I 

113TH CONGRESS 

1ST SESSION H. R. 3118 

To improve the retirement security of American families by strengthening 

Social Security. 

IN THE HOUSE OF REPRESENTATIVES 

SEPTEMBER 17, 2013 

Ms. LINDA T. SA ́NCHEZ of California (for herself, Mr. HOLT, Mr. HONDA, 

Mr. DEFAZIO, Mr. NADLER, Mr. BRADY of Pennsylvania, Mr. CARTWRIGHT, Mr. CONYERS, Mr. VEASEY, Ms. BROWN of Florida, Ms. SCHAKOWSKY, Mr. GRIJALVA, Ms. SHEA-PORTER, Mr. MCDERMOTT, Ms. LEE

of California, Ms. NORTON, Mrs. NEGRETE MCLEOD, Ms. FUDGE, Mr. 

GRAYSON, Mr. GENE GREEN of Texas, Mr. ELLISON, Mrs. NAPOLITANO, 

Mr. TAKANO, Mr. TONKO, Mr. VARGAS, Mr. COHEN, Mr. LOWENTHAL, 

and Ms. EDDIE BERNICE JOHNSON of Texas) introduced the following 

bill; which was referred to the Committee on Ways and Means, and in 

addition to the Committee on Education and the Workforce, 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 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’’. 


emcdonald on DSK67QTVN1PROD with BILLS
2 

•HR 3118 IH

1 SEC. 2. DETERMINATION OF TAXABLE WAGES AND SELF2 EMPLOYMENT INCOME ABOVE CONTRIBU3 TION AND BENEFIT BASE AFTER 2013. 

4 (a) DETERMINATION OF TAXABLE WAGES ABOVE

5 CONTRIBUTION AND BENEFIT BASE AFTER 2013.— 

6 (1) AMENDMENTS TO THE INTERNAL REVENUE

7 CODE OF 1986.—Section 3121 of the Internal Rev8 enue Code of 1986 is amended— 

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

10 applicable percentage (determined under sub11 section (c)(1)) of’’ before ‘‘that part of the re12 muneration’’; and 

13 (B) in subsection (c), by striking ‘‘(c) IN14 CLUDED AND EXCLUDED SERVICE.—For pur15 poses of this chapter, if’’ and inserting the fol16 lowing: 

17 ‘‘(c) SPECIAL RULES FOR WAGES AND EMPLOY18 MENT.— 

19 ‘‘(1) APPLICABLE PERCENTAGE OF REMUNERA20 TION IN DETERMINING TAXABLE WAGES.—For pur21 poses of subsection (a)(1), the applicable percentage 

22 for a calendar year shall be equal to— 

23 ‘‘(A) for 2014, 80 percent; 

24 ‘‘(B) for 2015 through 2017, the applica25 ble percentage under this paragraph for the 


emcdonald on DSK67QTVN1PROD with BILLS
3 

•HR 3118 IH

1 previous year, decreased by 20 percentage 

2 points; and 

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

4 percent. 

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

6 purposes of this chapter, if’’. 

7 (2) AMENDMENTS TO THE SOCIAL SECURITY

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

9 U.S.C. 409) is amended— 

10 (A) in subsection (a)(1)(I)— 

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

12 after ‘‘1974’’; and 

13 (ii) by inserting ‘‘and’’ after the semi14 colon; 

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

16 end the following new subparagraph: 

17 ‘‘(J) The applicable percentage (deter18 mined under subsection (l)) of that part of re19 muneration which, after remuneration (other 

20 than remuneration referred to in the succeeding 

21 subsections of this section) equal to the con22 tribution and benefit base (determined under 

23 section 230) with respect to employment has 

24 been paid to an individual during any calendar 

25 year after 2013 with respect to which such conVerDate Mar 15 2010 23:11 Sep 18, 2013 Jkt 029200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H3118.IH H3118

emcdonald on DSK67QTVN1PROD with BILLS
4 

•HR 3118 IH

1 tribution and benefit base is effective, is paid to 

2 such individual during such calendar year;’’; 

3 and 

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

5 subsection: 

6 ‘‘(l) For purposes of subsection (a)(1)(J), the applica7 ble percentage for a calendar year shall be equal to— 

8 ‘‘(1) for 2014, 80 percent; 

9 ‘‘(2) for 2015 through 2017, the applicable per10 centage under this subsection for the previous year, 

11 decreased by 20 percentage points; and 

12 ‘‘(3) for 2018 and each year thereafter, 0 per13 cent.’’. 

14 (3) EFFECTIVE DATE.—The amendments made 

15 by this subsection shall apply with respect to remu16 neration paid in calendar years after 2013. 

17 (b) DETERMINATION OF TAXABLE SELF-EMPLOY18 MENT INCOME ABOVE CONTRIBUTION AND BENEFIT

19 BASE AFTER 2013.— 

20 (1) AMENDMENTS TO THE INTERNAL REVENUE

21 CODE OF 1986.—Section 1402 of the Internal Rev22 enue Code of 1986 is amended— 

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

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

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


emcdonald on DSK67QTVN1PROD with BILLS
5 

•HR 3118 IH

1 ‘‘an amount equal to the applicable percentage 

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

3 part of the net earnings from self-employment 

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

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

6 the contribution and benefit base (as deter7 mined under section 230 of the Social Security 

8 Act) which is effective for the calendar year in 

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

10 (B) in subsection (d)— 

11 (i) by striking ‘‘(d) EMPLOYEE AND

12 WAGES.—The term’’ and inserting the fol13 lowing: 

14 ‘‘(d) RULES AND DEFINITIONS.— 

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

16 (ii) by adding at the end the fol17 lowing: 

18 ‘‘(2) APPLICABLE PERCENTAGE OF NET EARN19 INGS FROM SELF-EMPLOYMENT IN DETERMINING

20 TAXABLE SELF-EMPLOYMENT INCOME.—For pur21 poses of subsection (b)(1), the applicable percentage 

22 for a taxable year beginning in any calendar year re23 ferred to in such paragraph shall be equal to— 

24 ‘‘(A) for 2014, 80 percent; 


emcdonald on DSK67QTVN1PROD with BILLS
6 

•HR 3118 IH

1 ‘‘(B) for 2015 through 2017, the applica2 ble percentage under this paragraph for the 

3 previous year, decreased by 20 percentage 

4 points; and 

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

6 percent.’’. 

7 (2) AMENDMENTS TO THE SOCIAL SECURITY

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

9 U.S.C. 411) is amended— 

10 (A) in subsection (b)— 

11 (i) in paragraph (1)(I)— 

12 (I) by striking ‘‘or’’ after the 

13 semicolon; and 

14 (II) by inserting ‘‘and before 

15 2014’’ after ‘‘1974’’; 

16 (ii) by redesignating paragraph (2) as 

17 paragraph (3); and 

18 (iii) by inserting after paragraph (1) 

19 the following: 

20 ‘‘(2) For any taxable year beginning in any cal21 endar year after 2013, an amount equal to the appli22 cable percentage (as determined under subsection 

23 (l)) of that part of net earnings from self-employ24 ment which is in excess of the difference (not to be 

25 less than zero) between— 


emcdonald on DSK67QTVN1PROD with BILLS
7 

•HR 3118 IH

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

2 and benefit base (as determined under section 

3 230) that is effective for such calendar year, 

4 and 

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

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

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

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

9 percentage for a taxable year beginning in any calendar 

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

11 ‘‘(1) for 2014, 80 percent; 

12 ‘‘(2) for 2015 through 2017, the applicable per13 centage under this subsection for the previous year, 

14 decreased by 20 percentage points; and 

15 ‘‘(3) for 2018 and each year thereafter, 0 per16 cent.’’. 

17 (3) EFFECTIVE DATE.—The amendments made 

18 by this subsection shall apply with respect to taxable 

19 years beginning during or after calendar year 2014. 


emcdonald on DSK67QTVN1PROD with BILLS
8 

•HR 3118 IH

1 SEC. 3. ADJUSTMENTS TO BEND POINTS IN DETERMINING 

2 PRIMARY INSURANCE AMOUNT AND INCLU3 SION OF SURPLUS EARNINGS FOR BENEFIT 

4 DETERMINATIONS. 

5 (a) INCLUSION OF SURPLUS AVERAGE INDEXED

6 MONTHLY EARNINGS IN DETERMINATION OF PRIMARY

7 INSURANCE AMOUNTS.— 

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

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

10 amended— 

11 (A) in clauses (i), (ii), and (iii), by insert12 ing ‘‘basic’’ before ‘‘average indexed monthly 

13 earnings’’ each place it appears; 

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

15 end; 

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

17 end; and 

18 (D) by inserting after clause (iii) the fol19 lowing new clause: 

20 ‘‘(iv) 5 percent of the individual’s surplus aver21 age indexed monthly earnings,’’. 

22 (2) BEND POINT ADJUSTMENT.—Section 

23 215(a)(1)(B) of such Act (42 U.S.C. 415(a)(1)(B)) 

24 is amended— 

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

26 (iv); and 


emcdonald on DSK67QTVN1PROD with BILLS
9 

•HR 3118 IH

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

3 ‘‘(iii) For individuals who initially become eligi4 ble for old-age or disability insurance benefits, or 

5 who die (before becoming eligible for such benefits) 

6 in any calendar year after 2018, the amount deter7 mined under clause (i) of this subparagraph for pur8 poses of subparagraph (A)(i) for such calendar year 

9 shall be increased by— 

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

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

12 through 2032, the percent determined under 

13 this clause for the preceding year increased by 

14 1 percentage point; and 

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

16 year thereafter, 15 percent.’’. 

17 (b) BASIC AIME AND SURPLUS AIME.— 

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

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

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

21 and 

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

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

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

25 following: ‘‘to the extent such total does not exVerDate Mar 15 2010 23:11 Sep 18, 2013 Jkt 029200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\H3118.IH H3118

emcdonald on DSK67QTVN1PROD with BILLS
10 

•HR 3118 IH

1 ceed the contribution and benefit base for the 

2 applicable year’’. 

3 (2) SURPLUS AIME.— 

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

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

6 amended— 

7 (i) by redesignating subparagraphs 

8 (A) and (B) as clauses (i) and (ii), respec9 tively; 

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

11 and 

12 (iii) by adding at the end the fol13 lowing new subparagraph: 

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

15 monthly earnings shall be equal to the quotient obtained 

16 by dividing— 

17 ‘‘(I) the total (after adjustment under para18 graph (3)(B)) of such individual’s surplus earnings 

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

20 benefit computation years (determined under para21 graph (2)), by 

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

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

24 an individual’s surplus earnings for a benefit computation 

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


emcdonald on DSK67QTVN1PROD with BILLS
11 

•HR 3118 IH

1 self-employment income credited to such benefit computa2 tion year, to the extent such total (before adjustment 

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

4 benefit base for such year.’’. 

5 (B) CONFORMING AMENDMENT.—The 

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

7 amended by striking ‘‘Average Indexed Monthly 

8 Earnings’’ and inserting ‘‘Basic Average In9 dexed Monthly Earnings; Surplus Average In10 dexed Monthly Earnings’’. 

11 (3) ADJUSTMENT OF SURPLUS EARNINGS FOR

12 PURPOSES OF DETERMINING SURPLUS AIME.—Sec13 tion 215(b)(3) of such Act (42 U.S.C. 415(b)(3)) is 

14 amended— 

15 (A) in subparagraph (A), by striking ‘‘sub16 paragraph (B)’’ and inserting ‘‘subparagraph 

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

18 basic average indexed monthly income’’ after 

19 ‘‘paragraph (2)’’; 

20 (B) by redesignating subparagraph (B) as 

21 subparagraph (C); and 

22 (C) by inserting after subparagraph (A) 

23 the following new subparagraph: 

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

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


emcdonald on DSK67QTVN1PROD with BILLS
12 

•HR 3118 IH

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

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

3 be deemed to be equal to the product of— 

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

5 year (as determined without regard to this subpara6 graph), and 

7 ‘‘(ii) the quotient described in subparagraph 

8 (A)(ii).’’. 

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

10 this section shall apply with respect to individuals who ini11 tially become eligible (within the meaning of section 

12 215(a)(3)(B) of the Social Security Act) for old-age or dis13 ability insurance benefits under title II of the Social Secu14 rity Act, or who die (before becoming eligible for such ben15 efits), in any calendar year after 2018. 

16 SEC. 4. CONSUMER PRICE INDEX FOR ELDERLY CON17 SUMERS. 

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

19 of the Department of Labor shall prepare and publish an 

20 index for each calendar month to be known as the ‘‘Con21 sumer Price Index for Elderly Consumers’’ that indicates 

22 changes over time in expenditures for consumption which 

23 are typical for individuals in the United States who have 

24 attained early retirement age (as defined under section 

25 216(l)(2) of the Social Security Act (42 U.S.C. 416(l)(2)) 


emcdonald on DSK67QTVN1PROD with BILLS
13 

•HR 3118 IH

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

2 benefit). 

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

4 with respect to calendar months ending on or after June 

5 30 of the calendar year in which this Act is enacted. 

6 (c) AUTHORIZATION OF APPROPRIATIONS.—There 

7 are authorized to be appropriated such sums as are nec8 essary to carry out the provisions of this section. 

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

10 SOCIAL SECURITY BENEFITS. 

11 (a) IN GENERAL.—Section 215(i) of the Social Secu12 rity Act (42 U.S.C. 415(i)) is amended— 

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

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

15 monthly insurance benefit payable under this title, 

16 effective for adjustments under this subsection to 

17 the primary insurance amount on which such benefit 

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

19 or 228), the applicable Consumer Price Index shall 

20 be deemed to be the Consumer Price Index for El21 derly Consumers and such primary insurance 

22 amount shall be deemed adjusted under this sub23 section using such Index’’; and 

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


emcdonald on DSK67QTVN1PROD with BILLS
14 

•HR 3118 IH

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

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

3 of 2013,’’. 

4 (b) CONFORMING AMENDMENTS IN APPLICABLE

5 FORMER LAW.—Section 215(i)(1)(C) of the Social Secu6 rity Act, as in effect in December 1978 and applied in 

7 certain cases under the provisions of such Act in effect 

8 after December 1978, is amended by inserting before the 

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

10 insurance benefit payable under this title, effective for ad11 justments under this subsection to the primary insurance 

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

13 benefit under section 227 or 228), the applicable Con14 sumer Price Index shall be deemed to be the Consumer 

15 Price Index for Elderly Consumers and such primary in16 surance amount shall be deemed adjusted under this sub17 section using such Index’’. 

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

19 this section shall apply to determinations made by the 

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

21 of the Social Security Act (42 U.S.C. 415(i)(2)) with re22 spect to cost-of-living computation quarters ending on or 

23 after September 30, 2014. 

Æ 


emcdonald on DSK67QTVN1PROD with BILLS