I 

115TH CONGRESS 

1ST SESSION H. R. 1218 

To amend titles II and XVIII of the Social Security Act to establish a 

Social Security Surplus Protection Account in the Federal Old-Age and 

Survivors Insurance Trust Fund to hold the Social Security surplus 

and a Medicare Surplus Protection Account in the Federal Hospital 

Insurance Trust Fund to hold the Medicare surplus, to provide for 

suspension of investment of amounts held in such Accounts until enactment of legislation providing for investment of the Trust Funds in 

investment vehicles other than obligations of the United States, and 

to establish a Social Security and Medicare Part A Investment Commission to make recommendations for alternative forms of investment of 

the Social Security and Medicare surpluses. 

IN THE HOUSE OF REPRESENTATIVES 

FEBRUARY 24, 2017 

Mr. WALBERG introduced the following bill; which was referred to the 

Committee on Ways and Means 

A BILL 

To amend titles II and XVIII of the Social Security Act 

to establish a Social Security Surplus Protection Account 

in the Federal Old-Age and Survivors Insurance Trust 

Fund to hold the Social Security surplus and a Medicare 

Surplus Protection Account in the Federal Hospital Insurance Trust Fund to hold the Medicare surplus, to 

provide for suspension of investment of amounts held 

in such Accounts until enactment of legislation providing 

for investment of the Trust Funds in investment vehicles 

other than obligations of the United States, and to estabVerDate Sep 11 2014 01:22 Mar 01, 2017 Jkt 069200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6652 E:\BILLS\H1218.IH H1218

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lish a Social Security and Medicare Part A Investment 

Commission to make recommendations for alternative 

forms of investment of the Social Security and Medicare 

surpluses. 

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; FINDINGS. 

4 (a) SHORT TITLE.—This Act may be cited as the 

5 ‘‘Social Security and Medicare Lock-Box Act’’. 

6 (b) FINDINGS REGARDING SOCIAL SECURITY AND

7 MEDICARE PART A.—The Congress finds the following: 

8 (1)(A) Long-term projections show serious 

9 problems facing the fiscal health of the trust funds 

10 associated with Social Security and Medicare Hos11 pital Insurance. 

12 (B) According to the 2016 Annual Report of 

13 the Board of Trustees of the Federal Old-Age and 

14 Survivors Insurance and Federal Disability Insur15 ance Trust Funds, the assets of the combined Fed16 eral Old-Age and Survivors Insurance Trust Fund 

17 and the Federal Disability Insurance Trust Fund 

18 will be exhausted by 2034, and the Disability Insur19 ance Trust Fund alone will be depleted by 2022. 

20 (C) According to the 2016 Annual Report of 

21 the Board of Trustees of the Federal Hospital In22 surance and Federal Supplementary Medical InsurVerDate Sep 11 2014 01:22 Mar 01, 2017 Jkt 069200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H1218.IH H1218

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1 ance Trust Funds, the assets of the Federal Hos2 pital Insurance Trust Fund will be exhausted by 

3 2028. 

4 (2)(A) The Trustees of these trust funds 

5 strongly encourage action to protect the solvency of 

6 the trust funds. 

7 (B) In their message to the public, included in 

8 the 2016 Annual Reports, the Social Security and 

9 Medicare Boards of Trustees wrote, ‘‘Social Secu10 rity’s and Medicare’s projected long-range costs ex11 ceed currently scheduled financing and will require 

12 legislative action to avoid subjecting beneficiaries 

13 and taxpayers to unanticipated program changes. 

14 The sooner that lawmakers take action, the wider 

15 will be the range of solutions to consider and the 

16 more time that will be available to phase in changes, 

17 giving the public adequate time to prepare. Earlier 

18 action allows more generations to share the eco19 nomic cost of maintaining program solvency, and 

20 would provide more opportunity to ameliorate ad21 verse impacts on vulnerable populations, including 

22 lower-income workers and people already signifi23 cantly dependent on program benefits.’’ 


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1 (3) Social Security and Medicare are meant to 

2 provide a secure and stable base so that older Amer3 icans can live in dignity. 

4 (4) Protecting the future surpluses of these 

5 trust funds can only occur when meaningful reform 

6 has been enacted by Congress. Any path to solvency 

7 must include the protection of future surpluses. 

8 SEC. 2. INTERIM PROTECTIONS FOR SOCIAL SECURITY 

9 TRUST FUND SURPLUS. 

10 Section 201(d) of the Social Security Act (42 U.S.C. 

11 402(d)) is amended— 

12 (1) by striking ‘‘It shall be the duty’’ and in13 serting ‘‘(1) Except as provided in paragraph (2), it 

14 shall be the duty’’; 

15 (2) by striking ‘‘(1) on original issue at the 

16 issue price, or (2)’’ and inserting ‘‘(A) on original 

17 issue at the issue price, or (B)’’; and 

18 (3) by adding at the end the following new 

19 paragraph: 

20 ‘‘(2)(A) There is established in the Federal Old-Age 

21 and Survivors Insurance Trust Fund a Social Security 

22 Surplus Protection Account. As soon as practicable after 

23 the end of each fiscal year after fiscal year 2018, the Man24 aging Trustee shall transfer to the Account, from amounts 

25 otherwise available in the Trust Fund, amounts equivalent 


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1 to the social security surplus for such fiscal year. Such 

2 amounts shall be transferred from time to time to the Ac3 count, such amounts to be determined on the basis of esti4 mates by the Managing Trustee, and proper adjustments 

5 shall be made in amounts subsequently transferred to the 

6 extent prior estimates were in excess of or were less than 

7 the correct amount. 

8 ‘‘(B) For purposes of subparagraph (A), the term ‘so9 cial security surplus’ means, for any fiscal year, the excess, 

10 if any, of— 

11 ‘‘(i) the sum of— 

12 ‘‘(I) the taxes imposed for such fiscal year 

13 by chapter 21 (other than sections 3101(b) and 

14 3111(b)) of the Internal Revenue Code of 1986 

15 with respect to wages (as defined in section 

16 3121 of such Code) reported to the Secretary of 

17 the Treasury or his delegates pursuant to sub18 title F of such Code, as determined by the Sec19 retary of the Treasury by applying the applica20 ble rates of tax under such chapter 21 (other 

21 than sections 3101(b) and 3111(b)) to such 

22 wages, less the amounts specified in clause (1) 

23 of subsection (b) of this section for such fiscal 

24 year, 


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1 ‘‘(II) the taxes imposed by chapter 2 

2 (other than section 1401(b)) of the Internal 

3 Revenue Code of 1986 with respect to self-em4 ployment income (as defined in section 1402 of 

5 such Code) reported to the Secretary of the 

6 Treasury on tax returns under subtitle F of 

7 such Code, as determined by the Secretary of 

8 the Treasury by applying the applicable rate of 

9 tax under such chapter (other than section 

10 1401(b)) to such self-employment income, less 

11 the amounts specified in clause (2) of sub12 section (b) of this section for such fiscal year, 

13 and 

14 ‘‘(III) the amount equivalent to the aggre15 gate increase in tax liabilities under chapter 1 

16 of the Internal Revenue Code of 1986 which is 

17 attributable to the application of sections 86 

18 and 871(a)(3) of such Code to payments from 

19 the Trust Fund, over 

20 ‘‘(ii) the sum of— 

21 ‘‘(I) benefits paid from the Trust Fund 

22 during the fiscal year, and 

23 ‘‘(II) amounts authorized to be made avail24 able from the Trust Fund under subsection (g) 


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1 of this section which are paid from the Trust 

2 Fund during such fiscal year. 

3 ‘‘(C) Notwithstanding paragraph (1), the balance in 

4 the Account shall not be available for investment by the 

5 Managing Trustee. 

6 ‘‘(D)(i) The preceding provisions of this paragraph 

7 shall not apply with respect to fiscal years commencing 

8 with or after the first fiscal year, after fiscal year 2018, 

9 for which a provision of Federal law takes effect and au10 thorizes, for amounts in the Trust Fund, an investment 

11 vehicle other than obligations of the United States. 

12 ‘‘(ii) A provision of Federal law shall be deemed to 

13 meet the requirements of clause (i) if such provision in14 cludes the following: ‘This Act shall be considered to be 

15 a provision of Federal law meeting the requirements of 

16 section 201(d)(2)(D)(i) of the Social Security Act.’.’’. 

17 SEC. 3. INTERIM PROTECTIONS FOR MEDICARE PART A 

18 TRUST FUND SURPLUS. 

19 (a) IN GENERAL.—Section 1817(c) of the Social Se20 curity Act (42 U.S.C. 1395i(c)) is amended— 

21 (1) by striking ‘‘It shall be the duty’’ and in22 serting ‘‘(1) Except as provided in paragraph (2), it 

23 shall be the duty’’; 


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1 (2) by striking ‘‘(1) on original issue at the 

2 issue price, or (2)’’ and inserting ‘‘(A) on original 

3 issue at the issue price, or (B)’’; and 

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

5 paragraph: 

6 ‘‘(2)(A) There is established in the Federal Hospital 

7 Insurance Trust Fund a Medicare Surplus Protection Ac8 count (in this paragraph referred to as the ‘Account’). As 

9 soon as practicable after the end of each fiscal year after 

10 fiscal year 2018, the Managing Trustee shall transfer to 

11 the Account, from amounts otherwise available in the 

12 Trust Fund, amounts equivalent to the Medicare part A 

13 surplus for such fiscal year. Such amounts shall be trans14 ferred from time to time to the Account, such amounts 

15 to be determined on the basis of estimates by the Man16 aging Trustee, and proper adjustments shall be made in 

17 amounts subsequently transferred to the extent prior esti18 mates were in excess of or were less than the correct 

19 amount. 

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

21 ‘Medicare part A surplus’ means, for any fiscal year, the 

22 excess, if any, of— 

23 ‘‘(i) the sum of— 

24 ‘‘(I) the taxes imposed for such fiscal year 

25 by sections 3101(b) and 3111(b) of the Internal 


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1 Revenue Code of 1986 with respect to wages 

2 (as defined in section 3121 of such Code) re3 ported to the Secretary of the Treasury or his 

4 delegates pursuant to subtitle F of such Code, 

5 as determined by the Secretary of the Treasury 

6 by applying the applicable rates of tax under 

7 such sections to such wages; and 

8 ‘‘(II) the taxes imposed by section 1401(b) 

9 of the Internal Revenue Code of 1986 with re10 spect to self-employment income (as defined in 

11 section 1402 of such Code) reported to the Sec12 retary of the Treasury on tax returns under 

13 subtitle F of such Code, as determined by the 

14 Secretary of the Treasury by applying the ap15 plicable rate of tax under such section 1401(b) 

16 to such self-employment income; over 

17 ‘‘(ii) the sum of— 

18 ‘‘(I) benefits paid from the Trust Fund 

19 during the fiscal year; and 

20 ‘‘(II) amounts authorized to be made avail21 able from the Trust Fund under subsection (f) 

22 of this section (or section 201(g)) which are 

23 paid from the Trust Fund during such fiscal 

24 year. 


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1 ‘‘(C) Notwithstanding paragraph (1), the balance in 

2 the Account shall not be available for investment by the 

3 Managing Trustee. 

4 ‘‘(D)(i) The preceding provisions of this paragraph 

5 shall not apply with respect to fiscal years commencing 

6 with or after the first fiscal year, after fiscal year 2018, 

7 for which a provision of Federal law takes effect and au8 thorizes, for amounts in the Trust Fund, an investment 

9 vehicle other than obligations of the United States. 

10 ‘‘(ii) A provision of Federal law shall be deemed to 

11 meet the requirements of clause (i) if such provision in12 cludes the following: ‘This Act shall be considered to be 

13 a provision of Federal law meeting the requirements of 

14 section 1817(c)(2)(D)(i) of the Social Security Act.’.’’. 

15 SEC. 4. SOCIAL SECURITY AND MEDICARE PART A INVEST16 MENT COMMISSION. 

17 (a) ESTABLISHMENT.—There is established in the ex18 ecutive branch of the Government a Social Security and 

19 Medicare Part A Investment Commission (in this section 

20 referred to as the ‘‘Commission’’). 

21 (b) STUDY AND REPORT.—As soon as practicable 

22 after the date of the enactment of this Act, the Commis23 sion shall conduct a study to ascertain the most effective 

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1 surance Trust Fund, other than investment in the form 

2 of obligations of the United States. Not later than October 

3 1, 2018, the Commission shall submit a report to the 

4 President and to each House of the Congress setting forth 

5 its recommendations for such vehicles for investment, to6 gether with proposals for such administrative and legisla7 tive changes as the Commission determines necessary to 

8 authorize and implement such recommendations. 

9 (c) COMPOSITION.—The Commission shall be com10 posed of— 

11 (1) 3 members appointed by the President, of 

12 whom 1 shall be designated by the President as 

13 Chairman; 

14 (2) 2 members appointed by the Speaker of the 

15 House of Representatives; 

16 (3) 1 member appointed by the minority leader 

17 of the House of Representatives; 

18 (4) 2 members appointed by the majority leader 

19 of the Senate; and 

20 (5) 1 member appointed by the minority leader 

21 of the Senate. 

22 (d) MEMBERSHIP REQUIREMENTS.—Members of the 

23 Commission shall have substantial experience, training, 

24 and expertise in the management of financial investments 

25 and pension benefit plans. 


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1 (e) LENGTH OF APPOINTMENTS.—Members of the 

2 Commission shall serve for the life of the Commission. A 

3 vacancy on the Commission shall be filled in the manner 

4 in which the original appointment was made and shall be 

5 subject to any conditions that applied with respect to the 

6 original appointment. 

7 (f) ADMINISTRATIVE PROVISIONS.— 

8 (1) MEETINGS.—The Commission shall meet— 

9 (A) not less than once during each month; 

10 and 

11 (B) at additional times at the call of the 

12 Chairman. 

13 (2) EXERCISE OF POWERS.— 

14 (A) IN GENERAL.—The Commission shall 

15 perform the functions and exercise the powers 

16 of the Commission on a majority vote of a 

17 quorum of the Commission. Three members of 

18 the Commission shall constitute a quorum for 

19 the transaction of business. 

20 (B) VACANCIES.—A vacancy on the Com21 mission shall not impair the authority of a 

22 quorum of the Commission to perform the func23 tions and exercise the powers of the Commis24 sion. 

25 (g) COMPENSATION.— 


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1 (1) IN GENERAL.—Each member of the Com2 mission who is not an officer or employee of the 

3 Federal Government shall be compensated at the 

4 daily rate of basic pay for level IV of the Executive 

5 Schedule for each day during which such member is 

6 engaged in performing a function of the Commis7 sion. 

8 (2) EXPENSES.—A member of the Commission 

9 shall be paid travel, per diem, and other necessary 

10 expenses under subchapter I of chapter 57 of title 

11 5, United States Code, while traveling away from 

12 such member’s home or regular place of business in 

13 the performance of the duties of the Commission. 

14 (h) TERMINATION.—The Commission shall terminate 

15 90 days after the date of the submission of its report pur16 suant to subsection (b). 

Æ 


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