I

107TH CONGRESS

1ST SESSION H. R. 853

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

MARCH 1, 2001

Mr. WEXLER (for himself, Mr. BLAGOJEVICH, Mr. EVANS, Mr. TRAFICANT,

Mr. FILNER, Mrs. THURMAN, Ms. VELA ́QUEZ, Ms. DELAURO, Mr.

PALLONE, Mr. HILLIARD, Mr. PAYNE, and Mr. SISISKY) 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

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

24 ‘‘(B) For purposes of subparagraph (A)(ii), the term

25 ‘applicable transitional increase amount’ means, in the
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1 case of any individual, the product derived by

2 multiplying—

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

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

5 year in which the individual becomes eligible for old6 age insurance benefits, as determined by the fol7 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.

8 ‘‘(C) For purposes of subparagraph (B), the term ‘ex9 cess under former law’ means, in the case of any indi10 vidual, the excess of—

11 ‘‘(i) the applicable former law primary insur12 ance amount, over

13 ‘‘(ii) the amount which would be such individ14 ual’s primary insurance amount if computed or re15 computed under this section without regard to this

16 paragraph and paragraphs (4), (5), and (6).

17 ‘‘(D) For purposes of subparagraph (C)(i), the term

18 ‘applicable former law primary insurance amount’ means,
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1 in the case of any individual, the amount which would be

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

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

4 paragraph (4)(B)(i)) under section 215(a) as in ef5 fect in December 1978, or

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

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

8 (as applicable) and modified as provided by subparagraph

9 (E).

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

11 individual’s primary insurance amount as provided in sub12 paragraph (D)—

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

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

15 1978 shall apply, except that section 215(b)(2)(C)

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

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

18 only calendar years in the period after 1950 (or

19 1936 if applicable) and ending with the calendar

20 year in which such individual attains age 61, plus

21 the 3 calendar years after such period for which the

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

23 income is the largest; and

24 ‘‘(iii) subdivision (I) in the last sentence of

25 paragraph (4) shall be applied as though the words
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1 ‘without regard to any increases in that table’ in

2 such subdivision read ‘including any increases in

3 that table’.

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

5 individual only if such application results in a primary in6 surance amount for such individual that is greater than

7 it would be if computed or recomputed under paragraph

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

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

10 individual subject to any timely election to receive lump

11 sum payments under this subparagraph.

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

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

14 paragraph to the computation of the primary insurance

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

16 may be filed with the Commissioner of Social Security in

17 such form and manner as shall be prescribed in regula18 tions of the Commissioner. Any such election may be filed

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

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

21 by any other beneficiary entitled to benefits under section

22 202 on the basis of such individual’s wages and self-em23 ployment income. Any such election filed after December

24 31, 2001, shall be null and void and of no effect.
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1 ‘‘(iii) Upon receipt by the Commissioner of a timely

2 election filed by the individual described in paragraph

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

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

5 such election to the Secretary of the Treasury, and

6 the Secretary of the Treasury, after receipt of such

7 certification, shall pay such individual, from

8 amounts in the Federal Old-Age and Survivors In9 surance Trust Fund, a total amount equal to

10 $5,000, in 4 annual lump sum installments of

11 $1,250, the first of which shall be made during fis12 cal year 2002 not later than July 1, 2002, and

13 ‘‘(II) subparagraph (A) shall not apply in deter14 mining such individual’s primary insurance amount.

15 ‘‘(iv) Upon receipt by the Commissioner as of Decem16 ber 31, 2001, of a timely election filed in accordance with

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

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

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

20 such deceased individual has filed no timely election in ac21 cordance with clause (ii)—

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

23 such elections received as of such date to the Sec24 retary of the Treasury, and the Secretary of the

25 Treasury, after receipt of such certification, shall
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1 pay each beneficiary filing such a timely election,

2 from amounts in the Federal Old-Age and Survivors

3 Insurance Trust Fund, a total amount equal to

4 $5,000 (or, in the case of 2 or more such bene5 ficiaries, such amount distributed evenly among such

6 beneficiaries), in 4 equal annual lump sum install7 ments, the first of which shall be made during fiscal

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

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

10 amount of such beneficiary’s benefits, subparagraph

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

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

13 (b) EFFECTIVE DATE AND RELATED RULES.—

14 (1) APPLICABILITY OF AMENDMENTS.—

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

16 paragraph (2), the amendments made by this

17 Act shall be effective as though they had been

18 included or reflected in section 201 of the So19 cial Security Amendments of 1977.

20 (B) APPLICABILITY.—No monthly benefit

21 or primary insurance amount under title II of

22 the Social Security Act shall be increased by

23 reason of such amendments for any month be24 fore July 2002.
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1 (2) RECOMPUTATION TO REFLECT BENEFIT IN2 CREASES.—In any case in which an individual is en3 titled to monthly insurance benefits under title II of

4 the Social Security Act for June 2002, if such bene5 fits are based on a primary insurance amount

6 computed—

7 (A) under section 215 of such Act as in ef8 fect (by reason of the Social Security Amend9 ments of 1977) after December 1978, or

10 (B) under section 215 of such Act as in ef11 fect prior to January 1979 by reason of sub12 section (a)(4)(B) of such section (as amended

13 by the Social Security Amendments of 1977),

14 the Commissioner of Social Security (notwith15 standing section 215(f)(1) of the Social Security

16 Act) shall recompute such primary insurance

17 amount so as to take into account the amendments

18 made by this Act.

19 SEC. 3. OFFSET PROVIDED BY PROJECTED FEDERAL BUDG20 ET SURPLUSES.

21 Any amount of additional spending resulting from the

22 amendments made by this Act shall not be counted as di23 rect spending for purposes of the budgetary limits pro24 vided in the Congressional Budget Act of 1974 and the
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1 Balanced Budget and Emergency Deficit Control Act of

2 1985.

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