II

106TH CONGRESS

2D SESSION S. 2180

To repeal the increase in the tax on social security benefits, to eliminate

the earnings test for individuals who have attained retirement age, and

to gradually raise the age for required minimum distributions from

pension plans, and for other purposes.

IN THE SENATE OF THE UNITED STATES

MARCH 2, 2000

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

to the Committee on Finance

A BILL

To repeal the increase in the tax on social security benefits,

to eliminate the earnings test for individuals who have

attained retirement age, and to gradually raise the age

for required minimum distributions from pension plans,

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 ‘‘Senior Citizens’ Finan5 cial Freedom Act’’.
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1 SEC. 2. REPEAL OF INCREASE IN TAX ON SOCIAL SECURITY

2 BENEFITS.

3 (a) IN GENERAL.—Paragraph (2) of section 86(a) of

4 the Internal Revenue Code of 1986 (relating to social se5 curity and tier 1 railroad retirement benefits) is amended

6 by adding at the end the following new flush sentence:

7 ‘‘This paragraph shall not apply to any taxable year

8 beginning after December 31, 2000.’’

9 (b) EFFECTIVE DATE.—The amendment made by

10 this section shall apply to taxable years beginning after

11 December 31, 2000.

12 SEC. 3. ELIMINATION OF EARNINGS TEST FOR INDIVID13 UALS WHO HAVE ATTAINED RETIREMENT

14 AGE.

15 (a) IN GENERAL.—Section 203 of the Social Security

16 Act (42 U.S.C. 403) is amended—

17 (1) in subsection (c)(1), by striking ‘‘the age of

18 seventy’’ and inserting ‘‘retirement age (as defined

19 in section 216(l))’’;

20 (2) in paragraphs (1)(A) and (2) of subsection

21 (d), by striking ‘‘the age of seventy’’ each place it

22 appears and inserting ‘‘retirement age (as defined in

23 section 216(l))’’;

24 (3) in subsection (f)(1)(B), by striking ‘‘was

25 age seventy or over’’ and inserting ‘‘was at or above

26 retirement age (as defined in section 216(l))’’;
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1 (4) in subsection (f)(3)—

(A) by striking ‘‘331 2 ⁄3 percent’’ and all

3 that follows through ‘‘any other individual,’’

4 and inserting ‘‘50 percent of such individual’s

5 earnings for such year in excess of the product

6 of the exempt amount as determined under

7 paragraph (8),’’; and

8 (B) by striking ‘‘age 70’’ and inserting

9 ‘‘retirement age (as defined in section 216(l))’’;

10 (5) in subsection (h)(1)(A), by striking ‘‘age

11 70’’ each place it appears and inserting ‘‘retirement

12 age (as defined in section 216(l))’’; and

13 (6) in subsection (j)—

14 (A) in the heading, by striking ‘‘Age Sev15 enty’’ and inserting ‘‘Retirement Age’’; and

16 (B) by striking ‘‘seventy years of age’’ and

17 inserting ‘‘having attained retirement age (as

18 defined in section 216(l))’’.

19 (b) CONFORMING AMENDMENTS ELIMINATING THE

20 SPECIAL EXEMPT AMOUNT FOR INDIVIDUALS WHO HAVE

21 ATTAINED RETIREMENT AGE.—

22 (1) UNIFORM EXEMPT AMOUNT.—Section

23 203(f)(8)(A) of the Social Security Act (42 U.S.C.

24 403(f)(8)(A)) is amended by striking ‘‘the new ex25 empt amounts (separately stated for individuals de-
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1 scribed in subparagraph (D) and for other individ2 uals) which are to be applicable’’ and inserting ‘‘a

3 new exempt amount which shall be applicable’’.

4 (2) CONFORMING AMENDMENTS.—Section

5 203(f)(8)(B) of such Act (42 U.S.C. 403(f)(8)(B))

6 is amended—

7 (A) in the matter preceding clause (i), by

8 striking ‘‘Except’’ and all that follows through

9 ‘‘whichever’’ and inserting ‘‘The exempt amount

10 which is applicable for each month of a par11 ticular taxable year shall be whichever’’;

12 (B) in clauses (i) and (ii), by striking ‘‘cor13 responding’’ each place it appears; and

14 (C) in the last sentence, by striking ‘‘an

15 exempt amount’’ and inserting ‘‘the exempt

16 amount’’.

17 (3) REPEAL OF BASIS FOR COMPUTATION OF

18 SPECIAL EXEMPT AMOUNT.—Section 203(f)(8)(D) of

19 such Act (42 U.S.C. (f)(8)(D)) is repealed.

20 (c) ADDITIONAL CONFORMING AMENDMENTS.—

21 (1) ELIMINATION OF REDUNDANT REFERENCES

22 TO RETIREMENT AGE.—Section 203 of the Social

23 Security Act (42 U.S.C. 403) is amended—

24 (A) in subsection (c), in the last sentence,

25 by striking ‘‘nor shall any deduction’’ and all
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1 that follows and inserting ‘‘nor shall any deduc2 tion be made under this subsection from any

3 widow’s or widower’s insurance benefit if the

4 widow, surviving divorced wife, widower, or sur5 viving divorced husband involved became enti6 tled to such benefit prior to attaining age 60.’’;

7 and

8 (B) in subsection (f)(1), by striking clause

9 (D) and inserting the following: ‘‘(D) for which

10 such individual is entitled to widow’s or wid11 ower’s insurance benefits if such individual be12 came so entitled prior to attaining age 60,’’.

13 (2) CONFORMING AMENDMENT TO PROVISIONS

14 FOR DETERMINING AMOUNT OF INCREASE ON AC15 COUNT OF DELAYED RETIREMENT.—Section

16 202(w)(2)(B)(ii) of such Act (42 U.S.C.

17 402(w)(2)(B)(ii)) is amended—

18 (A) by striking ‘‘either’’; and

19 (B) by striking ‘‘or suffered deductions

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

21 equal to the amount of such benefit’’.

22 (3) PROVISIONS RELATING TO EARNINGS

23 TAKEN INTO ACCOUNT IN DETERMINING SUBSTAN24 TIAL GAINFUL ACTIVITY OF BLIND INDIVIDUALS.—

25 The second sentence of section 223(d)(4)(A) of the
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1 Social Security Act (42 U.S.C. 423(d)(4)(A)) is

2 amended by striking ‘‘if section 102 of the Senior

3 Citizens’ Right to Work Act of 1996 had not been

4 enacted’’ and inserting the following: ‘‘if the amend5 ments to section 203 made by section 102 of the

6 Senior Citizens’ Right to Work Act of 1996 and by

7 the Senior Citizens’ Financial Freedom Act had not

8 been enacted’’.

9 (d) EFFECTIVE DATE.—The amendments and re10 peals made by this section shall apply with respect to tax11 able years ending after December 31, 2000.

12 SEC. 4. GRADUAL INCREASE IN AGE FOR REQUIRED MIN13 IMUM DISTRIBUTIONS FROM PENSION

14 PLANS.

15 (a) IN GENERAL.—Section 401(a)(9)(C) of the Inter16 nal Revenue Code of 1986 (defining required beginning

17 date) is amended—

(1) by striking ‘‘age 701 18 ⁄2’’ and inserting ‘‘the

19 applicable age’’, and

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

21 clause:

22 ‘‘(v) APPLICABLE AGE.—For purposes

23 of this subparagraph, the applicable age

24 shall be determined in accordance with the

25 following table:
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Applicable

‘‘Calendar year: Age:

2000 ......................................................................................... 71

2001 ......................................................................................... 72

2002 ......................................................................................... 73

2003 ......................................................................................... 74

2004 ......................................................................................... 75

2005 ......................................................................................... 76

2006 ......................................................................................... 77

2007 ......................................................................................... 78

2008 ......................................................................................... 79

2009 ......................................................................................... 80

2010 ......................................................................................... 81

2011 ......................................................................................... 82

2012 ......................................................................................... 83

2013 ......................................................................................... 84

2014 and thereafter ................................................................. 85.’’

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

2 this section shall apply to years beginning after December

3 31, 1999.

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