II 

113TH CONGRESS 

1ST SESSION S. 567 

To improve the retirement security of American families by strengthening 

Social Security. 

IN THE SENATE OF THE UNITED STATES 

MARCH 14, 2013 

Mr. HARKIN introduced the following bill; which was read twice and referred 

to the Committee on Finance 

A BILL 

To improve the retirement security of American families by 

strengthening 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 ‘‘Strengthening Social 

5 Security Act of 2013’’. 

6 SEC. 2. DETERMINATION OF TAXABLE WAGES AND SELF7 EMPLOYMENT INCOME ABOVE CONTRIBU8 TION AND BENEFIT BASE AFTER 2013. 

9 (a) DETERMINATION OF TAXABLE WAGES ABOVE

10 CONTRIBUTION AND BENEFIT BASE AFTER 2013.— 

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1 (1) AMENDMENTS TO THE INTERNAL REVENUE

2 CODE OF 1986.—Section 3121 of the Internal Rev3 enue Code of 1986 is amended— 

4 (A) in subsection (a)(1), by inserting ‘‘the 

5 applicable percentage (determined under sub6 section (c)(1)) of’’ before ‘‘that part of the re7 muneration’’; and 

8 (B) in subsection (c), by striking ‘‘(c) IN9 CLUDED AND EXCLUDED SERVICE.—For pur10 poses of this chapter, if’’ and inserting the fol11 lowing: 

12 ‘‘(c) SPECIAL RULES FOR WAGES AND EMPLOY13 MENT.— 

14 ‘‘(1) APPLICABLE PERCENTAGE OF REMUNERA15 TION IN DETERMINING TAXABLE WAGES.—For pur16 poses of subsection (a)(1), the applicable percentage 

17 for a calendar year shall be equal to— 

18 ‘‘(A) for 2014, 80 percent; 

19 ‘‘(B) for 2015 through 2017, the applica20 ble percentage under this paragraph for the 

21 previous year, decreased by 20 percentage 

22 points; and 

23 ‘‘(C) for 2018 and each year thereafter, 0 

24 percent. 

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1 ‘‘(2) INCLUDED AND EXCLUDED SERVICE.—For 

2 purposes of this chapter, if’’. 

3 (2) AMENDMENTS TO THE SOCIAL SECURITY

4 ACT.—Section 209 of the Social Security Act (42 

5 U.S.C. 409) is amended— 

6 (A) in subsection (a)(1)(I)— 

7 (i) by inserting ‘‘and before 2014’’ 

8 after ‘‘1974’’; and 

9 (ii) by inserting ‘‘and’’ after the semi10 colon; 

11 (B) in subsection (a)(1), by adding at the 

12 end the following new subparagraph: 

13 ‘‘(J) The applicable percentage (deter14 mined under subsection (l)) of that part of re15 muneration which, after remuneration (other 

16 than remuneration referred to in the succeeding 

17 subsections of this section) equal to the con18 tribution and benefit base (determined under 

19 section 230) with respect to employment has 

20 been paid to an individual during any calendar 

21 year after 2013 with respect to which such con22 tribution and benefit base is effective, is paid to 

23 such individual during such calendar year;’’; 

24 and 

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1 (C) by adding at the end the following new 

2 subsection: 

3 ‘‘(l) For purposes of subsection (a)(1)(J), the applica4 ble percentage for a calendar year shall be equal to— 

5 ‘‘(1) for 2014, 80 percent; 

6 ‘‘(2) for 2015 through 2017, the applicable per7 centage under this subsection for the previous year, 

8 decreased by 20 percentage points; and 

9 ‘‘(3) for 2018 and each year thereafter, 0 per10 cent.’’. 

11 (3) EFFECTIVE DATE.—The amendments made 

12 by this subsection shall apply with respect to remu13 neration paid in calendar years after 2013. 

14 (b) DETERMINATION OF TAXABLE SELF-EMPLOY15 MENT INCOME ABOVE CONTRIBUTION AND BENEFIT

16 BASE AFTER 2013.— 

17 (1) AMENDMENTS TO THE INTERNAL REVENUE

18 CODE OF 1986.—Section 1402 of the Internal Rev19 enue Code of 1986 is amended— 

20 (A) in subsection (b)(1), by striking ‘‘that 

21 part of the net earnings’’ and all that follows 

22 through ‘‘minus’’ and inserting the following: 

23 ‘‘an amount equal to the applicable percentage 

24 (as determined under subsection (d)(2)) of that 

25 part of the net earnings from self-employment 

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1 which is in excess of the difference (not to be 

2 less than zero) between (i) an amount equal to 

3 the contribution and benefit base (as deter4 mined under section 230 of the Social Security 

5 Act) which is effective for the calendar year in 

6 which such taxable year begins, and’’; and 

7 (B) in subsection (d)— 

8 (i) by striking ‘‘(d) EMPLOYEE AND

9 WAGES.—The term’’ and inserting the fol10 lowing: 

11 ‘‘(d) RULES AND DEFINITIONS.— 

12 ‘‘(1) EMPLOYEE AND WAGES.—The term’’; and 

13 (ii) by adding at the end the fol14 lowing: 

15 ‘‘(2) APPLICABLE PERCENTAGE OF NET EARN16 INGS FROM SELF-EMPLOYMENT IN DETERMINING

17 TAXABLE SELF-EMPLOYMENT INCOME.—For pur18 poses of subsection (b)(1), the applicable percentage 

19 for a taxable year beginning in any calendar year re20 ferred to in such paragraph shall be equal to— 

21 ‘‘(A) for 2014, 80 percent; 

22 ‘‘(B) for 2015 through 2017, the applica23 ble percentage under this paragraph for the 

24 previous year, decreased by 20 percentage 

25 points; and 

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1 ‘‘(C) for 2018 and each year thereafter, 0 

2 percent.’’. 

3 (2) AMENDMENTS TO THE SOCIAL SECURITY

4 ACT.—Section 211 of the Social Security Act (42 

5 U.S.C. 411) is amended— 

6 (A) in subsection (b)— 

7 (i) in paragraph (1)(I)— 

8 (I) by striking ‘‘or’’ after the 

9 semicolon; and 

10 (II) by inserting ‘‘and before 

11 2014’’ after ‘‘1974’’; 

12 (ii) by redesignating paragraph (2) as 

13 paragraph (3); and 

14 (iii) by inserting after paragraph (1) 

15 the following: 

16 ‘‘(2) For any taxable year beginning in any cal17 endar year after 2013, an amount equal to the appli18 cable percentage (as determined under subsection 

19 (l)) of that part of net earnings from self-employ20 ment which is in excess of the difference (not to be 

21 less than zero) between— 

22 ‘‘(A) an amount equal to the contribution 

23 and benefit base (as determined under section 

24 230) that is effective for such calendar year, 

25 and 

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1 ‘‘(B) the amount of the wages paid to such 

2 individual during such taxable year; or’’; and 

3 (B) by adding at the end the following: 

4 ‘‘(l) For purposes of subsection (b)(2), the applicable 

5 percentage for a taxable year beginning in any calendar 

6 year referred to in such paragraph shall be equal to— 

7 ‘‘(1) for 2014, 80 percent; 

8 ‘‘(2) for 2015 through 2017, the applicable per9 centage under this subsection for the previous year, 

10 decreased by 20 percentage points; and 

11 ‘‘(3) for 2018 and each year thereafter, 0 per12 cent.’’. 

13 (3) EFFECTIVE DATE.—The amendments made 

14 by this subsection shall apply with respect to taxable 

15 years beginning during or after calendar year 2014. 

16 SEC. 3. ADJUSTMENTS TO BEND POINTS IN DETERMINING 

17 PRIMARY INSURANCE AMOUNT AND INCLU18 SION OF SURPLUS EARNINGS FOR BENEFIT 

19 DETERMINATIONS. 

20 (a) INCLUSION OF SURPLUS AVERAGE INDEXED

21 MONTHLY EARNINGS IN DETERMINATION OF PRIMARY

22 INSURANCE AMOUNTS.— 

23 (1) IN GENERAL.—Section 215(a)(1)(A) of the 

24 Social Security Act (42 U.S.C. 415(a)(1)(A)) is 

25 amended— 

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1 (A) in clauses (i), (ii), and (iii), by insert2 ing ‘‘basic’’ before ‘‘average indexed monthly 

3 earnings’’ each place it appears; 

4 (B) in clause (ii), by striking ‘‘and’’ at the 

5 end; 

6 (C) in clause (iii), by adding ‘‘and’’ at the 

7 end; and 

8 (D) by inserting after clause (iii) the fol9 lowing new clause: 

10 ‘‘(iv) 5 percent of the individual’s surplus aver11 age indexed monthly earnings,’’. 

12 (2) BEND POINT ADJUSTMENT.—Section 

13 215(a)(1)(B) of such Act (42 U.S.C. 415(a)(1)(B)) 

14 is amended— 

15 (A) by redesignating clause (iii) as clause 

16 (iv); and 

17 (B) by inserting after clause (ii) the fol18 lowing new clause: 

19 ‘‘(iii) For individuals who initially become eligi20 ble for old-age or disability insurance benefits, or 

21 who die (before becoming eligible for such benefits) 

22 in any calendar year after 2018, the amount deter23 mined under clause (i) of this subparagraph for pur24 poses of subparagraph (A)(i) for such calendar year 

25 shall be increased by— 

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1 ‘‘(I) for calendar year 2019, 1 percent; 

2 ‘‘(II) for each of calendar years 2020 

3 through 2032, the percent determined under 

4 this clause for the preceding year increased by 

5 1 percentage point; and 

6 ‘‘(III) for calendar year 2033 and each 

7 year thereafter, 15 percent.’’. 

8 (b) BASIC AIME AND SURPLUS AIME.— 

9 (1) BASIC AIME.—Section 215(b)(1) of such 

10 Act (42 U.S.C. 415(b)(1)) is amended— 

11 (A) by inserting ‘‘basic’’ before ‘‘average’’; 

12 and 

13 (B) in subparagraph (A), by striking 

14 ‘‘paragraph (3)’’ and inserting ‘‘paragraph 

15 (3)(A)’’ and by inserting before the comma the 

16 following: ‘‘to the extent such total does not ex17 ceed the contribution and benefit base for the 

18 applicable year’’. 

19 (2) SURPLUS AIME.— 

20 (A) IN GENERAL.—Section 215(b)(1) of 

21 such Act (as amended by paragraph (1)) is 

22 amended— 

23 (i) by redesignating subparagraphs 

24 (A) and (B) as clauses (i) and (ii), respec25 tively; 

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1 (ii) by inserting ‘‘(A)’’ after ‘‘(b)(1)’’; 

2 and 

3 (iii) by adding at the end the fol4 lowing new subparagraph: 

5 ‘‘(B)(i) An individual’s surplus average indexed 

6 monthly earnings shall be equal to the quotient obtained 

7 by dividing— 

8 ‘‘(I) the total (after adjustment under para9 graph (3)(B)) of such individual’s surplus earnings 

10 (determined under clause (ii)) for such individual’s 

11 benefit computation years (determined under para12 graph (2)), by 

13 ‘‘(II) the number of months in those years. 

14 ‘‘(ii) For purposes of clause (i) and paragraph (3)(B), 

15 an individual’s surplus earnings for a benefit computation 

16 year are the total of such individual’s wages paid in and 

17 self-employment income credited to such benefit computa18 tion year, to the extent such total (before adjustment 

19 under paragraph (3)(B)) exceeds the contribution and 

20 benefit base for such year.’’. 

21 (B) CONFORMING AMENDMENT.—The 

22 heading for section 215(b) of such Act is 

23 amended by striking ‘‘Average Indexed Monthly 

24 Earnings’’ and inserting ‘‘Basic Average Inmstockstill on DSK4VPTVN1PROD with BILLS

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1 dexed Monthly Earnings; Surplus Average In2 dexed Monthly Earnings’’. 

3 (3) ADJUSTMENT OF SURPLUS EARNINGS FOR

4 PURPOSES OF DETERMINING SURPLUS AIME.—Sec5 tion 215(b)(3) of such Act (42 U.S.C. 415(b)(3)) is 

6 amended— 

7 (A) in subparagraph (A), by striking ‘‘sub8 paragraph (B)’’ and inserting ‘‘subparagraph 

9 (C)’’ and by inserting ‘‘and determination of 

10 basic average indexed monthly income’’ after 

11 ‘‘paragraph (2)’’; 

12 (B) by redesignating subparagraph (B) as 

13 subparagraph (C); and 

14 (C) by inserting after subparagraph (A) 

15 the following new subparagraph: 

16 ‘‘(B) For purposes of determining under paragraph 

17 (1)(B) an individual’s surplus average indexed monthly 

18 earnings, the individual’s surplus earnings (described in 

19 paragraph (2)(B)(ii)) for a benefit computation year shall 

20 be deemed to be equal to the product of— 

21 ‘‘(i) the individual’s surplus earnings for such 

22 year (as determined without regard to this subpara23 graph), and 

24 ‘‘(ii) the quotient described in subparagraph 

25 (A)(ii).’’. 

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1 (c) EFFECTIVE DATE.—The amendments made by 

2 this section shall apply with respect to individuals who ini3 tially become eligible (within the meaning of section 

4 215(a)(3)(B) of the Social Security Act) for old-age or dis5 ability insurance benefits under title II of the Social Secu6 rity Act, or who die (before becoming eligible for such ben7 efits), in any calendar year after 2018. 

8 SEC. 4. CONSUMER PRICE INDEX FOR ELDERLY CON9 SUMERS. 

10 (a) IN GENERAL.—The Bureau of Labor Statistics 

11 of the Department of Labor shall prepare and publish an 

12 index for each calendar month to be known as the ‘‘Con13 sumer Price Index for Elderly Consumers’’ that indicates 

14 changes over time in expenditures for consumption which 

15 are typical for individuals in the United States who have 

16 attained early retirement age (as defined under section 

17 216(l)(2) of the Social Security Act (42 U.S.C. 416(l)(2)) 

18 for purposes of an old-age, wife’s, or husband’s insurance 

19 benefit). 

20 (b) EFFECTIVE DATE.—Subsection (a) shall apply 

21 with respect to calendar months ending on or after June 

22 30 of the calendar year in which this Act is enacted. 

23 (c) AUTHORIZATION OF APPROPRIATIONS.—There 

24 are authorized to be appropriated such sums as are nec25 essary to carry out the provisions of this section. 

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1 SEC. 5. COMPUTATION OF COST-OF-LIVING INCREASES FOR 

2 SOCIAL SECURITY BENEFITS. 

3 (a) IN GENERAL.—Section 215(i) of the Social Secu4 rity Act (42 U.S.C. 415(i)) is amended— 

5 (1) in paragraph (1)(G), by inserting before the 

6 period the following: ‘‘, and, with respect to any 

7 monthly insurance benefit payable under this title, 

8 effective for adjustments under this subsection to 

9 the primary insurance amount on which such benefit 

10 is based (or to any such benefit under section 227 

11 or 228), the applicable Consumer Price Index shall 

12 be deemed to be the Consumer Price Index for El13 derly Consumers and such primary insurance 

14 amount shall be deemed adjusted under this sub15 section using such Index’’; and 

16 (2) in paragraph (4), by striking ‘‘and by sec17 tion 9001’’ and inserting ‘‘, by section 9001’’, and 

18 by inserting after ‘‘1986,’’ the following: ‘‘and by 

19 section 5(a) of the Strengthening Social Security Act 

20 of 2013,’’. 

21 (b) CONFORMING AMENDMENTS IN APPLICABLE

22 FORMER LAW.—Section 215(i)(1)(C) of the Social Secu23 rity Act, as in effect in December 1978 and applied in 

24 certain cases under the provisions of such Act in effect 

25 after December 1978, is amended by inserting before the 

26 period the following: ‘‘, and, with respect to any monthly 

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1 insurance benefit payable under this title, effective for ad2 justments under this subsection to the primary insurance 

3 amount on which such benefit is based (or to any such 

4 benefit under section 227 or 228), the applicable Con5 sumer Price Index shall be deemed to be the Consumer 

6 Price Index for Elderly Consumers and such primary in7 surance amount shall be deemed adjusted under this sub8 section using such Index’’. 

9 (c) EFFECTIVE DATE.—The amendments made by 

10 this section shall apply to determinations made by the 

11 Commissioner of Social Security under section 215(i)(2) 

12 of the Social Security Act (42 U.S.C. 415(i)(2)) with re13 spect to cost-of-living computation quarters ending on or 

14 after September 30, 2014. 

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