II 

113TH CONGRESS 

2D SESSION S. 2382 

To establish the Consumer Price Index for Elderly Consumers for purposes 

of determining cost-of-living increases under the Social Security Act, 

and to amend the Internal Revenue Code of 1986 to apply payroll 

taxes to remuneration and earnings from self-employment up to the 

contribution and benefit base and to remuneration in excess of $250,000, 

and for other purposes. 

IN THE SENATE OF THE UNITED STATES 

MAY 22, 2014 

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

to the Committee on Finance 

A BILL 

To establish the Consumer Price Index for Elderly Consumers for purposes of determining cost-of-living increases under the Social Security Act, and to amend 

the Internal Revenue Code of 1986 to apply payroll 

taxes to remuneration and earnings from self-employment up to the contribution and benefit base and to 

remuneration in excess of $250,000, 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 Raises for Seniors 

3 Act’’. 

4 SEC. 2. CONSUMER PRICE INDEX FOR ELDERLY CON5 SUMERS. 

6 (a) IN GENERAL.—The Bureau of Labor Statistics 

7 of the Department of Labor shall prepare and publish an 

8 index for each calendar month to be known as the ‘‘Con9 sumer Price Index for Elderly Consumers’’ or ‘‘CPI-E’’ 

10 that indicates the average change over time in the prices 

11 paid by individuals in the United States who are 62 years 

12 of age and older for a market basket of consumer goods 

13 and services. 

14 (b) REQUIREMENTS.—In carrying out subsection (a), 

15 the Bureau of Labor Statistics shall— 

16 (1) increase the number of individuals in the 

17 United States who are 62 years of age and older 

18 sampled in the consumer expenditure survey used to 

19 establish the CPI-E above the number of such indi20 viduals sampled for purposes of determining the 

21 Consumer Price Index for Urban Wage Earners and 

22 Clerical Workers (CPI-W); 

23 (2) establish samples of market-based items, 

24 stores, and prices to represent the purchasing pat25 terns of older adults; and 


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1 (3) examine the medical care component, in2 cluding the cost and usage of prescription drugs, of 

3 the CPI-E taking into account that older adults have 

4 different illnesses and health care expenses, includ5 ing dental expenses, than individuals in the United 

6 States who are under 62 years of age. 

7 (c) AUTHORIZATION OF APPROPRIATIONS.—There 

8 are authorized to be appropriated such sums as are nec9 essary to carry out the provisions of this section. 

10 (d) EFFECTIVE DATE.—The section shall apply with 

11 respect to calendar months ending on or after July 31 of 

12 the calendar year following the calendar year in which this 

13 Act is enacted. 

14 SEC. 3. COMPUTATION OF COST-OF-LIVING INCREASES. 

15 (a) IN GENERAL.—Section 215(i) of the Social Secu16 rity Act (42 U.S.C. 415(i)) is amended— 

17 (1) in paragraph (1)(G), by inserting before the 

18 period the following: ‘‘, and, solely with respect to 

19 any monthly insurance benefit payable under this 

20 title to an individual who has attained age 62, effec21 tive for adjustments under this subsection to the pri22 mary insurance amount on which such benefit is 

23 based (or to any such benefit under section 227 or 

24 228) occurring after such individual attains such 

25 age, the applicable Consumer Price Index shall be 


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1 deemed to be the Consumer Price Index for Elderly 

2 Consumers and such primary insurance amount 

3 shall be deemed adjusted under this subsection using 

4 such Index’’; and 

5 (2) in paragraph (4), by striking ‘‘and by sec6 tion 9001’’ and inserting ‘‘, by section 9001’’, and 

7 by inserting after ‘‘1986,’’ the following: ‘‘and by 

8 section 3 of the Fair Raises for Seniors Act,’’. 

9 (b) CONFORMING AMENDMENTS IN APPLICABLE

10 FORMER LAW.—Section 215(i)(1)(C) of such Act, as in 

11 effect in December 1978 and applied in certain cases 

12 under the provisions of such Act in effect after December 

13 1978, is amended by inserting before the period the fol14 lowing: ‘‘, and, solely with respect to any monthly insur15 ance benefit payable under this title to an individual who 

16 has attained age 62, effective for adjustments under this 

17 subsection to the primary insurance amount on which such 

18 benefit is based (or to any such benefit under section 227 

19 or 228) occurring after such individual attains such age, 

20 the applicable Consumer Price Index shall be deemed to 

21 be the Consumer Price Index for Elderly Consumers and 

22 such primary insurance amount shall be deemed adjusted 

23 under this subsection using such Index’’. 

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

25 subsection (a) shall apply to determinations made with reVerDate Mar 15 2010 01:42 May 31, 2014 Jkt 039200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\S2382.IS S2382

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1 spect to cost-of-living computation quarters (as defined in 

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

3 415(i)(1)(B))) ending on or after September 30 of the sec4 ond calendar year following the calendar year in which this 

5 Act is enacted. 

6 SEC. 4. PAYROLL TAX ON REMUNERATION UP TO CON7 TRIBUTION AND BENEFIT BASE AND MORE 

8 THAN $250,000. 

9 (a) IN GENERAL.—Paragraph (1) of section 3121(a) 

10 of the Internal Revenue Code of 1986 is amended by in11 serting after ‘‘such calendar year.’’ the following: ‘‘The 

12 preceding sentence shall apply only to calendar years for 

13 which the contribution and benefit base (as so determined) 

14 is less than $250,000, and, for such calendar years, only 

15 to so much of the remuneration paid to such employee 

16 by such employer with respect to employment as does not 

17 exceed $250,000.’’. 

18 (b) CONFORMING AMENDMENT.—Paragraph (1) of 

19 section 3121(a) of the Internal Revenue Code of 1986 is 

20 amended by striking ‘‘Act) to’’ and inserting ‘‘Act), or in 

21 excess of $250,000, to’’. 

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

23 this section shall apply to remuneration paid after Decem24 ber 31, 2014. 


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1 SEC. 5. TAX ON NET EARNINGS FROM SELF-EMPLOYMENT 

2 UP TO CONTRIBUTION AND BENEFIT BASE 

3 AND MORE THAN $250,000. 

4 (a) IN GENERAL.—Paragraph (1) of section 1402(b) 

5 of the Internal Revenue Code of 1986 is amended to read 

6 as follows: 

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

8 1401(a), the excess of— 

9 ‘‘(A) that part of the net earnings from 

10 self-employment which is in excess of— 

11 ‘‘(i) an amount equal to the contribu12 tion and benefit base (as determined under 

13 section 230 of the Social Security Act) 

14 which is effective for the calendar year in 

15 which such taxable year begins, minus 

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

17 such individual during such taxable years; 

18 over 

19 ‘‘(B) that part of the net earnings from 

20 self-employment which is in excess of the sum 

21 of— 

22 ‘‘(i) the excess of— 

23 ‘‘(I) the net earning from self24 employment reduced by the excess (if 

25 any) of subparagraph (A)(i) over sub26 paragraph (A)(ii), over 


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1 ‘‘(II) $250,000, reduced by such 

2 contribution and benefit base, plus 

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

4 such individual during such taxable year in 

5 excess of such contribution and benefit 

6 base and not in excess of $250,000; or’’. 

7 (b) PHASEOUT.—Subsection (b) of section 1402 of 

8 the Internal Revenue Code of 1986 is amended by adding 

9 at the end the following: ‘‘Paragraph (1) shall apply only 

10 to taxable years beginning in calendar years for which the 

11 contribution and benefit base (as determined under section 

12 230 of the Social Security Act) is less than $250,000.’’. 

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

14 this section shall apply to net earnings from self-employ15 ment derived, and remuneration paid, after December 31, 

16 2014. 

17 SEC. 6. INCLUSION OF SURPLUS EARNINGS FOR BENEFIT 

18 DETERMINATIONS. 

19 (a) INCLUSION OF SURPLUS AVERAGE INDEXED

20 MONTHLY EARNINGS IN DETERMINATION OF PRIMARY

21 INSURANCE AMOUNTS.—Section 215(a)(1)(A) of the So22 cial Security Act (42 U.S.C. 415(a)(1)(A)) is amended— 

23 (1) in clauses (i), (ii), and (iii), by inserting 

24 ‘‘basic’’ before ‘‘average indexed monthly earnings’’ 

25 each place it appears; 


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

2 (3) in clause (iii), by adding ‘‘and’’ at the end; 

3 and 

4 (4) by inserting after clause (iii) the following 

5 new clause: 

6 ‘‘(iv) 1 percent or $1000 (whichever is less) of 

7 the individual’s surplus average indexed monthly 

8 earnings (determined under subsection (b)(1)(B)),’’. 

9 (b) BASIC AIME AND SURPLUS AIME.— 

10 (1) BASIC AIME.—Section 215(b)(1) of such 

11 Act (42 U.S.C. 415(b)(1)) is amended— 

12 (A) in the matter preceding subparagraph 

13 (A), by inserting ‘‘basic’’ before ‘‘average’’; and 

14 (B) in subparagraph (A), by striking 

15 ‘‘paragraph (3)’’ and inserting ‘‘paragraph 

16 (3)(A)’’ and by inserting before the comma the 

17 following: ‘‘to the extent such total does not ex18 ceed the contribution and benefit base for the 

19 applicable year’’. 

20 (2) SURPLUS AIME.— 

21 (A) IN GENERAL.—Section 215(b)(1) of 

22 such Act (as amended by paragraph (1)) is 

23 amended— 


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1 (i) by redesignating subparagraphs 

2 (A) and (B) as clauses (i) and (ii), respec3 tively; 

4 (ii) by inserting ‘‘(A)’’ after ‘‘(b)(1)’’; 

5 and 

6 (iii) by adding at the end the fol7 lowing new subparagraph: 

8 ‘‘(B)(i) An individual’s surplus average indexed 

9 monthly earnings shall be equal to the quotient obtained 

10 by dividing— 

11 ‘‘(I) the total (after adjustment under para12 graph (3)(B)) of such individual’s surplus earnings 

13 (determined under clause (ii)) for such individual’s 

14 benefit computation years (determined under para15 graph (2)), by 

16 ‘‘(II) the number of months in those years. 

17 ‘‘(ii) For purposes of clause (i) and paragraph (3)(B), 

18 an individual’s surplus earnings for a benefit computation 

19 year are the total of such individual’s wages paid in and 

20 self-employment income credited to such benefit computa21 tion year, to the extent such total (before adjustment 

22 under paragraph (3)(B)) exceeds the contribution and 

23 benefit base for such year.’’. 

24 (B) CONFORMING AMENDMENT.—The 

25 heading for section 215(b) of such Act is 


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1 amended by striking ‘‘AVERAGE INDEXED

2 MONTHLY EARNINGS’’ and inserting ‘‘BASIC

3 AVERAGE INDEXED MONTHLY EARNINGS; SUR4 PLUS AVERAGE INDEXED MONTHLY EARN5 INGS’’. 

6 (3) ADJUSTMENT OF SURPLUS EARNINGS FOR

7 PURPOSES OF DETERMINING SURPLUS AIME.—Sec8 tion 215(b)(3) of such Act (42 U.S.C. 415(b)(3)) is 

9 amended— 

10 (A) in subparagraph (A), by striking ‘‘sub11 paragraph (B)’’ and inserting ‘‘subparagraph 

12 (C)’’ and by inserting ‘‘and determination of 

13 basic average indexed monthly income’’ after 

14 ‘‘paragraph (2)’’; 

15 (B) by redesignating subparagraph (B) as 

16 subparagraph (C); and 

17 (C) by inserting after subparagraph (A) 

18 the following new subparagraph: 

19 ‘‘(B) For purposes of determining under paragraph 

20 (1)(B) an individual’s surplus average indexed monthly 

21 earnings, the individual’s surplus earnings for a benefit 

22 computation year shall be deemed to be equal to the prod23 uct of— 


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1 ‘‘(i) the individual’s surplus earnings for such 

2 year (as determined under clause (ii) of paragraph 

3 (1)(B) without regard to this subparagraph), and 

4 ‘‘(ii) the quotient described in subparagraph 

5 (A)(ii).’’. 

6 (c) CONFORMING AMENDMENTS.— 

7 (1) Paragraphs (3)(A)(ii) and (6)(A) of section 

8 203(a) of such Act (42 U.S.C. 403(a)) are each 

9 amended by inserting ‘‘basic’’ before ‘‘average in10 dexed monthly earnings’’. 

11 (2) Subsections (b) and (c) of section 212 of 

12 such Act (42 U.S.C. 412) are each amended by 

13 striking ‘‘average indexed monthly earnings’’ and in14 serting ‘‘basic average indexed monthly earnings, 

15 surplus average indexed monthly earnings’’. 

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

17 this section shall apply with respect to individuals who ini18 tially become eligible (within the meaning of section 

19 215(a)(3)(B) of the Social Security Act (42 U.S.C. 

20 415(a)(3)(B)) for old-age or disability insurance benefits 

21 under title II of the Social Security Act, or who die (before 

22 becoming eligible for such benefits), in any calendar year 

23 after 2014. 

Æ 


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