I 

114TH CONGRESS 

1ST SESSION H. R. 1984 

To amend the Internal Revenue Code of 1986 and title II of the Social 

Security Act to repeal the cap on compensation subject to the payroll 

tax, to reallocate payroll tax revenue to the Social Security Trust Funds, 

to apply the CPI–E to Social Security cost-of-living increases, and for 

other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

APRIL 23, 2015 

Mr. DEFAZIO (for himself, Mr. CONYERS, Ms. DELBENE, Mr. GRIJALVA, Ms. 

PINGREE, and Ms. SLAUGHTER) introduced the following bill; which was 

referred to the Committee on Ways and Means, and in addition to the 

Committee on Education and the Workforce, for a period to be subsequently determined by the Speaker, in each case for consideration of such 

provisions as fall within the jurisdiction of the committee concerned 

A BILL 

To amend the Internal Revenue Code of 1986 and title 

II of the Social Security Act to repeal the cap on compensation subject to the payroll tax, to reallocate payroll 

tax revenue to the Social Security Trust Funds, to apply 

the CPI–E to Social Security cost-of-living increases, 

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, 


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1 SECTION 1. SHORT TITLE. 

2 This Act may be cited as the ‘‘Fair Adjustment and 

3 Income Revenue for Social Security Act’’ or the ‘‘FAIR 

4 Social Security Act’’. 

5 SEC. 2. REPEAL OF CAP ON COMPENSATION SUBJECT TO 

6 FEDERAL INSURANCE CONTRIBUTIONS ACT. 

7 (a) WAGES.—Section 3121(a) of the Internal Rev8 enue Code of 1986 is amended by striking paragraph (1). 

9 (b) SELF-EMPLOYMENT INCOME.—The first sentence 

10 of section 1402(b) of the Internal Revenue Code of 1986 

11 is amended by striking ‘‘include—’’ and all that follows 

12 and inserting ‘‘include the net earnings from self-employ13 ment if such net earnings for the taxable year are less 

14 than $400.’’. 

15 (c) CONFORMING AMENDMENTS.— 

16 (1) Section 6413(c) of the Internal Revenue 

17 Code of 1986 is amended— 

18 (A) by striking paragraph (1), and 

19 (B) in paragraph (2)(A) by striking ‘‘, not 

20 to exceed an amount equal to the contribution 

21 and benefit base (as determined under section 

22 230 of the Social Security Act) for any calendar 

23 year with respect to which such contribution 

24 and benefit base is effective,’’. 

25 (2) Section 3122 of the Internal Revenue Code 

26 of 1986 is amended by striking ‘‘The person making 


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1 such return may, for convenience of administration, 

2 make payments of the tax imposed under section 

3 3111 with respect to such service without regard to 

4 the contribution and benefit base limitation in sec5 tion 3121(a)(1), and he shall not be required to ob6 tain a refund of the tax paid under section 3111 on 

7 that part of the remuneration not included in wages 

8 by reason of section 3121(a)(1).’’. 

9 (3) Section 3125 of the Internal Revenue Code 

10 of 1986 is amended by striking ‘‘without regard to 

11 the contribution and benefit base limitation in sec12 tion 3121(a)(1)’’ each place it appears. 

13 (4) Section 3231(e)(2)(C) of the Internal Rev14 enue Code of 1986 is amended by inserting ‘‘(as in 

15 effect on the date of the enactment of the Fair Ad16 justment and Income Revenue for Social Security 

17 Act’’ after ‘‘employers)’’. 

18 (5) Section 3511(b) of the Internal Revenue 

19 Code of 1986 is amended by striking ‘‘3121(a)(1), 

20 3231(e)(2)(C),’’ and inserting ‘‘3231(e)(2)(C)’’. 

21 (d) EFFECTIVE DATE.—The amendments made by 

22 this section shall apply with respect to remuneration re23 ceived, and taxable years beginning, after December 31, 

24 2015. 


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1 SEC. 3. REALLOCATION OF PAYROLL TAX REVENUE. 

2 (a) ALLOCATION OF 2016 PAYROLL TAX REV3 ENUE.—With respect to that portion of wages (as defined 

4 in section 3121 of the Internal Revenue Code of 1986) 

5 paid during calendar year 2016 that would not be consid6 ered wages but for the amendment made by section 2(a), 

7 and with respect to that portion of self-employment in8 come (as defined in section 1402 of the Internal Revenue 

9 Code of 1986) reported for any taxable year beginning 

10 during such calendar year that would not be considered 

11 self-employment income but for the amendment made by 

12 section 2(b), paragraphs (1)(R) and (2)(R) of section 

13 201(b) of the Social Security Act (42 U.S.C. 401(b)) shall 

14 each be applied by substituting ‘‘12.40 per centum’’ for 

15 ‘‘1.80 per centum’’. 

16 (b) WAGES.—Section 201(b)(1) of the Social Security 

17 Act (42 U.S.C. 401(b)(1)) is amended by striking ‘‘and 

18 (R) 1.80 per centum of the wages (as so defined) paid 

19 after December 31, 1999, and so reported’’ and inserting 

20 ‘‘(R) 1.80 per centum of the wages (as so defined) paid 

21 after December 31, 1999, and before January 1, 2033, 

22 and so reported, (S) 1.60 per centum of the wages (as 

23 so defined) paid after December 31, 2032, and before Jan24 uary 1, 2050, and so reported, and (T) 1.80 per centum 

25 of the wages (as so defined) paid after December 31, 

26 2049, and so reported’’. 


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1 (c) SELF-EMPLOYMENT INCOME.—Section 201(b)(2) 

2 of such Act (42 U.S.C. 401(b)(2)) is amended by striking 

3 ‘‘and (R) 1.80 per centum of the amount of self-employ4 ment income (as so defined) so reported for any taxable 

5 year beginning after December 31, 1999’’ and inserting 

6 ‘‘(R) 1.80 per centum of the amount of self-employment 

7 income (as so defined) so reported for any taxable year 

8 beginning after December 31, 1999, and before January 

9 1, 2033, (S) 1.60 per centum of the amount of self-em10 ployment income (as so defined) so reported for any tax11 able year beginning after December 31, 2032, and before 

12 January 1, 2050, (T) 1.80 per centum of the amount of 

13 self-employment income (as so defined) so reported for 

14 any taxable year beginning after December 31, 2049’’. 

15 (d) EFFECTIVE DATE.—The amendments made by 

16 this section shall apply with respect to wages paid after 

17 December 31, 2015, and self-employment income for tax18 able years beginning after such date. 

19 SEC. 4. CONSUMER PRICE INDEX FOR ELDERLY CON20 SUMERS. 

21 (a) PUBLICATION.— 

22 (1) IN GENERAL.—The Bureau of Labor Statis23 tics of the Department of Labor shall prepare and 

24 publish an index for each calendar month to be 

25 known as the ‘‘Consumer Price Index for Elderly 


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1 Consumers’’ that indicates changes over time in ex2 penditures for consumption which are typical for in3 dividuals in the United States who are 62 years of 

4 age or older. 

5 (2) EFFECTIVE DATE.—Subsection (a) shall 

6 apply with respect to calendar months ending on or 

7 after July 31 of the calendar year following the cal8 endar year in which this Act is enacted. 

9 (3) AUTHORIZATION OF APPROPRIATIONS.— 

10 There are authorized to be appropriated such sums 

11 as are necessary to carry out the provisions of this 

12 section. 

13 (b) COMPUTATION OF COST-OF-LIVING IN14 CREASES.— 

15 (1) AMENDMENTS TO TITLE II.— 

16 (A) IN GENERAL.—Section 215(i)(1) of the 

17 Social Security Act (42 U.S.C. 415(i)(1)) is 

18 amended by adding at the end the following 

19 new subparagraph: 

20 ‘‘(H) the term ‘Consumer Price Index’ means 

21 the Consumer Price Index for Elderly Consumers 

22 (CPI–E, as published by the Bureau of Labor Sta23 tistics of the Department of Labor).’’. 

24 (B) APPLICATION TO PRE-1979 LAW.— 


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1 (i) IN GENERAL.—Section 215(i)(1) of 

2 the Social Security Act as in effect in De3 cember 1978, and as applied in certain 

4 cases under the provisions of such Act as 

5 in effect after December 1978, is amended 

6 by adding at the end the following new 

7 subparagraph: 

8 ‘‘(D) the term ‘Consumer Price Index’ means 

9 the Consumer Price Index for Elderly Consumers 

10 (CPI–E, as published by the Bureau of Labor Sta11 tistics of the Department of Labor).’’. 

12 (ii) CONFORMING CHANGE.—Section 

13 215(i)(4) of the Social Security Act (42 

14 U.S.C. 415(i)(4)) is amended by inserting 

15 ‘‘and by section 4 of the Fair Adjustment 

16 and Income Revenue for Social Security 

17 Act’’ after ‘‘1986’’. 

18 (C) EFFECTIVE DATE.—The amendments 

19 made by subparagraphs (A) and (B) shall apply 

20 to determinations made with respect to cost-of21 living computation quarters ending on or after 

22 September 30 of the second calendar year fol23 lowing the calendar year in which this Act is 

24 enacted. 

25 (2) AMENDMENTS TO TITLE XVIII.— 


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1 (A) IN GENERAL.—Title XVIII of such Act 

2 (42 U.S.C. 1395 et seq.) is amended— 

3 (i) in section 1814(i)(2)(B) (42 

4 U.S.C. 1395f(i)(2)(B)), by inserting ‘‘(i) 

5 for accounting years ending before October 

6 1 of the second calendar year following the 

7 calendar year in which the Fair Adjust8 ment and Income Revenue for Social Secu9 rity Act was enacted,’’ after ‘‘for a year 

10 is’’, and by inserting after ‘‘fifth month of 

11 the accounting year’’ the following: ‘‘, and 

12 (ii) for accounting years ending after Octo13 ber 1 of such calendar year, the cap 

14 amount determined under clause (i) for the 

15 last accounting year referred to in such 

16 clause, increased or decreased by the same 

17 percentage as the percentage increase or 

18 decrease, respectively, in the medical care 

19 expenditure category (or corresponding 

20 category) of the Consumer Price Index for 

21 Elderly Consumers, published by the Bu22 reau of Labor Statistics, from March of 

23 such calendar year to the fifth month of 

24 the accounting year’’; 


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1 (ii) in section 1821(c)(2)(C)(ii)(II) 

2 (42 U.S.C. 1395i–5(c)(2)(C)(ii)(II)), by 

3 striking ‘‘consumer price index for all 

4 urban consumers (all items; United States 

5 city average)’’ and inserting ‘‘Consumer 

6 Price Index for Elderly Consumers’’; 

7 (iii) in section 1833(h)(2)(A)(i) (42 

8 U.S.C. 1395l(h)(2)(A)(i)) by striking 

9 ‘‘Consumer Price Index for All Urban Con10 sumers (United States city average)’’ and 

11 inserting ‘‘Consumer Price Index for El12 derly Consumers’’; 

13 (iv) in section 1833(i)(2)(C)(i) (42 

14 U.S.C. 1395l(i)(2)(C)(i)), by striking 

15 ‘‘Consumer Price Index for all urban con16 sumers (U.S. city average)’’ and inserting 

17 ‘‘Consumer Price Index for Elderly Con18 sumers’’; 

19 (v) in section 1834(a)(14)(L) (42 

20 U.S.C. 1395m(a)(14)(L)), by striking 

21 ‘‘consumer price index for all urban con22 sumers (U.S. urban average)’’ and insert23 ing ‘‘applicable consumer price index’’; 

24 (vi) in section 1834(h)(4)(A)(xi)(I) 

25 (42 U.S.C. 1395m(h)(4)(A)(xi)(I)), by 


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1 striking ‘‘consumer price index for all 

2 urban consumers (United States city aver3 age)’’ and inserting ‘‘Consumer Price 

4 Index for Elderly Consumers’’; 

5 (vii) in section 1834(l)(3)(B) (42 

6 U.S.C. 1395m(l)(3)(B)), by striking ‘‘con7 sumer price index for all urban consumers 

8 (U.S. city average)’’ and inserting ‘‘Con9 sumer Price Index for Elderly Con10 sumers’’; 

11 (viii) in section 1839(i)(5)(A)(ii) (42 

12 U.S.C. 1395r(i)(5)(A)(ii)), by striking 

13 ‘‘Consumer Price Index (United States city 

14 average)’’ and inserting ‘‘Consumer Price 

15 Index for Elderly Consumers’’; 

16 (ix) in section 1842(s)(1)(B)(ii)(I) (42 

17 U.S.C. 1395u(s)(1)(B)(ii)(I)), by striking 

18 ‘‘consumer price index for all urban con19 sumers (United States city average)’’ and 

20 inserting ‘‘Consumer Price Index for El21 derly Consumers’’; 

22 (x) in each of subparagraphs (D)(ii) 

23 and (E)(i)(II) of section 1860D–14(a)(3) 

24 (42 U.S.C. 1395w–114(a)(3)) and in sec25 tion 1860D–14(a)(4)(A)(ii) (42 U.S.C. 


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1 1395w–114(a)(4)(A)(ii)), by striking ‘‘con2 sumer price index (all items; U.S. city av3 erage)’’ and inserting ‘‘Consumer Price 

4 Index for Elderly Consumers’’; 

5 (xi) in section 1882(p)(11)(C)(ii) (42 

6 U.S.C. 1395ss(p)(11)(C)(ii)), by striking 

7 ‘‘Consumer Price Index for all urban con8 sumers (all items; U.S. city average)’’ and 

9 inserting ‘‘Consumer Price Index for El10 derly Consumers’’; 

11 (xii) in each of clauses (iv) and 

12 (vi)(II) of section 1886(h)(2)(E) (42 

13 U.S.C. 1395ww(h)(2)(E)), by striking ‘‘for 

14 all urban consumers’’; and 

15 (xiii) in section 1886(h)(5)(B) (42 

16 U.S.C. 1395ww(h)(5)(B)), by striking 

17 ‘‘Consumer Price Index for All Urban Con18 sumers (United States city average)’’ and 

19 inserting ‘‘Consumer Price Index for El20 derly Consumers’’. 

21 (B) EFFECTIVE DATE.—The amendments 

22 made by subparagraph (A) shall apply with re23 spect to determinations made for periods ending 

24 after December 31 of the second calendar year 


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1 following the calendar year in which this Act 

2 was enacted. 

Æ 


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