II 

114TH CONGRESS 

1ST SESSION S. 1940 

To improve the retirement security of American families by increasing Social 

Security benefits for current and future beneficiaries while making Social 

Security stronger for future generations. 

IN THE SENATE OF THE UNITED STATES 

AUGUST 5, 2015 

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

to the Committee on Finance 

A BILL 

To improve the retirement security of American families by 

increasing Social Security benefits for current and future 

beneficiaries while making Social Security stronger for 

future generations. 

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 ‘‘Safeguarding Amer5 ican Families and Expanding Social Security Act of 

6 2015’’. 


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1 SEC. 2. DETERMINATION OF TAXABLE WAGES AND SELF2 EMPLOYMENT INCOME ABOVE CONTRIBU3 TION AND BENEFIT BASE AFTER 2015. 

4 (a) DETERMINATION OF TAXABLE WAGES ABOVE

5 CONTRIBUTION AND BENEFIT BASE AFTER 2015.— 

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 2016, 80 percent; 

24 ‘‘(B) for 2017 through 2019, the applica25 ble percentage under this paragraph for the 


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1 previous year, decreased by 20 percentage 

2 points; and 

3 ‘‘(C) for 2020 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 2016’’ 

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 2015 with respect to which such conVerDate Sep 11 2014 22:49 Aug 11, 2015 Jkt 049200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\S1940.IS S1940

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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 2016, 80 percent; 

9 ‘‘(2) for 2017 through 2019, the applicable per10 centage under this subsection for the previous year, 

11 decreased by 20 percentage points; and 

12 ‘‘(3) for 2020 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 2015. 

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

19 BASE AFTER 2015.— 

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: 


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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 2016, 80 percent; 


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1 ‘‘(B) for 2017 through 2019, the applica2 ble percentage under this paragraph for the 

3 previous year, decreased by 20 percentage 

4 points; and 

5 ‘‘(C) for 2020 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 2016’’ 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 2015, 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— 


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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 2016, 80 percent; 

12 ‘‘(2) for 2017 through 2019, the applicable per13 centage under this subsection for the previous year, 

14 decreased by 20 percentage points; and 

15 ‘‘(3) for 2020 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 2015. 


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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 


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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 2020, 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 2021, 1 percent; 

11 ‘‘(II) for each of calendar years 2022 

12 through 2034, the percent determined under 

13 this clause for the preceding year increased by 

14 1 percentage point; and 

15 ‘‘(III) for calendar year 2035 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 

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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 


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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 


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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 2020. 

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)) 


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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 


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

2 section 5(a) of the Safeguarding American Families 

3 and Expanding Social Security Act of 2015,’’. 

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, 2016. 

Æ 


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