II

106TH CONGRESS

2D SESSION S. 2364

To amend the Social Security Act to require Social Security Administration

publications to highlight critical information relating to the future financing shortfalls of the social security program.

IN THE SENATE OF THE UNITED STATES

APRIL 5, 2000

Mr. SANTORUM (for himself and Mr. GREGG) introduced the following bill;

which was read twice and referred to the Committee on Finance

A BILL

To amend the Social Security Act to require Social Security

Administration publications to highlight critical information relating to the future financing shortfalls of the

social security program.

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 ‘‘Social Security Right

5 to Know Act’’.
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1 SEC. 2. EXPANSION OF SOCIAL SECURITY ACCOUNT STATE2 MENT.

3 (a) IN GENERAL.—Section 1143(a)(2) of the Social

4 Security Act (42 U.S.C. 1320b–13(a)(2)) is amended by

5 striking ‘‘and’’ at the end of subparagraph (C), by striking

6 the period at the end of subparagraph (D) and inserting

7 a semicolon, and by adding at the end the following:

8 ‘‘(E) a statement providing information that—

9 ‘‘(i) while the old age, survivors, and dis10 ability insurance program currently collects

11 more in employer, employee, and self-employ12 ment contributions than such program pays out

13 in retirement, disability, survivor, and auxiliary

14 benefits each year, such program will begin to

15 run cash flow deficits in 2015, thereafter neces16 sitating the allocation of general tax revenues in

17 order to finance promised benefits; and

18 ‘‘(ii) the trust funds for such program con19 tain claims on future Government resources

20 sufficient to cover the deficit through 2037, but

21 after that date, the trust funds would collect

22 sufficient revenues to pay 72 percent of bene23 fits; and

24 ‘‘(F) a statement explaining the nature of the

25 Federal old age, survivors, and disability insurance

26 trust funds, including the following: ‘Social Security
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1 Trust Fund balances are available to finance future

2 benefit payments and other Trust Fund responsibil3 ities only in a bookkeeping sense. They do not con4 sist of real economic assets that can be drawn down

5 in the future to fund benefits. Instead, such balances

6 are claims on the United States Treasury that, when

7 redeemed, will have to be financed by raising taxes,

8 borrowing from the public, or reducing benefits or

9 other expenditures. The existence of large Social Se10 curity Trust Fund balances, therefore, does not, by

11 itself, have any impact on the Federal Government’s

12 ability to pay benefits.’.

13 For purposes of subparagraph (E), the dates and percent14 ages described in such subparagraph shall be adjusted an15 nually based on the Alternative II (Intermediate) findings

16 of the Office of the Chief Actuary contained in the most

17 recent report of the Board of Trustees.’’.

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

19 subsection (a) shall apply with respect to statements pro20 vided after the date of enactment of this Act.

21 SEC. 3. EXPANSION OF ANNUAL REPORT OF THE TRUSTEES

22 OF THE SOCIAL SECURITY TRUST FUNDS.

23 (a) IN GENERAL.—Section 201(c) of the Social Secu24 rity Act (42 U.S.C. 401(c)) is amended by inserting before

25 the penultimate sentence the following: ‘‘Based on the Al-
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1 ternative II (Intermediate) findings of the Office of the

2 Chief Actuary, such report, including the report’s sum3 mary and any items that accompany the release of such

4 report, shall include in a clear and simple manner the in5 formation described in subsection (n)(1).

6 (b) ADDITIONAL CONTENTS OF REPORT.—Section

7 201 of the Social Security Act (42 U.S.C. 401) is amended

8 by adding at the end the following:

9 ‘‘(n)(1) For purposes of subsection (c), the informa10 tion described in this subsection is the following:

11 ‘‘(A) An estimate of the year in which an12 nual outlays from the Trust Funds is first pro13 jected, using the Trustees’ intermediate esti14 mates, to exceed the annual cash income of the

15 Trust Funds. For purposes of this paragraph,

16 annual cash income of the Trust Funds shall be

17 determined by including payroll and benefit tax

18 revenues, but not intragovernmental transfers

19 or interest income.

20 ‘‘(B) The annual excess of such projected

21 annual outlays from the Trust Funds over the

22 annual cash income of the Trust Funds in each

23 year, beginning with the first year identified in

24 subparagraph (A) and extending through the

25 year of projected program insolvency.
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1 ‘‘(C) The aggregate amount of the annual

2 excesses identified in subparagraph (B) for the

3 75-year projection period included in the report

4 and the change in such amount from the pre5 vious year’s report.

6 ‘‘(D) The amount of deficit or surplus that

7 the old-age, survivor, and disability insurance

8 program will run in the last year in the 75-year

9 projection period included in the report and the

10 aggregate assets and unfunded obligations con11 tained in the Trust Funds in that final pro12 jected year.

13 ‘‘(E) The amount that payroll taxes would

14 have to be raised or benefits be reduced (both

15 in percentage terms) in order to keep the old16 age, survivor, and disability insurance program

17 in annual financial balance after any cumulative

18 balances in the Trust Funds are exhausted. For

19 purposes of the preceding sentence, such pro20 gram shall be considered to be in annual finan21 cial balance when the annual cash income of the

22 Trust Funds and annual outlays from the

23 Trust Funds are approximately equal for each

24 year throughout the 75-year projection period

25 included in the report.
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1 ‘‘(F) How the annual amounts identified in

2 subparagraph (B) would change if either rais3 ing payroll taxes or reducing benefits to keep

4 the program in financial balance is delayed for

5 5, 10, 25, and 50 years.

6 ‘‘(G) A provision explaining the nature of

7 the Trust Funds, including the following state8 ment: ‘Social Security Trust Fund balances are

9 available to finance future benefit payments

10 and other Trust Fund responsibilities only in a

11 bookkeeping sense. They do not consist of real

12 economic assets that can be drawn down in the

13 future to fund benefits. Instead, such balances

14 are claims on the United States Treasury that,

15 when redeemed, will have to be financed by

16 raising taxes, borrowing from the public, or re17 ducing benefits or other expenditures. The ex18 istence of large Social Security Trust Fund bal19 ances, therefore, does not, by itself, have any

20 impact on the Federal Government’s ability to

21 pay benefits.’.

22 ‘‘(2) The information described in subpara23 graphs (B), (C), and (D) of paragraph (1) shall be

24 presented in terms of nominal dollars, inflation-ad25 justed dollars, and present discounted value in the
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1 report under subsection (c)(2), and in terms of infla2 tion-adjusted dollars in the summary of such report.

3 ‘‘(3) The Board of Trustees shall publish the

4 economic model and all relevant data that are used

5 to make the financial projections included in the re6 port under subsection (c)(2) and to make it available

7 on the Social Security Administration Internet web

8 site. Annually, the Board of Trustees shall also in9 clude in such report any changes made to the model

10 and data in the preceding 12 months.

11 ‘‘(4) The information described in paragraph

12 (1) shall also be included in a separate report to

13 Congress to be submitted not later than the first day

14 of April of each year (beginning with 2000).’’.

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

16 this section shall apply with respect to reports made after

17 the date of enactment of this Act.

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