II 

113TH CONGRESS 

2D SESSION S. 2455 

To enhance Social Security benefits for children, divorced spouses, and widows 

and widowers, and for other purposes. 

IN THE SENATE OF THE UNITED STATES 

JUNE 10, 2014 

Mr. BEGICH (for himself and Mrs. MURRAY) introduced the following bill; 

which was read twice and referred to the Committee on Finance 

A BILL 

To enhance Social Security benefits for children, divorced 

spouses, and widows and widowers, 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; TABLE OF CONTENTS. 

4 (a) SHORT TITLE.—This Act may be cited as the 

5 ‘‘Retirement and Income Security Enhancements 

6 (RAISE) Act’’. 

7 (b) TABLE OF CONTENTS.—The table of contents for 

8 this Act is as follows: 

Sec. 1. Short title; table of contents. 

Sec. 2. Improving benefits for divorced spouses, widows, widowers, and surviving divorced spouses. 

Sec. 3. Extended benefit eligibility for children who are full-time students. 


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Sec. 4. Establishment of payroll surtax for high-income individuals. 

Sec. 5. Inclusion of surplus earnings in social security benefit formula. 

1 SEC. 2. IMPROVING BENEFITS FOR DIVORCED SPOUSES, 

2 WIDOWS, WIDOWERS, AND SURVIVING DI3 VORCED SPOUSES. 

4 (a) EXPANSION OF BENEFITS FOR DIVORCED

5 SPOUSES.— 

6 (1) WIFE’S INSURANCE BENEFITS.—Section 

7 202(b) of the Social Security Act (42 U.S.C. 402(b)) 

8 is amended— 

9 (A) in paragraph (1)(G), by striking ‘‘10 

10 years’’ and inserting ‘‘5 years’’; and 

11 (B) by amending paragraph (2) to read as 

12 follows: 

13 ‘‘(2)(A) Except as provided in subsections (k)(5) and 

14 (q), a wife’s insurance benefit for each month shall be 

15 equal to— 

16 ‘‘(i) in the case of a wife (as defined in section 

17 216(b)), one-half of the primary insurance amount 

18 of her husband for such month; or 

19 ‘‘(ii) in the case of a divorced wife (as defined 

20 in section 216(d)), the applicable percentage (as de21 termined under subparagraph (B)) of one-half of the 

22 primary insurance amount of her former husband 

23 for such month. 


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1 ‘‘(B) For purposes of subparagraph (A)(ii), the appli2 cable percentage shall be equal to 100 percent reduced by 

3 10 percentage points for each year in the period imme4 diately before the date the divorce became effective in 

5 which the divorced wife was married to her former hus6 band that is less than 10 years.’’. 

7 (2) HUSBAND’S INSURANCE BENEFITS.—Sec8 tion 202(c) of the Social Security Act (42 U.S.C. 

9 402(c)) is amended— 

10 (A) in paragraph (1)(G), by striking ‘‘10 

11 years’’ and inserting ‘‘5 years’’; and 

12 (B) by amending paragraph (2) to read as 

13 follows: 

14 ‘‘(2)(A) Except as provided in subsections (k)(5) and 

15 (q), a husband’s insurance benefit for each month shall 

16 be equal to— 

17 ‘‘(i) in the case of a husband (as defined in sec18 tion 216(f)), one-half of the primary insurance 

19 amount of his wife for such month; or 

20 ‘‘(ii) in the case of a divorced husband (as de21 fined in section 216(d)), the applicable percentage 

22 (as determined under subparagraph (B)) of one-half 

23 of the primary insurance amount of his former wife 

24 for such month. 


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1 ‘‘(B) For purposes of subparagraph (A)(ii), the appli2 cable percentage shall be equal to 100 percent reduced by 

3 10 percentage points for each year in the period imme4 diately before the date the divorce became effective in 

5 which the divorced husband was married to his former 

6 wife that is less than 10 years.’’. 

7 (b) IMPROVING SOCIAL SECURITY BENEFITS FOR

8 WIDOWS AND WIDOWERS IN TWO-INCOME HOUSE9 HOLDS.— 

10 (1) WIDOWS.—Section 202(e) of the Social Se11 curity Act (42 U.S.C. 402(e)) is amended— 

12 (A) in paragraph (1)— 

13 (i) in subparagraph (B), by inserting 

14 ‘‘and’’ at the end; 

15 (ii) in subparagraph (C)(iii), by strik16 ing ‘‘and’’ at the end; 

17 (iii) by striking subparagraph (D); 

18 (iv) by redesignating subparagraphs 

19 (E) and (F) as subparagraphs (D) and 

20 (E), respectively; and 

21 (v) in the flush matter following sub22 paragraph (E)(ii), as so redesignated, by 

23 striking ‘‘becomes entitled to an old-age in24 surance benefit’’ and all that follows 

25 through ‘‘such deceased individual,’’; 


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1 (B) by striking subparagraph (A) in para2 graph (2) and inserting the following: 

3 ‘‘(2)(A) Except as provided in subsection 

4 (k)(5), subsection (q), and subparagraph (D) of this 

5 paragraph, such widow’s insurance benefit for each 

6 month shall be equal to the greater of— 

7 ‘‘(i) subject to paragraph (9), the primary 

8 insurance amount (as determined for purposes 

9 of this subsection after application of subpara10 graphs (B) and (C)) of such deceased indi11 vidual; or 

12 ‘‘(ii) subject to paragraphs (9) and (10), in 

13 the case of a fully-insured widow or surviving 

14 divorced wife, 75 percent of the sum of any old15 age or disability insurance benefit for which the 

16 widow or the surviving divorced wife is entitled 

17 for such month and the primary insurance 

18 amount (as determined for purposes of this 

19 subsection after application of subparagraphs 

20 (B) and (C)) of such deceased individual.’’; 

21 (C) in paragraph (5)— 

22 (i) in subparagraph (A), by striking 

23 ‘‘paragraph (1)(F)’’ and inserting ‘‘para24 graph (1)(E)’’; and 


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1 (ii) in subparagraph (B), by striking 

2 ‘‘paragraph (1)(F)(i)’’ and inserting 

3 ‘‘paragraph (1)(E)(i)’’; and 

4 (D) by adding at the end the following new 

5 paragraphs: 

6 ‘‘(9) For purposes of clauses (i) and (ii) of 

7 paragraph (2)(A), in the case of a surviving divorced 

8 wife, the amount determined under either such 

9 clause (and, for purposes of clause (ii) of paragraph 

10 (2)(A), as determined after application of paragraph 

11 (10)) shall be equal to the applicable percentage (as 

12 determined under section 202(b)(2)(B)) of such 

13 amount (as determined before application of this 

14 paragraph but after application of subsection 

15 (k)(3)). 

16 ‘‘(10) For purposes of paragraph (2)(A)(ii), the 

17 amount determined under such paragraph shall not 

18 exceed the primary insurance amount for such 

19 month of a hypothetical individual— 

20 ‘‘(A) who became entitled to old-age insur21 ance benefits upon attaining early retirement 

22 age during the month in which the deceased in23 dividual referred to in paragraph (1) became 

24 entitled to old-age or disability insurance beneVerDate Mar 15 2010 00:04 Jun 12, 2014 Jkt 039200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\S2455.IS S2455

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1 fits, or died (before becoming entitled to such 

2 benefits); and 

3 ‘‘(B) to whom wages and self-employment 

4 income were credited in each of such hypo5 thetical individual’s elapsed years (within the 

6 meaning of section 215(b)(2)(B)(iii)) in an 

7 amount equal to the national average wage 

8 index (as described in section 209(k)(1)) for 

9 each such year.’’. 

10 (2) WIDOWERS.—Section 202(f) of the Social 

11 Security Act (42 U.S.C. 402(f)) is amended— 

12 (A) in paragraph (1)— 

13 (i) in subparagraph (B), by inserting 

14 ‘‘and’’ at the end; 

15 (ii) in subparagraph (C)(iii), by strik16 ing ‘‘and’’ at the end; 

17 (iii) by striking subparagraph (D); 

18 (iv) by redesignating subparagraphs 

19 (E) and (F) as subparagraphs (D) and 

20 (E), respectively; and 

21 (v) in the flush matter following sub22 paragraph (E)(ii), as so redesignated, by 

23 striking ‘‘becomes entitled to an old-age in24 surance benefit’’ and all that follows 

25 through ‘‘such deceased individual,’’; 


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1 (B) by striking subparagraph (A) in para2 graph (2) and inserting the following: 

3 ‘‘(2)(A) Except as provided in subsection 

4 (k)(5), subsection (q), and subparagraph (D) of this 

5 paragraph, such widower’s insurance benefit for 

6 each month shall be equal to the greater of— 

7 ‘‘(i) subject to paragraph (9), the primary 

8 insurance amount (as determined for purposes 

9 of this subsection after application of subpara10 graphs (B) and (C)) of such deceased indi11 vidual; or 

12 ‘‘(ii) subject to paragraphs (9) and (10), in 

13 the case of a fully-insured widower or surviving 

14 divorced husband, 75 percent of the sum of any 

15 old-age or disability insurance benefit for which 

16 the widower or the surviving divorced husband 

17 is entitled for such month and the primary in18 surance amount (as determined for purposes of 

19 this subsection after application of subpara20 graphs (B) and (C)) of such deceased indi21 vidual.’’; 

22 (C) in paragraph (5)— 

23 (i) in subparagraph (A), by striking 

24 ‘‘paragraph (1)(F)’’ and inserting ‘‘para25 graph (1)(E)’’; and 


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1 (ii) in subparagraph (B), by striking 

2 ‘‘paragraph (1)(F)(i)’’ and inserting 

3 ‘‘paragraph (1)(E)(i)’’; and 

4 (D) by adding at the end the following new 

5 paragraphs: 

6 ‘‘(9) For purposes of clauses (i) and (ii) of 

7 paragraph (2)(A), in the case of a surviving divorced 

8 husband, the amount determined under either such 

9 clause (and, for purposes of clause (ii) of paragraph 

10 (2)(A), as determined after application of paragraph 

11 (10)) shall be equal to the applicable percentage (as 

12 determined under section 202(c)(2)(B)) of such 

13 amount (as determined before application of this 

14 paragraph but after application of subsection 

15 (k)(3)). 

16 ‘‘(10) For purposes of paragraph (2)(A)(ii), the 

17 amount determined under such paragraph shall not 

18 exceed the primary insurance amount for such 

19 month of a hypothetical individual— 

20 ‘‘(A) who became entitled to old-age insur21 ance benefits upon attaining early retirement 

22 age during the month in which the deceased in23 dividual referred to in paragraph (1) became 

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1 fits, or died (before becoming entitled to such 

2 benefits); and 

3 ‘‘(B) to whom wages and self-employment 

4 income were credited in each of such hypo5 thetical individual’s elapsed years (within the 

6 meaning of section 215(b)(2)(B)(iii)) in an 

7 amount equal to the national average wage 

8 index (as described in section 209(k)(1)) for 

9 each such year.’’. 

10 (3) REDUCTION OF BENEFIT FOR INDIVIDUALS

11 ENTITLED TO SIMULTANEOUS BENEFITS.—Section 

12 202(k)(3) of the Social Security Act (42 U.S.C. 

13 402(k)(3)) is amended— 

14 (A) in subparagraph (A), by striking ‘‘If 

15 an individual’’ and inserting ‘‘Except as pro16 vided in subparagraph (C), if an individual’’; 

17 and 

18 (B) by adding at the end the following new 

19 subparagraph: 

20 ‘‘(C) If an individual is entitled for any month to a 

21 widow’s or widower’s insurance benefit and is also entitled 

22 to an old-age or disability insurance benefit for such 

23 month that is greater than such widow’s or widower’s in24 surance benefit, the reduction described in subparagraph 

25 (A), with respect to such widow’s or widower’s insurance 


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1 benefit, shall be carried out by substituting an amount 

2 equal to the primary insurance amount of the deceased 

3 individual referred to in subsection (e)(1) or (f)(1) (as de4 termined for purposes of subsection (e)(2)(A)(i) or 

5 (f)(2)(A)(i)) for the amount equal to the old-age or dis6 ability insurance benefit of the individual entitled to the 

7 widow’s or widower’s insurance benefit.’’. 

8 (c) CONFORMING AMENDMENTS.—Section 216(d) of 

9 the Social Security Act (42 U.S.C. 416(d)) is amended— 

10 (1) in paragraph (1), by striking ‘‘10 years’’ 

11 and inserting ‘‘5 years’’; 

12 (2) in paragraph (2), by striking ‘‘10 years’’ 

13 and inserting ‘‘5 years’’; 

14 (3) in paragraph (4), by striking ‘‘10 years’’ 

15 and inserting ‘‘5 years’’; and 

16 (4) in paragraph (5), by striking ‘‘10 years’’ 

17 and inserting ‘‘5 years’’. 

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

19 this section shall apply with respect to wife’s insurance 

20 benefits, husband’s insurance benefits, widow’s insurance 

21 benefits, and widower’s insurance benefits that are pay22 able for months beginning after December 31, 2014. 

23 SEC. 3. EXTENDED BENEFIT ELIGIBILITY FOR CHILDREN 

24 WHO ARE FULL-TIME STUDENTS. 

25 (a) IN GENERAL.— 


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1 (1) EXTENSION OF BENEFITS.—Section 202(d) 

2 of the Social Security Act (42 U.S.C. 402(d)) is 

3 amended— 

4 (A) in paragraphs (1)(B), (1)(E), 

5 (1)(F)(i), (1)(G)(ii), (6)(A), (6)(D), (6)(E)(i), 

6 (7)(A), (7)(B), and (7)(D), by striking ‘‘full7 time elementary or secondary school student’’ 

8 each place it appears and inserting ‘‘full-time 

9 student’’; 

10 (B) in paragraphs (1)(B), (1)(F)(ii), 

11 (1)(G)(iii), (6)(A), (6)(D), (6)(E)(ii), and 

12 (7)(D), by striking ‘‘19’’ each place it appears 

13 and inserting ‘‘23’’; 

14 (C) in subparagraphs (A), (B), and (D) of 

15 paragraph (7), by striking ‘‘elementary or sec16 ondary school’’ each place it appears and insert17 ing ‘‘educational institution’’; 

18 (D) in paragraph (7)(A), by striking 

19 ‘‘schools involved’’ and inserting ‘‘institutions 

20 involved’’; 

21 (E) in paragraph (7), by amending sub22 paragraph (C) to read as follows: 

23 ‘‘(C) For purposes of this subsection, the 

24 term ‘educational institution’ means— 


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1 ‘‘(i) a school which provides elemen2 tary or secondary education as determined 

3 under the law of the State or other juris4 diction in which it is located; and 

5 ‘‘(ii) an institution described in sec6 tion 102 of the Higher Education Act of 

7 1965 (20 U.S.C. 1002).’’; and 

8 (F) in paragraph (7)(D), by striking ‘‘di9 ploma or equivalent certificate from a secondary 

10 school (as defined in subparagraph (C)(i))’’ and 

11 inserting ‘‘diploma, degree, or equivalent certifi12 cate from an institution described in subpara13 graph (C)(ii)’’. 

14 (2) EFFECTIVE DATE.—The amendments made 

15 by this subsection shall apply to child’s insurance 

16 benefits that are payable for months beginning after 

17 December 31, 2014. 

18 (b) TEMPORARY EXCLUSION FROM DETERMINATION

19 OF MAXIMUM FAMILY BENEFITS.—Section 203(a) of the 

20 Social Security Act (42 U.S.C. 403(a)) is amended— 

21 (1) in paragraph (3)— 

22 (A) by redesignating subparagraph (D) as 

23 subparagraph (E); and 

24 (B) by inserting after subparagraph (C) 

25 the following new subparagraph: 


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1 ‘‘(D) During the period that begins on January 

2 1, 2015, and ends on December 31, 2019, when any 

3 of such individuals has attained age 19 and is enti4 tled to monthly benefits as a child who is a full-time 

5 student under section 202(d)(1)(B)(i) for any 

6 month, the benefit to which he or she is entitled on 

7 the basis of the wages and self-employment income 

8 of such insured individual for such month shall be 

9 determined without regard to this subsection, and 

10 the benefits of all other individuals who are entitled 

11 for such month to monthly benefits under section 

12 202 on the wages and self-employment income of 

13 such insured individual shall be determined as if no 

14 such child were entitled to benefits for such 

15 month.’’; and 

16 (2) in paragraph (6), by inserting ‘‘(3)(E),’’ 

17 after ‘‘(3)(D),’’. 

18 (c) RAILROAD RETIREMENT ACT.— 

19 (1) Section 2(d) of the Railroad Retirement Act 

20 of 1974 (45 U.S.C. 232(2)(d)) is amended— 

21 (A) in clause (iii) of paragraph (1), by 

22 striking ‘‘will be less than nineteen years of age 

23 and a full-time elementary or secondary school 

24 student’’ and inserting ‘‘will be less than 23 

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1 cational institution (as defined in section 

2 202(d)(7) of the Social Security Act)’’; and 

3 (B) in paragraph (4)— 

4 (i) by striking ‘‘elementary or sec5 ondary school’’ each place it appears and 

6 inserting ‘‘educational institution’’; 

7 (ii) by striking ‘‘nineteen’’ and insert8 ing ‘‘23’’; and 

9 (iii) by striking ‘‘a diploma or equiva10 lent certificate from a secondary school (as 

11 defined in section 202(d)(7)(c)(i) of the 

12 Social Security Act)’’ and inserting ‘‘a di13 ploma, degree, or equivalent certificate 

14 from an institution described in section 

15 202(d)(7)(C)(ii) of the Social Security 

16 Act’’. 

17 (2) Section 5(c)(7) of the Railroad Retirement 

18 Act of 1974 (45 U.S.C. 235(c)(7)) is amended— 

19 (A) by striking ‘‘elementary or secondary 

20 school’’ and inserting ‘‘educational institution’’; 

21 and 

22 (B) by striking ‘‘19’’ and inserting ‘‘23’’. 


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1 SEC. 4. ESTABLISHMENT OF PAYROLL SURTAX FOR HIGH2 INCOME INDIVIDUALS. 

3 (a) SELF-EMPLOYMENT INCOME SURTAX.—Section 

4 1401 of the Internal Revenue Code of 1986 is amended— 

5 (1) by redesignating subsection (c) as sub6 section (d), and 

7 (2) by inserting after subsection (b) the fol8 lowing new subsection: 

9 ‘‘(c) ADDITIONAL TAX FOR OLD-AGE, SURVIVORS, 

10 AND DISABILITY INSURANCE.— 

11 ‘‘(1) IN GENERAL.—In addition to the taxes im12 posed by the preceding subsections, there is hereby 

13 imposed on every individual for each taxable year be14 ginning after December 31, 2014, a tax equal to 4 

15 percent of additional self-employment income for 

16 such taxable year. 

17 ‘‘(2) ADDITIONAL SELF-EMPLOYMENT IN18 COME.—For purposes of paragraph (1), the term 

19 ‘additional self-employment income’ means, for any 

20 taxable year, the amount (not less than zero) equal 

21 to the excess of— 

22 ‘‘(A) the sum of self-employment income 

23 (determined without regard to section 

24 1402(b)(1)) for the taxable year and wages (as 

25 defined in section 3121(a), determined without 


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1 regard to paragraph (1) thereof) paid to such 

2 individual during such taxable year, over 

3 ‘‘(B) the sum of the additional wages (as 

4 defined in section 3101(c)(2)) paid to such indi5 vidual for the taxable year and the amount de6 termined under paragraph (3) for the taxable 

7 year. 

8 Rules similar to the rules of subparagraph (A) of the 

9 second sentence of section 1402(b) shall apply for 

10 purposes of determining wages under clause (i). 

11 ‘‘(3) EXEMPTION AMOUNT.—The amount deter12 mined under this paragraph is an amount equal to— 

13 ‘‘(A) in the case of a taxable year begin14 ning after December 31, 2014, and before Jan15 uary 1, 2016, $400,000, and 

16 ‘‘(B) in the case of any taxable year begin17 ning after December 31, 2015, the product of— 

18 ‘‘(i) $400,000, and 

19 ‘‘(ii) the quotient obtained by divid20 ing— 

21 ‘‘(I) the national average wage 

22 index (as defined in section 209(k)(1)) 

23 for the calendar year which is 2 years 

24 before the calendar year in which the 

25 taxable year begins, by 


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1 ‘‘(II) the national average wage 

2 index for calendar year 2013.’’. 

3 (b) EMPLOYEE WAGE SURTAX.—Section 3101 of the 

4 Internal Revenue Code of 1986 is amended— 

5 (1) by redesignating subsection (c) as sub6 section (d), and 

7 (2) by inserting after subsection (b) the fol8 lowing new subsection: 

9 ‘‘(c) ADDITIONAL TAX FOR OLD-AGE, SURVIVORS, 

10 AND DISABILITY INSURANCE.— 

11 ‘‘(1) IN GENERAL.—In addition to the taxes im12 posed by the preceding subsections, there is hereby 

13 imposed on the income of every individual a tax 

14 equal to 2 percent of additional wages (as defined in 

15 paragraph (2)) which are received with respect to 

16 employment during any calendar year beginning 

17 after December 31, 2014. 

18 ‘‘(2) ADDITIONAL WAGES.—For purposes of 

19 paragraph (1), the term ‘additional wages’ has the 

20 same meaning given the term ‘wages’ under section 

21 3121(a) (determined without regard to paragraph 

22 (1) thereof), except that such term shall not include 

23 that amount of remuneration that is less than— 

24 ‘‘(A) for calendar year 2015, $400,000, 

25 and 


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1 ‘‘(B) for any calendar year after 2015, the 

2 product of— 

3 ‘‘(i) $400,000, and 

4 ‘‘(ii) the quotient obtained by divid5 ing— 

6 ‘‘(I) the national average wage 

7 index (as defined in section 209(k)(1)) 

8 for the second preceding calendar 

9 year, by 

10 ‘‘(II) the national average wage 

11 index for calendar year 2013.’’. 

12 (c) EMPLOYER WAGE SURTAX.—Section 3111 of the 

13 Internal Revenue Code of 1986 is amended by adding at 

14 the end the following new subsection: 

15 ‘‘(f) ADDITIONAL TAX FOR OLD-AGE, SURVIVORS, 

16 AND DISABILITY INSURANCE.— 

17 ‘‘(1) IN GENERAL.—In addition to the taxes im18 posed by subsections (a) and (b), there is hereby im19 posed on every employer an excise tax, with respect 

20 to having individuals in his employ, equal to 2 per21 cent of additional wages (as defined in paragraph 

22 (2)) paid by the employer with respect to employ23 ment during any calendar year beginning after De24 cember 31, 2014. 


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1 ‘‘(2) ADDITIONAL WAGES.—For purposes of 

2 paragraph (1), the term ‘additional wages’ has the 

3 same meaning given such term under section 

4 3101(c).’’. 

5 (d) RAILROAD RETIREMENT TAX ACT.— 

6 (1) RAILROAD EMPLOYEES.—Section 3201 of 

7 the Internal Revenue Code of 1986 is amended— 

8 (A) by redesignating subsection (c) as sub9 section (d), and 

10 (B) by inserting after subsection (b) the 

11 following new subsection: 

12 ‘‘(c) ADDITIONAL TIER 1 TAX.— 

13 ‘‘(1) IN GENERAL.—In addition to the taxes im14 posed by the preceding subsections, there is hereby 

15 imposed on the income of each employee a tax equal 

16 to 2 percent of additional compensation (as defined 

17 in paragraph (2)) received by such employee during 

18 any calendar year beginning after December 31, 

19 2014, for services rendered by such employee. 

20 ‘‘(2) ADDITIONAL COMPENSATION.—For pur21 poses of paragraph (1), the term ‘additional com22 pensation’ has the same meaning given the term 

23 ‘compensation’ under section 3231(e) (determined 

24 without regard to paragraph (2) thereof), except 


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1 that such term shall not include that amount of re2 muneration that is less than— 

3 ‘‘(A) for calendar year 2015, $400,000, 

4 and 

5 ‘‘(B) for any calendar year after 2015, the 

6 product of— 

7 ‘‘(i) $400,000, and 

8 ‘‘(ii) the quotient obtained by divid9 ing— 

10 ‘‘(I) the national average wage 

11 index (as defined in section 209(k)(1)) 

12 for the second preceding calendar 

13 year, by 

14 ‘‘(II) the national average wage 

15 index for calendar year 2013.’’. 

16 (2) RAILROAD EMPLOYEE REPRESENTATIVES.— 

17 Section 3211 of the Internal Revenue Code of 1986 

18 is amended— 

19 (A) by redesignating subsection (c) as sub20 section (d), and 

21 (B) by inserting after subsection (b) the 

22 following new subsection: 

23 ‘‘(c) ADDITIONAL TIER 1 TAX.—In addition to the 

24 taxes imposed by the preceding subsections, there is here25 by imposed on the income of each employee representative 


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1 a tax equal to 4 percent of additional compensation (as 

2 defined under section 3201(c)) received by such employee 

3 representative during any calendar year beginning after 

4 December 31, 2014, for services rendered by such em5 ployee representative.’’. 

6 (3) RAILROAD EMPLOYERS.—Section 3221 of 

7 the Internal Revenue Code of 1986 is amended by 

8 adding at the end the following new subsection: 

9 ‘‘(e) ADDITIONAL TIER 1 TAX.—In addition to the 

10 taxes imposed by subsections (a) and (b), there is hereby 

11 imposed on every employer an excise tax, with respect to 

12 having individuals in his employ, equal to 2 percent of ad13 ditional compensation (as defined under section 3201(c)) 

14 paid by such employer during any calendar year beginning 

15 after December 31, 2014, for services rendered to such 

16 employer.’’. 

17 (4) SOCIAL SECURITY EQUIVALENT BENEFIT

18 ACCOUNT.—Section 15A(b)(1)(A) of the Railroad 

19 Retirement Act of 1974 (45 U.S.C. 231n– 

20 1(b)(1)(A)) is amended by striking ‘‘sections 

21 3201(a), 3211(a)(1), and 3221(a) of the Railroad 

22 Retirement Tax Act’’ and inserting ‘‘subsections (a) 

23 and (c) of section 3201, subsections (a) and (c) of 

24 section 3211, and subsections (a) and (e) of section 

25 3221 of the Internal Revenue Code of 1986’’. 


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1 (e) AMENDMENTS TO THE SOCIAL SECURITY ACT.— 

2 (1) TRANSFER OF AMOUNTS TO FEDERAL OLD3 AGE AND SURVIVORS INSURANCE TRUST FUND.— 

4 Section 201 of the Social Security Act (42 U.S.C. 

5 401) is amended— 

6 (A) in subsection (b)(3)— 

7 (i) by inserting ‘‘and additional wages 

8 (as defined in section 1402(c) of such 

9 Code)’’ after ‘‘section 3121 of such 

10 Code)’’, 

11 (ii) by inserting ‘‘and additional 

12 wages’’ after ‘‘such wages’’, 

13 (iii) by inserting ‘‘and additional 

14 wages’’ after ‘‘which wages’’, and 

15 (iv) by inserting ‘‘and additional 

16 wages’’ after ‘‘records of wages’’, 

17 (B) in subsection (b)(4)— 

18 (i) by inserting ‘‘and additional self19 employment income (as defined in section 

20 3101(c) of such Code)’’ after ‘‘section 

21 1402 of such Code)’’, 

22 (ii) by inserting ‘‘and additional self23 employment income’’ after ‘‘such self-em24 ployment income’’, 


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1 (iii) by inserting ‘‘and additional self2 employment income’’ after ‘‘which self-em3 ployment income’’, and 

4 (iv) by inserting ‘‘and additional self5 employment income’’ after ‘‘records of self6 employment income’’, 

7 (C) in subsection (c)(1)(R)— 

8 (i) by inserting ‘‘and additional wages 

9 (as so defined)’’ after ‘‘wages (as so de10 fined)’’, 

11 (ii) by inserting ‘‘and additional 

12 wages’’ after ‘‘which wages’’, and 

13 (iii) by inserting ‘‘and additional 

14 wages’’ after ‘‘records of wages’’, and 

15 (D) in subsection (c)(2)(R)— 

16 (i) by inserting ‘‘and additional self17 employment income (as so defined)’’ after 

18 ‘‘self-employment income (as so defined)’’, 

19 (ii) by inserting ‘‘and additional self20 employment income’’ after ‘‘which self-em21 ployment income’’, and 

22 (iii) by inserting ‘‘and additional self23 employment income’’ after ‘‘records of self24 employment income’’. 


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1 (2) DEFINITION OF ADDITIONAL WAGES.—Sec2 tion 209 of the Social Security Act (42 U.S.C. 409) 

3 is amended by adding at the end the following new 

4 subsection: 

5 ‘‘Additional Wages 

6 ‘‘(l) For purposes of this title, the term ‘additional 

7 wages’ has the same meaning given the term ‘wages’ (de8 termined without regard to subsection (a)(1)), except that 

9 such term shall not include that amount of remuneration 

10 that is less than— 

11 ‘‘(1) for calendar year 2015, $400,000, and 

12 ‘‘(2) for any calendar year after 2015, the prod13 uct of— 

14 ‘‘(A) $400,000, and 

15 ‘‘(B) the quotient obtained by dividing— 

16 ‘‘(i) the national average wage index 

17 (as defined in section 209(k)(1)) for the 

18 second preceding calendar year, by 

19 ‘‘(ii) the national average wage index 

20 for calendar year 2013.’’. 

21 (3) DEFINITION OF ADDITIONAL SELF-EMPLOY22 MENT INCOME.—Section 211 of the Social Security 

23 Act (42 U.S.C. 411) is amended by adding at the 

24 end the following new subsection: 


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1 ‘‘Additional Self-Employment Income 

2 ‘‘(m)(1) For purposes of this title, the term ‘addi3 tional self-employment income’ means, for any taxable 

4 year, the amount equal to the excess (if any) of— 

5 ‘‘(A) the sum of self-employment income (deter6 mined without regard to subsection (b)(1)) for the 

7 taxable year and wages (as defined in section 

8 209(a), determined without regard to paragraph (1) 

9 thereof) paid to such individual during such taxable 

10 year, over 

11 ‘‘(B) the sum of the additional wages paid to 

12 such individual for the taxable year and the amount 

13 determined under paragraph (2) for the taxable 

14 year. 

15 ‘‘(2) The amount determined under this paragraph 

16 is an amount equal to— 

17 ‘‘(A) in the case of a taxable year beginning 

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

19 2016, $400,000, and 

20 ‘‘(B) in the case of any taxable year beginning 

21 after December 31, 2015, the product of— 

22 ‘‘(i) $400,000, and 

23 ‘‘(ii) the quotient obtained by dividing— 

24 ‘‘(I) the national average wage index 

25 (as defined in section 209(k)(1)) for the 


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1 calendar year which is 2 years before the 

2 calendar year in which the taxable year be3 gins, by 

4 ‘‘(II) the national average wage index 

5 for calendar year 2013.’’. 

6 SEC. 5. INCLUSION OF SURPLUS EARNINGS IN SOCIAL SE7 CURITY BENEFIT FORMULA. 

8 (a) INCLUSION OF SURPLUS AVERAGE INDEXED

9 MONTHLY EARNINGS IN DETERMINATION OF PRIMARY

10 INSURANCE AMOUNTS.—Section 215(a)(1)(A) of the So11 cial Security Act (42 U.S.C. 415(a)(1)(A)) is amended— 

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

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

14 each place it appears; 

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

16 (3) in clause (iii), by inserting ‘‘and’’ at the 

17 end; and 

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

19 new clause: 

20 ‘‘(iv) 2 percent of the individual’s surplus aver21 age indexed monthly earnings,’’. 

22 (b) BASIC AIME AND SURPLUS AIME.— 

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

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


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1 (A) in the matter preceding subparagraph 

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

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

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

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

6 following: ‘‘to the extent such total does not ex7 ceed the contribution and benefit base for the 

8 applicable year’’. 

9 (2) SURPLUS AIME.— 

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

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

12 amended— 

13 (i) by redesignating subparagraphs 

14 (A) and (B) as clauses (i) and (ii), respec15 tively; 

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

17 and 

18 (iii) by adding at the end the fol19 lowing new subparagraph: 

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

21 monthly earnings shall be equal to the quotient obtained 

22 by dividing— 

23 ‘‘(I) the total (after adjustment under para24 graph (3)(B)) of such individual’s surplus earnings 

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


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1 benefit computation years (determined under para2 graph (2)), by 

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

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

5 an individual’s surplus earnings for a benefit computation 

6 year are the total of such individual’s additional wages (as 

7 defined in section 209(l)) paid in and additional self-em8 ployment income (as defined in section 209(m)) credited 

9 to such benefit computation year, to the extent such total 

10 does not exceed the amount determined for such year 

11 under clause (iii). 

12 ‘‘(iii) For purposes of clause (ii), the amount deter13 mined under this clause is— 

14 ‘‘(I) in the case of a benefit computation year 

15 beginning after December 31, 2014, and before Jan16 uary 1, 2016, $500,000; and 

17 ‘‘(II) in the case of any benefit computation 

18 year beginning on or after January 1, 2016, the 

19 product of $500,000 and the quotient obtained by 

20 dividing— 

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

22 defined in section 209(k)(1)) for the calendar 

23 year which is 2 years before the calendar year 

24 in which the benefit computation year begins, 

25 by 


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1 ‘‘(bb) the national average wage index for 

2 calendar year 2013.’’. 

3 (B) CONFORMING AMENDMENT.—The 

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

5 amended by striking ‘‘Average Indexed Monthly 

6 Earnings’’ and inserting ‘‘Basic Average In7 dexed Monthly Earnings; Surplus Average In8 dexed Monthly Earnings’’. 

9 (3) ADJUSTMENT OF SURPLUS EARNINGS FOR

10 PURPOSES OF DETERMINING SURPLUS AIME.—Sec11 tion 215(b)(3) of such Act (42 U.S.C. 415(b)(3)) is 

12 amended— 

13 (A) in subparagraph (A), by striking ‘‘sub14 paragraph (B)’’ and inserting ‘‘subparagraph 

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

16 basic average indexed monthly income’’ after 

17 ‘‘paragraph (2)’’; 

18 (B) by redesignating subparagraph (B) as 

19 subparagraph (C); and 

20 (C) by inserting after subparagraph (A) 

21 the following new subparagraph: 

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

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

24 earnings, the individual’s surplus earnings (described in 


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1 paragraph (1)(B)(ii)) for a benefit computation year shall 

2 be deemed to be equal to the product of— 

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

4 year (as determined without regard to this subpara5 graph), and 

6 ‘‘(ii) the quotient described in subparagraph 

7 (A)(ii).’’. 

8 (c) RAILROAD RETIREMENT ACT.—Section 1(h)(5) 

9 of the Railroad Retirement Act of 1974 (45 U.S.C. 

10 231(h)(5)) is amended— 

11 (1) by striking ‘‘and’’ at the end of clause (ii); 

12 (2) by striking the period at the end of clause 

13 (iii) and inserting ‘‘; and’’; and 

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

15 clause: 

16 ‘‘(iv) for each such calendar month 

17 after 2014, the amount which is creditable 

18 as such individual’s ‘additional wages’ 

19 under section 209(l) of the Social Security 

20 Act.’’. 

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

22 this section shall apply with respect to individuals who ini23 tially become eligible (within the meaning of section 

24 215(a)(3)(B) of the Social Security Act (42 U.S.C. 

25 415(a)(3)(B))) for old-age or disability insurance benefits 


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

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

3 after 2014. 

Æ 


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