCE TRUST 

9 FUND. 

10 (a) IN GENERAL.—Section 201(d) of the Social Secu11 rity Act (42 U.S.C. 401(d)) is amended—

12 (1) by inserting ‘‘(1)’’ after ‘‘(d)’’; 
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1 (2) by striking ‘‘Such investments may be made 

2 only’’ and inserting the following: ‘‘Except as pro3 vided in paragraphs (2) and (3), such investments 

4 may be made only’’; 

5 (3) by striking the last sentence; and 

6 (4) by adding at the end the following new 

7 paragraphs: 

8 ‘‘(2)(A) As of the end of each fiscal year, the Man9 aging Trustee shall determine—

10 ‘‘(i) the surplus (if any) in the total budget of 

11 the Government of the United States, and 

12 ‘‘(ii) the total amount of the Trust Funds then 

13 invested in obligations issued pursuant to paragraph 

14 (1). 

15 ‘‘(B) During the following fiscal year, the Managing 

16 Trustee shall purchase qualified investments, with 

17 amounts otherwise available in the general fund of the 

18 Treasury, at original issue or on the market, at a total 

19 cost equal to at least 90 percent of the surplus referred 

20 to in subparagraph (A)(i), except that such total cost may 

21 not exceed the total amount referred to in subparagraph 

22 (A)(ii). 

23 ‘‘(C) Upon the purchase of qualified investments pur24 suant to subparagraph (B), the Managing Trustee shall 

25 redeem, with such qualified investments, obligations which 
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1 have been issued pursuant to paragraph (1) and are held 

2 by either of the Trust Funds. Such qualified investments 

3 shall be held by the Trust Fund until liquidation of such 

4 qualified investments is necessary to meet current with5 drawals or is otherwise determined by the Managing 

6 Trustee to be in the public interest. 

7 ‘‘(D) Effective for fiscal years beginning after such 

8 time as all obligations issued pursuant to paragraph (1) 

9 and held by the Trust Funds have been redeemed with 

10 qualified investments pursuant to subparagraph (C), the 

11 Managing Trustee shall invest only in qualified invest12 ments such portion of each Trust Fund as is not, in his 

13 judgment, required to meet current withdrawals. 

14 ‘‘(E) The Managing Trustee shall exercise his author15 ity under this paragraph solely for the benefit of the bene16 ficiaries under the old-age, survivors, and disability insur17 ance program under this title. 

18 ‘‘(3) For purposes of paragraph (2)—

19 ‘‘(A)(i) The term ‘qualified investment’ means a 

20 marketable interest-bearing obligation of the United 

21 States, purchased on original issue or at the market 

22 price, which meets the requirements of clause (ii). 

23 ‘‘(ii) An obligation referred to in clause (i) 

24 meets the requirements of this section if such obliga25 tion—
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1 ‘‘(I) has a maturity fixed with due regard 

2 for the needs of the Trust Funds, 

3 ‘‘(II) bears interest at a rate at least equal 

4 to the average market yield (computed by the 

5 Managing Trustee on the basis of market 

6 quotations as of the end of the calendar month 

7 next preceding the date of purchase) on all 

8 marketable interest-bearing obligations of the 

9 United States then forming a part of the public 

10 debt which are not due or callable until after 

11 the expiration of four years from the end of 

12 such calendar month, and 

13 ‘‘(III) is subject to an option to redeem 

14 such obligations at any time at the purchase 

15 price.

16 ‘‘(B) The term ‘total budget of the United 

17 States Government’ means all spending and receipt

18 accounts of the United States Government that are 

19 designated as on-budget or off-budget accounts. 

20 ‘‘(4) The preceding provisions of this subsection shall 

21 be subject to such reforms of the old-age, survivors, and 

22 disability insurance program under this title as may be 

23 provided in legislation enacted after the date of the enact24 ment of the Social Security Strengthening and Protection 

25 Act of 2003.’’. 
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1 (b) EFFECTIVE DATE.—The amendments made by 

2 this section shall apply with respect to fiscal years begin3 ning on or after October 1, 2004. 

4 SEC. 3. PROTECTION OF THE SOCIAL SECURITY TRUST 

5 FUNDS FROM THE PUBLIC DEBT LIMIT. 

6 (a) PROTECTION OF TRUST FUNDS.—Notwith7 standing any other provision of law—

8 (1) no officer or employee of the United States 

9 may—

10 (A) delay the deposit of any amount into 

11 (or delay the credit of any amount to) the Fed12 eral Old-Age and Survivors Insurance Trust 

13 Fund or the Federal Disability Insurance Trust 

14 Fund or otherwise vary from the normal terms, 

15 procedures, or timing for making such deposits 

16 or credits, or

17 (B) refrain from the investment in public 

18 debt obligations of amounts in either of such 

19 Trust Funds, 

20 if a purpose of such action or inaction is to not in21 crease the amount of outstanding public debt obliga22 tions, and 

23 (2) no officer or employee of the United States 

24 may disinvest amounts in either of such Trust 

25 Funds which are invested in public debt obligations 
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1 if a purpose of the disinvestment is to reduce the 

2 amount of outstanding public debt obligations. 

3 (b) PROTECTION OF BENEFITS AND EXPENDITURES

4 FOR ADMINISTRATIVE EXPENSES.—

5 (1) IN GENERAL.—Notwithstanding subsection 

6 (a), during any period for which cash benefits or ad7 ministrative expenses would not otherwise be payable 

8 from the Federal Old-Age and Survivors Insurance 

9 Trust Fund or the Federal Disability Insurance 

10 Trust Fund by reason of an inability to issue further 

11 public debt obligations because of the applicable 

12 public debt limit, public debt obligations held by 

13 such Trust Fund shall be sold or redeemed only for 

14 the purpose of making payment of such benefits or 

15 administrative expenses and only to the extent cash 

16 assets of such Trust Fund are not available from 

17 month to month for making payment of such bene18 fits or administrative expenses. 

19 (2) ISSUANCE OF CORRESPONDING DEBT.—For 

20 purposes of undertaking the sale or redemption of 

21 public debt obligations held by the Federal Old-Age 

22 and Survivors Insurance Trust Fund or the Federal 

23 Disability Insurance Trust Fund pursuant to para24 graph (1), the Secretary of the Treasury may issue 

25 corresponding public debt obligations to the public, 
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1 in order to obtain the cash necessary for payment of 

2 benefits or administrative expenses from such Trust 

3 Fund, notwithstanding the public debt limit. 

4 (3) ADVANCE NOTICE OF SALE OR REDEMP5 TION.—Not less than 3 days prior to the date on 

6 which, by reason of the public debt limit, the Sec7 retary of the Treasury expects to undertake a sale 

8 or redemption authorized under paragraph (1), the 

9 Secretary of the Treasury shall report to each House 

10 of the Congress and to the Comptroller General of 

11 the United States regarding the expected sale or re12 demption. Upon receipt of such report, the Comp13 troller General shall review the extent of compliance 

14 with subsection (a) and paragraphs (1) and (2) of 

15 this subsection and shall issue such findings and rec16 ommendations to each House of the Congress as the 

17 Comptroller General considers necessary and appro18 priate. 

19 (c) PUBLIC DEBT OBLIGATION.—For purposes of 

20 this section, the term ‘‘public debt obligation’’ means any 

21 obligation subject to the public debt limit established 

22 under section 3101 of title 31, United States Code.

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