I 

113TH CONGRESS 

2D SESSION H. R. 5306 

To protect our Social Security system and improve benefits for current and 

future generations. 

IN THE HOUSE OF REPRESENTATIVES 

JULY 31, 2014 

Mr. LARSON of Connecticut introduced the following bill; which was referred 

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

on Education and the Workforce and the Budget, 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 protect our Social Security system and improve benefits 

for current and future generations. 

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 2100 

5 Act’’. 


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1 TITLE I—STRENGTHENING 

2 BENEFITS 

3 SEC. 101. ACROSS-THE-BOARD BENEFIT INCREASE. 

4 (a) IN GENERAL.—Section 215(a)(1)(A)(i) of the So5 cial Security Act (42 U.S.C. 415(a)(1)(A)(i)) is amended 

6 by striking ‘‘90 percent’’ and inserting ‘‘93 percent’’. 

7 (b) EFFECTIVE DATE.— 

8 (1) IN GENERAL.—The amendment made by 

9 subsection (a) shall apply with respect to monthly 

10 insurance benefits payable for any month after De11 cember 2014. 

12 (2) RECOMPUTATION OF PRIMARY INSURANCE

13 AMOUNTS.—Notwithstanding section 215(f) of the 

14 Social Security Act, the Commissioner of Social Se15 curity shall recompute primary insurance amounts 

16 originally computed for months prior to January 

17 2015 to the extent necessary to carry out the 

18 amendments made by this section. 

19 SEC. 102. COMPUTATION OF COST-OF-LIVING INCREASES. 

20 (a) IN GENERAL.—Section 215(i)(1) of the Social Se21 curity Act (42 U.S.C. 415(i)(1)) is amended by adding 

22 at the end the following new subparagraph: 

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

24 the Consumer Price Index for Elderly Consumers 


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1 (CPI–E, as published by the Bureau of Labor Sta2 tistics of the Department of Labor).’’. 

3 (b) APPLICATION TO PRE-1979 LAW.— 

4 (1) IN GENERAL.—Section 215(i)(1) of the So5 cial Security Act as in effect in December 1978, and 

6 as applied in certain cases under the provisions of 

7 such Act as in effect after December 1978, is 

8 amended by adding at the end the following new 

9 subparagraph: 

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

11 the Consumer Price Index for Elderly Consumers 

12 (CPI–E, as published by the Bureau of Labor Sta13 tistics of the Department of Labor).’’. 

14 (2) CONFORMING CHANGE.—Section 215(i)(4) 

15 of the Social Security Act (42 U.S.C. 415(i)(4)) is 

16 amended by inserting ‘‘and by section 102 of the So17 cial Security 2100 Act’’ after ‘‘1986’’. 

18 (c) NO EFFECT ON ADJUSTMENTS UNDER OTHER

19 LAWS.—Section 215(i) of the Social Security Act (42 

20 U.S.C. 415(i)) is amended by adding at the end the fol21 lowing: 

22 ‘‘(6) Any provision of law (other than in this title, 

23 title VIII, or title XVI) which provides for adjustment of 

24 an amount based on a change in benefit amounts resulting 

25 from a determination made under this subsection shall be 


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1 applied and administered without regard to the amend2 ments made by section 102 of the Social Security 2100 

3 Act.’’. 

4 (d) PUBLICATION OF CONSUMER PRICE INDEX FOR

5 ELDERLY CONSUMERS.—The Bureau of Labor Statistics 

6 of the Department of Labor shall prepare and publish the 

7 index authorized by section 191 of the Older Americans 

8 Amendments Act of 1987 (29 U.S.C. 2 note) for each cal9 endar month, beginning with July of the calendar year fol10 lowing the calendar year in which this Act is enacted, and 

11 such index shall be known as the ‘‘Consumer Price Index 

12 for Elderly Consumers’’. 

13 (e) EFFECTIVE DATE.—The amendments made by 

14 subsection (a) shall apply to determinations made with re15 spect to cost-of-living computation quarters (as defined in 

16 section 215(i)(1)(B) of the Social Security Act (42 U.S.C. 

17 415(i)(1)(B))) ending on or after September 30 of the sec18 ond calendar year following the calendar year in which this 

19 Act is enacted. 

20 SEC. 103. INCREASE IN MINIMUM BENEFIT FOR LIFETIME 

21 LOW EARNERS BASED ON YEARS IN THE 

22 WORKFORCE. 

23 (a) IN GENERAL.—Section 215(a)(1) of the Social 

24 Security Act (42 U.S.C. 415(a)(1)) is amended— 


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1 (1) by redesignating subparagraph (D) as sub2 paragraph (E); and 

3 (2) by inserting after subparagraph (C) the fol4 lowing new subparagraph: 

5 ‘‘(D)(i) Effective with respect to the benefits of indi6 viduals who become eligible for old-age insurance benefits 

7 or disability insurance benefits (or die before becoming so 

8 eligible) after 2014, no primary insurance amount com9 puted under subparagraph (A) may be less than the great10 er of— 

11 ‘‘(I) the minimum monthly amount computed 

12 under subparagraph (C); or 

13 ‘‘(II) in the case of an individual who has more 

14 than 10 years of work (as defined in clause (iv)(I)), 

15 the alternative minimum amount determined under 

16 clause (ii). 

17 ‘‘(ii)(I) The alternative minimum amount determined 

under this clause is the applicable percentage of 1 18 ⁄12 of 

19 the annual dollar amount determined under clause (iii) for 

20 the year in which the amount is determined. 

21 ‘‘(II) For purposes of subclause (I), the applicable 

22 percentage is the percentage specified in connection with 

23 the number of years of work, as set forth in the following 

24 table: 


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‘‘If the number of years The applicable 

of work is: percentage is: 

11 ...................................................................................... 6.25 percent

12 ...................................................................................... 12.50 percent

13 ...................................................................................... 18.75 percent

14 ...................................................................................... 25.00 percent

15 ...................................................................................... 31.25 percent

16 ...................................................................................... 37.50 percent

17 ...................................................................................... 43.75 percent

18 ...................................................................................... 50.00 percent

19 ...................................................................................... 56.25 percent

20 ...................................................................................... 62.50 percent

21 ...................................................................................... 68.75 percent

22 ...................................................................................... 75.00 percent

23 ...................................................................................... 81.25 percent

24 ...................................................................................... 87.50 percent

25 ...................................................................................... 93.75 percent

26 ...................................................................................... 100.00 percent

27 ...................................................................................... 106.25 percent

28 ...................................................................................... 112.50 percent

29 ...................................................................................... 118.75 percent

30 or more ........................................................................ 125.00 percent. 

1 ‘‘(iii) The annual dollar amount determined under 

2 this clause is— 

3 ‘‘(I) for calendar year 2015, the poverty guide4 line for 2014; and 

5 ‘‘(II) for any calendar year after 2015, the an6 nual dollar amount for 2015 multiplied by the ratio 

7 of— 

8 ‘‘(aa) the national average wage index (as 

9 defined in section 209(k)(1)) for the second cal10 endar year preceding the calendar year for 

11 which the determination is made, to 

12 ‘‘(bb) the national average wage index (as 

13 so defined) for 2013. 

14 ‘‘(iv) For purposes of this subparagraph— 


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1 ‘‘(I) the term ‘year of work’ means, with re2 spect to an individual, a year to which 4 quarters of 

3 coverage have been credited based on such individ4 ual’s wages and self-employment income; and 

5 ‘‘(II) the term ‘poverty guideline for 2014’ 

6 means the annual poverty guideline for 2014 (as up7 dated annually in the Federal Register by the De8 partment of Health and Human Services under the 

9 authority of section 673(2) of the Omnibus Budget 

10 Reconciliation Act of 1981) as applicable to a single 

11 individual.’’. 

12 (b) RECOMPUTATION.—Notwithstanding section 

13 215(f)(1) of the Social Security Act, the Commissioner of 

14 Social Security shall recompute primary insurance 

15 amounts originally computed for months prior to Novem16 ber 2014 to the extent necessary to carry out the amend17 ments made by this section. 

18 (c) CONFORMING AMENDMENT.—Section 209(k)(1) 

19 of such Act (42 U.S.C. 409(k)(1)) is amended by inserting 

20 ‘‘215(a)(1)(E),’’ after ‘‘215(a)(1)(D),’’. 


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1 SEC. 104. INCREASE IN THRESHOLD AMOUNTS AND RATE 

2 FOR INCLUSION OF SOCIAL SECURITY BENE3 FITS IN INCOME. 

4 (a) IN GENERAL.—Subsection (a) of section 86 of the 

5 Internal Revenue Code of 1986 is amended to read as fol6 lows: 

7 ‘‘(a) IN GENERAL.—Gross income for the taxable 

8 year of any taxpayer described in subsection (b) (notwith9 standing section 207 of the Social Security Act) includes 

10 social security benefits in an amount equal to the lesser 

11 of— 

12 ‘‘(1) 85 percent of the social security benefits 

13 received during the taxable year, or 

14 ‘‘(2) one-half of the excess described in sub15 section (b)(1).’’. 

16 (b) BASE AMOUNT.—Subsection (c) of section 86 of 

17 such Code is amended to read as follows: 

18 ‘‘(c) BASE AMOUNT.—For purposes of this section, 

19 the term ‘base amount’ means— 

20 ‘‘(1) except as otherwise provided in this para21 graph, $50,000, 

22 ‘‘(2) $100,000 in the case of a joint return, and 

23 ‘‘(3) zero in the case of a taxpayer who— 

24 ‘‘(A) is married as of the close of the tax25 able year (within the meaning of section 7703) 


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1 but does not file a joint return for such year, 

2 and 

3 ‘‘(B) does not live apart from his spouse at 

4 all times during the taxable year.’’. 

5 (c) HOSPITAL INSURANCE TRUST FUND HELD

6 HARMLESS.—Section 121(e)(1) of the Social Security 

7 Amendments of 1986 (42 U.S.C. 401 note) is amended 

8 by adding at the end the following new subparagraph: 

9 ‘‘(C) The amounts appropriated to the hospital 

10 insurance trust fund by subparagraph (B) shall be 

11 determined, and transferred from the general fund, 

12 at such times and in such manner so as to replicate, 

13 to the extent possible, the appropriations and trans14 fers which would have occurred with respect to such 

15 trust fund had subsections (a) and (b) of section 

16 104 of the Social Security 2100 Act not been en17 acted.’’. 

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

19 this section shall apply to taxable years beginning after 

20 December 31, 2014. 


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1 TITLE II—STRENGTHENING THE 

2 TRUST FUND 

3 SEC. 201. DETERMINATION OF WAGES AND SELF-EMPLOY4 MENT INCOME ABOVE CONTRIBUTION AND 

5 BENEFIT BASE AFTER 2013. 

6 (a) DETERMINATION OF WAGES ABOVE CONTRIBU7 TION AND BENEFIT BASE AFTER 2014.— 

8 (1) AMENDMENTS TO THE INTERNAL REVENUE

9 CODE.— 

10 (A) IN GENERAL.—Paragraph (1) of sec11 tion 3121(a) of the Internal Revenue Code of 

12 1986 is amended by inserting after ‘‘such cal13 endar year.’’ the following: ‘‘The preceding sen14 tence shall apply only to calendar years for 

15 which the contribution and benefit base (as so 

16 determined) is less than $400,000, and, for 

17 such calendar years, only to the extent remu18 neration paid to such employee by such em19 ployer with respect to employment does not ex20 ceed $400,000.’’. 

21 (B) CONFORMING AMENDMENT.—Para22 graph (1) of section 3121(a) of the Internal 

23 Revenue Code of 1986 is amended by striking 

24 ‘‘Act) to’’ and inserting ‘‘Act), or in excess of 

25 $400,000, to’’. 


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1 (2) AMENDMENT TO THE SOCIAL SECURITY

2 ACT.—Section 209(a)(1)(I) of the Social Security 

3 Act (42 U.S.C. 409(a)(1)(I)) is amended by insert4 ing before the semicolon at the end the following: 

5 ‘‘except that this subparagraph shall apply only to 

6 calendar years for which the contribution and ben7 efit base (as so determined) is less than $400,000, 

8 and, for such calendar years, only to the extent re9 muneration paid to such employee by such employer 

10 with respect to employment does not exceed 

11 $400,000’’. 

12 (3) EFFECTIVE DATE.—The amendments made 

13 by this subsection shall apply with respect to remu14 neration paid in calendar years after 2014. 

15 (b) DETERMINATION OF SELF-EMPLOYMENT IN16 COME ABOVE CONTRIBUTION AND BENEFIT BASE AFTER

17 2014.— 

18 (1) AMENDMENTS TO THE INTERNAL REVENUE

19 CODE.— 

20 (A) IN GENERAL.—Paragraph (1) of sec21 tion 1402(b) of the Internal Revenue Code of 

22 1986 is amended to read as follows: 

23 ‘‘(1) in the case of the tax imposed by section 

24 1401(a), an amount equal to— 


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1 ‘‘(A) $400,000, reduced (but not below 

2 zero) by 

3 ‘‘(B) the sum of— 

4 ‘‘(i) the part of the net earnings from 

5 self-employment (if any) which is not in 

6 excess of— 

7 ‘‘(I) the amount equal to the con8 tribution and benefit base (as deter9 mined under section 230 of the Social 

10 Security Act) which is effective for the 

11 calendar year in which such taxable 

12 year begins, minus 

13 ‘‘(II) the amount of the wages 

14 paid to such individual during such 

15 taxable year, plus 

16 ‘‘(ii) the amount of the wages paid to 

17 such individual during such taxable year 

18 which is in excess of the amount in clause 

19 (i)(I); or’’. 

20 (B) PHASEOUT.—Subsection (b) of section 

21 1402 of the Internal Revenue Code of 1986 is 

22 amended by adding at the end the following: 

23 ‘‘Paragraph (1) shall apply only to taxable 

24 years beginning in calendar years for which the 

25 contribution and benefit base (as determined 


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1 under section 230 of the Social Security Act) is 

2 less than $400,000.’’. 

3 (2) AMENDMENTS TO THE SOCIAL SECURITY

4 ACT.— 

5 (A) IN GENERAL.—Section 211(b)(1) of 

6 the Social Security Act (42 U.S.C. 411(b)) is 

7 amended— 

8 (i) in subparagraph (I)— 

9 (I) by inserting ‘‘and before 

10 2014’’ after ‘‘1974’’; and 

11 (II) by striking ‘‘or’’ at the end; 

12 and 

13 (ii) by adding at the end the fol14 lowing: 

15 ‘‘(J) For any taxable year beginning in any 

16 calendar year after 2014, an amount equal to— 

17 ‘‘(i) $400,000, reduced (but not below 

18 zero) by 

19 ‘‘(ii) the sum of— 

20 ‘‘(I) the part of the net earnings 

21 from self-employment (if any) which is 

22 not in excess of— 

23 ‘‘(aa) the amount equal to 

24 the contribution and benefit base 

25 (as determined under section 


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1 230) which is effective for the 

2 calendar year in which such tax3 able year begins, minus 

4 ‘‘(bb) the amount of the 

5 wages paid to such individual 

6 during such taxable year, plus 

7 ‘‘(II) the amount of the wages 

8 paid to such individual during such 

9 taxable year which is in excess of the 

10 amount in subclause (I)(aa); or’’. 

11 (B) PHASEOUT.—Section 211(b) of the 

12 Social Security Act (42 U.S.C. 411(b)) is 

13 amended by adding at the end the following: 

14 ‘‘Paragraph (1) shall apply only to taxable 

15 years beginning in calendar years for which the 

16 contribution and benefit base (as determined 

17 under section 230) is less than $400,000.’’. 

18 (3) EFFECTIVE DATE.—The amendments made 

19 by this subsection shall apply to net earnings from 

20 self-employment derived, and remuneration paid, in 

21 calendar years after 2014. 

22 SEC. 202. INCLUSION OF EARNINGS OVER $400,000 IN SO23 CIAL SECURITY BENEFIT FORMULA. 

24 (a) INCLUSION OF EARNINGS OVER $400,000 IN DE25 TERMINATION OF PRIMARY INSURANCE AMOUNTS.—SecVerDate Mar 15 2010 01:48 Aug 09, 2014 Jkt 039200 PO 00000 Frm 00014 Fmt 6652 Sfmt 6201 E:\BILLS\H5306.IH H5306

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1 tion 215(a)(1)(A) of the Social Security Act (42 U.S.C. 

2 415(a)(1)(A)) is amended— 

3 (1) in clause (ii), by striking ‘‘and’’ at the end; 

4 (2) in clause (iii), by inserting ‘‘and’’ at the 

5 end; and 

6 (3) by inserting after clause (iii) the following: 

7 ‘‘(iv) 2 percent of the individual’s excess aver8 age indexed monthly earnings (as defined in sub9 section (b)(5)(A)).’’. 

10 (b) DEFINITION OF EXCESS AVERAGE INDEXED

11 MONTHLY EARNINGS.—Section 215(b) of the Social Secu12 rity Act (42 U.S.C. 415(b)) is amended— 

13 (1) by striking ‘‘wages’’ and ‘‘self-employment 

14 income’’ each place such terms appear and inserting 

15 ‘‘basic wages’’ and ‘‘basic self-employment income’’, 

16 respectively; and 

17 (2) by adding at the end the following: 

18 ‘‘(5)(A) An individual’s excess average indexed 

19 monthly earnings shall be equal to the amount of the indi20 vidual’s average indexed monthly earnings that would be 

21 determined under this subsection by substituting ‘excess 

22 wages’ for ‘basic wages’ and ‘excess self-employment in23 come’ for ‘basic self-employment income’ each place such 

24 terms appear in this subsection (except in this paragraph). 

25 ‘‘(B) For purposes of this subsection— 


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1 ‘‘(i) the term ‘basic wages’ means that portion 

2 of the wages of an individual paid in a year that 

3 does not exceed the contribution and benefit base for 

4 the year; 

5 ‘‘(ii) the term ‘basic self-employment income’ 

6 means that portion of the self-employment income of 

7 an individual credited to a year that does not exceed 

8 an amount equal to the contribution and benefit 

9 base for the year minus the amount of the wages 

10 paid to the individual in the year; 

11 ‘‘(iii) the term ‘excess wages’ means that por12 tion of the wages of an individual paid in a year 

13 after 2013 in excess of the higher of $400,000 or 

14 the contribution and benefit base for the year; and 

15 ‘‘(iv) the term ‘excess self-employment income’ 

16 means that portion of the self-employment income of 

17 an individual credited to a year after 2014 in excess 

18 of the higher of $400,000 or such contribution and 

19 benefit base.’’. 

20 (c) CONFORMING AMENDMENT.—Section 215(e)(1) 

21 of the Social Security Act (42 U.S.C. 415(e)(1)) is amend22 ed by inserting ‘‘and before 2015’’ after ‘‘1974’’. 

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

24 this section shall apply with respect to individuals who ini25 tially become eligible (within the meaning of section 


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1 215(a)(3)(B) of the Social Security Act) for old-age or dis2 ability insurance benefits under title II of the Social Secu3 rity Act, or who die (before becoming eligible for such ben4 efits), in any calendar year after 2014. 

5 SEC. 203. INCREASE IN SOCIAL SECURITY TAX RATE. 

6 (a) TAX ON EMPLOYEES.—The table in subsection 

7 (a) of section 3101 of the Internal Revenue Code of 1986 

8 is amended to read as follows: 

‘‘In cases of wages The rate of tax 

received during: shall be: 

1990 or any calendar year before 2018 ............................ 6.20 percent

2018 .................................................................................. 6.25 percent

2019 .................................................................................. 6.30 percent

2020 .................................................................................. 6.35 percent

2021 .................................................................................. 6.40 percent

2022 .................................................................................. 6.45 percent

2023 .................................................................................. 6.50 percent

2024 .................................................................................. 6.55 percent

2025 .................................................................................. 6.60 percent

2026 .................................................................................. 6.65 percent

2027 .................................................................................. 6.70 percent

2028 .................................................................................. 6.75 percent

2029 .................................................................................. 6.80 percent

2030 .................................................................................. 6.85 percent

2031 .................................................................................. 6.90 percent

2032 .................................................................................. 6.95 percent

2033 .................................................................................. 7.00 percent

2034 .................................................................................. 7.05 percent

2035 .................................................................................. 7.10 percent

2036 .................................................................................. 7.15 percent

2037 or thereafter ............................................................. 7.20 percent.’’. 

9 (b) TAX ON EMPLOYERS.—The table in subsection 

10 (a) of section 3111 of the Internal Revenue Code of 1986 

11 is amended to read as follows: 

‘‘In cases of wages The rate of tax 

received during: shall be: 

1990 or any calendar year before 2018 ............................ 6.20 percent

2018 .................................................................................. 6.25 percent

2019 .................................................................................. 6.30 percent

2020 .................................................................................. 6.35 percent

2021 .................................................................................. 6.40 percent


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‘‘In cases of wages The rate of tax 

received during: shall be: 

2022 .................................................................................. 6.45 percent

2023 .................................................................................. 6.50 percent

2024 .................................................................................. 6.55 percent

2025 .................................................................................. 6.60 percent

2026 .................................................................................. 6.65 percent

2027 .................................................................................. 6.70 percent

2028 .................................................................................. 6.75 percent

2029 .................................................................................. 6.80 percent

2030 .................................................................................. 6.85 percent

2031 .................................................................................. 6.90 percent

2032 .................................................................................. 6.95 percent

2033 .................................................................................. 7.00 percent

2034 .................................................................................. 7.05 percent

2035 .................................................................................. 7.10 percent

2036 .................................................................................. 7.15 percent

2037 or thereafter ............................................................. 7.20 percent.’’. 

1 (c) SELF-EMPLOYMENT INCOME.—The table in sub2 section (a) of section 1401 of the Internal Revenue Code 

3 of 1986 is amended to read as follows: 

‘‘In cases of wages The rate of tax 

received during: shall be: 

1990 or any calendar year before 2018 ............................ 12.40 percent

2018 .................................................................................. 12.50 percent

2019 .................................................................................. 12.60 percent

2020 .................................................................................. 12.70 percent

2021 .................................................................................. 12.80 percent

2022 .................................................................................. 12.90 percent

2023 .................................................................................. 13.00 percent

2024 .................................................................................. 13.10 percent

2025 .................................................................................. 13.20 percent

2026 .................................................................................. 13.30 percent

2027 .................................................................................. 13.40 percent

2028 .................................................................................. 13.50 percent

2029 .................................................................................. 13.60 percent

2030 .................................................................................. 13.70 percent

2031 .................................................................................. 13.80 percent

2032 .................................................................................. 13.90 percent

2033 .................................................................................. 14.00 percent

2034 .................................................................................. 14.10 percent

2035 .................................................................................. 14.20 percent

2036 .................................................................................. 14.30 percent

2037 or thereafter ............................................................. 14.40 percent.’’. 

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

5 this section shall apply to remuneration received, and tax6 able years beginning, after December 31, 2014. 


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1 SEC. 204. INVESTMENT OF THE SOCIAL SECURITY TRUST 

2 FUNDS. 

3 (a) IN GENERAL.—Section 201(d) of the Social Secu4 rity Act (42 U.S.C. 401(d)) is amended— 

5 (1) by striking ‘‘It shall be the duty’’ and in6 serting ‘‘(1) It shall be the duty’’; 

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

8 only’’ and inserting ‘‘Except as provided in para9 graph (2), such investments may be made only’’; and 

10 (3) by adding at the end the following: 

11 ‘‘(2)(A) The Independent Social Security Investment 

12 Oversight Board shall establish, as provided in section 

13 235(a)— 

14 ‘‘(i) a Common Stock Old-Age Investment Fund 

15 in the Federal Old-Age and Survivors Insurance 

16 Trust Fund; and 

17 ‘‘(ii) a Common Stock Disability Investment 

18 Fund in the Federal Disability Insurance Trust 

19 Fund. 

20 ‘‘(B)(i) In any calendar year after 2015 in which the 

21 OASDI trust fund ratio (as defined in subsection 

22 (l)(3)(B)(iii)) is projected to be below 150 percent in the 

23 75th year after such year, the Managing Trustee shall 

24 transfer amounts from the Federal Old-Age and Survivors 

25 Insurance Trust Fund or the Federal Disability Insurance 

26 Trust Fund into the Common Stock Old-Age Investment 


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1 Fund or the Common Stock Disability Investment Fund, 

2 respectively, in accordance with the policies and require3 ments set forth in section 714. Amounts so transferred 

4 shall be the minimum amounts which would result in a 

5 common stock ratio for such year that is 2.5 percentage 

6 points greater than the common stock ratio for the pre7 vious year, except that the common stock ratio may not 

8 exceed 25 percent for any year. 

9 ‘‘(ii) In any calendar year after 2015 in which the 

10 OASDI trust fund ratio (as defined in subsection 

11 (l)(3)(B)(iii)) is projected to equal or exceed 150 percent 

12 in the 75th year after such year, the Managing Trustee 

13 shall take appropriate actions to reduce the common stock 

14 ratio for such year by the lesser of— 

15 ‘‘(I) the minimum reduction necessary to result 

16 in an OASDI trust fund ratio (as so defined) for 

17 such year that does not exceed 150 percent in the 

18 75th year after such year; or 

19 ‘‘(II) 2.5 percentage points. 

20 ‘‘(iii) For purposes of this subparagraph, the term 

21 ‘common stock ratio’ means, with respect to a calendar 

22 year, the aggregate percentage of the total amounts at the 

23 end of such calendar year within each of the Federal Old24 Age and Survivors Insurance Trust Fund and the Federal 

25 Disability Insurance Trust Fund that is maintained in the 


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1 Common Stock Old-Age Investment Fund or the Common 

2 Stock Disability Investment Fund, respectively.’’. 

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

4 subsection (a) shall apply with respect to fiscal years be5 ginning on or after October 1, 2015. 

6 SEC. 205. RULES GOVERNING INVESTMENT OF TRUST 

7 FUNDS IN COMMON STOCK. 

8 Title II of the Social Security Act (42 U.S.C. 401 

9 et seq.) is amended by adding at the end the following 

10 new section: 

11 ‘‘INVESTMENT OF TRUST FUNDS IN COMMON STOCK

12 ‘‘SEC. 235. (a) COMMON STOCK INVESTMENT

13 FUNDS.— 

14 ‘‘(1) SELECTION OF INDEX.—The Independent 

15 Social Security Investment Oversight Board shall se16 lect, for purposes of investment of amounts held in 

17 a Common Stock Investment Fund, an index which 

18 is a commonly recognized index comprised of com19 mon stock the aggregate market value of which is a 

20 reasonably complete representation of the United 

21 States equity markets. 

22 ‘‘(2) PORTFOLIO DESIGN.—Amounts held in a 

23 Common Stock Investment Fund shall be invested in 

24 a portfolio designed to replicate the performance of 

25 the index selected under paragraph (1). The port26 folio shall be designed such that, to the extent pracVerDate Mar 15 2010 01:48 Aug 09, 2014 Jkt 039200 PO 00000 Frm 00021 Fmt 6652 Sfmt 6201 E:\BILLS\H5306.IH H5306

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1 ticable, the percentage of the balance in such Ac2 count that is invested in each stock is the same as 

3 the percentage determined by dividing the aggregate 

4 market value of all shares of that stock by the ag5 gregate market value of all shares of all stocks in6 cluded in such index. 

7 ‘‘(b) NO VOTING RIGHTS IN SECURITIES.—The Inde8 pendent Social Security Investment Oversight Board and 

9 the Managing Trustee of the Trust Funds may not exer10 cise voting rights associated with the ownership of securi11 ties by the Trust Funds. 

12 ‘‘(c) ENGAGEMENT OF QUALIFIED PUBLIC AC13 COUNTANT.— 

14 ‘‘(1) IN GENERAL.—The Independent Social Se15 curity Investment Oversight Board shall annually 

16 engage, on behalf of the Trust Funds, an inde17 pendent qualified public accountant, who shall con18 duct an examination of all accounts and other books 

19 and records maintained in the administration of this 

20 section as the public accountant considers necessary 

21 to enable the public accountant to make the deter22 mination required by paragraph (2). The examina23 tion shall be conducted in accordance with generally 

24 accepted auditing standards and shall involve such 


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1 tests of the accounts, books, and records as the pub2 lic accountant considers necessary. 

3 ‘‘(2) EXAMINATION AND REPORT.—The public 

4 accountant conducting an examination under para5 graph (1) shall determine whether the accounts, 

6 books, and records referred to in paragraph (1) have 

7 been maintained in conformity with generally accept8 ed accounting principles applied on a basis con9 sistent with the manner in which such principles 

10 were applied during the examination conducted 

11 under paragraph (1) during each preceding year. 

12 The public accountant shall transmit to the Board, 

13 the Comptroller General of the United States, and 

14 each House of the Congress a report on his exam15 ination, including his determination under this para16 graph. The Board shall make publicly available, by 

17 posting on the Internet and such other means as the 

18 Board may determine, each report received under 

19 the preceding sentence. 

20 ‘‘(3) DEFINITION.—For the purposes of this 

21 subsection, the term ‘qualified public accountant’ 

22 shall have the same meaning as is provided in sec23 tion 103(a)(3)(D) of the Employee Retirement In24 come Security Act of 1974 (29 U.S.C. 

25 1023(a)(3)(D)). 


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1 ‘‘(d) FIDUCIARY RESPONSIBILITIES.— 

2 ‘‘(1) IN GENERAL.—Under regulations of the 

3 Secretary of Labor, the provisions of sections 8477 

4 and 8478 of title 5, United States Code, shall apply 

5 in connection with the amounts maintained in a 

6 Common Stock Investment Fund in the same man7 ner and to the same extent as such provisions apply 

8 in connection with the Thrift Savings Fund. 

9 ‘‘(2) INVESTIGATIVE AUTHORITY.—Any author10 ity available to the Secretary of Labor under section 

11 504 of the Employee Retirement Income Security 

12 Act of 1974 (29 U.S.C. 1134) is hereby made avail13 able to the Secretary of Labor, and any officer des14 ignated by the Secretary of Labor, to determine 

15 whether any person has violated, or is about to vio16 late, any provision applicable under paragraph (1). 

17 ‘‘(3) EXCULPATORY PROVISIONS; INSURANCE.— 

18 ‘‘(A) IN GENERAL.—Any provision in an 

19 agreement or instrument which purports to re20 lieve a fiduciary from responsibility or liability 

21 for any responsibility, obligation, or duty under 

22 this section shall be void. 

23 ‘‘(B) INSURANCE.—Amounts held in the 

24 Trust Funds available for administrative ex25 penses shall be available and may be used at 


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1 the discretion of the Independent Social Secu2 rity Investment Oversight Board to purchase 

3 insurance to cover potential liability of persons 

4 who serve in a fiduciary capacity with respect 

5 to amounts maintained in a Common Stock In6 vestment Fund, without regard to whether a 

7 policy of insurance permits recourse by the in8 surer against the fiduciary in the case of a 

9 breach of a fiduciary obligation. 

10 ‘‘(e) DEFINITION OF COMMON STOCK INVESTMENT

11 FUND.—In this section, the term ‘Common Stock Invest12 ment Fund’ means the Common Stock Old-Age Invest13 ment Fund of the Federal Old-Age and Survivors Insur14 ance Trust Fund and the Common Stock Disability In15 vestment Fund of the Federal Disability Insurance Trust 

16 Fund.’’. 

17 SEC. 206. ESTABLISHMENT OF INDEPENDENT SOCIAL SE18 CURITY INVESTMENT OVERSIGHT BOARD. 

19 Title VII of the Social Security Act (42 U.S.C. 901 

20 et seq.) is amended by adding at the end the following: 

21 ‘‘INDEPENDENT SOCIAL SECURITY INVESTMENT

22 OVERSIGHT BOARD

23 ‘‘SEC. 714. (a) There is established in the Social Se24 curity Administration an Independent Social Security In25 vestment Oversight Board. 


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1 ‘‘(b) The Board shall be composed of a Chairman and 

2 four additional members. The Chairman and each addi3 tional member shall be appointed by the President, by and 

4 with the advice and consent of the Senate. 

5 ‘‘(c) Members of the Board shall have substantial ex6 perience, training, and expertise in the management of fi7 nancial investments and service in a fiduciary capacity. 

8 ‘‘(d)(1) A member of the Board shall be appointed 

9 for a term of 10 years, except that of the members first 

10 appointed— 

11 ‘‘(A) the member appointed as Chairman shall 

12 be appointed for a term of 10 years; 

13 ‘‘(B) one member shall be appointed for a term 

14 of 8 years; 

15 ‘‘(C) one member shall be appointed for a term 

16 of 6 years; 

17 ‘‘(D) one member shall be appointed for a term 

18 of 4 years; and 

19 ‘‘(E) one member shall be appointed for a term 

20 of 2 years, as designated by the President at the 

21 time of appointment. 

22 ‘‘(2)(A) A vacancy on the Board shall be filled in the 

23 manner in which the original appointment was made and 

24 shall be subject to any conditions which applied with re25 spect to the original appointment. 


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1 ‘‘(B) An individual chosen to fill a vacancy shall be 

2 appointed for the unexpired term of the member replaced. 

3 ‘‘(C) The term of any member shall not expire before 

4 the date on which the member’s successor takes office. 

5 ‘‘(3) An individual appointed as a member of the 

6 Board may be removed from office only pursuant to a 

7 finding by the President of neglect of duty or malfeasance 

8 in office. 

9 ‘‘(e) The member of the Board designated by the 

10 President as Chairman shall serve as Chairman for a term 

11 of 4 years (or until the expiration of his term as member 

12 of the Board, if earlier). A member serving as Chairman 

13 may be reappointed as Chairman. 

14 ‘‘(f) The Board shall— 

15 ‘‘(1) establish policies for the investment and 

16 management of the Common Stock Old-Age Invest17 ment Fund and the Common Stock Disability In18 vestment Fund described in section 201(d)(2), in19 cluding policies to provide for— 

20 ‘‘(A) prudent investments suitable for ac21 cumulating funds for payment of monthly in22 surance benefits under title II; and 

23 ‘‘(B) low administrative costs; 

24 ‘‘(2) review bids relating to, and hire managers 

25 for, each such Fund; 


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1 ‘‘(3) annually review the performance of each 

2 such Fund; 

3 ‘‘(4)(A) report annually to the House of Rep4 resentatives and the Senate and to the President re5 garding the earnings on such investments; and 

6 ‘‘(B) make each such report publicly available 

7 by publication in the Federal Register, posting on 

8 the Internet, and such other means as the Board 

9 may determine; and 

10 ‘‘(5) review and approve the budget of the 

11 Board. 

12 ‘‘(g)(1) The Board may— 

13 ‘‘(A) adopt, alter, and use a seal; 

14 ‘‘(B) establish policies with which the Managing 

15 Trustee of the Trust Funds is required to comply 

16 under section 201(d)(2); and 

17 ‘‘(C) take such other actions as may be nec18 essary to carry out the functions of the Board. 

19 ‘‘(2) The policies of the Board may not require the 

20 Managing Trustee of the Trust Funds to invest or to 

21 cause to be invested any sums in such Trust Funds in 

22 a specific asset or to dispose of or cause to be disposed 

23 of any specific asset of such Trust Funds. 

24 ‘‘(h)(1) The Board shall meet— 

25 ‘‘(A) not less than once during each month; and 


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1 ‘‘(B) at additional times at the call of the 

2 Chairman. 

3 ‘‘(2)(A) The Board shall perform the functions and 

4 exercise the powers of the Board on a majority vote of 

5 a quorum of the Board. 

6 ‘‘(B) A vacancy on the Board shall not impair the 

7 authority of a quorum of the Board to perform the func8 tions and exercise the powers of the Board. 

9 ‘‘(3) Three members of the Board shall constitute a 

10 quorum for the transaction of business. 

11 ‘‘(4)(A) Each member of the Board who is not an 

12 officer or employee of the Federal Government shall be 

13 compensated at the daily rate of basic pay payable for level 

14 IV of the Executive Schedule for each day during which 

15 such member is engaged in performing a function of the 

16 Board. 

17 ‘‘(B) A member of the Board shall be paid travel, 

18 per diem, and other necessary expenses under subchapter 

19 I of chapter 57 of title 5, United States Code, while trav20 eling away from such member’s home or regular place of 

21 business in the performance of the duties of the Board. 

22 ‘‘(5) The accrued annual leave of any officer or em23 ployee of the Federal Government who is a member of the 

24 Board shall not be charged for any time used in per25 forming services for the Board. 


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1 ‘‘(i) The members of the Board shall discharge their 

2 responsibilities solely in the interest of the Trust Funds 

3 in connection with investments of amounts in funds under 

4 section 201(d)(2). 

5 ‘‘(j) The Board shall prepare and submit to the Presi6 dent, and, at the same time, to the appropriate committees 

7 of Congress, an annual budget of the expenses and other 

8 items relating to the Board which shall be included as a 

9 separate item in the budget required to be transmitted to 

10 the Congress under section 1105 of title 31, United States 

11 Code. 

12 ‘‘(k) The Board may submit to the President, and, 

13 at the same time, shall submit to each House of Congress, 

14 any legislative recommendations of the Board relating to 

15 any of its functions under this section. 

16 ‘‘(l) There are hereby made available from each of 

17 the Trust Funds such sums as are necessary to carry out 

18 the provisions of this section and to administer the provi19 sions of section 235, in accordance with certifications 

20 which shall be made from time to time by the Board to 

21 the Secretary of the Treasury. 

22 ‘‘(m) In this section, the term ‘Trust Funds’ has the 

23 meaning given such term in section 201(c).’’. 


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1 SEC. 207. REALLOCATION OF PAYROLL TAX REVENUE 

2 FROM THE OLD-AGE AND SURVIVORS INSUR3 ANCE TRUST FUND TO THE FEDERAL DIS4 ABILITY INSURANCE TRUST FUND. 

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

6 Security Act (42 U.S.C. 401(b)(1)) is amended by 

7 striking ‘‘and (R) 1.80 per centum of the wages (as 

8 so defined) paid after December 31, 1999, and so 

9 reported’’ and inserting ‘‘(R) 1.80 per centum of the 

10 wages (as so defined) paid after December 31, 1999, 

11 and before January 1, 2015, and so reported, (S) 

12 2.8 per centum of the wages (as so defined) paid 

13 after December 31, 2014, and before January 1, 

14 2016, and so reported, (T) 2.4 per centum of the 

15 wages (as so defined) paid after December 31, 2015, 

16 and before January 1, 2017, and so reported, (U) 

17 2.2 per centum of the wages (as so defined) paid 

18 after December 31, 2016, and before January 1, 

19 2020, and so reported, (V) 2.0 per centum of the 

20 wages (as so defined) paid after December 31, 2019, 

21 and before January 1, 2026, and so reported, and 

22 (W) 1.8 per centum of the wages (as so defined) 

23 paid after December 31, 2025, and so reported’’. 

24 (2) SELF-EMPLOYMENT INCOME.—Section 

25 201(b)(2) of such Act (42 U.S.C. 401(b)(2)) is 

26 amended by striking ‘‘and (R) 1.80 per centum of 


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1 the amount of self-employment income (as so de2 fined) so reported for any taxable year beginning 

3 after December 31, 1999’’ and inserting ‘‘(R) 1.80 

4 per centum of the amount of self-employment in5 come (as so defined) so reported for any taxable 

6 year beginning after December 31, 1999, and before 

7 January 1, 2015, (S) 2.8 per centum of the amount 

8 of self-employment income (as so defined) so re9 ported for any taxable year beginning after Decem10 ber 31, 2014, and before January 1, 2016, (T) 2.4 

11 per centum of the amount of self-employment in12 come (as so defined) so reported for any taxable 

13 year beginning after December 31, 2015, and before 

14 January 1, 2017, (U) 2.2 per centum of the amount 

15 of self-employment income (as so defined) so re16 ported for any taxable year beginning after Decem17 ber 31, 2016, and before January 1, 2020, (V) 2.0 

18 per centum of the amount of self-employment in19 come (as so defined) so reported for any taxable 

20 year beginning after December 31, 2019, and before 

21 January 1, 2026, and (W) 1.8 per centum of the 

22 amount of self-employment income (as so defined) so 

23 reported for any taxable year beginning after De24 cember 31, 2025’’. 


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1 (3) EFFECTIVE DATE.—The amendments made 

2 by this section shall apply with respect to wages paid 

3 after December 31, 2014, and self-employment in4 come for taxable years beginning after such date. 

Æ 


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