II

103D CONGRESS

2D SESSION S. 1892

To amend title II of the Social Security Act to phase out the earnings

test over a 10-year period for individuals who have attained retirement

age, and for other purposes.

IN THE SENATE OF THE UNITED STATES

MARCH 7 (legislative day, FEBRUARY 22), 1994

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

to the Committee on Finance

A BILL

To amend title II of the Social Security Act to phase out

the earnings test over a 10-year period for individuals

who have attained retirement age, and for other

purposes.

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 ‘‘Older Americans’

5 Freedom to Work Act of 1994’’.
2

•S 1892 IS

1 SEC. 2. PHASE OUT OF THE EARNINGS TEST OVER A 10-

2 YEAR PERIOD FOR INDIVIDUALS WHO HAVE

3 ATTAINED RETIREMENT AGE.

4 (a) LIBERALIZATION OF EARNINGS TEST OVER THE

5 PERIOD 1995–2004 FOR INDIVIDUALS WHO HAVE AT6 TAINED RETIREMENT AGE.—Effective with respect to

7 taxable years ending after 1994, subparagraph (D) of sec8 tion 203(f)(8) of the Social Security Act is amended to

9 read as follows:

10 ‘‘(D) Notwithstanding any other provision of

11 this subsection, the exempt amount which is applica12 ble to an individual who has attained retirement age

13 (as defined in section 216(l)) before the close of the

14 taxable year involved shall be increased by $12,000

15 in each taxable year over the exempt amount for the

16 previous taxable year, beginning with any taxable

17 year ending after 1994 and before 2005.’’.

18 (b) REPEAL OF EARNINGS TEST IN 2005 FOR INDI19 VIDUALS WHO HAVE ATTAINED RETIREMENT AGE.—Ef20 fective with respect to taxable years ending after 2004—

21 (1) clause (B) in the third sentence of section

22 203(f)(1) of the Social Security Act is amended by

23 striking out ‘‘age seventy’’ and inserting in lieu

24 thereof ‘‘retirement age (as defined in section

25 216(l))’’; and

26 (2) section 203(f)(3) of such Act is amended—
3

•S 1892 IS

(A) by striking out ‘‘331 1 ⁄2 percent’’ and all

2 that follows through ‘‘other individual’’ and in3 serting in lieu thereof ‘‘50 percent of his earn4 ings for such year in excess of the product of

5 the applicable exempt amount as determined

6 under paragraph (8)’’, and

7 (B) by striking out ‘‘age 70’’ and inserting

8 in lieu thereof ‘‘retirement age (as defined in

9 section 216(l))’’.

10 (c) CONFORMING AND RELATED AMENDMENTS.—Ef11 fective with respect to taxable years ending after 2004—

12 (1) section 203(c)(1) of the Social Security Act

13 is amended by striking out ‘‘is under the age of sev14 enty’’ and inserting in lieu thereof ‘‘is under retire15 ment age (as defined in section 216(l))’’;

16 (2) the last sentence of subsection (c) of section

17 203 of such Act is amended by striking out ‘‘nor

18 shall any deduction’’ and all that follows and insert19 ing in lieu thereof ‘‘nor shall any deduction be made

20 under this subsection from any widow’s or widower’s

21 insurance benefit if the widow, surviving divorced

22 wife, widower, or surviving divorced husband in23 volved became entitled to such benefit prior to at24 taining age 60.’’;
4

•S 1892 IS

1 (3) paragraphs (1)(A) and (2) of section 203(d)

2 of such Act are each amended by striking out

3 ‘‘under the age of seventy’’ and inserting in lieu

4 thereof ‘‘under retirement age (as defined in section

5 216(l))’’;

6 (4) section 203(f)(1) of such Act is amended by

7 striking out clause (D) and inserting in lieu thereof

8 the following: ‘‘(D) for which such individual is enti9 tled to widow’s or widower’s insurance benefits if

10 such individual became so entitled prior to attaining

11 age 60, or’’;

12 (5) subparagraph (D) of section 203(f)(5) of

13 such Act is amended—

14 (A) by striking out ‘‘(D) In the case of’’

15 and all that follows down through ‘‘(ii) an indi16 vidual’’ and inserting in lieu thereof the follow17 ing:

18 ‘‘(D) An individual’’;

19 (B) by striking out ‘‘became entitled to

20 such benefits’’ and all that follows and inserting

21 in lieu thereof ‘‘became entitled to such bene22 fits, there shall be excluded from gross income

23 any such other income.’’; and

24 (C) by shifting such subparagraph as so

25 amended to the left to the extent necessary to
5

•S 1892 IS

1 align its left margin with that of subparagraphs

2 (A) through (C) of such section;

3 (6) section 203(f)(8)(A) of such Act is amended

4 by striking out ‘‘the new exempt amounts (sepa5 rately stated for individuals described in subpara6 graph (D) and for other individuals) which are to be

7 applicable’’ and inserting in lieu thereof ‘‘the new

8 exempt amount which is to be applicable’’;

9 (7) section 203(f)(8)(B) of such Act is amend10 ed—

11 (A) by striking out all that precedes clause

12 (i) and inserting in lieu thereof the following:

13 ‘‘(B) The exempt amount which is applicable

14 for each month of a particular taxable year shall be

15 whichever of the following is the larger—’’;

16 (B) by striking out ‘‘corresponding’’ in

17 clause (i); and

18 (C) by striking out ‘‘an exempt amount’’ in

19 the matter following clause (ii) and inserting in

20 lieu thereof ‘‘the exempt amount’’;

21 (8) section 203(f)(8)(D) of such Act (as amend22 ed by subsection (a) of this Act) is repealed;

23 (9) section 203(f)(9) of such Act is repealed;

24 (10) section 203(h)(1)(A) of such Act is amend25 ed by striking out ‘‘age 70’’ each place it appears
6

•S 1892 IS

1 and inserting in lieu thereof ‘‘retirement age (as de2 fined in section 216(l))’’;

3 (11) section 203(j) of such Act is amended to

4 read as follows:

5 ‘‘Attainment of Retirement Age

6 ‘‘(j) For purposes of this section—

7 ‘‘(1) an individual shall be considered as having

8 attained retirement age (as defined in section

9 216(l)) during the entire month in which he attains

10 such age; and

11 ‘‘(2) the term ‘retirement age (as defined in

12 section 216(l))’, with respect to any individual enti13 tled to monthly insurance benefits under section

14 202, means the retirement age (as so defined) which

15 is applicable in the case of old-age insurance bene16 fits, regardless of whether or not the particular ben17 efits to which the individual is entitled (or the only

18 such benefits) are old-age insurance benefits.’’;

19 (12) section 202(w)(2)(B)(ii) of such Act is

20 amended—

21 (A) by striking out ‘‘either’’; and

22 (B) by striking out ‘‘or suffered deductions

23 under section 203(b) or 203(c) in amounts

24 equal to the amount of such benefit’’; and
7

•S 1892 IS

1 (13) the second sentence of section 223(d)(4) of

2 such Act is amended by inserting ‘‘(or would be ap3 plicable to such individuals but for the amendments

4 made by the Older Americans’ Freedom to Work Act

5 of 1994)’’ after ‘‘subparagraph (D) thereof’’ the

6 first place it appears.

Æ