I 

112TH CONGRESS 

1ST SESSION H. R. 539 

To amend title II of the Social Security Act and the Internal Revenue 

Code of 1986 to make improvements in the old-age, survivors, and 

disability insurance program, to provide for cash relief for years for 

which annual COLAs do not take effect under certain cash benefit 

programs, and to provide for Social Security benefit protection. 

IN THE HOUSE OF REPRESENTATIVES 

FEBRUARY 8, 2011 

Mr. DEUTCH (for himself, Mr. FRANK of Massachusetts, Mr. HASTINGS of 

Florida, Mr. CARNAHAN, Ms. PINGREE of Maine, and Mr. CRITZ) introduced the following bill; which was referred to the Committee on Ways 

and Means, and in addition to the Committees on Education and the 

Workforce, Rules, Transportation and Infrastructure, and Veterans’ Affairs, 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 and the Internal 

Revenue Code of 1986 to make improvements in the 

old-age, survivors, and disability insurance program, to 

provide for cash relief for years for which annual COLAs 

do not take effect under certain cash benefit programs, 

and to provide for Social Security benefit protection. 

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


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1 SECTION 1. SHORT TITLE AND TABLE OF CONTENTS. 

2 (a) SHORT TITLE.—This Act may cited as the ‘‘Pre3 serving Our Promise to Seniors Act’’. 

4 (b) TABLE OF CONTENTS.—The table of contents of 

5 this Act is as follows: 

Sec. 1. Short title and table of contents. 

TITLE I—COST-OF-LIVING INCREASES 

Sec. 101. Consumer price index for elderly consumers. 

Sec. 102. Computation of cost-of-living increases. 

TITLE II—GUARANTEED SUPPLEMENTAL PAYMENT 

Sec. 201. Relief payments to recipients of social security, supplemental security 

income, railroad retirement benefits, and veterans disability 

compensation or pension benefits. 

TITLE III—CONTRIBUTION AND BENEFIT FAIRNESS 

Sec. 301. Determination of wages and self-employment income above contribution and benefit base after 2011. 

Sec. 302. Inclusion of surplus earnings in social security benefit formula. 

TITLE IV—SOCIAL SECURITY BENEFIT PROTECTION 

Sec. 401. Point of order against privatization of Social Security or reductions 

in Social Security benefits. 

6 TITLE I—COST-OF-LIVING 

7 INCREASES 

8 SEC. 101. 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 are 

16 62 years of age or older. 


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

2 with respect to calendar months ending on or after July 

3 31 of the calendar year following the calendar year in 

4 which this Act is enacted. 

5 (c) AUTHORIZATION OF APPROPRIATIONS.—There 

6 are authorized to be appropriated such sums as are nec7 essary to carry out the provisions of this section. 

8 SEC. 102. COMPUTATION OF COST-OF-LIVING INCREASES. 

9 (a) IN GENERAL.—Section 215(i) of the Social Secu10 rity Act (42 U.S.C. 415(i)) is amended— 

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

12 period the following: ‘‘, and, solely with respect to 

13 any monthly insurance benefit payable under this 

14 title to an individual who has attained age 62, effec15 tive for adjustments under this subsection to the pri16 mary insurance amount on which such benefit is 

17 based (or to any such benefit under section 227 or 

18 228) occurring after such individual attains such 

19 age, the applicable Consumer Price Index shall be 

20 deemed to be the Consumer Price Index for Elderly 

21 Consumers and such primary insurance amount 

22 shall be deemed adjusted under this subsection using 

23 such Index’’; and 

24 (2) in paragraph (4), by striking ‘‘and by sec25 tion 9001’’ and inserting ‘‘, by section 9001’’, and 


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

2 section 102 of the Preserving Our Promise to Sen3 iors Act,’’. 

4 (b) CONFORMING AMENDMENTS IN APPLICABLE

5 FORMER LAW.—Section 215(i)(1)(C) of such Act, as in 

6 effect in December 1978 and applied in certain cases 

7 under the provisions of such Act in effect after December 

8 1978, is amended by inserting before the period the fol9 lowing: ‘‘, and, solely with respect to any monthly insur10 ance benefit payable under this title to an individual who 

11 has attained age 62, effective for adjustments under this 

12 subsection to the primary insurance amount on which such 

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

14 or 228) occurring after such individual attains such age, 

15 the applicable Consumer Price Index shall be deemed to 

16 be the Consumer Price Index for Elderly Consumers and 

17 such primary insurance amount shall be deemed adjusted 

18 under this subsection using such Index’’. 

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

20 subsection (a) shall apply to determinations made with re21 spect to cost-of-living computation quarters (as defined in 

22 section 215(i)(1)(B) of the Social Security Act (42 U.S.C. 

23 415(i)(1)(B))) ending on or after September 30 of the sec24 ond calendar year following the calendar year in which this 

25 Act is enacted. 


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1 TITLE II—GUARANTEED 

2 SUPPLEMENTAL PAYMENT 

3 SEC. 201. RELIEF PAYMENTS TO RECIPIENTS OF SOCIAL SE4 CURITY, SUPPLEMENTAL SECURITY INCOME, 

5 RAILROAD RETIREMENT BENEFITS, AND VET6 ERANS DISABILITY COMPENSATION OR PEN7 SION BENEFITS. 

8 (a) AUTHORITY TO MAKE PAYMENTS.— 

9 (1) ELIGIBILITY.— 

10 (A) IN GENERAL.—The Secretary of the 

11 Treasury shall disburse a cash payment equal 

12 to $250 (or such greater amount as may take 

13 effect under paragraph (2)), for each non14 COLA year of a program providing benefit pay15 ments described in clause (i), (ii), or (iii) of 

16 subparagraph (C) or in subparagraph (D), to 

17 each individual who, for any month during such 

18 year, is entitled to such a benefit payment 

19 under such program. 

20 (B) NON-COLA YEAR.—For purposes of 

21 this section, the term ‘‘non-COLA year’’ means, 

22 in connection with a program referred to in 

23 subparagraph (A), a 12-month period, ending 

24 with or during any calendar year after 2009, 

25 for which— 


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1 (i) a cost-of-living adjustment is gen2 erally provided under such program in re3 lation to an index; and 

4 (ii) such an adjustment does not take 

5 effect by reason of the performance of such 

6 index. 

7 (C) BENEFIT PAYMENT DESCRIBED.—For 

8 purposes of subparagraph (A): 

9 (i) TITLE II BENEFIT.—A benefit pay10 ment described in this clause is a monthly 

11 insurance benefit payable (without regard 

12 to sections 202(j)(1) and 223(b) of the So13 cial Security Act (42 U.S.C. 402(j)(1), 

14 423(b)) under— 

15 (I) section 202(a) of such Act 

16 (42 U.S.C. 402(a)); 

17 (II) section 202(b) of such Act 

18 (42 U.S.C. 402(b)); 

19 (III) section 202(c) of such Act 

20 (42 U.S.C. 402(c)); 

21 (IV) section 202(d)(1)(B)(ii) of 

22 such Act (42 U.S.C. 

23 402(d)(1)(B)(ii)); 

24 (V) section 202(e) of such Act 

25 (42 U.S.C. 402(e)); 


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1 (VI) section 202(f) of such Act 

2 (42 U.S.C. 402(f)); 

3 (VII) section 202(g) of such Act 

4 (42 U.S.C. 402(g)); 

5 (VIII) section 202(h) of such Act 

6 (42 U.S.C. 402(h)); 

7 (IX) section 223(a) of such Act 

8 (42 U.S.C. 423(a)); 

9 (X) section 227 of such Act (42 

10 U.S.C. 427); or 

11 (XI) section 228 of such Act (42 

12 U.S.C. 428). 

13 (ii) RAILROAD RETIREMENT BEN14 EFIT.—A benefit payment described in this 

15 clause is a monthly annuity or pension 

16 payment payable (without regard to section 

17 5(a)(ii) of the Railroad Retirement Act of 

18 1974 (45 U.S.C. 231d(a)(ii))) under— 

19 (I) section 2(a)(1) of such Act 

20 (45 U.S.C. 231a(a)(1)); 

21 (II) section 2(c) of such Act (45 

22 U.S.C. 231a(c)); 

23 (III) section 2(d)(1)(i) of such 

24 Act (45 U.S.C. 231a(d)(1)(i)); 


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1 (IV) section 2(d)(1)(ii) of such 

2 Act (45 U.S.C. 231a(d)(1)(ii)); 

3 (V) section 2(d)(1)(iii)(C) of such 

4 Act to an adult disabled child (45 

5 U.S.C. 231a(d)(1)(iii)(C)); 

6 (VI) section 2(d)(1)(iv) of such 

7 Act (45 U.S.C. 231a(d)(1)(iv)); 

8 (VII) section 2(d)(1)(v) of such 

9 Act (45 U.S.C. 231a(d)(1)(v)); or 

10 (VIII) section 7(b)(2) of such Act 

11 (45 U.S.C. 231f(b)(2)) with respect to 

12 any of the benefit payments described 

13 in clause (i) of this subparagraph. 

14 (iii) VETERANS BENEFIT.—A benefit 

15 payment described in this clause is a com16 pensation or pension payment payable 

17 under— 

18 (I) section 1110, 1117, 1121, 

19 1131, 1141, or 1151 of title 38, 

20 United States Code; 

21 (II) section 1310, 1312, 1313, 

22 1315, 1316, or 1318 of title 38, 

23 United States Code; 


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1 (III) section 1513, 1521, 1533, 

2 1536, 1537, 1541, 1542, or 1562 of 

3 title 38, United States Code; or 

4 (IV) section 1805, 1815, or 1821 

5 of title 38, United States Code, 

6 to a veteran, surviving spouse, child, or 

7 parent as described in paragraph (2), (3), 

8 (4)(A)(ii), or (5) of section 101, title 38, 

9 United States Code, who received that ben10 efit during any month within the 3 month 

11 period ending with the month which ends 

12 prior to the month that includes the date 

13 of the enactment of this Act. 

14 (D) SSI CASH BENEFIT DESCRIBED.—A 

15 SSI cash benefit described in this subparagraph 

16 is a cash benefit payable under section 1611 

17 (other than under subsection (e)(1)(B) of such 

18 section) or 1619(a) of the Social Security Act 

19 (42 U.S.C. 1382, 1382h). 

20 (2) COST-OF-LIVING ADJUSTMENT TO PAY21 MENT.— 

22 (A) IN GENERAL.—Effective for each 12- 

23 month period referred to in paragraph (1)(B)(i) 

24 in connection with a program referred to in 

25 paragraph (1)(A) (irrespective of whether such 


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1 period is a non-COLA year) ending with or dur2 ing a calendar year after 2011, the dollar 

3 amount determined under this paragraph shall 

4 be substituted for the dollar amount specified in 

5 paragraph (1)(A). The dollar amount shall be 

6 determined by multiplying the dollar amount 

7 specified in paragraph (1)(A) by the quotient 

8 obtained by dividing— 

9 (i) the Consumer Price Index for El10 derly Consumers (published by the Bureau 

11 of Labor Statistics of the Department of 

12 Labor) for the calendar quarter ending 

13 with September preceding the 12-month 

14 period for which the determination is 

15 made, by 

16 (ii) such Index for the calendar quar17 ter ending with September 2010. 

18 (B) DETERMINATION OF QUARTERLY

19 INDEX.—For purposes of subparagraph (A), the 

20 Consumer Price Index for Elderly Consumers 

21 for a calendar quarter shall be the arithmetical 

22 mean of such index for the 3 months in such 

23 quarter. 

24 (3) REQUIREMENT.—A payment shall be made 

25 under paragraph (1) only to individuals who reside 


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1 in 1 of the 50 States, the District of Columbia, 

2 Puerto Rico, Guam, the United States Virgin Is3 lands, American Samoa, or the Northern Mariana 

4 Islands. For purposes of the preceding sentence, the 

5 determination of the individual’s residence shall be 

6 based on the current address of record under a pro7 gram specified in paragraph (1). 

8 (4) NO DOUBLE PAYMENTS.—An individual 

9 shall be paid only 1 payment under this section, re10 gardless of whether the individual is entitled to, or 

11 eligible for, more than 1 benefit or cash payment de12 scribed in paragraph (1). 

13 (5) LIMITATION.—A payment under this section 

14 shall not be made— 

15 (A) in the case of an individual entitled to 

16 a benefit specified in paragraph (1)(C)(i) or 

17 paragraph (1)(C)(ii)(VIII) if, for the most re18 cent month of such individual’s entitlement in 

19 the 3-month period described in paragraph (1), 

20 such individual’s benefit under such paragraph 

21 was not payable by reason of subsection (x) or 

22 (y) of section 202 of the Social Security Act (42 

23 U.S.C. 402) or section 1129A of such Act (42 

24 U.S.C. 1320a–8a); 


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1 (B) in the case of an individual entitled to 

2 a benefit specified in paragraph (1)(C)(iii) if, 

3 for the most recent month of such individual’s 

4 entitlement in the 3 month period described in 

5 paragraph (1), such individual’s benefit under 

6 such paragraph was not payable, or was re7 duced, by reason of section 1505, 5313, or 

8 5313B of title 38, United States Code; 

9 (C) in the case of an individual entitled to 

10 a benefit specified in paragraph (1)(D) if, for 

11 such most recent month, such individual’s ben12 efit under such paragraph was not payable by 

13 reason of subsection (e)(1)(A) or (e)(4) of sec14 tion 1611 (42 U.S.C. 1382) or section 1129A 

15 of such Act (42 U.S.C. 1320a–8a); or 

16 (D) in the case of any individual whose 

17 date of death occurs before the date on which 

18 the individual is certified under subsection (b) 

19 to receive a payment under this section. 

20 (6) TIMING AND MANNER OF PAYMENTS.—The 

21 Secretary of the Treasury shall commence disbursing 

22 payments under this section with respect to a non23 COLA year at the earliest practicable date but in no 

24 event later than 120 days after the later of the date 

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1 COLA year. The Secretary of the Treasury may dis2 burse any payment electronically to an individual in 

3 such manner as if such payment was a benefit pay4 ment or cash benefit to such individual under the 

5 applicable program described in subparagraph (C) or 

6 (D) of paragraph (1). 

7 (b) IDENTIFICATION OF RECIPIENTS.—The Commis8 sioner of Social Security, the Railroad Retirement Board, 

9 and the Secretary of Veterans Affairs shall certify the in10 dividuals entitled to receive payments under this section 

11 and provide the Secretary of the Treasury with the infor12 mation needed to disburse such payments. A certification 

13 of an individual shall be unaffected by any subsequent de14 termination or redetermination of the individual’s entitle15 ment to, or eligibility for, a benefit specified in subpara16 graph (C) or (D) of subsection (a)(1). 

17 (c) TREATMENT OF PAYMENTS.— 

18 (1) PAYMENT TO BE DISREGARDED FOR PUR19 POSES OF ALL FEDERAL AND FEDERALLY ASSISTED

20 PROGRAMS.—A payment under subsection (a) shall 

21 not be regarded as income and shall not be regarded 

22 as a resource for the month of receipt and the fol23 lowing 9 months, for purposes of determining the 

24 eligibility of the recipient (or the recipient’s spouse 

25 or family) for benefits or assistance, or the amount 


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1 or extent of benefits or assistance, under any Fed2 eral program or under any State or local program fi3 nanced in whole or in part with Federal funds. 

4 (2) PAYMENT NOT CONSIDERED INCOME FOR

5 PURPOSES OF TAXATION.—A payment under sub6 section (a) shall not be considered as gross income 

7 for purposes of the Internal Revenue Code of 1986. 

8 (3) PAYMENTS PROTECTED FROM ASSIGN9 MENT.—The provisions of sections 207 and 

10 1631(d)(1) of the Social Security Act (42 U.S.C. 

11 407, 1383(d)(1)), section 14(a) of the Railroad Re12 tirement Act of 1974 (45 U.S.C. 231m(a)), and sec13 tion 5301 of title 38, United States Code, shall 

14 apply to any payment made under subsection (a) as 

15 if such payment was a benefit payment or cash ben16 efit to such individual under the applicable program 

17 described in subparagraph (C) or (D) of subsection 

18 (a)(1). 

19 (4) PAYMENTS SUBJECT TO OFFSET.—Notwith20 standing paragraph (3), for purposes of section 

21 3716 of title 31, United States Code, any payment 

22 made under this section shall not be considered a 

23 benefit payment or cash benefit made under the ap24 plicable program described in subparagraph (C) or 


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1 (D) of subsection (a)(1) and all amounts paid shall 

2 be subject to offset to collect delinquent debts. 

3 (d) PAYMENT TO REPRESENTATIVE PAYEES AND FI4 DUCIARIES.— 

5 (1) IN GENERAL.—In any case in which an in6 dividual who is entitled to a payment under sub7 section (a) and whose benefit payment or cash ben8 efit described in paragraph (1) of that subsection is 

9 paid to a representative payee or fiduciary, the pay10 ment under subsection (a) shall be made to the indi11 vidual’s representative payee or fiduciary and the en12 tire payment shall be used only for the benefit of the 

13 individual who is entitled to the payment. 

14 (2) APPLICABILITY.— 

15 (A) PAYMENT ON THE BASIS OF A TITLE

16 II OR SSI BENEFIT.—Section 1129(a)(3) of the 

17 Social Security Act (42 U.S.C. 1320a–8(a)(3)) 

18 shall apply to any payment made on the basis 

19 of an entitlement to a benefit specified in para20 graph (1)(C)(i) or (1)(D) of subsection (a) in 

21 the same manner as such section applies to a 

22 payment under title II or XVI of such Act. 

23 (B) PAYMENT ON THE BASIS OF A RAIL24 ROAD RETIREMENT BENEFIT.—Section 13 of 

25 the Railroad Retirement Act (45 U.S.C. 231l) 


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1 shall apply to any payment made on the basis 

2 of an entitlement to a benefit specified in para3 graph (1)(C)(ii) of subsection (a) in the same 

4 manner as such section applies to a payment 

5 under such Act. 

6 (C) PAYMENT ON THE BASIS OF A VET7 ERANS BENEFIT.—Sections 5502, 6106, and 

8 6108 of title 38, United States Code, shall 

9 apply to any payment made on the basis of an 

10 entitlement to a benefit specified in paragraph 

11 (1)(C)(iii) of subsection (a) in the same manner 

12 as those sections apply to a payment under that 

13 title. 

14 (e) APPROPRIATION.—Out of any sums in the Treas15 ury of the United States not otherwise appropriated, the 

16 following sums are appropriated for each fiscal year begin17 ning on or after October 1, 2011, to remain available until 

18 expended, to carry out this section: 

19 (1) For the Secretary of the Treasury, such 

20 sums as may be necessary for administrative costs 

21 incurred in carrying out this section. 

22 (2) For the Commissioner of Social Security— 

23 (A) such sums as may be necessary for 

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1 missioner of Social Security as entitled to re2 ceive a payment under this section; and 

3 (B) such sums as may be certified by the 

4 Commissioner to the Secretary of the Treasury 

5 for the Social Security Administration’s Limita6 tion on Administrative Expenses as necessary 

7 for administrative costs incurred in carrying out 

8 this section. 

9 (3) For the Railroad Retirement Board— 

10 (A) such sums as may be necessary for 

11 payments to individuals certified by the Rail12 road Retirement Board as entitled to receive a 

13 payment under this section; and 

14 (B) such sums as may be certified by the 

15 Board to the Secretary of the Treasury for the 

16 Railroad Retirement Board’s Limitation on Ad17 ministration as necessary for administrative 

18 costs incurred in carrying out this section. 

19 (4)(A) For the Secretary of Veterans Affairs— 

20 (i) such sums as may be necessary for 

21 the Compensation and Pensions account, 

22 for payments to individuals certified by the 

23 Secretary of Veterans Affairs as entitled to 

24 receive a payment under this section; and 


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1 (ii) such sums as may be certified by 

2 the Secretary of Veterans Affairs to the 

3 Secretary of the Treasury for the Informa4 tion Systems Technology account and for 

5 the General Operating Expenses account 

6 as necessary for administrative costs in7 curred in carrying out this section. 

8 (B) The Department of Veterans Affairs Com9 pensation and Pensions account shall hereinafter be 

10 available for payments authorized under subsection 

11 (a)(1)(A) to individuals entitled to a benefit payment 

12 described in subsection (a)(1)(C)(iii). 

13 TITLE III—CONTRIBUTION AND 

14 BENEFIT FAIRNESS 

15 SEC. 301. DETERMINATION OF WAGES AND SELF-EMPLOY16 MENT INCOME ABOVE CONTRIBUTION AND 

17 BENEFIT BASE AFTER 2011. 

18 (a) DETERMINATION OF WAGES ABOVE CONTRIBU19 TION AND BENEFIT BASE AFTER 2011.— 

20 (1) AMENDMENTS TO THE INTERNAL REVENUE

21 CODE OF 1986.—Section 3121 of the Internal Rev22 enue Code of 1986 is amended— 

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

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1 section (c)(1)) of’’ before ‘‘that part of the re2 muneration’’; and 

3 (B) in subsection (c), by striking ‘‘(c) IN4 CLUDED AND EXCLUDED SERVICE.—For pur5 poses of this chapter, if’’ and inserting the fol6 lowing: 

7 ‘‘(c) SPECIAL RULES FOR WAGES AND EMPLOY8 MENT.— 

9 ‘‘(1) APPLICABLE PERCENTAGE OF REMUNERA10 TION IN DETERMINING WAGES.—For purposes of 

11 paragraph (1) of subsection (a), the applicable per12 centage for a calendar year, in connection with any 

13 calendar year referred to in such subparagraph, 

14 shall be the percentage determined in accordance 

15 with the following table: 

‘‘In the case of: 

The applicable 

percentage 

is: 

Calendar year 2012 ............................................................................ 86%

Calendar year 2013 ............................................................................ 71%

Calendar year 2014 ............................................................................ 57%

Calendar year 2015 ............................................................................ 43%

Calendar year 2016 ............................................................................ 29%

Calendar year 2017 ............................................................................ 14%

Calendar years after 2017 .................................................................. 0%. 

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

17 purposes of this chapter, if’’. 


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1 (2) AMENDMENTS TO THE SOCIAL SECURITY

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

3 U.S.C. 409) is amended— 

4 (A) in subsection (a)(1)(I)— 

5 (i) by inserting ‘‘and before 2012’’ 

6 after ‘‘1974’’; and 

7 (ii) by inserting ‘‘and’’ after the semi8 colon; 

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

10 end the following new subparagraph: 

11 ‘‘(J) The applicable percentage (deter12 mined under subsection (l)) of that part of re13 muneration which, after remuneration (other 

14 than remuneration referred to in the succeeding 

15 subsections of this section) equal to the con16 tribution and benefit base (determined under 

17 section 230) with respect to employment has 

18 been paid to an individual during any calendar 

19 year after 2011 with respect to which such con20 tribution and benefit base is effective, is paid to 

21 such individual during such calendar year;’’; 

22 and 

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

24 subsection: 


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1 ‘‘(l) For purposes of subparagraph (J) of subsection 

2 (a)(1), the applicable percentage for a calendar year, in 

3 connection with any calendar year referred to in such sub4 paragraph, shall be the percentage determined in accord5 ance with the following table: 

‘‘In the case of: 

The applicable 

percentage 

is: 

Calendar year 2012 ............................................................................ 86%

Calendar year 2013 ............................................................................ 71%

Calendar year 2014 ............................................................................ 57%

Calendar year 2015 ............................................................................ 43%

Calendar year 2016 ............................................................................ 29%

Calendar year 2017 ............................................................................ 14%

Calendar years after 2017 .................................................................. 0%’’. 

6 (3) EFFECTIVE DATE.—The amendments made 

7 by this subsection shall apply with respect to remu8 neration paid in calendar years after 2011. 

9 (b) DETERMINATION OF SELF-EMPLOYMENT IN10 COME ABOVE CONTRIBUTION AND BENEFIT BASE AFTER

11 2011.— 

12 (1) AMENDMENTS TO THE INTERNAL REVENUE

13 CODE OF 1986.—Section 1402 of the Internal Rev14 enue Code of 1986 is amended— 

15 (A) in subsection (b)(1), by inserting ‘‘an 

16 amount equal to the applicable percentage (as 

17 determined under subsection (d)(2)) of’’ before 

18 ‘‘that part of the net earnings from self-employ19 ment’’; and 


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1 (B) in subsection (d)— 

2 (i) by striking ‘‘(d) EMPLOYEE AND

3 WAGES.—The term’’ and inserting the fol4 lowing: 

5 ‘‘(d) RULES AND DEFINITIONS.— 

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

7 (ii) by adding at the end the fol8 lowing: 

9 ‘‘(2) APPLICABLE PERCENTAGE OF NET EARN10 INGS FROM SELF-EMPLOYMENT IN DETERMINING

11 SELF-EMPLOYMENT INCOME.—For purposes of para12 graph (1) of subsection (b), the applicable percent13 age for a taxable year beginning in any calendar 

14 year referred to in such paragraph shall be the per15 centage determined in accordance with the following 

16 table: 

‘‘In the case of: 

The applicable 

percentage 

is: 

Calendar year 2012 ............................................................................ 86%

Calendar year 2013 ............................................................................ 71%

Calendar year 2014 ............................................................................ 57%

Calendar year 2015 ............................................................................ 43%

Calendar year 2016 ............................................................................ 29%

Calendar year 2017 ............................................................................ 14%

Calendar years after 2017 .................................................................. 0%’’. 

17 (2) AMENDMENTS TO THE SOCIAL SECURITY

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

19 U.S.C. 411) is amended— 


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1 (A) in subsection (b)(1)(I)— 

2 (i) by striking ‘‘or’’ after the semi3 colon; and 

4 (ii) by inserting ‘‘and before 2012’’ 

5 after ‘‘1974’’; 

6 (B) in subsection (b)— 

7 (i) by redesignating paragraph (2) as 

8 paragraph (3); and 

9 (ii) by inserting after paragraph (1) 

10 the following: 

11 ‘‘(2) For any taxable year beginning in any cal12 endar year after 2011, an amount equal to the appli13 cable percentage (as determined under subsection 

14 (l)) of that part of net earnings from self-employ15 ment which is in excess of (A) an amount equal to 

16 the contribution and benefit base (determined under 

17 section 230) that is effective for such calendar year, 

18 minus (B) the amount of the wages paid to such in19 dividual during such taxable year; or’’; and 

20 (C) by adding at the end the following: 

21 ‘‘(l) For purposes of paragraph (2) of subsection (b), 

22 the applicable percentage for a taxable year beginning in 

23 any calendar year referred to in such paragraph, shall be 

24 the percentage determined in accordance with the fol25 lowing table: 


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‘‘In the case of: 

The applicable 

percentage 

is: 

Calendar year 2012 ............................................................................ 86%

Calendar year 2013 ............................................................................ 71%

Calendar year 2014 ............................................................................ 57%

Calendar year 2015 ............................................................................ 43%

Calendar year 2016 ............................................................................ 29%

Calendar year 2017 ............................................................................ 14%

Calendar years after 2017 .................................................................. 0%’’. 

1 (3) EFFECTIVE DATE.—The amendments made 

2 by this subsection shall apply with respect to taxable 

3 years beginning during or after calendar year 2012. 

4 SEC. 302. INCLUSION OF SURPLUS EARNINGS IN SOCIAL SE5 CURITY BENEFIT FORMULA. 

6 (a) INCLUSION OF SURPLUS AVERAGE INDEXED

7 MONTHLY EARNINGS IN DETERMINATION OF PRIMARY

8 INSURANCE AMOUNTS.— 

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

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

11 amended— 

12 (A) in clauses (i), (ii), and (iii), by insert13 ing ‘‘basic’’ before ‘‘average indexed monthly 

14 earnings’’ each place it appears; 

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

16 end; and 

17 (C) by inserting after clause (iii) the fol18 lowing new clauses: 


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1 ‘‘(iv) 3 percent of the individual’s surplus aver2 age indexed monthly earnings to the extent such 

3 surplus average indexed monthly earnings do not ex4 ceed the excess of the amount established for purposes of this clause by subparagraph (B) over 1 5 ⁄12

6 of the contribution and benefit base for the last of 

7 such individual’s computation base years, and 

8 ‘‘(v) 0.25 percent of the sum of the individual’s 

surplus average indexed monthly earnings plus 1 9 ⁄12

10 of the contribution and benefit base for the last of 

11 such individual’s computation base years, to the ex12 tent such sum exceeds the amount established for 

13 purposes of clause (iv) by subparagraph (B).’’. 

14 (2) BEND POINT FOR SURPLUS EARNINGS.— 

15 Section 215(a)(1)(B) of such Act (42 U.S.C. 

16 415(a)(1)(B)) is amended— 

17 (A) in clause (ii), by striking ‘‘the amounts 

18 so established’’ and inserting ‘‘the amounts es19 tablished for purposes of clauses (i) and (ii) of 

20 subparagraph (A)’’; 

21 (B) by redesignating clause (iii) as clause 

22 (v); 

23 (C) in clause (v) (as redesignated), by in24 serting ‘‘or (iv)’’ after ‘‘clause (ii)’’; and 


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1 (D) by inserting after clause (ii) the fol2 lowing new clauses: 

3 ‘‘(iii) For individuals who initially become eligible for 

4 old-age or disability insurance benefits, or who die (before 

5 becoming eligible for such benefits), in the calendar year 

6 2012, the amount established for purposes of clause (iv) 

7 of subparagraph (A) shall be $11,933. 

8 ‘‘(iv) For individuals who initially become eligible for 

9 old-age or disability insurance benefits, or who die (before 

10 becoming eligible for such benefits), in any calendar year 

11 after 2012, the amount established for purposes of clause 

12 (iv) of subparagraph (A) shall equal the product of the 

13 amount established with respect to the calendar year 2012 

14 under clause (iii) of this subparagraph and the quotient 

15 obtained by dividing— 

16 ‘‘(I) the national average wage index (as de17 fined in section 209(k)(1)) for the second calendar 

18 year preceding the calendar year for which the de19 termination is made, by 

20 ‘‘(II) the national average wage index (as so de21 fined) for 2010.’’. 

22 (b) BASIC AIME AND SURPLUS AIME.— 

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

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


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

2 and 

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

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

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

6 following: ‘‘to the extent such total does not ex7 ceed the contribution and benefit base for the 

8 applicable year’’. 

9 (2) SURPLUS AIME.— 

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

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

12 amended— 

13 (i) by redesignating subparagraphs 

14 (A) and (B) as clauses (i) and (ii), respec15 tively; 

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

17 and 

18 (iii) by adding at the end the fol19 lowing new subparagraph: 

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

21 monthly earnings shall be equal to the quotient obtained 

22 by dividing— 

23 ‘‘(I) the total (after adjustment under para24 graph (3)(B)) of such individual’s surplus earnings 

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


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1 benefit computation years (determined under para2 graph (2)), by 

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

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

5 an individual’s surplus earnings for a benefit computation 

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

7 self-employment income credited to such benefit computa8 tion year, to the extent such total (before adjustment 

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

10 benefit base for such year.’’. 

11 (B) CONFORMING AMENDMENT.—The 

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

13 amended by striking ‘‘Average Indexed Monthly 

14 Earnings’’ and inserting ‘‘Basic Average In15 dexed Monthly Earnings; Surplus Average In16 dexed Monthly Earnings’’. 

17 (3) ADJUSTMENT OF SURPLUS EARNINGS FOR

18 PURPOSES OF DETERMINING SURPLUS AIME.—Sec19 tion 215(b)(3) of such Act (42 U.S.C. 415(b)(3)) is 

20 amended— 

21 (A) in subparagraph (A), by striking ‘‘sub22 paragraph (B)’’ and inserting ‘‘subparagraph 

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

24 basic average indexed monthly income’’ after 

25 ‘‘paragraph (2)’’; 


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1 (B) by redesignating subparagraph (B) as 

2 subparagraph (C); and 

3 (C) by inserting after subparagraph (A) 

4 the following new subparagraph: 

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

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

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

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

9 be deemed to be equal to the product of— 

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

11 year (as determined without regard to this subpara12 graph), and 

13 ‘‘(ii) the quotient described in subparagraph 

14 (A)(ii).’’. 

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

16 this section shall apply with respect to individuals who ini17 tially become eligible (within the meaning of section 

18 215(a)(3)(B) of the Social Security Act) for old-age or dis19 ability insurance benefits under title II of the Social Secu20 rity Act, or who die (before becoming eligible for such ben21 efits), in any calendar year after 2011. 


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1 TITLE IV—SOCIAL SECURITY 

2 BENEFIT PROTECTION 

3 SEC. 401. POINT OF ORDER AGAINST PRIVATIZATION OF 

4 SOCIAL SECURITY OR REDUCTIONS IN SO5 CIAL SECURITY BENEFITS. 

6 (a) IN GENERAL.—It shall not be in order in the 

7 House of Representatives or the Senate to consider any 

8 bill, joint resolution, amendment, motion, or conference re9 port if the enactment of that bill or resolution, as reported, 

10 the adoption and enactment of that amendment, or the 

11 enactment of that bill or resolution in the form rec12 ommended in that conference report would have the effect 

13 of— 

14 (1) establishing or maintaining a program— 

15 (A) under which benefits under title II of 

16 the Social Security Act are reduced, in whole or 

17 in part, in connection with contributions made 

18 to individual accounts of beneficiaries under 

19 such title established or maintained in the pri20 vate sector or in connection with returns on in21 vestment of amounts credited to such accounts, 

22 or 

23 (B) which provides for administration of 

24 the old-age, survivors, and disability insurance 


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1 program under such title, in whole or in part, 

2 by any entity in the private sector, 

3 (2) otherwise reducing benefits under title II of 

4 the Social Security Act in the case of any present or 

5 future beneficiary below the level of such benefits 

6 that would be in effect without the enactment of 

7 such bill, resolution, or amendment, or 

8 (3) providing for investment of amounts held in 

9 the Federal Old-Age and Survivors Insurance Trust 

10 Fund and the Federal Disability Insurance Trust 

11 Fund in any investment vehicle other than interest12 bearing obligations of the United States or obliga13 tions guaranteed as to both principal and interest by 

14 the United States. 

15 (b) WAIVER AND APPEAL.—Subsection (a) may be 

16 waived or suspended in the Senate only by an affirmative 

17 vote of three-fifths of the Members, duly chosen and 

18 sworn. An affirmative vote of three-fifths of the Members 

19 of the Senate, duly chosen and sworn, shall be required 

20 in the Senate to sustain an appeal of the ruling of the 

21 Chair on a point of order raised under this section. 

22 (c) EXERCISE OF RULEMAKING POWERS.—The Con23 gress adopts the provisions of this section— 

24 (1) as an exercise of the rulemaking power of 

25 the House of Representatives and the Senate and as 


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1 such they shall be considered as part of the rules of 

2 each House or of that House to which they specifi3 cally apply, and these rules shall supersede other 

4 rules only to the extent that they are inconsistent 

5 with other such rules; and 

6 (2) with full recognition of the constitutional 

7 right of either the House of Representatives or the 

8 Senate to change those rules at any time, in the 

9 same manner, and to the same extent as in the case 

10 of any other rule of the House of Representatives or 

11 the Senate. 

Æ 


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