I

105TH CONGRESS

1ST SESSION H. R. 857

To amend title II of the Social Security Act to ensure the integrity of

the social security trust funds by requiring the Managing Trustee to

invest the annual surplus of such trust funds in marketable interestbearing obligations of the United States and certificates of deposit in

depository institutions insured by the Federal Deposit Insurance Corporation, and to protect such trust funds from the public debt limit.

IN THE HOUSE OF REPRESENTATIVES

FEBRUARY 27, 1997

Mr. NEUMANN (for himself, Mr. MCINTOSH, Mr. SOUDER, Mr. METCALF, Mr.

BARTON of Texas, Mr. BASS, Mr. BONO, Mr. BRYANT, Mr. BURR of

North Carolina, Mr. CAMPBELL, Mr. CHABOT, Mrs. CHENOWETH, Mr.

CHRISTENSEN, Mr. COBURN, Mrs. CUBIN, Mr. DUNCAN, Mr. ENGLISH

of Pennsylvania, Mr. ENSIGN, Mr. FOLEY, Mr. FORBES, Mr. GRAHAM,

Mr. GUTKNECHT, Mr. HASTINGS of Washington, Mr. HAYWORTH, Mr.

HILLEARY, Mr. HOEKSTRA, Mr. HOSTETTLER, Mr. LAHOOD, Mr.

LATOURETTE, Mrs. MYRICK, Mr. NEY, Mr. NORWOOD, Mr. PETRI, Mr.

RADANOVICH, Mr. RIGGS, Mr. ROHRABACHER, Mr. ROYCE, Mr. SALMON,

Mr. SCARBOROUGH, Mr. SHADEGG, Mr. SMITH of New Jersey, Mrs.

SMITH of Washington, Mr. SMITH of Michigan, Mr. STEARNS, Mr.

THORNBERRY, Mr. TIAHRT, Mr. WAMP, Mr. WATTS of Oklahoma, Mr.

WELLER, Mr. WHITE, Mr. GOODE, Mr. PAUL, and Mr. GIBBONS) introduced the following bill; which was referred to the Committee on Ways

and Means

A BILL

To amend title II of the Social Security Act to ensure the

integrity of the social security trust funds by requiring

the Managing Trustee to invest the annual surplus of

such trust funds in marketable interest-bearing obligations of the United States and certificates of deposit
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in depository institutions insured by the Federal Deposit

Insurance Corporation, and to protect such trust funds

from the public debt limit.

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 Preser5 vation Act of 1997’’.

6 SEC. 2. INVESTMENT OF THE FEDERAL OLD-AGE AND SUR7 VIVORS INSURANCE TRUST FUND AND THE

8 FEDERAL DISABILITY INSURANCE TRUST

9 FUND.

10 (a) IN GENERAL.—Section 201(d) of the Social Secu11 rity Act (42 U.S.C. 401(d)) is amended—

12 (1) by inserting ‘‘(1)’’ after ‘‘(d)’’;

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

14 only’’ and inserting the following: ‘‘Except as pro15 vided in paragraph (2), such investments may be

16 made only’’;

17 (3) by striking the last sentence; and

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

19 paragraph:

20 ‘‘(2)(A) The Managing Trustee shall determine the

21 annual surplus (as defined in subparagraph (B)) for each

22 of the Trust Funds as of the end of each fiscal year. The
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1 Managing Trustee shall ensure that such annual surplus

2 is invested, throughout the next following fiscal year, in—

3 ‘‘(i) marketable interest-bearing obligations of

4 the United States or obligations guaranteed as to

5 both principal and interest by the United States,

6 purchased on original issue or at the market price,

7 or

8 ‘‘(ii) certificates of deposit in insured depository

9 institutions (as defined in section 3(c)(2) of the Fed10 eral Deposit Insurance Act).

11 ‘‘(B) For purposes of this paragraph, the ‘annual sur12 plus’ for either of the Trust Funds as of the end of a

13 fiscal year is the excess (if any) of—

14 ‘‘(i) the sum of—

15 ‘‘(I) in the case of the Federal Old-Age

16 and Survivors Insurance Trust Fund, the

17 amounts appropriated to such Trust Fund

18 under paragraphs (3) and (4) of subsection (a)

19 for the fiscal year,

20 ‘‘(II) in the case of the Federal Disability

21 Insurance Trust Fund, the amounts appro22 priated to such Trust Fund under paragraphs

23 (1) and (2) of subsection (b) for the fiscal year,

24 and
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1 ‘‘(III) in either case, the amount appro2 priated to such Trust Fund under section

3 121(e) of the Social Security Amendments of

4 1983 for the fiscal year, and any amounts oth5 erwise credited to or deposited in such Trust

6 Fund under this title for the fiscal year, over

7 ‘‘(ii) the amounts paid or transferred from such

8 Trust Fund during the fiscal year.’’.

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

10 this section shall apply with respect to annual surpluses

11 as of the end of fiscal years beginning on or after October

12 1, 1998.

13 SEC. 3. PROTECTION OF THE SOCIAL SECURITY TRUST

14 FUNDS FROM THE PUBLIC DEBT LIMIT.

15 (a) PROTECTION OF TRUST FUNDS.—Notwithstand16 ing any other provision of law—

17 (1) no officer or employee of the United States

18 may—

19 (A) delay the deposit of any amount into

20 (or delay the credit of any amount to) the Fed21 eral Old-Age and Survivors Insurance Trust

22 Fund or the Federal Disability Insurance Trust

23 Fund or otherwise vary from the normal terms,

24 procedures, or timing for making such deposits

25 or credits, or
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1 (B) refrain from the investment in public

2 debt obligations of amounts in either of such

3 Trust Funds,

4 if a purpose of such action or inaction is to not in5 crease the amount of outstanding public debt obliga6 tions, and

7 (2) no officer or employee of the United States

8 may disinvest amounts in either of such Trust

9 Funds which are invested in public debt obligations

10 if a purpose of the disinvestment is to reduce the

11 amount of outstanding public debt obligations.

12 (b) PROTECTION OF BENEFITS AND EXPENDITURES

13 FOR ADMINISTRATIVE EXPENSES.—

14 (1) IN GENERAL.—Notwithstanding subsection

15 (a), during any period for which cash benefits or ad16 ministrative expenses would not otherwise be payable

17 from the Federal Old-Age and Survivors Insurance

18 Trust Fund or the Federal Disability Insurance

19 Trust Fund by reason of an inability to issue further

20 public debt obligations because of the applicable

21 public debt limit, public debt obligations held by

22 such Trust Fund shall be sold or redeemed only for

23 the purpose of making payment of such benefits or

24 administrative expenses and only to the extent cash

25 assets of such Trust Fund are not available from
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1 month to month for making payment of such bene2 fits or administrative expenses.

3 (2) ISSUANCE OF CORRESPONDING DEBT.—For

4 purposes of undertaking the sale or redemption of

5 public debt obligations held by the Federal Old-Age

6 and Survivors Insurance Trust Fund or the Federal

7 Disability Insurance Trust Fund pursuant to para8 graph (1), the Secretary of the Treasury may issue

9 corresponding public debt obligations to the public,

10 in order to obtain the cash necessary for payment of

11 benefits or administrative expenses from such Trust

12 Fund, notwithstanding the public debt limit.

13 (3) ADVANCE NOTICE OF SALE OR REDEMP14 TION.—Not less than 3 days prior to the date on

15 which, by reason of the public debt limit, the Sec16 retary of the Treasury expects to undertake a sale

17 or redemption authorized under paragraph (1), the

18 Secretary of the Treasury shall report to each House

19 of the Congress and to the Comptroller General of

20 the United States regarding the expected sale or re21 demption. Upon receipt of such report, the Comp22 troller General shall review the extent of compliance

23 with subsection (a) and paragraphs (1) and (2) of

24 this subsection and shall issue such findings and rec25 ommendations to each House of the Congress as the
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1 Comptroller General considers necessary and appro2 priate.

3 (c) PUBLIC DEBT OBLIGATION.—For purposes of

4 this section, the term ‘‘public debt obligation’’ means any

5 obligation subject to the public debt limit established

6 under section 3101 of title 31, United States Code.

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