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[Congressional Bills 115th Congress]
[From the U.S. Government Publishing Office]
[S. 2484 Introduced in Senate (IS)]

<DOC>

115th CONGRESS
  2d Session
                                S. 2484

To enhance Social Security benefits for children, divorced spouses, and 
              widows and widowers, and for other purposes.

_______________________________________________________________________

                   IN THE SENATE OF THE UNITED STATES

                             March 1, 2018

  Mrs. Murray introduced the following bill; which was read twice and 
                  referred to the Committee on Finance

_______________________________________________________________________

                                 A BILL

 
To enhance Social Security benefits for children, divorced spouses, and 
              widows and widowers, and for other purposes.

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

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``Stronger Safety 
Net Act'', or the ``SSN Act''.
    (b) Table of Contents.--The table of contents for this Act is as 
follows:

Sec. 1. Short title; table of contents.
Sec. 2. Improving benefits for divorced spouses, widows, widowers, and 
                            surviving divorced spouses.
Sec. 3. Extended benefit eligibility for children who are full-time 
                            students.
Sec. 4. Establishment of payroll surtax for high-income individuals.
Sec. 5. Inclusion of surplus earnings in social security benefit 
                            formula.

SEC. 2. IMPROVING BENEFITS FOR DIVORCED SPOUSES, WIDOWS, WIDOWERS, AND 
              SURVIVING DIVORCED SPOUSES.

    (a) Expansion of Benefits for Divorced Spouses.--
            (1) Wife's insurance benefits.--Section 202(b) of the 
        Social Security Act (42 U.S.C. 402(b)) is amended--
                    (A) in paragraph (1)(G), by striking ``10 years'' 
                and inserting ``5 years''; and
                    (B) by amending paragraph (2) to read as follows:
    ``(2)(A) Except as provided in subsections (k)(5) and (q), a wife's 
insurance benefit for each month shall be equal to--
            ``(i) in the case of a wife (as defined in section 216(b)), 
        one-half of the primary insurance amount of her husband for 
        such month; or
            ``(ii) in the case of a divorced wife (as defined in 
        section 216(d)), the applicable percentage (as determined under 
        subparagraph (B)) of one-half of the primary insurance amount 
        of her former husband for such month.
    ``(B) For purposes of subparagraph (A)(ii), the applicable 
percentage shall be equal to 100 percent reduced by 10 percentage 
points for each year in the period immediately before the date the 
divorce became effective in which the divorced wife was married to her 
former husband that is less than 10 years.''.
            (2) Husband's insurance benefits.--Section 202(c) of the 
        Social Security Act (42 U.S.C. 402(c)) is amended--
                    (A) in paragraph (1)(G), by striking ``10 years'' 
                and inserting ``5 years''; and
                    (B) by amending paragraph (2) to read as follows:
    ``(2)(A) Except as provided in subsections (k)(5) and (q), a 
husband's insurance benefit for each month shall be equal to--
            ``(i) in the case of a husband (as defined in section 
        216(f)), one-half of the primary insurance amount of his wife 
        for such month; or
            ``(ii) in the case of a divorced husband (as defined in 
        section 216(d)), the applicable percentage (as determined under 
        subparagraph (B)) of one-half of the primary insurance amount 
        of his former wife for such month.
    ``(B) For purposes of subparagraph (A)(ii), the applicable 
percentage shall be equal to 100 percent reduced by 10 percentage 
points for each year in the period immediately before the date the 
divorce became effective in which the divorced husband was married to 
his former wife that is less than 10 years.''.
    (b) Improving Social Security Benefits for Widows and Widowers in 
Two-Income Households.--
            (1) Widows.--Section 202(e) of the Social Security Act (42 
        U.S.C. 402(e)) is amended--
                    (A) in paragraph (1)--
                            (i) in subparagraph (B), by inserting 
                        ``and'' at the end;
                            (ii) in subparagraph (C)(iii), by striking 
                        ``and'' at the end;
                            (iii) by striking subparagraph (D);
                            (iv) by redesignating subparagraphs (E) and 
                        (F) as subparagraphs (D) and (E), respectively; 
                        and
                            (v) in the flush matter following 
                        subparagraph (E)(ii), as so redesignated, by 
                        striking ``becomes entitled to an old-age 
                        insurance benefit'' and all that follows 
                        through ``such deceased individual,'';
                    (B) by striking subparagraph (A) in paragraph (2) 
                and inserting the following:
            ``(2)(A) Except as provided in subsection (k)(5), 
        subsection (q), and subparagraph (D) of this paragraph, such 
        widow's insurance benefit for each month shall be equal to the 
        greater of--
                    ``(i) subject to paragraph (9), the primary 
                insurance amount (as determined for purposes of this 
                subsection after application of subparagraphs (B) and 
                (C)) of such deceased individual; or
                    ``(ii) subject to paragraphs (9) and (10), in the 
                case of a fully insured widow or surviving divorced 
                wife, 75 percent of the sum of any old-age or 
                disability insurance benefit for which the widow or the 
                surviving divorced wife is entitled for such month and 
                the primary insurance amount (as determined for 
                purposes of this subsection after application of 
                subparagraphs (B) and (C)) of such deceased 
                individual.'';
                    (C) in paragraph (5)--
                            (i) in subparagraph (A), by striking 
                        ``paragraph (1)(F)'' and inserting ``paragraph 
                        (1)(E)''; and
                            (ii) in subparagraph (B), by striking 
                        ``paragraph (1)(F)(i)'' and inserting 
                        ``paragraph (1)(E)(i)''; and
                    (D) by adding at the end the following new 
                paragraphs:
            ``(9) For purposes of clauses (i) and (ii) of paragraph 
        (2)(A), in the case of a surviving divorced wife, the amount 
        determined under either such clause (and, for purposes of 
        clause (ii) of paragraph (2)(A), as determined after 
        application of paragraph (10)) shall be equal to the applicable 
        percentage (as determined under section 202(b)(2)(B)) of such 
        amount (as determined before application of this paragraph but 
        after application of subsection (k)(3)).
            ``(10) For purposes of paragraph (2)(A)(ii), the amount 
        determined under such paragraph shall not exceed the primary 
        insurance amount for such month of a hypothetical individual--
                    ``(A) who became entitled to old-age insurance 
                benefits upon attaining early retirement age during the 
                month in which the deceased individual referred to in 
                paragraph (1) became entitled to old-age or disability 
                insurance benefits, or died (before becoming entitled 
                to such benefits); and
                    ``(B) to whom wages and self-employment income were 
                credited in each of such hypothetical individual's 
                elapsed years (within the meaning of section 
                215(b)(2)(B)(iii)) in an amount equal to the national 
                average wage index (as described in section 209(k)(1)) 
                for each such year.''.
            (2) Widowers.--Section 202(f) of the Social Security Act 
        (42 U.S.C. 402(f)) is amended--
                    (A) in paragraph (1)--
                            (i) in subparagraph (B), by inserting 
                        ``and'' at the end;
                            (ii) in subparagraph (C)(iii), by striking 
                        ``and'' at the end;
                            (iii) by striking subparagraph (D);
                            (iv) by redesignating subparagraphs (E) and 
                        (F) as subparagraphs (D) and (E), respectively; 
                        and
                            (v) in the flush matter following 
                        subparagraph (E)(ii), as so redesignated, by 
                        striking ``becomes entitled to an old-age 
                        insurance benefit'' and all that follows 
                        through ``such deceased individual,'';
                    (B) by striking subparagraph (A) in paragraph (2) 
                and inserting the following:
            ``(2)(A) Except as provided in subsection (k)(5), 
        subsection (q), and subparagraph (D) of this paragraph, such 
        widower's insurance benefit for each month shall be equal to 
        the greater of--
                    ``(i) subject to paragraph (9), the primary 
                insurance amount (as determined for purposes of this 
                subsection after application of subparagraphs (B) and 
                (C)) of such deceased individual; or
                    ``(ii) subject to paragraphs (9) and (10), in the 
                case of a fully insured widower or surviving divorced 
                husband, 75 percent of the sum of any old-age or 
                disability insurance benefit for which the widower or 
                the surviving divorced husband is entitled for such 
                month and the primary insurance amount (as determined 
                for purposes of this subsection after application of 
                subparagraphs (B) and (C)) of such deceased 
                individual.'';
                    (C) in paragraph (5)--
                            (i) in subparagraph (A), by striking 
                        ``paragraph (1)(F)'' and inserting ``paragraph 
                        (1)(E)''; and
                            (ii) in subparagraph (B), by striking 
                        ``paragraph (1)(F)(i)'' and inserting 
                        ``paragraph (1)(E)(i)''; and
                    (D) by adding at the end the following new 
                paragraphs:
            ``(9) For purposes of clauses (i) and (ii) of paragraph 
        (2)(A), in the case of a surviving divorced husband, the amount 
        determined under either such clause (and, for purposes of 
        clause (ii) of paragraph (2)(A), as determined after 
        application of paragraph (10)) shall be equal to the applicable 
        percentage (as determined under section 202(c)(2)(B)) of such 
        amount (as determined before application of this paragraph but 
        after application of subsection (k)(3)).
            ``(10) For purposes of paragraph (2)(A)(ii), the amount 
        determined under such paragraph shall not exceed the primary 
        insurance amount for such month of a hypothetical individual--
                    ``(A) who became entitled to old-age insurance 
                benefits upon attaining early retirement age during the 
                month in which the deceased individual referred to in 
                paragraph (1) became entitled to old-age or disability 
                insurance benefits, or died (before becoming entitled 
                to such benefits); and
                    ``(B) to whom wages and self-employment income were 
                credited in each of such hypothetical individual's 
                elapsed years (within the meaning of section 
                215(b)(2)(B)(iii)) in an amount equal to the national 
                average wage index (as described in section 209(k)(1)) 
                for each such year.''.
            (3) Reduction of benefit for individuals entitled to 
        simultaneous benefits.--Section 202(k)(3) of the Social 
        Security Act (42 U.S.C. 402(k)(3)) is amended--
                    (A) in subparagraph (A), by striking ``If an 
                individual'' and inserting ``Except as provided in 
                subparagraph (C), if an individual''; and
                    (B) by adding at the end the following new 
                subparagraph:
    ``(C) If an individual is entitled for any month to a widow's or 
widower's insurance benefit and is also entitled to an old-age or 
disability insurance benefit for such month that is greater than such 
widow's or widower's insurance benefit, the reduction described in 
subparagraph (A), with respect to such widow's or widower's insurance 
benefit, shall be carried out by substituting an amount equal to the 
primary insurance amount of the deceased individual referred to in 
subsection (e)(1) or (f)(1) (as determined for purposes of subsection 
(e)(2)(A)(i) or (f)(2)(A)(i)) for the amount equal to the old-age or 
disability insurance benefit of the individual entitled to the widow's 
or widower's insurance benefit.''.
    (c) Conforming Amendments.--Section 216(d) of the Social Security 
Act (42 U.S.C. 416(d)) is amended--
            (1) in paragraph (1), by striking ``10 years'' and 
        inserting ``5 years'';
            (2) in paragraph (2), by striking ``10 years'' and 
        inserting ``5 years'';
            (3) in paragraph (4), by striking ``10 years'' and 
        inserting ``5 years''; and
            (4) in paragraph (5), by striking ``10 years'' and 
        inserting ``5 years''.
    (d) Effective Date.--The amendments made by this section shall 
apply with respect to wife's insurance benefits, husband's insurance 
benefits, widow's insurance benefits, and widower's insurance benefits 
that are payable for months beginning after December 31, 2018.

SEC. 3. EXTENDED BENEFIT ELIGIBILITY FOR CHILDREN WHO ARE FULL-TIME 
              STUDENTS.

    (a) In General.--
            (1) Extension of benefits.--Section 202(d) of the Social 
        Security Act (42 U.S.C. 402(d)) is amended--
                    (A) in paragraphs (1)(B), (1)(E), (1)(F)(i), 
                (1)(G)(ii), (6)(A), (6)(D), (6)(E)(i), (7)(A), (7)(B), 
                and (7)(D), by striking ``full-time elementary or 
                secondary school student'' each place it appears and 
                inserting ``full-time student'';
                    (B) in paragraphs (1)(B), (1)(F)(ii), (1)(G)(iii), 
                (6)(A), (6)(D), (6)(E)(ii), and (7)(D), by striking 
                ``19'' each place it appears and inserting ``23'';
                    (C) in subparagraphs (A), (B), and (D) of paragraph 
                (7), by striking ``elementary or secondary school'' 
                each place it appears and inserting ``educational 
                institution'';
                    (D) in paragraph (7)(A), by striking ``schools 
                involved'' and inserting ``institutions involved'';
                    (E) in paragraph (7), by amending subparagraph (C) 
                to read as follows:
                    ``(C) For purposes of this subsection, the term 
                `educational institution' means--
                            ``(i) a school which provides elementary or 
                        secondary education as determined under the law 
                        of the State or other jurisdiction in which it 
                        is located; and
                            ``(ii) an institution described in section 
                        102 of the Higher Education Act of 1965 (20 
                        U.S.C. 1002).''; and
                    (F) in paragraph (7)(D), by striking ``diploma or 
                equivalent certificate from a secondary school (as 
                defined in subparagraph (C)(i))'' and inserting 
                ``diploma, degree, or equivalent certificate from an 
                institution described in subparagraph (C)(ii)''.
            (2) Effective date.--The amendments made by this subsection 
        shall apply to child's insurance benefits that are payable for 
        months beginning after December 31, 2018.
    (b) Temporary Exclusion From Determination of Maximum Family 
Benefits.--Section 203(a) of the Social Security Act (42 U.S.C. 403(a)) 
is amended--
            (1) in paragraph (3)--
                    (A) by redesignating subparagraph (D) as 
                subparagraph (E); and
                    (B) by inserting after subparagraph (C) the 
                following new subparagraph:
            ``(D) During the period that begins on January 1, 2019, and 
        ends on December 31, 2023, when any of such individuals has 
        attained age 19 and is entitled to monthly benefits as a child 
        who is a full-time student under section 202(d)(1)(B)(i) for 
        any month, the benefit to which he or she is entitled on the 
        basis of the wages and self-employment income of such insured 
        individual for such month shall be determined without regard to 
        this subsection, and the benefits of all other individuals who 
        are entitled for such month to monthly benefits under section 
        202 on the wages and self-employment income of such insured 
        individual shall be determined as if no such child were 
        entitled to benefits for such month.''; and
            (2) in paragraph (6), by inserting ``(3)(E),'' after 
        ``(3)(D),''.
    (c) Railroad Retirement Act.--
            (1) Section 2(d) of the Railroad Retirement Act of 1974 (45 
        U.S.C. 232(2)(d)) is amended--
                    (A) in clause (iii) of paragraph (1), by striking 
                ``will be less than nineteen years of age and a full-
                time elementary or secondary school student'' and 
                inserting ``will be less than 23 years of age and a 
                full-time student at an educational institution (as 
                defined in section 202(d)(7) of the Social Security 
                Act)''; and
                    (B) in paragraph (4)--
                            (i) by striking ``elementary or secondary 
                        school'' each place it appears and inserting 
                        ``educational institution'';
                            (ii) by striking ``nineteen'' and inserting 
                        ``23''; and
                            (iii) by striking ``a diploma or equivalent 
                        certificate from a secondary school (as defined 
                        in section 202(d)(7)(c)(i) of the Social 
                        Security Act)'' and inserting ``a diploma, 
                        degree, or equivalent certificate from an 
                        institution described in section 
                        202(d)(7)(C)(ii) of the Social Security Act''.
            (2) Section 5(c)(7) of the Railroad Retirement Act of 1974 
        (45 U.S.C. 235(c)(7)) is amended--
                    (A) by striking ``elementary or secondary school'' 
                and inserting ``educational institution''; and
                    (B) by striking ``19'' and inserting ``23''.

SEC. 4. ESTABLISHMENT OF PAYROLL SURTAX FOR HIGH-INCOME INDIVIDUALS.

    (a) Self-Employment Income Surtax.--Section 1401 of the Internal 
Revenue Code of 1986 is amended--
            (1) by redesignating subsection (c) as subsection (d); and
            (2) by inserting after subsection (b) the following new 
        subsection:
    ``(c) Additional Tax for Old-Age, Survivors, and Disability 
Insurance.--
            ``(1) In general.--In addition to the taxes imposed by the 
        preceding subsections, there is hereby imposed on every 
        individual for each taxable year beginning after December 31, 
        2018, a tax equal to 4 percent of additional self-employment 
        income for such taxable year.
            ``(2) Additional self-employment income.--For purposes of 
        paragraph (1), the term `additional self-employment income' 
        means, for any taxable year, the amount (not less than zero) 
        equal to the excess of--
                    ``(A) the sum of self-employment income (determined 
                without regard to section 1402(b)(1)) for the taxable 
                year and wages (as defined in section 3121(a), 
                determined without regard to paragraph (1) thereof) 
                paid to such individual during such taxable year, over
                    ``(B) the sum of the additional wages (as defined 
                in section 3101(c)(2)) paid to such individual for the 
                taxable year and the amount determined under paragraph 
                (3) for the taxable year.
        Rules similar to the rules of subparagraph (A) of the second 
        sentence of section 1402(b) shall apply for purposes of 
        determining wages under clause (i).
            ``(3) Exemption amount.--The amount determined under this 
        paragraph is an amount equal to--
                    ``(A) in the case of a taxable year beginning after 
                December 31, 2018, and before January 1, 2020, 
                $400,000, and
                    ``(B) in the case of any taxable year beginning 
                after December 31, 2019, the product of--
                            ``(i) $400,000, and
                            ``(ii) the quotient obtained by dividing--
                                    ``(I) the national average wage 
                                index (as defined in section 209(k)(1)) 
                                for the calendar year which is 2 years 
                                before the calendar year in which the 
                                taxable year begins, by
                                    ``(II) the national average wage 
                                index for calendar year 2017.''.
    (b) Employee Wage Surtax.--Section 3101 of the Internal Revenue 
Code of 1986 is amended--
            (1) by redesignating subsection (c) as subsection (d); and
            (2) by inserting after subsection (b) the following new 
        subsection:
    ``(c) Additional Tax for Old-Age, Survivors, and Disability 
Insurance.--
            ``(1) In general.--In addition to the taxes imposed by the 
        preceding subsections, there is hereby imposed on the income of 
        every individual a tax equal to 2 percent of additional wages 
        (as defined in paragraph (2)) which are received with respect 
        to employment during any calendar year beginning after December 
        31, 2018.
            ``(2) Additional wages.--For purposes of paragraph (1), the 
        term `additional wages' has the same meaning given the term 
        `wages' under section 3121(a) (determined without regard to 
        paragraph (1) thereof), except that such term shall not include 
        that amount of remuneration that is less than--
                    ``(A) for calendar year 2019, $400,000, and
                    ``(B) for any calendar year after 2019, the product 
                of--
                            ``(i) $400,000, and
                            ``(ii) the quotient obtained by dividing--
                                    ``(I) the national average wage 
                                index (as defined in section 209(k)(1)) 
                                for the second preceding calendar year, 
                                by
                                    ``(II) the national average wage 
                                index for calendar year 2017.''.
    (c) Employer Wage Surtax.--Section 3111 of the Internal Revenue 
Code of 1986 is amended by adding at the end the following new 
subsection:
    ``(f) Additional Tax for Old-Age, Survivors, and Disability 
Insurance.--
            ``(1) In general.--In addition to the taxes imposed by 
        subsections (a) and (b), there is hereby imposed on every 
        employer an excise tax, with respect to having individuals in 
        his employ, equal to 2 percent of additional wages (as defined 
        in paragraph (2)) paid by the employer with respect to 
        employment during any calendar year beginning after December 
        31, 2018.
            ``(2) Additional wages.--For purposes of paragraph (1), the 
        term `additional wages' has the same meaning given such term 
        under section 3101(c).''.
    (d) Railroad Retirement Tax Act.--
            (1) Railroad employees.--Section 3201 of the Internal 
        Revenue Code of 1986 is amended--
                    (A) by redesignating subsection (c) as subsection 
                (d); and
                    (B) by inserting after subsection (b) the following 
                new subsection:
    ``(c) Additional Tier 1 Tax.--
            ``(1) In general.--In addition to the taxes imposed by the 
        preceding subsections, there is hereby imposed on the income of 
        each employee a tax equal to 2 percent of additional 
        compensation (as defined in paragraph (2)) received by such 
        employee during any calendar year beginning after December 31, 
        2018, for services rendered by such employee.
            ``(2) Additional compensation.--For purposes of paragraph 
        (1), the term `additional compensation' has the same meaning 
        given the term `compensation' under section 3231(e) (determined 
        without regard to paragraph (2) thereof), except that such term 
        shall not include that amount of remuneration that is less 
        than--
                    ``(A) for calendar year 2019, $400,000, and
                    ``(B) for any calendar year after 2019, the product 
                of--
                            ``(i) $400,000, and
                            ``(ii) the quotient obtained by dividing--
                                    ``(I) the national average wage 
                                index (as defined in section 209(k)(1)) 
                                for the second preceding calendar year, 
                                by
                                    ``(II) the national average wage 
                                index for calendar year 2017.''.
            (2) Railroad employee representatives.--Section 3211 of the 
        Internal Revenue Code of 1986 is amended--
                    (A) by redesignating subsection (c) as subsection 
                (d); and
                    (B) by inserting after subsection (b) the following 
                new subsection:
    ``(c) Additional Tier 1 Tax.--In addition to the taxes imposed by 
the preceding subsections, there is hereby imposed on the income of 
each employee representative a tax equal to 4 percent of additional 
compensation (as defined under section 3201(c)) received by such 
employee representative during any calendar year beginning after 
December 31, 2018, for services rendered by such employee 
representative.''.
            (3) Railroad employers.--Section 3221 of the Internal 
        Revenue Code of 1986 is amended by adding at the end the 
        following new subsection:
    ``(e) Additional Tier 1 Tax.--In addition to the taxes imposed by 
subsections (a) and (b), there is hereby imposed on every employer an 
excise tax, with respect to having individuals in his employ, equal to 
2 percent of additional compensation (as defined under section 3201(c)) 
paid by such employer during any calendar year beginning after December 
31, 2018, for services rendered to such employer.''.
            (4) Social security equivalent benefit account.--Section 
        15A(b)(1)(A) of the Railroad Retirement Act of 1974 (45 U.S.C. 
        231n-1(b)(1)(A)) is amended by striking ``sections 3201(a), 
        3211(a)(1), and 3221(a) of the Railroad Retirement Tax Act'' 
        and inserting ``subsections (a) and (c) of section 3201, 
        subsections (a) and (c) of section 3211, and subsections (a) 
        and (e) of section 3221 of the Internal Revenue Code of 1986''.
    (e) Amendments to the Social Security Act.--
            (1) Transfer of amounts to federal old-age and survivors 
        insurance trust fund.--Section 201 of the Social Security Act 
        (42 U.S.C. 401) is amended--
                    (A) in subsection (b)(3)--
                            (i) by inserting ``and additional wages (as 
                        defined in section 1402(c) of such Code)'' 
                        after ``section 3121 of such Code)'';
                            (ii) by inserting ``and additional wages'' 
                        after ``such wages'';
                            (iii) by inserting ``and additional wages'' 
                        after ``which wages''; and
                            (iv) by inserting ``and additional wages'' 
                        after ``records of wages'';
                    (B) in subsection (b)(4)--
                            (i) by inserting ``and additional self-
                        employment income (as defined in section 
                        3101(c) of such Code)'' after ``section 1402 of 
                        such Code)'';
                            (ii) by inserting ``and additional self-
                        employment income'' after ``such self-
                        employment income'';
                            (iii) by inserting ``and additional self-
                        employment income'' after ``which self-
                        employment income''; and
                            (iv) by inserting ``and additional self-
                        employment income'' after ``records of self-
                        employment income'';
                    (C) in subsection (c)(1)(R)--
                            (i) by inserting ``and additional wages (as 
                        so defined)'' after ``wages (as so defined)'';
                            (ii) by inserting ``and additional wages'' 
                        after ``which wages''; and
                            (iii) by inserting ``and additional wages'' 
                        after ``records of wages''; and
                    (D) in subsection (c)(2)(R)--
                            (i) by inserting ``and additional self-
                        employment income (as so defined)'' after 
                        ``self-employment income (as so defined)'';
                            (ii) by inserting ``and additional self-
                        employment income'' after ``which self-
                        employment income''; and
                            (iii) by inserting ``and additional self-
                        employment income'' after ``records of self-
                        employment income''.
            (2) Definition of additional wages.--Section 209 of the 
        Social Security Act (42 U.S.C. 409) is amended by adding at the 
        end the following new subsection:

                           ``Additional Wages

    ``(l) For purposes of this title, the term `additional wages' has 
the same meaning given the term `wages' (determined without regard to 
subsection (a)(1)), except that such term shall not include that amount 
of remuneration that is less than--
            ``(1) for calendar year 2019, $400,000, and
            ``(2) for any calendar year after 2019, the product of--
                    ``(A) $400,000, and
                    ``(B) the quotient obtained by dividing--
                            ``(i) the national average wage index (as 
                        defined in section 209(k)(1)) for the second 
                        preceding calendar year, by
                            ``(ii) the national average wage index for 
                        calendar year 2017.''.
            (3) Definition of additional self-employment income.--
        Section 211 of the Social Security Act (42 U.S.C. 411) is 
        amended by adding at the end the following new subsection:

                  ``Additional Self-Employment Income

    ``(m)(1) For purposes of this title, the term `additional self-
employment income' means, for any taxable year, the amount equal to the 
excess (if any) of--
            ``(A) the sum of self-employment income (determined without 
        regard to subsection (b)(1)) for the taxable year and wages (as 
        defined in section 209(a), determined without regard to 
        paragraph (1) thereof) paid to such individual during such 
        taxable year, over
            ``(B) the sum of the additional wages paid to such 
        individual for the taxable year and the amount determined under 
        paragraph (2) for the taxable year.
    ``(2) The amount determined under this paragraph is an amount equal 
to--
            ``(A) in the case of a taxable year beginning after 
        December 31, 2018, and before January 1, 2020, $400,000, and
            ``(B) in the case of any taxable year beginning after 
        December 31, 2019, the product of--
                    ``(i) $400,000, and
                    ``(ii) the quotient obtained by dividing--
                            ``(I) the national average wage index (as 
                        defined in section 209(k)(1)) for the calendar 
                        year which is 2 years before the calendar year 
                        in which the taxable year begins, by
                            ``(II) the national average wage index for 
                        calendar year 2017.''.

SEC. 5. INCLUSION OF SURPLUS EARNINGS IN SOCIAL SECURITY BENEFIT 
              FORMULA.

    (a) Inclusion of Surplus Average Indexed Monthly Earnings in 
Determination of Primary Insurance Amounts.--Section 215(a)(1)(A) of 
the Social Security Act (42 U.S.C. 415(a)(1)(A)) is amended--
            (1) in clauses (i), (ii), and (iii), by inserting ``basic'' 
        before ``average indexed monthly earnings'' each place it 
        appears;
            (2) in clause (ii), by striking ``and'' at the end;
            (3) in clause (iii), by inserting ``and'' at the end; and
            (4) by inserting after clause (iii) the following new 
        clause:
            ``(iv) 2 percent of the individual's surplus average 
        indexed monthly earnings,''.
    (b) Basic AIME and Surplus AIME.--
            (1) Basic aime.--Section 215(b)(1) of such Act (42 U.S.C. 
        415(b)(1)) is amended--
                    (A) in the matter preceding subparagraph (A), by 
                inserting ``basic'' before ``average''; and
                    (B) in subparagraph (A), by striking ``paragraph 
                (3)'' and inserting ``paragraph (3)(A)'' and by 
                inserting before the comma the following: ``to the 
                extent such total does not exceed the contribution and 
                benefit base for the applicable year''.
            (2) Surplus aime.--
                    (A) In general.--Section 215(b)(1) of such Act (as 
                amended by paragraph (1)) is amended--
                            (i) by redesignating subparagraphs (A) and 
                        (B) as clauses (i) and (ii), respectively;
                            (ii) by inserting ``(A)'' after ``(b)(1)''; 
                        and
                            (iii) by adding at the end the following 
                        new subparagraph:
    ``(B)(i) An individual's surplus average indexed monthly earnings 
shall be equal to the quotient obtained by dividing--
            ``(I) the total (after adjustment under paragraph (3)(B)) 
        of such individual's surplus earnings (determined under clause 
        (ii)) for such individual's benefit computation years 
        (determined under paragraph (2)), by
            ``(II) the number of months in those years.
    ``(ii) For purposes of clause (i) and paragraph (3)(B), an 
individual's surplus earnings for a benefit computation year are the 
total of such individual's additional wages (as defined in section 
209(l)) paid in and additional self-employment income (as defined in 
section 209(m)) credited to such benefit computation year, to the 
extent such total does not exceed the amount determined for such year 
under clause (iii).
    ``(iii) For purposes of clause (ii), the amount determined under 
this clause is--
            ``(I) in the case of a benefit computation year beginning 
        after December 31, 2018, and before January 1, 2020, $500,000; 
        and
            ``(II) in the case of any benefit computation year 
        beginning after December 31, 2019, the product of $500,000 and 
        the quotient obtained by dividing--
                    ``(aa) the national average wage index (as defined 
                in section 209(k)(1)) for the calendar year which is 2 
                years before the calendar year in which the benefit 
                computation year begins, by
                    ``(bb) the national average wage index for calendar 
                year 2017.''.
                    (B) Conforming amendment.--The heading for section 
                215(b) of such Act is amended by striking ``Average 
                Indexed Monthly Earnings'' and inserting ``Basic 
                Average Indexed Monthly Earnings; Surplus Average 
                Indexed Monthly Earnings''.
            (3) Adjustment of surplus earnings for purposes of 
        determining surplus aime.--Section 215(b)(3) of such Act (42 
        U.S.C. 415(b)(3)) is amended--
                    (A) in subparagraph (A), by striking ``subparagraph 
                (B)'' and inserting ``subparagraph (C)'' and by 
                inserting ``and determination of basic average indexed 
                monthly income'' after ``paragraph (2)'';
                    (B) by redesignating subparagraph (B) as 
                subparagraph (C); and
                    (C) by inserting after subparagraph (A) the 
                following new subparagraph:
    ``(B) For purposes of determining under paragraph (1)(B) an 
individual's surplus average indexed monthly earnings, the individual's 
surplus earnings (described in paragraph (1)(B)(ii)) for a benefit 
computation year shall be deemed to be equal to the product of--
            ``(i) the individual's surplus earnings for such year (as 
        determined without regard to this subparagraph), and
            ``(ii) the quotient described in subparagraph (A)(ii).''.
    (c) Railroad Retirement Act.--Section 1(h)(5) of the Railroad 
Retirement Act of 1974 (45 U.S.C. 231(h)(5)) is amended--
            (1) by striking ``and'' at the end of clause (ii);
            (2) by striking the period at the end of clause (iii) and 
        inserting ``; and''; and
            (3) by adding at the end the following new clause:
                            ``(iv) for each such calendar month after 
                        2018, the amount which is creditable as such 
                        individual's `additional wages' under section 
                        209(l) of the Social Security Act.''.
    (d) Effective Date.--The amendments made by this section shall 
apply with respect to individuals who initially become eligible (within 
the meaning of section 215(a)(3)(B) of the Social Security Act (42 
U.S.C. 415(a)(3)(B))) for old-age or disability insurance benefits 
under title II of the Social Security Act, or who die (before becoming 
eligible for such benefits), in any calendar year after 2018.
                                 <all>
```