II

105TH CONGRESS

2D SESSION S. 1790

To amend title II of the Social Security Act to ensure the integrity of

the Social Security trust funds by requiring the Managing Trustee to

invest the annual surplus of such trust funds in marketable interestbearing obligations of the United States and certificates of deposit in

depository institutions insured by the Federal Deposit Insurance Corporation, and to protect such trust funds from the public debt limit.

IN THE SENATE OF THE UNITED STATES

MARCH 18, 1998

Mr. BROWNBACK 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 ensure the

integrity of the Social Security trust funds by requiring

the Managing Trustee to invest the annual surplus of

such trust funds in marketable interest-bearing obligations of the United States and certificates of deposit

in depository institutions insured by the Federal Deposit

Insurance Corporation, and to protect such trust funds

from the public debt limit.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,
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1 SECTION 1. SHORT TITLE.

2 This Act may be cited as the ‘‘Social Security Preser3 vation Act of 1997’’.

4 SEC. 2. INVESTMENT OF THE FEDERAL OLD-AGE AND SUR5 VIVORS INSURANCE TRUST FUND AND THE

6 FEDERAL DISABILITY INSURANCE TRUST

7 FUND.

8 (a) IN GENERAL.—Section 201(d) of the Social Secu9 rity Act (42 U.S.C. 401(d)) is amended—

10 (1) by inserting ‘‘(1)’’ after ‘‘(d)’’;

11 (2) by striking ‘‘Such investments may be made

12 only’’ and inserting the following: ‘‘Except as pro13 vided in paragraph (2), such investments may be

14 made only’’;

15 (3) by striking the last sentence; and

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

17 paragraph:

18 ‘‘(2)(A) The Managing Trustee shall determine the

19 annual surplus (as defined in subparagraph (B)) for each

20 of the Trust Funds as of the end of each fiscal year. The

21 Managing Trustee shall ensure that such annual surplus

22 is invested, throughout the next following fiscal year, in—

23 ‘‘(i) marketable interest-bearing obligations of

24 the United States or obligations guaranteed as to

25 both principal and interest by the United States,
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1 purchased on original issue or at the market price,

2 or

3 ‘‘(ii) certificates of deposit in insured depository

4 institutions (as defined in section 3(c)(2) of the Fed5 eral Deposit Insurance Act).

6 ‘‘(B) For purposes of this paragraph, the ‘annual sur7 plus’ for either of the Trust Funds as of the end of a

8 fiscal year is the excess (if any) of—

9 ‘‘(i) the sum of—

10 ‘‘(I) in the case of the Federal Old-Age

11 and Survivors Insurance Trust Fund, the

12 amounts appropriated to such Trust Fund

13 under clauses (3) and (4) of subsection (a) for

14 the fiscal year,

15 ‘‘(II) in the case of the Federal Disability

16 Insurance Trust Fund, the amounts appro17 priated to such Trust Fund under clauses (1)

18 and (2) of subsection (b) for the fiscal year,

19 and

20 ‘‘(III) in either case, the amount appro21 priated to such Trust Fund under section

22 121(e) of the Social Security Amendments of

23 1983 for the fiscal year, and any amounts oth24 erwise credited to or deposited in such Trust

25 Fund under this title for the fiscal year, over
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1 ‘‘(ii) the amounts paid or transferred from such

2 Trust Fund during the fiscal year.’’.

3 (b) EFFECTIVE DATE.—The amendments made by

4 this section shall apply with respect to annual surpluses

5 as of the end of fiscal years beginning on or after October

6 1, 2002.

7 SEC. 3. PROTECTION OF THE SOCIAL SECURITY TRUST

8 FUNDS FROM THE PUBLIC DEBT LIMIT.

9 (a) PROTECTION OF TRUST FUNDS.—Notwithstand10 ing any other provision of law—

11 (1) no officer or employee of the United States

12 may—

13 (A) delay the deposit of any amount into

14 (or delay the credit of any amount to) the Fed15 eral Old-Age and Survivors Insurance Trust

16 Fund or the Federal Disability Insurance Trust

17 Fund or otherwise vary from the normal terms,

18 procedures, or timing for making such deposits

19 or credits, or

20 (B) refrain from the investment in public

21 debt obligations of amounts in either of such

22 Trust Funds,

23 if a purpose of such action or inaction is to not in24 crease the amount of outstanding public debt obliga25 tions, and
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1 (2) no officer or employee of the United States

2 may disinvest amounts in either of such Trust

3 Funds which are invested in public debt obligations

4 if a purpose of the disinvestment is to reduce the

5 amount of outstanding public debt obligations.

6 (b) PROTECTION OF BENEFITS AND EXPENDITURES

7 FOR ADMINISTRATIVE EXPENSES.—

8 (1) IN GENERAL.—Notwithstanding subsection

9 (a), during any period for which cash benefits or ad10 ministrative expenses would not otherwise be payable

11 from the Federal Old-Age and Survivors Insurance

12 Trust Fund or the Federal Disability Insurance

13 Trust Fund by reason of an inability to issue further

14 public debt obligations because of the applicable

15 public debt limit, public debt obligations held by

16 such Trust Fund shall be sold or redeemed only for

17 the purpose of making payment of such benefits or

18 administrative expenses and only to the extent cash

19 assets of such Trust Fund are not available from

20 month to month for making payment of such bene21 fits or administrative expenses.

22 (2) ISSUANCE OF CORRESPONDING DEBT.—For

23 purposes of undertaking the sale or redemption of

24 public debt obligations held by the Federal Old-Age

25 and Survivors Insurance Trust Fund or the Federal
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1 Disability Insurance Trust Fund pursuant to para2 graph (1), the Secretary of the Treasury may issue

3 corresponding public debt obligations to the public,

4 in order to obtain the cash necessary for payment of

5 benefits or administrative expenses from such Trust

6 Fund, notwithstanding the public debt limit.

7 (3) ADVANCE NOTICE OF SALE OR REDEMP8 TION.—Not less than 3 days prior to the date on

9 which, by reason of the public debt limit, the Sec10 retary of the Treasury expects to undertake a sale

11 or redemption authorized under paragraph (1), the

12 Secretary of the Treasury shall report to each House

13 of the Congress and to the Comptroller General of

14 the United States regarding the expected sale or re15 demption. Upon receipt of such report, the Comp16 troller General shall review the extent of compliance

17 with subsection (a) and paragraphs (1) and (2) of

18 this subsection and shall issue such findings and rec19 ommendations to each House of the Congress as the

20 Comptroller General considers necessary and appro21 priate.

22 (c) PUBLIC DEBT OBLIGATION.—For purposes of

23 this section, the term ‘‘public debt obligation’’ means any
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1 obligation subject to the public debt limit established

2 under section 3101 of title 31, United States Code.

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