I 

113TH CONGRESS 

1ST SESSION H. R. 1517 

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 

APRIL 11, 2013 

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 Mar 15 2010 02:15 Apr 19, 2013 Jkt 029200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6652 E:\BILLS\H1517.IH H1517

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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 2012 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 2033, and the Disability Insur19 ance Trust Fund alone will be depleted by 2016. 

20 (C) According to the 2012 Annual Report of 

21 the Board of Trustees of the Federal Hospital In22 surance and Federal Supplementary Medical InsurVerDate Mar 15 2010 02:15 Apr 19, 2013 Jkt 029200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H1517.IH H1517

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

3 2024. 

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 2012 Annual Reports, the Social Security and 

9 Medicare Boards of Trustees wrote, ‘‘Lawmakers 

10 should not delay addressing the long-run financial 

11 challenges facing Social Security and Medicare. If 

12 they take action sooner rather than later, more op13 tions and more time will be available to phase in 

14 changes so that the public has adequate time to pre15 pare.’’. 

16 (3) Social Security and Medicare are meant to 

17 provide a secure and stable base so that older Amer18 icans can live in dignity. 

19 (4) Protecting the future surpluses of these 

20 trust funds can only occur when meaningful reform 

21 has been enacted by Congress. Any path to solvency 

22 must include the protection of future surpluses. 


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1 SEC. 2. INTERIM PROTECTIONS FOR SOCIAL SECURITY 

2 TRUST FUND SURPLUS. 

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

4 402(d)) is amended— 

5 (1) by striking ‘‘It shall be the duty’’ and in6 serting ‘‘(1) Except as provided in paragraph (2), it 

7 shall be the duty’’; and 

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

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

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

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

12 paragraph: 

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

14 and Survivors Insurance Trust Fund a Social Security 

15 Surplus Protection Account. As soon as practicable after 

16 each fiscal year after fiscal year 2013, the Managing 

17 Trustee shall transfer to the Account, from amounts oth18 erwise available in the Trust Fund, amounts equivalent 

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

20 amounts shall be transferred from time to time to the Ac21 count, such amounts to be determined on the basis of esti22 mates by the Managing Trustee, and proper adjustments 

23 shall be made in amounts subsequently transferred to the 

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

25 the correct amount. 


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1 ‘‘(B) For purposes of subparagraph (A), the term ‘so2 cial security surplus’ means, for any fiscal year, the excess, 

3 if any, of— 

4 ‘‘(i) the sum of— 

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

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

7 3111(b)) of the Internal Revenue Code of 1986 

8 with respect to wages (as defined in section 

9 3121 of such Code) reported to the Secretary of 

10 the Treasury or his delegates pursuant to sub11 title F of such Code, as determined by the Sec12 retary of the Treasury by applying the applica13 ble rates of tax under such chapter 21 (other 

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

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

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

17 year, 

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

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

20 Revenue Code of 1986 with respect to self-em21 ployment income (as defined in section 1402 of 

22 such Code) reported to the Secretary of the 

23 Treasury on tax returns under subtitle F of 

24 such Code, as determined by the Secretary of 

25 the Treasury by applying the applicable rate of 


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1 tax under such chapter (other than section 

2 1401(b)) to such self-employment income, less 

3 the amounts specified in clause (2) of sub4 section (b) of this section for such fiscal year, 

5 and 

6 ‘‘(III) the amount equivalent to the aggre7 gate increase in tax liabilities under chapter 1 

8 of the Internal Revenue Code of 1986 which is 

9 attributable to the application of sections 86 

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

11 the Trust Fund, over 

12 ‘‘(ii) the sum of— 

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

14 during the fiscal year, and 

15 ‘‘(II) amounts authorized to be made avail16 able from the Trust Fund under subsection (g) 

17 of this section which are paid from the Trust 

18 Fund during such fiscal year. 

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

20 the Account shall not be available for investment by the 

21 Managing Trustee. 

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

23 shall not apply with respect to fiscal years commencing 

24 with or after the first fiscal year, after fiscal year 2013, 

25 for which a provision of Federal law takes effect and auVerDate Mar 15 2010 02:15 Apr 19, 2013 Jkt 029200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\H1517.IH H1517

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1 thorizes, for amounts in the Trust Fund, an investment 

2 vehicle other than obligations of the United States result3 ing in the transfer of Trust Fund assets to the general 

4 fund of the Treasury. 

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

6 meet the requirements of clause (i) if such provision in7 cludes the following: ‘This Act shall be considered to be 

8 a provision of Federal law meeting the requirements of 

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

10 SEC. 3. INTERIM PROTECTIONS FOR MEDICARE PART A 

11 TRUST FUND SURPLUS. 

12 (a) IN GENERAL.—Section 1817(c) of the Social Se13 curity Act (42 U.S.C. 1395i(c)) is amended— 

14 (1) by striking ‘‘It shall be the duty’’ and in15 serting ‘‘(1) Except as provided in paragraph (2), it 

16 shall be the duty’’; 

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

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

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

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

21 paragraph: 

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

23 Insurance Trust Fund a Medicare Surplus Protection Ac24 count (in this paragraph referred to as the ‘Account’). As 

25 soon as practicable after each fiscal year after fiscal year 


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1 2013, the Managing Trustee shall transfer to the Account, 

2 from amounts otherwise available in the Trust Fund, 

3 amounts equivalent to the Medicare part A surplus for 

4 such fiscal year. Such amounts shall be transferred from 

5 time to time to the Account, such amounts to be deter6 mined on the basis of estimates by the Managing Trustee, 

7 and proper adjustments shall be made in amounts subse8 quently transferred to the extent prior estimates were in 

9 excess of or were less than the correct amount. 

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

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

12 excess, if any, of— 

13 ‘‘(i) the sum of— 

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

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

16 Revenue Code of 1986 with respect to wages 

17 (as defined in section 3121 of such Code) re18 ported to the Secretary of the Treasury or his 

19 delegates pursuant to subtitle F of such Code, 

20 as determined by the Secretary of the Treasury 

21 by applying the applicable rates of tax under 

22 such sections to such wages; and 

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

24 of the Internal Revenue Code of 1986 with re25 spect to self-employment income (as defined in 


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1 section 1402 of such Code) reported to the Sec2 retary of the Treasury on tax returns under 

3 subtitle F of such Code, as determined by the 

4 Secretary of the Treasury by applying the ap5 plicable rate of tax under such section 1401(b) 

6 to such self-employment income; over 

7 ‘‘(ii) the sum of— 

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

9 during the fiscal year; and 

10 ‘‘(II) amounts authorized to be made avail11 able from the Trust Fund under subsection (f) 

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

13 paid from the Trust Fund during such fiscal 

14 year. 

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

16 the Account shall not be available for investment by the 

17 Managing Trustee. 

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

19 shall not apply with respect to fiscal years commencing 

20 with or after the first fiscal year, after fiscal year 2013, 

21 for which a provision of Federal law takes effect and au22 thorizes, for amounts in the Trust Fund, an investment 

23 vehicle other than obligations of the United States result24 ing in the transfer of Trust Fund assets to the general 

25 fund of the Treasury. 


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

2 meet the requirements of clause (i) if such provision in3 cludes the following: ‘This Act shall be considered to be 

4 a provision of Federal law meeting the requirements of 

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

6 SEC. 4. SOCIAL SECURITY AND MEDICARE PART A INVEST7 MENT COMMISSION. 

8 (a) ESTABLISHMENT.—There is established in the ex9 ecutive branch of the Government a Social Security and 

10 Medicare Part A Investment Commission (in this section 

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

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

13 after the date of the enactment of this Act, the Commis14 sion shall conduct a study to ascertain the most effective 

15 vehicles for investment of the Federal Old-Age and Sur16 vivors Insurance Trust Fund and the Federal Hospital In17 surance Trust Fund, other than investment in the form 

18 of obligations of the United States resulting in the trans19 fer of Trust Fund assets to the general fund of the Treas20 ury. Not later than October 1, 2014, the Commission shall 

21 submit a report to the President and to each House of 

22 the Congress setting forth its recommendations for such 

23 vehicles for investment, together with proposals for such 

24 administrative and legislative changes as the Commission 


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1 determines necessary to authorize and implement such 

2 recommendations. 

3 (c) COMPOSITION.—The Commission shall be com4 posed of— 

5 (1) 3 members appointed by the President, of 

6 whom 1 shall be designated by the President as 

7 Chairman; 

8 (2) 2 members appointed by the Speaker of the 

9 House of Representatives; 

10 (3) 1 member appointed by the minority leader 

11 of the House of Representatives; 

12 (4) 2 members appointed by the majority leader 

13 of the Senate; and 

14 (5) 1 member appointed by the minority leader 

15 of the Senate. 

16 (d) MEMBERSHIP REQUIREMENTS.—Members of the 

17 Commission shall have substantial experience, training, 

18 and expertise in the management of financial investments 

19 and pension benefit plans. 

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

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

22 vacancy on the Commission shall be filled in the manner 

23 in which the original appointment was made and shall be 

24 subject to any conditions that applied with respect to the 

25 original appointment. 


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1 (f) ADMINISTRATIVE PROVISIONS.— 

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

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

4 and 

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

6 Chairman. 

7 (2) EXERCISE OF POWERS.— 

8 (A) IN GENERAL.—The Commission shall 

9 perform the functions and exercise the powers 

10 of the Commission on a majority vote of a 

11 quorum of the Commission. Three members of 

12 the Commission shall constitute a quorum for 

13 the transaction of business. 

14 (B) VACANCIES.—A vacancy on the Com15 mission shall not impair the authority of a 

16 quorum of the Commission to perform the func17 tions and exercise the powers of the Commis18 sion. 

19 (g) COMPENSATION.— 

20 (1) IN GENERAL.—Each member of the Com21 mission who is not an officer or employee of the 

22 Federal Government shall be compensated at the 

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

24 Schedule for each day during which such member is 


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1 engaged in performing a function of the Commis2 sion. 

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

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

5 expenses under subchapter I of chapter 57 of title 

6 5, United States Code, while traveling away from 

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

8 the performance of the duties of the Commission. 

9 (h) TERMINATION.—The Commission shall terminate 

10 90 days after the date of the submission of its report pur11 suant to subsection (b). 

Æ 


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