I

107TH CONGRESS

1ST SESSION H. R. 97

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 totalling $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, and for other purposes.

IN THE HOUSE OF REPRESENTATIVES

JANUARY 3, 2001

Mr. HALL of Texas (for himself, Mr. CONDIT, Ms. DELAURO, Mr. BARCIA,

Mr. GREEN of Wisconsin, Mr. ENGEL, Mr. HORN, Mr. WEINER, Mr.

NEY, Mr. QUINN, Mr. HILLIARD, Mr. ADERHOLT, Mr. CRAMER, Ms.

BERKLEY, Mr. SMITH of Washington, Mr. BALDACCI, Mr. GREEN of

Texas, Mr. WEXLER, Mr. FILNER, Mr. TAYLOR of North Carolina, Mr.

FROST, Mr. RILEY, Mr. LAMPSON, and Mr. RYAN of Wisconsin) introduced the following bill; which was referred to the Committee on Ways

and Means, and in addition to the Committee on the Budget, for a period

to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee

concerned

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 totalling

$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
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Social Security Amendments of 1977, and for other purposes.

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 ‘‘Notch Fairness Act

5 of 2001’’.

6 SEC. 2. NEW GUARANTEED MINIMUM PRIMARY INSURANCE

7 AMOUNT WHERE ELIGIBILITY ARISES DUR8 ING TRANSITIONAL PERIOD.

9 (a) IN GENERAL.—Section 215(a) of the Social Secu10 rity Act is amended—

11 (1) in paragraph (4)(B), by inserting ‘‘(with or

12 without the application of paragraph (8))’’ after

13 ‘‘would be made’’, and by striking ‘‘1984’’ in clause

14 (i) and inserting ‘‘1989’’; and

15 (2) by adding at the end the following:

16 ‘‘(8)(A) In the case of an individual described in

17 paragraph (4)(B) (subject to subparagraphs (F) and (G)

18 of this paragraph), the amount of the individual’s primary

19 insurance amount as computed or recomputed under para20 graph (1) shall be deemed equal to the sum of—

21 ‘‘(i) such amount, and

22 ‘‘(ii) the applicable transitional increase amount

23 (if any).
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1 ‘‘(B) For purposes of subparagraph (A)(ii), the term

2 ‘applicable transitional increase amount’ means, in the

3 case of any individual, the product derived by

4 multiplying—

5 ‘‘(i) the excess under former law, by

6 ‘‘(ii) the applicable percentage in relation to the

7 year in which the individual becomes eligible for old8 age insurance benefits, as determined by the fol9 lowing 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.

10 ‘‘(C) For purposes of subparagraph (B), the term ‘ex11 cess under former law’ means, in the case of any indi12 vidual, the excess of—

13 ‘‘(i) the applicable former law primary insur14 ance amount, over

15 ‘‘(ii) the amount which would be such individ16 ual’s primary insurance amount if computed or re17 computed under this section without regard to this

18 paragraph and paragraphs (4), (5), and (6).
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1 ‘‘(D) For purposes of subparagraph (C)(i), the term

2 ‘applicable former law primary insurance amount’ means,

3 in the case of any individual, the amount which would be

4 such individual’s primary insurance amount if it were—

5 ‘‘(i) computed or recomputed (pursuant to

6 paragraph (4)(B)(i)) under section 215(a) as in ef7 fect in December 1978, or

8 ‘‘(ii) computed or recomputed (pursuant to

9 paragraph (4)(B)(ii)) as provided by subsection (d),

10 (as applicable) and modified as provided by subparagraph

11 (E).

12 ‘‘(E) In determining the amount which would be an

13 individual’s primary insurance amount as provided in sub14 paragraph (D)—

15 ‘‘(i) subsection (b)(4) shall not apply;

16 ‘‘(ii) section 215(b) as in effect in December

17 1978 shall apply, except that section 215(b)(2)(C)

18 (as then in effect) shall be deemed to provide that

19 an individual’s ‘computation base years’ may include

20 only calendar years in the period after 1950 (or

21 1936 if applicable) and ending with the calendar

22 year in which such individual attains age 61, plus

23 the 3 calendar years after such period for which the

24 total of such individual’s wages and self-employment

25 income is the largest; and
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1 ‘‘(iii) subdivision (I) in the last sentence of

2 paragraph (4) shall be applied as though the words

3 ‘without regard to any increases in that table’ in

4 such subdivision read ‘including any increases in

5 that table’.

6 ‘‘(F) This paragraph shall apply in the case of any

7 individual only if such application results in a primary in8 surance amount for such individual that is greater than

9 it would be if computed or recomputed under paragraph

10 (4)(B) without regard to this paragraph.

11 ‘‘(G)(i) This paragraph shall apply in the case of any

12 individual subject to any timely election to receive lump

13 sum payments under this subparagraph.

14 ‘‘(ii) A written election to receive lump sum payments

15 under this subparagraph, in lieu of the application of this

16 paragraph to the computation of the primary insurance

17 amount of an individual described in paragraph (4)(B),

18 may be filed with the Commissioner of Social Security in

19 such form and manner as shall be prescribed in regula20 tions of the Commissioner. Any such election may be filed

21 by such individual or, in the event of such individual’s

22 death before any such election is filed by such individual,

23 by any other beneficiary entitled to benefits under section

24 202 on the basis of such individual’s wages and self-em-
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1 ployment income. Any such election filed after December

2 31, 2001, shall be null and void and of no effect.

3 ‘‘(iii) Upon receipt by the Commissioner of a timely

4 election filed by the individual described in paragraph

5 (4)(B) in accordance with clause (ii)—

6 ‘‘(I) the Commissioner shall certify receipt of

7 such election to the Secretary of the Treasury, and

8 the Secretary of the Treasury, after receipt of such

9 certification, shall pay such individual, from

10 amounts in the Federal Old-Age and Survivors In11 surance Trust Fund, a total amount equal to

12 $5,000, in 4 annual lump sum installments of

13 $1,250, the first of which shall be made during fis14 cal year 2002 not later than July 1, 2002, and

15 ‘‘(II) subparagraph (A) shall not apply in deter16 mining such individual’s primary insurance amount.

17 ‘‘(iv) Upon receipt by the Commissioner as of Decem18 ber 31, 2001, of a timely election filed in accordance with

19 clause (ii) by at least one beneficiary entitled to benefits

20 on the basis of the wages and self-employment income of

21 a deceased individual described in paragraph (4)(B), if

22 such deceased individual has filed no timely election in ac23 cordance with clause (ii)—

24 ‘‘(I) the Commissioner shall certify receipt of all

25 such elections received as of such date to the Sec-
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1 retary of the Treasury, and the Secretary of the

2 Treasury, after receipt of such certification, shall

3 pay each beneficiary filing such a timely election,

4 from amounts in the Federal Old-Age and Survivors

5 Insurance Trust Fund, a total amount equal to

6 $5,000 (or, in the case of 2 or more such bene7 ficiaries, such amount distributed evenly among such

8 beneficiaries), in 4 equal annual lump sum install9 ments, the first of which shall be made during fiscal

10 year 2002 not later than July 1, 2002, and

11 ‘‘(II) solely for purposes of determining the

12 amount of such beneficiary’s benefits, subparagraph

13 (A) shall be deemed not to apply in determining the

14 deceased individual’s primary insurance amount.’’.

15 (b) EFFECTIVE DATE AND RELATED RULES.—

16 (1) APPLICABILITY OF AMENDMENTS.—

17 (A) IN GENERAL.—Except as provided in

18 paragraph (2), the amendments made by this

19 Act shall be effective as though they had been

20 included or reflected in section 201 of the So21 cial Security Amendments of 1977.

22 (B) APPLICABILITY.—No monthly benefit

23 or primary insurance amount under title II of

24 the Social Security Act shall be increased by

25 reason of such amendments for any month be-
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1 fore July 2002. The amendments made to this

2 section shall apply with respect to benefits pay3 able in months in any fiscal year after fiscal

4 year 2002 only if the corresponding decrease in

5 adjusted discretionary spending limits for budg6 et authority and outlays under section 3 of this

7 Act for fiscal years prior to fiscal year 2003 is

8 extended by Federal law to such fiscal year

9 after fiscal year 2002.

10 (2) RECOMPUTATION TO REFLECT BENEFIT IN11 CREASES.—In any case in which an individual is en12 titled to monthly insurance benefits under title II of

13 the Social Security Act for June 2002, if such bene14 fits are based on a primary insurance amount

15 computed—

16 (A) under section 215 of such Act as in ef17 fect (by reason of the Social Security Amend18 ments of 1977) after December 1978, or

19 (B) under section 215 of such Act as in ef20 fect prior to January 1979 by reason of sub21 section (a)(4)(B) of such section (as amended

22 by the Social Security Amendments of 1977),

23 the Commissioner of Social Security (notwith24 standing section 215(f)(1) of the Social Security

25 Act) shall recompute such primary insurance
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1 amount so as to take into account the amendments

2 made by this Act.

3 SEC. 3. OFFSET THROUGH REDUCTIONS IN DISCRE4 TIONARY SPENDING LIMITS.

5 Whenever the Director of the Office of Management

6 and Budget estimates this legislation under section

7 252(d)(2) of the Balanced Budget and Emergency Deficit

8 Control Act of 1985, the Director shall decrease the ad9 justed discretionary spending limits for budget authority

10 and outlays for fiscal year 2002 set forth in section

11 251(c)(6)(A) of such Act by the increase in direct spend12 ing estimated to result from enactment of this legislation

13 for that fiscal year. For purposes of section 252(b) of such

14 Act, an amount equal to that decrease in the discretionary

15 spending limit for outlays for such fiscal year shall be

16 treated as direct spending legislation decreasing the deficit

17 for that fiscal year.

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