I 

108TH CONGRESS 

2D SESSION H. R. 3821

To amend title II of the Social Security Act to provide for individual security 

accounts funded by employee and employer Social Security payroll deductions, to extend the solvency of the old-age, survivors, and disability 

insurance program, and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

FEBRUARY 24, 2004

Mr. KOLBE (for himself and Mr. STENHOLM) introduced the following bill; 

which was referred to the Committee on Ways and Means, and in addition to the Committee on Rules, 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 amend title II of the Social Security Act to provide 

for individual security accounts funded by employee and 

employer Social Security payroll deductions, to extend 

the solvency of the old-age, survivors, and disability insurance program, 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 AND TABLE OF CONTENTS. 

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

5 ‘‘Bipartisan Retirement Security Act of 2004’’. 
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1 (b) TABLE OF CONTENTS.—The table of contents is 

2 as follows:

Sec. 1. Short title and table of contents. 

Sec. 2. Individual security accounts. 

Sec. 3. Minimum social security benefit. 

Sec. 4. Reduction in the amount of certain transfers to medicare trust fund. 

Sec. 5. Revised formula for average indexed monthly earnings. 

Sec. 6. Actuarial adjustment for retirement. 

Sec. 7. CPI overstatement. 

Sec. 8. Adjustments to bend points in determining primary insurance amounts. 

Sec. 9. Adjustment to benefit formula factors. 

Sec. 10. Modification to PIA formula to reflect changes to life expectancy. 

Sec. 11. Treatment of disabled beneficiaries. 

Sec. 12. Maintenance of benefit and contribution base. 

Sec. 13. Acceleration of increase in social security eligibility age. 

Sec. 14. Mechanism for remedying unforeseen deterioration in social security 

solvency. 

Sec. 15. Increase in widow’s and widower’s insurance benefits. 

Sec. 16. Limitation on benefits of married couple to level of maximum worker 

benefits.

3 SEC. 2. INDIVIDUAL SECURITY ACCOUNTS. 

4 (a) ESTABLISHMENT AND MAINTENANCE OF INDI5 VIDUAL SECURITY ACCOUNTS.—

6 (1) IN GENERAL.—Title II of the Social Secu7 rity Act (42 U.S.C. 401 et seq.) is amended—

8 (A) by inserting before section 201 the fol9 lowing: 

10 ‘‘PART A—INSURANCE BENEFITS’’; 

11 and 

12 (B) by adding at the end the following: 

13 ‘‘PART B—INDIVIDUAL SECURITY SYSTEM 

14 ‘‘Subpart 1—Individual Security Accounts 

15 ‘‘FEDERALLY-ADMINISTERED INDIVIDUAL SECURITY

16 ACCOUNT

17 ‘‘SEC. 251. (a) ESTABLISHMENT.—
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1 ‘‘(1) IN GENERAL.—Within 30 days after re2 ceiving the first contribution under subsection (b) 

3 with respect to an eligible individual, the Commis4 sioner of Social Security shall establish an individual 

5 security account for such individual in the Individual 

6 Security Fund. Each account shall be identified to 

7 its account holder by means of the account holder’s 

8 social security account number. 

9 ‘‘(2) ELIGIBLE INDIVIDUAL.—For purposes of 

10 this part, the term ‘eligible individual’ means any in11 dividual born after December 31, 1949. 

12 ‘‘(b) CONTRIBUTIONS.—

13 ‘‘(1) IN GENERAL.—The Secretary of the 

14 Treasury shall transfer from the Federal Old-Age 

15 and Survivors Insurance Trust Fund, for crediting 

16 by the Commissioner of Social Security to the indi17 vidual security account of an eligible individual, an 

18 amount equal to the sum of any amount received by 

19 such Secretary on behalf of such individual under 

20 section 3101(a)(2) or 1401(a)(2) of the Internal 

21 Revenue Code of 1986. 

22 ‘‘(2) OTHER CONTRIBUTIONS.—For provisions 

23 relating to additional contributions credited to indi24 vidual security accounts, see sections 54(d) and 

25 6402(l) of the Internal Revenue Code of 1986. 
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1 ‘‘(c) CREDITING REQUIREMENTS.—Except as other2 wise provided in section 252, contributions under sub3 section (b) on behalf of an eligible individual shall be cred4 ited—

5 ‘‘(1) to the individual security account estab6 lished for such individual under subsection (a); and 

7 ‘‘(2) in accordance with the allocation in effect 

8 with respect to such individual under subsection (d). 

9 ‘‘(d) ALLOCATION AND OTHER DESIGNATIONS.—

10 ‘‘(1) IN GENERAL.—The Commissioner of So11 cial Security shall prescribe regulations in accord12 ance with which any eligible individual who is em13 ployed or self-employed may designate—

14 ‘‘(A) in the event that 2 or more invest15 ment options are available in the Individual Se16 curity Fund—

17 ‘‘(i) the option or options to which 

18 such individual wishes to have such indi19 vidual’s contributions under subsection (b) 

20 credited; and 

21 ‘‘(ii) if such individual designates 

22 more than 1 option under clause (i), how 

23 such individual wishes for those contribu24 tions to be allocated; and 
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1 ‘‘(B) the amount of wages or self-employ2 ment income such individual wishes to des3 ignate for purposes of section 3101(a)(2)(C) or 

4 1401(a)(2)(C) of the Internal Revenue Code of 

5 1986 (as applicable), if any. 

6 ‘‘(2) DEFAULT ALLOCATION.—In the absence of 

7 a required designation under paragraph (1)(A), con8 tributions on behalf of the individual involved shall 

9 be allocated in such manner as the Commissioner of 

10 Social Security shall prescribe, taking into account 

11 the competing objectives of maximizing returns on 

12 investments and minimizing the risk involved with 

13 such investments. 

14 ‘‘(3) FORM OF DESIGNATION.—Any designation 

15 under paragraph (1) shall be made in such manner 

16 and at such intervals as the Commissioner of Social 

17 Security may prescribe in order to ensure ease of ad18 ministration and to avoid creating an undue burden 

19 on employers. 

20 ‘‘(4) SPECIAL RULE FOR 2006.—Not later than 

21 January 1, 2006, any eligible individual who is em22 ployed or self-employed as of such date shall execute 

23 all designations required under paragraph (1). 

24 ‘‘(e) PERIODIC STATEMENTS TO ACCOUNT HOLD25 ER.—
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1 ‘‘(1) IN GENERAL.—The Individual Security 

2 Fund Board shall prescribe regulations under which 

3 each individual for whom an individual security ac4 count is maintained under this section shall be fur5 nished with—

6 ‘‘(A) a periodic statement relating to the 

7 individual’s account, including, for any report8 ing period as of the end of which the individ9 ual’s account balance is at least equal to the 

10 minimum balance amount (within the meaning 

11 of section 252), clear and conspicuous notice to 

12 that effect; 

13 ‘‘(B) a summary description of any invest14 ment options or other choices which may be 

15 available to such individual under this section 

16 or under section 252 (as applicable); and 

17 ‘‘(C) any forms and information necessary 

18 to make a designation under subsection (d) or 

19 section 252 (as applicable). 

20 ‘‘(2) INFORMED DECISIONMAKING.—All infor21 mation, materials, and other matter furnished under 

22 this subsection shall be furnished to the account 

23 holder at such times and in such manner as the 

24 Board considers appropriate in order to permit in25 formed decisionmaking. 
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1 ‘‘PRIVATELY-ADMINISTERED INDIVIDUAL SECURITY

2 ACCOUNT

3 ‘‘SEC. 252. (a) DEFINITIONS.—For purposes of this 

4 part—

5 ‘‘(1) MINIMUM DEPOSIT AMOUNT.—

6 ‘‘(A) IN GENERAL.—The term ‘minimum 

7 deposit amount’ means an amount equal to 

8 $7,500, as adjusted under subparagraph (B). 

9 ‘‘(B) ADJUSTMENT.—The Secretary of the 

10 Treasury shall adjust annually (effective for pe11 riods beginning after December 2003) the dol12 lar amount set forth in subparagraph (A) under 

13 procedures providing for adjustments in the 

14 same manner and to the same extent as adjust15 ments are provided for under the procedures 

16 used to adjust benefit amounts under section 

17 215(i)(2)(A), except that any amount so ad18 justed that is not a multiple of $10 shall be 

19 rounded to the nearest multiple of $10. 

20 ‘‘(2) FEDERALLY-ADMINISTERED INDIVIDUAL

21 SECURITY ACCOUNT.—The term ‘Federally-adminis22 tered individual security account’ means an indi23 vidual security account maintained, in accordance 

24 with applicable provisions of this part, in the Indi25 vidual Security Fund. 
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1 ‘‘(3) PRIVATELY-ADMINISTERED INDIVIDUAL

2 SECURITY ACCOUNT.—The term ‘privately-adminis3 tered individual security account’ means an indi4 vidual security account maintained, in accordance 

5 with applicable provisions of this part, by a certified 

6 institution. 

7 ‘‘(4) CERTIFIED INSTITUTION.—The term ‘cer8 tified institution’ refers to an investment firm, credit 

9 union, insurance company, or other certified institu10 tion under subpart 3. 

11 ‘‘(b) OPTION TO DESIGNATE A PRIVATELY-ADMINIS12 TERED INDIVIDUAL SECURITY ACCOUNT.—

13 ‘‘(1) IN GENERAL.—Under regulations pre14 scribed by the Individual Security Fund Board, 

15 whenever the balance in an individual’s Federally16 administered individual security account is at least 

17 equal to the minimum deposit amount, such indi18 vidual shall be eligible to designate a privately-ad19 ministered individual security account (established 

20 and maintained on such individual’s behalf) to serve 

21 as such individual’s individual security account 

22 under this part, in lieu of such individual’s Feder23 ally-administered individual security account. 

24 ‘‘(2) EFFECT OF DESIGNATION.—If an indi25 vidual makes a designation under paragraph (1)—
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1 ‘‘(A) the entire balance in the individual’s 

2 Federally-administered individual security ac3 count shall be promptly transferred to the pri4 vately-administered individual security account 

5 specified by such individual in such designation; 

6 and 

7 ‘‘(B) that privately-administered individual 

8 security account shall, for all purposes, be 

9 treated as the electing individual’s individual se10 curity account, subject to paragraph (4). 

11 ‘‘(3) REGULATORY MANAGEMENT OF PRIVATE

12 INVESTMENT.—A designation under this subsection 

13 shall not be effective unless it is made in such time, 

14 form, and manner as the Individual Security Fund 

15 Board prescribes. The Individual Security Fund 

16 Board shall—

17 ‘‘(A) maintain individual account records, 

18 and 

19 ‘‘(B) combine account transactions with 

20 certified institutions maintaining privately-ad21 ministered individual security accounts in ag22 gregate amounts, 

23 in the same manner as is applicable with respect to 

24 records and account transactions with respect to 

25 Federally administered individual security accounts. 
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1 ‘‘(4) SUBSEQUENT DESIGNATIONS.—The Indi2 vidual Security Fund Board shall provide by regula3 tion opportunity for subsequent designation, from 

4 time to time, of another individual security account 

5 in lieu of the account previously designated under 

6 this section, subject to the following: 

7 ‘‘(A) OPTIONS AVAILABLE.—The account 

8 designated under this paragraph may be either 

9 within—

10 ‘‘(i) another certified institution, sub11 ject to subparagraph (B); or 

12 ‘‘(ii) the Individual Security Fund. 

13 ‘‘(B) MINIMUM BALANCE.—In order to 

14 make a designation referred to in subparagraph 

15 (A)(i), the balance in the individual’s individual 

16 security account must be at least equal to the 

17 minimum deposit amount. No minimum balance 

18 requirement under this subparagraph shall 

19 apply in the case of a designation referred to in 

20 subparagraph (A)(ii). 

21 ‘‘(C) ONLY 1 ACCOUNT PERMITTED AT

22 ANY TIME.—An individual may not, at any 

23 time, concurrently maintain—
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1 ‘‘(i) a privately-administered indi2 vidual security account with each of 2 or 

3 more certified institutions; or 

4 ‘‘(ii) a privately-administered and a 

5 Federally-administered individual security 

6 account. 

7 ‘‘(D) EFFECT.—A designation under this 

8 paragraph has (with respect to the individual’s 

9 respective accounts, before and after such des10 ignation) the same effect as results following a 

11 designation under paragraph (2) (with respect 

12 to the Federally-administered and privately-ad13 ministered accounts involved). 

14 ‘‘DISTRIBUTIONS FROM INDIVIDUAL SECURITY ACCOUNTS

15 ‘‘SEC. 253. (a) DATE OF EARLIEST DISTRIBU16 TION.—Except as provided in subsection (c), distributions 

17 may not be made from the Federally-administered or pri18 vately-administered individual security account of an eligi19 ble individual (as the case may be) before the earlier of—

20 ‘‘(1) the date the eligible individual attains nor21 mal retirement age, as determined under section 216 

22 (or early retirement age, as so determined, if elected 

23 by such individual), or 

24 ‘‘(2) the date on which funds in the eligible in25 dividual’s account are sufficient to provide a month26 ly payment over the life expectancy of the eligible in-
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1 dividual (determined under reasonable actuarial as2 sumptions) which, when added to the eligible individ3 ual’s monthly benefit under part A (if any), is at 

least equal to an amount equal to 1 4 ⁄12 of 185 percent 

5 of the poverty line (as defined in section 673(2) of 

6 the Community Services Block Grant Act (42 U.S.C. 

7 9902(2) and determined on such date for a family 

8 of the size involved) and adjusted annually there9 after by the adjustment determined under section 

10 215(i). 

11 ‘‘(b) FORMS OF DISTRIBUTION.—

12 ‘‘(1) REQUIRED MONTHLY PAYMENTS.—Except 

13 as provided in paragraph (2), beginning as of the 

14 date distributions begin to be made in accordance 

15 with subsection (a), the balance in the individual se16 curity account available to provide monthly pay17 ments not in excess of the amount described in sub18 section (a)(2) shall be paid, as elected by the ac19 count holder (in such form and manner as shall be 

20 prescribed in regulations of the Individual Security 

21 Fund Board or the Securities and Exchange Com22 mission, as applicable), by means of the purchase of 

23 annuities or equal monthly payments over the life 

24 expectancy of the eligible individual (determined 

25 under reasonable actuarial assumptions) in accord-
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1 ance with requirements (which shall be provided in 

2 regulations of the Board or Commission, as applica3 ble) similar to the requirements applicable to pay4 ments of benefits under subchapter III of chapter 84 

5 of title 5, United States Code. 

6 ‘‘(2) PAYMENT OF EXCESS FUNDS.—To the ex7 tent funds remain in an eligible individual’s Feder8 ally-administered or privately-administered indi9 vidual security account (as the case may be) after 

10 the application of paragraph (1) and to the extent 

11 not inconsistent with the provisions of subchapter 

12 III of chapter 84 of title 5, United States Code, 

13 such funds shall be payable to the eligible individual 

14 in such manner and in such amounts as determined 

15 by the eligible individual. 

16 ‘‘(c) DISTRIBUTION IN THE EVENT OF DEATH BE17 FORE THE DATE OF INITIAL DISTRIBUTION.—If the eligi18 ble individual dies before the date determined under sub19 section (a), the balance in such individual’s individual se20 curity account shall be distributed to the individual’s heirs 

21 under rules established by the Individual Security Fund 

22 Board or the Securities and Exchange Commission, as ap23 plicable. 
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1 ‘‘Subpart 2—Individual Security Fund; Individual 

2 Security Fund Board 

3 ‘‘INDIVIDUAL SECURITY FUND

4 ‘‘SEC. 261. There shall be established and maintained 

5 in the Treasury of the United States an Individual Secu6 rity Fund in the same manner as the Thrift Savings Fund 

7 under sections 8437 (excluding paragraphs (4) and (5) of 

8 subsection (c) thereof), 8438, and 8439 of title 5, United 

9 States Code. 

10 ‘‘INDIVIDUAL SECURITY FUND BOARD

11 ‘‘SEC. 262. (a) ESTABLISHMENT.—There shall be es12 tablished and maintained in the Social Security Adminis13 tration an Individual Security Fund Board in the same 

14 manner as the Federal Retirement Thrift Investment 

15 Board under subchapter VII of chapter 84 of title 5, 

16 United States Code. 

17 ‘‘(b) SPECIFIC INVESTMENT AND REPORTING DU18 TIES.—The Individual Security Fund Board shall manage 

19 and report on the activities of the Individual Security 

20 Fund and on Federally-administered individual security 

21 accounts in the same manner as the Federal Retirement 

22 Thrift Investment Board manages and reports on the 

23 Thrift Savings Fund and the individual accounts of such 

24 Fund under subchapter VII of chapter 84 of title 5, 

25 United States Code. 
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1 ‘‘(c) BUDGETARY TREATMENT OF INDIVIDUAL SECU2 RITY FUND AND ACCOUNTS.—The receipts and disburse3 ments of the Individual Security Fund and any accounts 

4 within such Fund shall not be included in the totals of 

5 the budget of the United States Government as submitted 

6 by the President or of the congressional budget and shall 

7 be exempt from any general budget limitation imposed by 

8 statute on expenditures and net lending (budget outlays) 

9 of the United States Government. 

10 ‘‘(d) COMMISSIONER OF SOCIAL SECURITY AS EXEC11 UTIVE DIRECTOR.—The Commissioner of Social Security 

12 shall have, with respect to the Individual Security Fund 

13 and accounts within such Fund, the same duties and re14 sponsibilities as does the Executive Director (appointed 

15 under section 8474(a) of title 5, United States Code) with 

16 respect to the Thrift Savings Fund and accounts within 

17 such Fund. 

18 ‘‘Subpart 3—Certified Institutions 

19 ‘‘CERTIFICATION OF INSTITUTIONS BY SECURITIES AND

20 EXCHANGE COMMISSION

21 ‘‘SEC. 271. (a) IN GENERAL.—For purposes of this 

22 part, any institution that is engaged, in a fiduciary capac23 ity, in the business of maintaining accounts for individuals 

24 for purposes of investment may apply to the Securities and 

25 Exchange Commission (in such form and manner as the 
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1 Commission shall by regulation require) for certification 

2 under this subpart. 

3 ‘‘(b) REVIEW REQUIREMENTS.—In reviewing any ap4 plication for certification under this subpart and deter5 mining whether to approve the application for certifi6 cation, the Commission shall consider the following fac7 tors: 

8 ‘‘(1) The financial history and condition of the 

9 institution. 

10 ‘‘(2) The adequacy of the institution’s capital 

11 structure. 

12 ‘‘(3) The future earnings prospects of the insti13 tution. 

14 ‘‘(4) The general character and fitness of the 

15 management of the institution. 

16 ‘‘(5) The convenience and needs of individuals 

17 who are account holders with respect to personal re18 tirement accounts for which the institution is to 

19 serve as trustee. 

20 ‘‘(6) Whether the institution’s corporate powers 

21 are consistent with the purposes of this part. 

22 ‘‘(7) The institution’s disclosure policies, includ23 ing with respect to its administrative fees, invest24 ment policies, and investment activities. 

25 ‘‘(8) The appropriateness of—
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1 ‘‘(A) the fund or funds that such institu2 tion proposes to offer for purposes of this part, 

3 and 

4 ‘‘(B) the criteria by which such institution 

5 will make future decisions regarding the selec6 tion of new funds or the making of any other 

7 modifications in the investment options offered 

8 by such institution for purposes of this part, as 

9 determined based on guidelines established by 

10 the Commission for purposes of this paragraph. 

11 ‘‘(c) NOTICE OF DENIAL OF APPLICATION FOR CER12 TIFICATION.—If the Commission votes to deny any appli13 cation for certification by any institution, the Commission 

14 shall promptly notify the institution of the denial of such 

15 application, giving specific reasons in writing for the Com16 mission’s determination with reference to the factors de17 scribed in subsection (b). 

18 ‘‘(d) NONDELEGATION REQUIREMENT.—The author19 ity of the Commission to make any determination to deny 

20 any application under this section may not be delegated 

21 by the Commission. 

22 ‘‘REVOCATION OF CERTIFICATION

23 ‘‘SEC. 272. (a) IN GENERAL.—The Securities and 

24 Exchange Commission shall prescribe regulations in ac25 cordance with which the certified status of an institution 

26 may be voluntarily or involuntarily revoked. 
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1 ‘‘(b) JUDICIAL REVIEW.—Any party to any involun2 tary revocation proceeding under this section to which an 

3 institution is a party may obtain a review of any order 

4 served pursuant to this section by the filing in the court 

5 of appeals of the United States for the circuit in which 

6 the home office of the institution is located, or in the 

7 United States Court of Appeals for the District of Colum8 bia Circuit, within 30 days after the date of service of such 

9 order, a written petition praying that the order of the 

10 Commission be modified, terminated, or set aside. A copy 

11 of such petition shall be forthwith transmitted by the clerk 

12 of the court to the Commission, and thereupon the Com13 mission shall file in the court the record in the proceeding, 

14 as provided in section 2112 of title 28, United States 

15 Code. Upon the filing of such petition, such court shall 

16 have jurisdiction, which upon the filing of the record shall 

17 be exclusive, to affirm, modify, terminate, or set aside, in 

18 whole or in part, the order of the Commission. Review of 

19 such proceedings shall be had as provided in chapter 7 

20 of title 5, United States Code. The judgment and decree 

21 of the court shall be final, except that the judgment and 

22 decree shall be subject to review by the Supreme Court 

23 upon certiorari, as provided in section 1254 of title 28, 

24 United States Code. The commencement of proceedings 

25 for judicial review under this subsection shall not, unless 
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1 specifically ordered by the court, operate as a stay of any 

2 order issued by the Commission. 

3 ‘‘FIDUCIARY DUTIES

4 ‘‘SEC. 273. (a) IN GENERAL.—In the case of a pri5 vately-administered individual security account which does 

6 not form part of an individual account plan covered under 

7 part 4 of subtitle B of title I of the Employee Retirement 

8 Income Security Act of 1974, rules similar to the rules 

9 of such part 4 applicable to individual account plans cov10 ered under such part 4 shall apply with respect to a pri11 vately-administered individual security account and the 

12 terms of any arrangement under which such account is 

13 maintained. 

14 ‘‘(b) GENERAL REQUIREMENTS.—In applying under 

15 subsection (a) the rules of part 4 of subtitle B of title 

16 I of the Employee Retirement Income Security Act of 

17 1974 in the case of a privately-administered individual se18 curity account, references in such part to the Secretary 

19 of Labor shall be deemed to be references to the Securities 

20 and Exchange Commission, references in such part to a 

21 participants or beneficiary in connection with an indi22 vidual account plan covered under such part shall be 

23 deemed to be references to the account holder with respect 

24 to the privately-administered individual security account, 

25 and references in such part to the plan administrator or 

26 plan sponsor in connection with an individual account plan 
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1 covered under such part shall be deemed to be references 

2 to the trustee of the privately-administered individual se3 curity account. 

4 ‘‘(c) LIMITATION ON LIABILITY.—Any account holder 

5 who issues an instruction to the trustee of the account 

6 directing an investment of funds held in the account shall 

7 sign an acknowledgement prescribed by the Securities and 

8 Exchange Commission which states that the account hold9 er understands that an investment of any amount in the 

10 account is made at the account holder’s risk, that the ac11 count holder is not protected by the Government or by 

12 the trustee against any loss on such investment, and that 

13 a return on such investment is not guaranteed by the Gov14 ernment or by the trustee. Notwithstanding the preceding 

15 provisions of this section and any other provision of Fed16 eral or State law, the trustee of a privately-administered 

17 individual security account shall not be liable for losses 

18 suffered in connection with any investment of assets held 

19 in the account unless it is shown by clear and convincing 

20 evidence that the trustee did not act in the manner in 

21 which a reasonable trustee would act under the cir22 cumstances then prevailing in evaluating the risk and re23 ward properties of the investment option involved. 
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1 ‘‘Subpart 4—Enforcement 

2 ‘‘CAUSE OF ACTION

3 ‘‘SEC. 281. The account holder with respect to a pri4 vately-administered individual security account who is ad5 versely affected by an act or practice of any party (other 

6 than the Securities and Exchange Commission, the Social 

7 Security Administration, the Department of the Treasury, 

8 or any officer or employee of any of the foregoing) in viola9 tion of any provision of this part, may bring an action—

10 ‘‘(1) to enjoin such act or practice, or 

11 ‘‘(2) to obtain other appropriate equitable relief 

12 (A) to redress such violation or (B) to enforce such 

13 provision. 

14 ‘‘JURISDICTION AND VENUE

15 ‘‘SEC. 282. Civil actions under this subpart may be 

16 brought in the district courts of the United States in the 

17 district where the privately-administered individual secu18 rity account is administered, where the violation took 

19 place, or where a defendant resides or may be found, and 

20 process may be served in any district where a defendant 

21 resides or may be found. The district courts of the United 

22 State shall have jurisdiction, without regard to the amount 

23 in controversy or the citizenship of the parties, to grant 

24 the relief provided for in section 281 in any action. 
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1 ‘‘RIGHT OF SECURITIES AND EXCHANGE COMMISSION TO

2 INTERVENE

3 ‘‘SEC. 283. A copy of the complaint or notice of ap4 peal in any action under this subpart shall be served upon 

5 the Securities and Exchange Commission by certified mail. 

6 The Commission shall each have the right to intervene in 

7 any action. 

8 ‘‘AWARDS OF COSTS AND EXPENSES

9 ‘‘SEC. 284. In any action brought under this subpart, 

10 the court in its discretion may award all or a portion of 

11 the costs and expenses incurred in connection with such 

12 action, including reasonable attorney’s fees, to any party 

13 who prevails or substantially prevails in such action. 

14 ‘‘LIMITATION ON ACTIONS

15 ‘‘SEC. 285. (a) IN GENERAL.—Except as provided in 

16 subsection (c), an action under this subpart may not be 

17 brought after the later of—

18 ‘‘(1) 6 years after the date on which the cause 

19 of action arose, or 

20 ‘‘(2) 3 years after the applicable date specified 

21 in subsection (b). 

22 ‘‘(b) APPLICABLE DATE.—The applicable date speci23 fied in this subsection is the earliest date on which the 

24 plaintiff acquired or should have acquired actual knowl25 edge of the existence of such cause of action. 
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1 ‘‘(c) CASES OF FRAUD OR CONCEALMENT.—In the 

2 case of fraud or concealment, the period described in sub3 section (a)(2) shall be extended to 6 years after the appli4 cable date specified in subsection (b). 

5 ‘‘PENALTY FOR FAILURE TO TIMELY PROVIDE REQUIRED

6 INFORMATION

7 ‘‘SEC. 286. The Securities and Exchange Commission 

8 may assess a penalty, payable to it, against any person 

9 who fails to provide any notice or other material informa10 tion required under this part or any regulations prescribed 

11 under this part within the applicable time limit specified 

12 therein. Such penalty shall not exceed $1,000 for each day 

13 for which such failure continues. 

14 ‘‘ACTIONS BY SECURITIES AND EXCHANGE COMMISSION

15 ‘‘SEC. 287. If any person is assessed under this sub16 part and fails to pay the assessment when due, or any 

17 person otherwise fails to meet any requirement of this 

18 part, the Securities and Exchange Commission may bring 

19 a civil action in any district court of the United States 

20 within the jurisdiction of which such person’s assets are 

21 located or in which such person resides or is found for 

22 the recovery of the amount of the assessment or for appro23 priate equitable relief to redress the violation or enforce 

24 the provisions of this part, and process may be served in 

25 any other district. The district courts of the United States 

26 shall have jurisdiction over actions brought under this sec-
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1 tion by the Commission without regard to the amount in 

2 controversy. 

3 ‘‘CRIMINAL PENALTY FOR FRAUD OR INTENTIONAL MIS4 REPRESENTATION IN CONNECTION WITH INVEST5 MENT OPTIONS

6 ‘‘SEC. 288. Any person who makes, or causes to be 

7 made, a statement or representation of a material fact for 

8 use in selecting an investment option that the person 

9 knows or should know is false or misleading or knows or 

10 should know omits a material fact or makes such a state11 ment with knowing disregard for the truth shall upon con12 viction be fined not more than $500,000 or imprisoned 

13 for not more than 5 years, or both.’’. 

14 (b) MODIFICATION OF FICA RATES.—

15 (1) EMPLOYEES.—Section 3101(a) of the Inter16 nal Revenue Code of 1986 (relating to tax on em17 ployees) is amended to read as follows: 

18 ‘‘(a) OLD-AGE, SURVIVORS, AND DISABILITY INSUR19 ANCE.—

20 ‘‘(1) IN GENERAL.—

21 ‘‘(A) INDIVIDUALS COVERED UNDER PART

22 A OF TITLE II OF THE SOCIAL SECURITY ACT.—

23 In addition to other taxes, there is hereby im24 posed on the income of every individual who is 

25 not a part B eligible individual a tax equal to 
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1 6.2 percent of the wages received by him with 

2 respect to employment. 

3 ‘‘(B) INDIVIDUALS COVERED UNDER PART

4 B OF TITLE II OF THE SOCIAL SECURITY

5 ACT.—

6 ‘‘(i) IN GENERAL.—In addition to 

7 other taxes, there is hereby imposed on the 

8 income of every part B eligible individual a 

9 tax equal to the applicable percentage of 

10 the wages received by such individual with 

11 respect to employment. 

12 ‘‘(ii) APPLICABLE PERCENTAGE.—For 

13 purposes of clause (i), the term ‘applicable 

14 percentage’ means the excess of 6.2 per15 cent, over 

16 ‘‘(I) 3 percent, in the case of the 

17 first $10,000 of such wages received 

18 in the calendar year, and 

19 ‘‘(II) 2 percent, in the case of 

20 any additional such wages received in 

21 the calendar year. 

22 ‘‘(2) CONTRIBUTION OF OASDI TAX REDUCTION

23 TO INDIVIDUAL SECURITY ACCOUNTS.—In addition 

24 to other taxes, there is hereby imposed on the in25 come of every part B eligible individual for the cal-
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1 endar year an individual security account contribu2 tion equal to the sum of—

3 ‘‘(A) 3 percent of so much of the wages as 

4 does not exceed the first $10,000 received in 

5 such calendar year by such individual with re6 spect to employment, 

7 ‘‘(B) 2 percent of the excess of—

8 ‘‘(i) such wages, over 

9 ‘‘(ii) the wages taken into account 

10 under subparagraph (A), plus 

11 ‘‘(C) so much of such wages (not to exceed 

12 $5,000) as designated by the individual in the 

13 same manner as described in section 251(c) of 

14 the Social Security Act. 

15 ‘‘(3) INFLATION ADJUSTMENTS.—

16 ‘‘(A) IN GENERAL.—In the case of any cal17 endar year beginning after 2006, the $10,000 

18 amount in paragraphs (1) and (2) shall be in19 creased by an amount equal to—

20 ‘‘(i) such dollar amount, multiplied by 

21 ‘‘(ii) the wage increase percentage (if 

22 any) for such year. 

23 ‘‘(B) DESIGNATED CONTRIBUTIONS.—In 

24 the case of any calendar year beginning after 
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•HR 3821 IH 

1 2008, the $5,000 amount in paragraph (2)(C) 

2 shall be increased by an amount equal to—

3 ‘‘(i) such dollar amount, multiplied by 

4 ‘‘(ii) the percentage increase (if any) 

5 for such year determined under section 

6 215(i) of the Social Security Act. 

7 ‘‘(C) ROUNDING.—If any dollar amount 

8 after being increased under subparagraph (A) 

9 or (B) is not a multiple of $10, such dollar 

10 amount shall be rounded to the nearest multiple 

11 of $10. 

12 ‘‘(4) DEFINITIONS.—For purposes of this sub13 section—

14 ‘‘(A) WAGES.—The term ‘wages’ shall have 

15 the meaning given to such term by section 

16 3121(a). 

17 ‘‘(B) EMPLOYMENT.—The term ‘employ18 ment’ shall have the meaning given to such 

19 term by section 3121(b). 

20 ‘‘(C) WAGE INCREASE PERCENTAGE.—The 

21 term ‘wage increase percentage’, with respect to 

22 a calendar year, means the percentage increase 

23 which would become effective under section 

24 215(i)(2) of the Social Security Act in such 
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1 year if such increase were determined as de2 scribed in section 215(i)(5)(A)(i) of such Act.’’. 

3 (2) SELF-EMPLOYED.—Section 1401(a) of the 

4 Internal Revenue Code of 1986 (relating to tax on 

5 self-employment income) is amended to read as fol6 lows: 

7 ‘‘(a) OLD-AGE, SURVIVORS, AND DISABILITY INSUR8 ANCE.—

9 ‘‘(1) IN GENERAL.—

10 ‘‘(A) INDIVIDUALS COVERED UNDER PART

11 A OF THE SOCIAL SECURITY ACT.—In addition 

12 to other taxes, there shall be imposed for each 

13 taxable year, on the self-employment income of 

14 every individual who is not a part B eligible in15 dividual for the calendar year ending with or 

16 during such taxable year, a tax equal to 12.40 

17 percent of the amount of the self-employment 

18 income for such taxable year. 

19 ‘‘(B) INDIVIDUALS COVERED UNDER PART

20 B OF TITLE II OF THE SOCIAL SECURITY ACT.—

21 ‘‘(i) IN GENERAL.—In addition to 

22 other taxes, there is hereby imposed for 

23 each taxable year, on the self-employment 

24 income of every part B eligible individual, 

25 a tax equal to the applicable percentage of 
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•HR 3821 IH 

1 the amount of the self-employment income 

2 for such taxable year. 

3 ‘‘(ii) APPLICABLE PERCENTAGE.—For 

4 purposes of clause (i), the term ‘applicable 

5 percentage’ means the excess of 12.4 per6 cent, over 

7 ‘‘(I) 3 percent, in the case of the 

8 first $10,000 of self-employment in9 come received in the calendar year, 

10 and 

11 ‘‘(II) 2 percent, in the case of 

12 any additional self-employment income 

13 received in the calendar year. 

14 ‘‘(2) CONTRIBUTION OF OASDI TAX REDUCTION

15 TO INDIVIDUAL SECURITY ACCOUNTS.—In addition 

16 to other taxes, there is hereby imposed for each tax17 able year, on the self-employment income of every 

18 part B eligible individual for the calendar year, an 

19 individual security account contribution equal to the 

20 sum of—

21 ‘‘(A) 3 percent of self-employment income 

22 as does not exceed the first $10,000 of such in23 come derived during the taxable year by such 

24 individual, 
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•HR 3821 IH 

1 ‘‘(B) 2 percent of self-employment income 

2 in the case of any additional self-employment 

3 income derived by such individual during the 

4 taxable year, and 

5 ‘‘(C) so much of such self-employment in6 come (not to exceed $5,000) as designated by 

7 the individual in the same manner as described 

8 in section 251(c) of the Social Security Act. 

9 ‘‘(3) INFLATION ADJUSTMENTS.—

10 ‘‘(A) IN GENERAL.—In the case of any cal11 endar year beginning after 2006, the $10,000 

12 amount in paragraphs (1) and (2) shall be in13 creased by an amount equal to—

14 ‘‘(i) such dollar amount, multiplied by 

15 ‘‘(ii) the wage increase percentage (if 

16 any) for such year, 

17 ‘‘(B) DESIGNATED CONTRIBUTIONS.—In 

18 the case of any calendar year beginning after 

19 2008, the $5,000 amount in paragraph (2)(C) 

20 shall be increased by an amount equal to—

21 ‘‘(i) such dollar amount, multiplied by 

22 ‘‘(ii) the percentage increase (if any) 

23 for such year determined under section 

24 215(i) of the Social Security Act. 
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•HR 3821 IH 

1 ‘‘(C) ROUNDING.—If any dollar amount 

2 after being increased under subparagraph (A) 

3 or (B) is not a multiple of $10, such dollar 

4 amount shall be rounded to the nearest multiple 

5 of $10. 

6 ‘‘(4) DEFINITION.—For purposes of this sub7 section, the term ‘wage increase percentage’, with re8 spect to a calendar year, means the percentage in9 crease which would become effective under section 

10 215(i)(2) of the Social Security Act in such year if 

11 such increase were determined as described in sec12 tion 215(i)(5)(A)(i) of such Act.’’. 

13 (3) PART B ELIGIBLE INDIVIDUAL.—

14 (A) TAXES ON EMPLOYEES.—Section 3121 

15 of such Code (relating to definitions) is amend16 ed by inserting after subsection (s) the fol17 lowing new subsection: 

18 ‘‘(t) PART B ELIGIBLE INDIVIDUAL.—For purposes 

19 of this chapter, the term ‘part B eligible individual’ means, 

20 for any calendar year, an individual who is an eligible indi21 vidual (as defined in section 251(a)(2) of the Social Secu22 rity Act) for such calendar year.’’. 

23 (B) SELF-EMPLOYMENT TAX.—Section 

24 1402 of such Code (relating to definitions) is 
32

•HR 3821 IH 

1 amended by adding at the end the following 

2 new subsection: 

3 ‘‘(k) PART B ELIGIBLE INDIVIDUAL.—The term 

4 ‘part B eligible individual’ means, for any calendar year, 

5 an individual who is an eligible individual (as defined in 

6 section 251(a)(2) of the Social Security Act) for such cal7 endar year.’’. 

8 (4) EFFECTIVE DATES.—

9 (A) EMPLOYEES.—The amendments made 

10 by paragraphs (1) and (3)(A) apply to remu11 neration paid after December 31, 2005. 

12 (B) SELF-EMPLOYED INDIVIDUALS.—The 

13 amendments made by paragraphs (2) and 

14 (3)(B) apply to taxable years beginning after 

15 December 31, 2005. 

16 (c) MATCHING CONTRIBUTIONS.—

17 (1) IN GENERAL.—Part IV of subchapter A of 

18 chapter 1 of the Internal Revenue Code of 1986 (re19 lating to credits against tax) is amended by adding 

20 at the end the following new subpart: 

21 ‘‘Subpart H—Individual Security Account Credits

‘‘Sec. 54. Individual security account credit.
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•HR 3821 IH 

1 ‘‘SEC. 54. INDIVIDUAL SECURITY ACCOUNT CREDIT. 

2 ‘‘(a) ALLOWANCE OF CREDIT.—Each part B eligible 

3 individual is entitled to a credit for the taxable year in 

4 an amount equal to the sum of—

5 ‘‘(1) $150, 

6 ‘‘(2) 50 percent of the designated wages of such 

7 individual for the taxable year, 

8 ‘‘(3) 50 percent of the designated self-employ9 ment income of such individual for the taxable year, 

10 and 

11 ‘‘(4) 50 percent of the designated earned in12 come credit. 

13 ‘‘(b) LIMITATIONS.—

14 ‘‘(1) AMOUNT.—The amount determined under 

15 paragraphs (2) and (3) of subsection (a) with re16 spect to such individual for any taxable year may 

17 not exceed the excess (if any) of—

18 ‘‘(A) $600, over 

19 ‘‘(B) the sum of the amounts received by 

20 the Secretary on behalf of such individual under 

21 subparagraphs (A) and (B) of section 

22 3101(a)(2) and subparagraphs (A) and (B) of 

23 1401(a)(2) for the taxable year. 

24 ‘‘(2) FAILURE TO MAKE VOLUNTARY CONTRIBU25 TIONS.—In the case of a part B eligible individual 

26 with respect to whom the amount of wages des-
34

•HR 3821 IH 

1 ignated under section 3101(a)(2)(C) plus the 

2 amount self-employment income designated under 

3 section 1401(a)(2)(C) for the taxable year is zero, 

4 the credit to which such individual is entitled under 

5 this section shall be equal to zero. 

6 ‘‘(c) DEFINITIONS.—For purposes of this section—

7 ‘‘(1) PART B ELIGIBLE INDIVIDUAL.—The term 

8 ‘part B eligible individual’ means, for any calendar 

9 year, an individual who is an eligible individual (as 

10 defined in section 251(a)(2) of the Social Security 

11 Act) for such calendar year. 

12 ‘‘(2) DESIGNATED WAGES.—The term ‘des13 ignated wages’ means with respect to any taxable 

14 year the amount designated under section 

15 3101(a)(2)(C). 

16 ‘‘(3) DESIGNATED SELF-EMPLOYMENT IN17 COME.—The term ‘designated self-employment in18 come’ means with respect to any taxable year the 

19 amount designated under section 1401(a)(2)(C) for 

20 such taxable year. 

21 ‘‘(4) DESIGNATED EARNED INCOME CREDIT.—

22 The term ‘designated earned income credit’ means 

23 the amount of the credit allowed under section 32 

24 for the taxable year that is designated by the part 
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•HR 3821 IH 

1 B eligible individual in the same manner as de2 scribed in section 251(c) of the Social Security Act. 

3 ‘‘(d) CREDIT USED ONLY FOR INDIVIDUAL SECU4 RITY ACCOUNT.—For purposes of this title, the credit al5 lowed under this section with respect to any part B eligible 

6 individual—

7 ‘‘(1) shall not be treated as a credit allowed 

8 under this part, but 

9 ‘‘(2) shall be treated as an overpayment of tax 

10 under section 6401(b)(3) which may, in accordance 

11 with section 6402(l), only be transferred to an indi12 vidual security account established under part B of 

13 title II of the Social Security Act with respect to 

14 such individual.’’. 

15 (2) CONTRIBUTION OF EITC AMOUNTS TO INDI16 VIDUAL SECURITY ACCOUNTS.—Section 32 of such 

17 Code (relating to earned income) is amended by add18 ing at the end the following new subsection: 

19 ‘‘(n) CONTRIBUTION TO INDIVIDUAL SECURITY AC20 COUNT.—

21 ‘‘(1) IN GENERAL.—An eligible part B indi22 vidual who is allowed a credit under this section may 

23 designate all or a portion of such credit as a con24 tribution to the individual security account estab25 lished on behalf of such individual. 
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•HR 3821 IH 

1 ‘‘(2) CREDIT USED ONLY FOR INDIVIDUAL SE2 CURITY ACCOUNT.—For purposes of this title, the 

3 amount designated under paragraph (1) with respect 

4 to any part B individual—

5 ‘‘(A) shall not be treated as a credit al6 lowed under this section, but 

7 ‘‘(B) shall be treated as an overpayment of 

8 tax under section 6401(b)(3) which may, in ac9 cordance with section 6402(l), only be trans10 ferred to an individual security account estab11 lished under part B of title II of the Social Se12 curity Act with respect to such individual.’’. 

13 (3) CONTRIBUTION OF CREDITED AMOUNTS TO

14 INDIVIDUAL SECURITY ACCOUNT.—

15 (A) CREDITED AMOUNTS TREATED AS

16 OVERPAYMENT OF TAX.—Subsection (b) of sec17 tion 6401 (relating to excessive credits) is 

18 amended by adding at the end the following 

19 new paragraph: 

20 ‘‘(3) SPECIAL RULE FOR CREDIT UNDER SEC21 TIONS 32 AND 54.—Subject to the provisions of sec22 tion 6402(l), the following sum shall be considered 

23 an overpayment—
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•HR 3821 IH 

1 ‘‘(A) SECTION 54 CREDIT.—The amount of 

2 any credit allowed under section 54 for any tax3 able year, plus 

4 ‘‘(B) SECTION 32 DESIGNATED EARNED IN5 COME CREDIT CONTRIBUTION.—The amount of 

6 the earned income credit designated as a con7 tribution to an individual security account 

8 under section 32(n) for the taxable year.’’. 

9 (B) TRANSFER OF CREDIT AMOUNT TO IN10 DIVIDUAL SECURITY ACCOUNT.—Section 6402 

11 of such Code (relating to authority to make 

12 credits or refunds) is amended by adding at the 

13 end the following new subsection: 

14 ‘‘(l) OVERPAYMENTS ATTRIBUTABLE TO INDIVIDUAL

15 SECURITY ACCOUNT CREDIT.—In the case of any over16 payment described in section 6401(b)(3) with respect to 

17 any individual, the Secretary shall transfer for crediting 

18 by the Commissioner of Social Security to the individual 

19 security account of an such individual, an amount equal 

20 to the amount of such overpayment.’’. 

21 (4) NOTICE TO EITC RECIPIENTS OF MATCHING

22 CONTRIBUTIONS TO INDIVIDUAL SECURITY AC23 COUNTS.—In connection with information and tax 

24 forms relating to the credit allowed under section 32 

25 of the Internal Revenue Code of 1986, the Secretary 
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•HR 3821 IH 

1 of the Treasury shall provide notice of the avail2 ability of matching contributions pursuant to section 

3 54 of such Code (as added by subsection (a) of this 

4 section) to individual security accounts under part B 

5 of title II of the Social Security Act. 

6 (5) CONFORMING AMENDMENTS.—

7 (A) Section 1324(b)(2) of title 31, United 

8 States Code, is amended by inserting before the 

9 period at the end ‘‘, or enacted by the Bipar10 tisan Retirement Security Act of 2004’’. 

11 (B) The table of subparts for part IV of 

12 subchapter A of chapter 1 of the Internal Rev13 enue Code of 1986 is amended by adding at the 

14 end the following new item:

‘‘SUBPART H. INDIVIDUAL SECURITY ACCOUNT CREDITS.’’.

15 (6) EFFECTIVE DATE.—The amendments made 

16 by this subsection shall apply to refunds payable 

17 after December 31, 2005. 

18 SEC. 3. MINIMUM SOCIAL SECURITY BENEFIT. 

19 Section 215 of the Social Security Act (42 U.S.C. 

20 415) is amended by adding at the end the following: 

21 ‘‘(j) MINIMUM MONTHLY INSURANCE BENEFIT.—(1) 

22 Notwithstanding the preceding provisions of this section—

23 ‘‘(A) the primary insurance amount of a quali24 fied individual shall be equal to the greater of—
39

•HR 3821 IH 

1 ‘‘(i) the primary insurance amount deter2 mined under this section (without regard to this 

3 subsection), or 

‘‘(ii) 1 4 ⁄12 of the applicable percentage of 

5 the applicable amount, and 

6 rounded, if not a multiple of $0.10, to the next lower 

7 multiple of $0.10, and thereafter increased as pro8 vided in subsection (i), and 

9 ‘‘(B) any recomputation of the primary insur10 ance amount of a qualified individual shall not result 

11 in a primary insurance amount less than the pri12 mary insurance amount as in effect immediately 

13 prior to such recomputation. 

14 ‘‘(2) For purposes of this subsection—

15 ‘‘(A) The term ‘qualified individual’ means an 

16 individual—

17 ‘‘(i) who initially becomes eligible for old18 age or disability insurance benefits, or dies (be19 fore becoming eligible for such benefits) for a 

20 month beginning after December 31, 2009, and 

21 ‘‘(ii) who, in the case of any such indi22 vidual other than an individual eligible for old23 age insurance benefits, has quarters of coverage 

24 greater in number than the number of such in-
40

•HR 3821 IH 

1 dividual’s elapsed years (as defined in sub2 section (a)(1)(C)(ii)). 

3 ‘‘(B) The term ‘applicable amount’ means, in 

4 connection with an individual, $8,628, adjusted an5 nually for years after 2002—

6 ‘‘(i) by the CPI increase percentage deter7 mined under section 215(i) for 2003 through 

8 the earlier of—

9 ‘‘(I) the year prior to the year of the 

10 individual’s initial eligibility, or 

11 ‘‘(II) 2012; and 

12 ‘‘(ii) by the wage increase percentage de13 termined under such section for 2013 through 

14 the second year prior to the year of such indi15 vidual’s initial eligibility. 

16 ‘‘(C)(i) In the case of a qualified individual de17 scribed in subparagraph (A)(i), the term ‘applicable 

18 percentage’ means the sum of—

19 ‘‘(I) the product derived by multiplying 2.0 

20 percent by the number of such individual’s 

21 quarters of coverage, to the extent that the 

22 number of such quarters of coverage does not 

23 exceed 80, and 

24 ‘‘(II) the product derived by multiplying 

25 0.5 percent by the number of such individual’s 
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•HR 3821 IH 

1 quarters of coverage, to the extent that the 

2 number of such quarters of coverage is in ex3 cess of 80 but does not exceed 120. 

4 ‘‘(ii) In the case of a qualified individual de5 scribed in subparagraph (A)(ii), the term ‘applicable 

6 percentage’ means the sum of—

7 ‘‘(I) the product derived by multiplying the 

8 higher pro-rated percentage increment by the 

9 number of such individual’s quarters of cov10 erage, to the extent that the number of such 

11 quarters of coverage exceeds the number of 

12 such individual’s elapsed years (as defined in 

13 subsection (a)(10(C)(ii)) but does not exceed 

14 twice the number of such elapsed years, and 

15 ‘‘(II) the product derived by multiplying 

16 the lower pro-rated percentage increment by the 

17 number of such individual’s quarters of cov18 erage, to the extent that the number of such 

19 quarters of coverage exceeds twice the number 

20 of such elapsed years but does not exceed 4 

21 times the number of such elapsed years. 

22 ‘‘(iii) For purposes of clause (ii)—

23 ‘‘(I) the higher pro-rated percentage incre24 ment, in connection with the qualified indi25 vidual, is the quotient obtained by dividing 80 
42

•HR 3821 IH 

1 percent by the number of the individual’s 

2 elapsed years, and 

3 ‘‘(II) the lower pro-rated percentage incre4 ment, in connection with the qualified indi5 vidual, is the quotient obtained by dividing 40 

6 percent by twice the number of the individual’s 

7 elapsed years, 

8 each of which is rounded, if a multiple of 0.05 per9 cent and not of 0.10 percent, to the next higher mul10 tiple of 0.10 percent, and in any other case to the 

11 next higher multiple of 0.10 percent. 

12 ‘‘(3) In the case of a qualified individual who becomes 

13 eligible for old-age or disability insurance benefits, or who 

14 dies (before becoming eligible to such benefits) in a year 

15 prior to 2013, in lieu of the amount otherwise determined 

16 under paragraph (a)(A)(ii), the amount provided under 

17 paragraph (1)(A)(ii) shall be deemed to be equal to the 

18 the product derived by multiplying such amount otherwise 

19 determined by the percentage set forth in the following 

20 table in connection with such year, rounded, if not a mul21 tiple of $0.10, to the next lower multiple of $0.10.

The applicable 

‘‘If the year is: percentage is: 

2009 ................................................................................................... 20

2010 ................................................................................................... 40

2011 ................................................................................................... 60

2012 ................................................................................................... 80.’’.
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1 SEC. 4. REDUCTION IN THE AMOUNT OF CERTAIN TRANS2 FERS TO MEDICARE TRUST FUND. 

3 Subparagraph (A) of section 121(e)(1) of the Social 

4 Security Amendments of 1983 (42 U.S.C. 401 note), as 

5 amended by section 13215(c)(1) of the Omnibus Budget 

6 Reconciliation Act of 1993, is amended—

7 (1) in clause (ii), by striking ‘‘the amounts’’ 

8 and inserting ‘‘the applicable percentage of the 

9 amounts’’; and 

10 (2) by adding at the end the following: ‘‘For 

11 purposes of clause (ii), the applicable percentage for 

12 a year is equal to 100 percent, reduced (but not 

13 below zero) by 10 percentage points for each year 

14 after 2010.’’. 

15 SEC. 5. REVISED FORMULA FOR AVERAGE INDEXED 

16 MONTHLY EARNINGS. 

17 (a) IN GENERAL.—So much of subsection (b) of sec18 tion 215 of the Social Security Act (42 U.S.C. 415) as 

19 precedes paragraph (3) is amended to read as follows: 

20 ‘‘Average Indexed Monthly Earnings; Average Monthly 

21 Wage 

22 ‘‘(b)(1)(A) In the case of an individual who is entitled 

23 to old-age insurance benefits (except as provided in para24 graph (2)(C)), or who has died (before becoming eligible 

25 for such benefits or disability insurance benefits), such in-
44

•HR 3821 IH 

1 dividual’s average indexed monthly earnings shall be equal 

2 to the quotient obtained by dividing—

3 ‘‘(i) the total (after adjustment under para4 graph (3)) of his wages paid in and self-employment 

5 income credited to his computation base years (de6 termined under subparagraph (C)(i)), by 

7 ‘‘(ii) the product derived by multiplying—

8 ‘‘(I) the number of such individual’s 

9 elapsed years (determined under subparagraph 

10 (C)(ii)), by 

11 ‘‘(II) 12. 

12 ‘‘(B)(i) For purposes of clause (i) of subparagraph 

13 (A), in the case of an individual who becomes eligible for 

14 old-age insurance benefits, or dies (before becoming eligi15 ble for such benefits or disability insurance benefits), in 

16 any calendar year after 2004 and before 2013, if the num17 ber of such individual’s computation base years exceed in 

18 number the maximum number for such calendar year, 

19 those computation base years referred to in such clause 

20 shall consist only of those computation base years, equal 

21 in number to such maximum number, for which the total 

22 of such individual’s wages and self-employment income, 

23 after adjustment under paragraph (3), is the largest. For 

24 purposes of this clause, the maximum number for a cal-
45

•HR 3821 IH 

1 endar year is the maximum number set forth in connection 

2 with such calendar year in the following table:

The maximum number 

‘‘If the calendar year is: of years is: 

2005 or 2006 ..................................................................................... 37

2007 or 2008 ..................................................................................... 39

2009 or 2010 ..................................................................................... 41

2011 or 2012 ..................................................................................... 43.

3 ‘‘(ii) For purposes of subclause (I) of subparagraph 

4 (A)(ii), in the case of an individual who becomes eligible 

5 for old-age insurance benefits, or dies (before becoming 

6 eligible for such benefits or disability insurance benefits), 

7 in any calendar year after 2004, if the number of such 

8 individual’s elapsed years exceed in number the maximum 

9 number for such calendar year, the number of elapsed 

10 years referred to in such subclause shall be deemed equal 

11 to such maximum number. For purposes of this clause, 

12 the maximum number for a calendar year is the maximum 

13 number set forth in connection with such calendar year 

14 in the following table:

The maximum number 

‘‘If the calendar year is: of years is: 

2005 or 2006 ..................................................................................... 36

2007 or 2008 ..................................................................................... 37

2009 or 2010 ..................................................................................... 38

2011 or 2012 ..................................................................................... 39

after 2012 .......................................................................................... 40.

15 ‘‘(iii) In any case in which—

16 ‘‘(I) an individual described in clause (ii) is 

17 married at the time the individual becomes eligible 

18 for old-age insurance benefits or dies (before becom19 ing eligible for such benefits), and 
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•HR 3821 IH 

1 ‘‘(II) the total of the wages paid in and self-em2 ployment income credited to the individual’s com3 putation base years under subparagraph (A)(i) is 

4 less that the total of the wages paid in and self-em5 ployment income credited to the computation base 

6 years of the individual’s spouse under subparagraph 

7 (A)(i), 

8 then the maximum number of such individual’s elapsed 

9 years determined under clause (ii) shall be deemed to be 

10 35. 

11 ‘‘(C) For purposes of this subsection with respect to 

12 any individual—

13 ‘‘(i) the term ‘contribution base year’ means the 

14 calendar years after 1950 and before—

15 ‘‘(I) in the case of an individual entitled to 

16 old-age insurance benefits or disability insur17 ance benefits, the year in which occurred 

18 (whether by reason of section 202(j)(1) or oth19 erwise) the first month of that entitlement, or 

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

21 died (without having become entitled to old-age 

22 insurance benefits), the year succeeding the 

23 year of his death, 

24 except that such term excludes any calendar year en25 tirely included in a period of disability, and 
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•HR 3821 IH 

1 ‘‘(ii) the term ‘elapsed year’ means (except as 

2 otherwise provided by section 104(j)(2) of the Social 

3 Security Amendments of 1972) a calendar year—

4 ‘‘(I) after 1950 (or, if later, the year in 

5 which the individual attained age 21), and 

6 ‘‘(II) before the year in which the indi7 vidual died, or, if it occurred earlier (but after 

8 1960), the year in which he attained age 62; 

9 except that such term excludes any calendar year 

10 any part of which is included in a period of dis11 ability. 

12 ‘‘(2)(A) In the case of an individual who is entitled 

13 to disability insurance benefits, such individual’s average 

14 indexed monthly earnings shall be equal to the quotient 

15 obtained by dividing—

16 ‘‘(i) the total (after adjustment under para17 graph (3)) of his wages paid in and self-employment 

18 income credited to his elapsed years (determined 

19 under paragraph (1)(C)(ii)) prior to his current pe20 riod of disability, equal in number to the reduced 

21 number determined under subparagraph (B), for 

22 which the total of such individual’s wages and self23 employment income, after adjustment under para24 graph (3), is the largest, by 

25 ‘‘(ii) the product derived by multiplying—
48

•HR 3821 IH 

1 ‘‘(I) the number of the individual’s elapsed 

2 years, by 

3 ‘‘(II) 12. 

4 ‘‘(B) The reduced number of an individual’s elapsed 

5 years, determined under this subparagraph for purposes 

6 of subparagraph (A)(i), is the number of such elapsed 

7 years, reduced by the number of years equal to one-fifth 

8 of such number of elapsed years (disregarding any result9 ing fractional part of a year), but not by more than 5 

10 years. 

11 ‘‘(C)(i) This paragraph, once applicable with respect 

12 to any individual, shall continue to apply for purposes of 

13 determining such individual’s primary insurance amount 

14 for purposes of any subsequent eligibility for disability or 

15 old-age insurance benefits, unless, prior to the month in 

16 which such eligibility begins, there occurs a period of at 

17 least 12 consecutive months for which he was not entitled 

18 to a disability or an old-age insurance benefit. 

19 ‘‘(ii) If an individual to which this paragraph applies 

20 is living with a child (of such individual or his or her 

21 spouse) under the age of 3 in any calendar year which 

22 is included in such individual’s elapsed years, but which 

23 is not disregarded pursuant to subparagraphs (A)(i) and 

24 (B) by reason of the reduction in the number of such indi25 vidual’s elapsed years under subparagraph (B), the num-
49

•HR 3821 IH 

1 ber by which the number of such elapsed years is reduced 

2 under subparagraph (B) shall be increased by one (up to 

3 a combined total not exceeding 3) for each such calendar 

4 year, except that—

5 ‘‘(I) no calendar year shall be disregarded by 

6 reason of this clause (in determining elapsed years 

7 to be taken into account under subparagraph (A)(i)) 

8 unless the individual was living with such child sub9 stantially throughout the period in which the child 

10 was alive and under the age of 3 in such year and 

11 the individual had no earnings as described in sec12 tion 203(f)(5) in such year, 

13 ‘‘(II) the particular calendar years to be dis14 regarded under this clause (in determining such 

15 elapsed years) shall be those years (not otherwise 

16 disregarded under subparagraph (B)) which, before 

17 the application of section 215(f), meet the conditions 

18 of subclause (I), and 

19 ‘‘(III) this clause shall apply only to the extent 

20 that its application would not result in a lower pri21 mary insurance amount. 

22 ‘‘(D) The reduction in the number of elapsed years 

23 taken into account under subparagraph (A)(i) resulting 

24 from the application of subparagraphs (B) and (C) shall 
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1 not in any case reduce the number of elapsed years taken 

2 into account under subparagraph (A)(i) to less than 2.’’. 

3 (b) CONFORMING AMENDMENT.—Section 

4 215(b)(3)(A) of such Act (42 U.S.C. 415(b)(3)(A)) is 

5 amended by striking ‘‘computation base years for purposes 

6 of the selection therefrom of benefit computation years 

7 under paragraph (2)’’ and inserting ‘‘for purposes of para8 graphs (1)(B)(i) and (2)(A)(i)’’. 

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

10 subsection (a) shall apply with respect to individuals ini11 tially becoming eligible for old-age or disability insurance 

12 benefits, or dying (before becoming eligible for such bene13 fits), in any calendar year after 2008. For purposes of 

14 this subsection, and individual shall be deemed eligible for 

15 a benefit for a month if, upon filing application therefor 

16 in such month, such individual would be entitled to such 

17 benefit for such month. 

18 SEC. 6. ACTUARIAL ADJUSTMENT FOR RETIREMENT. 

19 (a) EARLY RETIREMENT.—

20 (1) IN GENERAL.—Section 202(q) of the Social 

21 Security Act (42 U.S.C. 402(q)) is amended—

(A) in paragraph (1)(A), by striking ‘‘5 22 ⁄9’’ 

23 and inserting ‘‘the applicable old-age benefit 

24 fraction (determined under paragraph 

(12)(A))’’, and by striking ‘‘25 25 ⁄36’’ and inserting 
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1 ‘‘the applicable spousal benefit fraction (deter2 mined under paragraph (12)(B))’’; and 

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

4 ‘‘(12) For purposes of paragraph (1)(A)—

5 ‘‘(A) the ‘applicable old-age benefit fraction’ for 

6 an individual who attains the age of 62 in—

‘‘(i) any year before 2004, is 5 7 ⁄9; 

‘‘(ii) 2004, is 7 8 ⁄12; 

‘‘(iii) 2005, is 11 9 ⁄18; 

‘‘(iv) 2006, is 23 10 ⁄36; 

‘‘(v) 2007, is 2 11 ⁄3; and 

‘‘(vi) 2008 or any succeeding year, is 25 12 ⁄36; 

13 and 

14 ‘‘(B) the ‘applicable spousal benefit fraction’ for 

15 an individual who becomes eligible for wife’s or hus16 band’s insurance benefits in—

‘‘(i) any year before 2004, is 25 17 ⁄36; 

‘‘(ii) 2004, is 13 18 ⁄18; 

‘‘(iii) 2005, is 27 19 ⁄36; 

‘‘(iv) 2006, is 7 20 ⁄9; 

‘‘(v) 2007, is 29 21 ⁄36; and 

‘‘(vi) 2008 or any succeeding year, is 5 22 ⁄6.’’. 

23 (2) MONTHS BEYOND FIRST 36 MONTHS.—Sec24 tion 202(q) of such Act (42 U.S.C. 402(q)(9)) (as 

25 amended by paragraph (1)) is amended—
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1 (A) in paragraph (9)(A), by striking ‘‘five2 twelfths’’ and inserting ‘‘the applicable fraction 

3 (determined under paragraph (13))’’; and 

4 (B) by adding at the end the following: 

5 ‘‘(13) For purposes of paragraph (9)(A), the ‘applica6 ble fraction’ for an individual who becomes eligible for old7 age, wife’s, or husband’s insurance benefits in—

‘‘(A) any year before 2004, is 5 8 ⁄12; 

‘‘(B) 2004, is 16 9 ⁄36; 

‘‘(C) 2005, is 16 10 ⁄36; 

‘‘(D) 2006, is 17 11 ⁄36; 

‘‘(E) 2007, is 17 12 ⁄36; and 

‘‘(F) 2008 or any succeeding year, is 1 13 ⁄2.’’. 

14 (3) ELIGIBILITY.—Section 202(q) of such Act 

15 (as amended by the preceding provisions of this sub16 section) is amended further by adding at the end the 

17 following new paragraph: 

18 ‘‘(14) For purposes of this subsection, an individual 

19 shall be deemed eligible for a benefit for a month if, upon 

20 filing application therefor in such month, such individual 

21 would be entitled to such benefit for such month.’’. 

22 (4) EFFECTIVE DATE.—The amendments made 

23 by this subsection shall apply to individuals who, in 

24 connection with old-age, wife’s, and husband’s insur25 ance benefits under title II of the Social Security 
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1 Act, become eligible for such benefits (within the 

2 meaning of section 202(q)(14) of such Act (as 

3 amended by this subsection) in years after 2003. 

4 (b) DELAYED RETIREMENT.—Section 202(w)(6) of 

5 the Social Security Act (42 U.S.C. 402(w)(6)) is amend6 ed—

7 (1) in subparagraph (C), by striking ‘‘and’’ at 

8 the end; 

9 (2) in subparagraph (D), by striking ‘‘2004.’’ 

10 and inserting ‘‘2004 and before 2007;’’; and 

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

‘‘(E) 17 12 ⁄24 of 1 percent in the case of an indi13 vidual who attains the age of 62 in a calendar year 

14 after 2006 and before 2009; 

‘‘(F) 3 15 ⁄4 of 1 percent in the case of an indi16 vidual who attains the age of 62 in a calendar year 

17 after 2008 and before 2011; 

‘‘(G) 19 18 ⁄24 of 1 percent in the case of an indi19 vidual who attains the age of 62 in a calendar year 

20 after 2010 and before 2013; and 

‘‘(H) 5 21 ⁄6 of 1 percent in the case of an indi22 vidual who attains the age of 62 in a calendar year 

23 after 2012.’’. 
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1 SEC. 7. CPI OVERSTATEMENT. 

2 (a) ANNUAL DECLARATIONS OF CPI OVERSTATE3 MENT.—

4 (1) IN GENERAL.—Whenever the Commissioner 

5 of the Bureau of Labor Statistics publishes the Con6 sumer Price Index for All Urban Consumers for any 

7 month ending after the date of the enactment of this 

8 Act, such Commissioner shall also publish the CPI 

9 overstatement for such month. Not later than No10 vember 1, 2004, such Commissioner shall also pub11 lish the CPI overstatement for each month prior to 

12 the month in which this Act is enacted. 

13 (2) DETERMINATION OF CPI OVERSTATE14 MENT.—For purposes of paragraph (1), the CPI 

15 overstatement for a month is the excess (not less 

16 than zero) of—

17 (A) the Consumer Price Index for All 

18 Urban Consumers for such month, over 

19 (B) the Chained Consumer Price Index for 

20 All Urban Consumers published by the Bureau 

21 of Labor Statistics for such month (or the most 

22 recent prior month for which it was published, 

23 based on availability of necessary data). 

24 (b) MODIFICATIONS TO COST-OF-LIVING INDEXING

25 OF BENEFITS.—
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1 (1) IN GENERAL.—Section 215(i)(1)(G) of the 

2 Social Security Act (42 U.S.C. 415(i)(1)(G)) is 

3 amended to read as follows: 

4 ‘‘(G) the Consumer Price Index for a base 

5 quarter, a cost-of-living computation quarter, or any 

6 other calendar quarter shall be the arithmetical 

7 mean of such index for the 3 months in such quar8 ter, except that, for purposes of this subparagraph, 

9 the Consumer Price Index for a month shall be 

10 deemed to be the excess of—

11 ‘‘(i) the Consumer Price Index for All 

12 Urban Consumers published by the Bureau of 

13 Labor Statistics for such month, over 

14 ‘‘(ii) the CPI overstatement published by 

15 the Bureau of Labor Statistics for such 

16 month.’’. 

17 (2) EFFECTIVE DATE.—The amendment made 

18 by paragraph (1) shall apply with respect to in19 creases under section 215(i) of the Social Security 

20 Act effective with the month of December of years 

21 after 2004. 

22 (c) CONSUMER PRICE INDEX ADJUSTMENTS APPLI23 CABLE TO THE INTERNAL REVENUE CODE PROVI24 SIONS.—
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1 (1) IN GENERAL.—Paragraph (5) of section 

2 1(f) of the Internal Revenue Code of 1986 (defining 

3 Consumer Price Index) is amended to read as fol4 lows: 

5 ‘‘(5) CONSUMER PRICE INDEX.—For purposes 

6 of paragraph (4), the term ‘Consumer Price Index’ 

7 means the excess of—

8 ‘‘(A) the last Consumer Price Index for All 

9 Urban Consumers published by the Bureau of 

10 Labor Statistics for any month, over 

11 ‘‘(B) the CPI overstatement published by 

12 the Bureau of Labor Statistics for such 

13 month.’’. 

14 (2) LIMITATION ON INCREASES.—Subsection (f) 

15 of section 1 of such Code is amended by adding at 

16 the end the following new paragraph: 

17 ‘‘(9) COMPUTATION OF BASE TO REFLECT LIMI18 TATION ON CPI.—The Secretary shall adjust the 

19 number taken into account under paragraph (3)(B) 

20 so that any increase which is not taken into account 

21 by reason of the CPI overstatement referred to in 

22 paragraph (5)(B) shall not be taken into account at 

23 any time so as to allow such increase for any pe24 riod.’’. 
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1 (d) CORRESPONDING AMENDMENTS TO OTHER PRO2 VISIONS UTILIZING THE CONSUMER PRICE INDEX.—

3 (1) IN GENERAL.—For purposes of determining 

4 the amount of any cost-of-living adjustment which 

5 takes effect for benefits payable after December 31, 

6 2004, with respect to any benefit described in para7 graph (4)—

8 (A) any increase in the Consumer Price 

9 Index effective for any month (determined with10 out regard to this subsection) shall be reduced 

11 (to not less than zero) by the CPI overstate12 ment (published by the Bureau of Labor Statis13 tics) for such month, and 

14 (B) the amount of the increase in such 

15 benefit shall be equal to the product of—

16 (i) the increase in the Consumer Price 

17 Index (as reduced under subparagraph 

18 (A)), and 

19 (ii) the average such benefit for the 

20 preceding calendar year under the program 

21 described in paragraph (5) which provides 

22 such benefit. 

23 (2) PARAGRAPH (1) TO APPLY ONLY TO COM24 PUTATION OF BENEFIT AMOUNTS.—Paragraph (1) 

25 shall apply only for purposes of determining the 
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1 amount of benefits and not for purposes of deter2 mining—

3 (A) whether a threshold increase in the 

4 Consumer Price Index has been met, or 

5 (B) increases in amounts under other pro6 visions of law not described in paragraph (5) 

7 which operate by reference to increases in such 

8 benefits. 

9 (3) DEFINITION.—For purposes of this sub10 section, the term ‘‘cost of living adjustment’’ means 

11 any adjustment in the amount of benefits described 

12 in paragraph (5) which is determined by reference to 

13 changes in the Consumer Price Index. 

14 (4) BENEFITS TO WHICH SUBSECTION AP15 PLIES.—For purposes of this subsection, the benefits 

16 described in this paragraph are—

17 (A) retired and retainer pay subject to ad18 justment under section 1401a of title 10, 

19 United States Code; 

20 (B) civil service retirement benefits under 

21 section 8340 of title 5, United States Code, for22 eign service retirement benefits under section 

23 826 of the Foreign Service Act of 1980, Central 

24 Intelligence Agency retirement benefits under 

25 part J of the Central Intelligence Agency Re-
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1 tirement Act of 1964 for certain employees, and 

2 any other benefits under any similar provision 

3 under any retirement system for employees of 

4 the government of the United States; 

5 (C) Federal workers’ compensation under 

6 section 8146a of title 5, United States Code; 

7 (D) benefits under section 3(a), 4(a), or 

8 4(f) of the Railroad Retirement Act of 1974; 

9 and 

10 (E) benefits and expenditure limits under 

11 title XVIII or XIX of the Social Security Act. 

12 (5) BENEFIT.—For purposes of this section, 

13 the term ‘‘benefit’’ includes a payment. 

14 (e) RECAPTURE TO FEDERAL OLD-AGE AND SUR15 VIVORS INSURANCE TRUST FUND.—Section 201 of the 

16 Social Security Act (42 U.S.C. 401) is amended by adding 

17 at the end the following new subsection: 

18 ‘‘(n) On July 1 of each calendar year specified in the 

19 following table, the Secretary of the Treasury shall trans20 fer, from the general fund of the Treasury to the Federal 

21 Old-Age and Survivors Insurance Trust Fund, an amount 

22 equal to the applicable percentage for such year, specified 

23 in such table, of the total wages paid in and self-employ24 ment income credited to such year.

The applicable percentage 

‘‘For a calendar year— for the year is—

After 2004 and before 2006 .............................................................. 0.02
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The applicable percentage 

‘‘For a calendar year— for the year is—

After 2005 and before 2007 .............................................................. 0.04

After 2006 and before 2008 .............................................................. 0.10

After 2007 and before 2009 .............................................................. 0.12

After 2008 and before 2010 .............................................................. 0.13

After 2009 and before 2011 .............................................................. 0.20

After 2010 and before 2012 .............................................................. 0.24

After 2011 and before 2013 .............................................................. 0.29

After 2012 and before 2019 .............................................................. 0.33

After 2018 and before 2043 .............................................................. 0.39

After 2042 and before 2063 .............................................................. 0.47

After 2062 .......................................................................................... 0.57.’’.

1 SEC. 8. ADJUSTMENTS TO BEND POINTS IN DETERMINING 

2 PRIMARY INSURANCE AMOUNTS. 

3 (a) ADDITIONAL BEND POINT.—Section 

4 215(a)(1)(A) of the Social Security Act (42 U.S.C. 

5 415(a)(1)(A)) is amended to read as follows: 

6 ‘‘(a)(1)(A)(i) Subject to clause (ii), the primary in7 surance amount of an individual shall (except as otherwise 

8 provided in this section) be equal to the sum of—

9 ‘‘(I) 90 percent of the individual’s average in10 dexed monthly earnings (determined under sub11 section (b)) to the extent that such earnings do not 

12 exceed the amount established for purposes of this 

13 subclause by subparagraph (B), 

14 ‘‘(II) 70 percent of the individual’s average in15 dexed monthly earnings to the extent that such 

16 earnings exceed the amount established for purposes 

17 of subclause (I) but do not exceed the amount estab18 lished for purposes of this subclause by subpara19 graph (B), 
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1 ‘‘(III) 20 percent of the individual’s average in2 dexed monthly earnings to the extent that such 

3 earnings exceed the amount established for purposes 

4 of subclause (II) but do not exceed the amount es5 tablished for purposes of this subclause by subpara6 graph (B), and 

7 ‘‘(IV) 10 percent of the individual’s average in8 dexed monthly earnings to the extent that such 

9 earnings exceed the amount established for purposes 

10 of this clause by subparagraph (B). 

11 ‘‘(ii) In the case of individuals becoming eligible for 

12 old-age or disability insurance benefits, or dying (before 

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

14 after 2005 and before 2016—

15 ‘‘(I) In lieu of the percentage specified in sub16 clause (II) of clause (i), the applicable percentage 

17 set forth in the following table in connection with 

18 such calendar year shall apply:

The applicable 

‘‘If the calendar year is: percentage is: 

2006 ................................................................................................... 35.8

2007 ................................................................................................... 39.6

2008 ................................................................................................... 43.4

2009 ................................................................................................... 47.2

2010 ................................................................................................... 51.0

2011 ................................................................................................... 54.8

2012 ................................................................................................... 58.6

2013 ................................................................................................... 62.4

2014 ................................................................................................... 66.2.

19 ‘‘(II) In lieu of the percentage specified in sub20 clause (III) of clause (i), the applicable percentage 
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1 set forth in the following table in connection with 

2 such calendar year shall apply:

The applicable 

‘‘If the calendar year is: percentage is: 

2006 ................................................................................................... 30.8

2007 ................................................................................................... 29.6

2008 ................................................................................................... 28.4

2009 ................................................................................................... 27.2

2010 ................................................................................................... 26.0

2011 ................................................................................................... 24.8

2012 ................................................................................................... 23.6

2013 ................................................................................................... 22.4

2014 ................................................................................................... 21.2.

3 ‘‘(III) In lieu of the percentage specified in sub4 clause (IV) of clause (i), the applicable percentage 

5 set forth in the following table in connection with 

6 such calendar year shall apply:

The applicable 

‘‘If the calendar year is: percentage is: 

2006 ................................................................................................... 14.5

2007 ................................................................................................... 14.0

2008 ................................................................................................... 13.5

2009 ................................................................................................... 12.5

2010 ................................................................................................... 12.0

2011 ................................................................................................... 11.5

2012 ................................................................................................... 11.0

2013 ................................................................................................... 10.5

2014 ................................................................................................... 21.2.’’.

7 (b) INITIAL LEVEL OF ADDITIONAL BEND POINT.—

8 Section 215(a)(1)(B) of such Act (42 U.S.C. 

9 415(a)(1)(B)) is amended—

10 (1) in clause (i), by inserting ‘‘(as then in ef11 fect)’’ after ‘‘subparagraph (A)’’, and by adding at 

12 the end the following new sentence: ‘‘For individuals 

13 who initially become eligible for old-age or disability 

14 insurance benefits, or who die (before becoming eli15 gible for such benefits) after 2005, such dollar 
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1 amounts shall be deemed to have been so established 

2 in 1979 for purposes of subclauses (I) and (III) of 

3 subparagraph (A)(i), respectively, as in effect with 

4 respect to such individuals.’’; 

5 (2) by redesignating clause (iii) as clause (iv); 

6 (3) by inserting after clause (ii) the following 

7 new clause: 

8 ‘‘(iii) For individuals who initially become eligible for 

9 old-age or disability insurance benefits, or who die (before 

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

11 after 2005, the amount established for purposes of clause 

12 (ii) of subparagraph (A) for such calendar year after 2005 

13 shall be 183.8 percent of the amount established for pur14 poses of clause (i) for such calendar year.’’; and 

15 (4) in clause (iv) (as redesignated by paragraph 

16 (1)), by striking ‘‘clause (ii)’’ and inserting ‘‘clauses 

17 (ii) and (iii)’’. 

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

19 this section shall apply with respect to individuals becom20 ing eligible for old-age insurance benefits or disability in21 surance benefits, or dying (before becoming eligible for 

22 such benefits), after 2005. 
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1 SEC. 9. ADJUSTMENT TO BENEFIT FORMULA FACTORS. 

2 Section 215(a)(1)(B) of the Social Security Act (42 

3 U.S.C. 415(a)(1)(B)) (as amended by section 8) is amend4 ed further—

5 (1) by redesignating clause (iv) as clause (vii); 

6 and 

7 (2) by inserting after clause (iii) the following: 

8 ‘‘(iv) For an individual who initially becomes eligible 

9 for old-age insurance benefits, or who dies (before becom10 ing eligible for such benefits or disability insurance bene11 fits), in any calendar year after 2011, each of the amounts 

12 otherwise established for purposes of clauses (i), (ii), and 

13 (iii) of subparagraph (A) under this subparagraph shall 

14 be substituted with the product derived by successively 

15 multiplying, once for each year of the factoring period for 

16 such individual—

17 ‘‘(I) such amount (after applying this clause for 

18 earlier years of the factoring period), by 

19 ‘‘(II) the designated factor for such year. 

20 ‘‘(v) For purposes of clause (iii), the term ‘factoring 

21 period’ means, for an individual, the period beginning with 

22 2012 and ending with the earlier of—

23 ‘‘(I) the year of the individual’s initial eligibility 

24 or death, or 

25 ‘‘(II) 2060. 
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1 ‘‘(vi) For purposes of clause (iii), the term ‘des2 ignated factor’ means—

3 ‘‘(I) for a year prior to 2031, 0.975, except 

4 that, for any such year, such factor shall be 1.000 

5 with respect to amounts otherwise established for 

6 purposes of clause (i) of subparagraph (A) under 

7 this subparagraph, and 

8 ‘‘(II) for a year after 2030, 0.985.’’. 

9 SEC. 10. MODIFICATION TO PIA FORMULA TO REFLECT 

10 CHANGES TO LIFE EXPECTANCY. 

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

12 Security Act (42 U.S.C. 415(a)(1)(B)) is amended by re13 designating subparagraph (C) and (D) as subparagraphs 

14 (D) and (E), respectively, and by inserting after subpara15 graph (B) the following new subparagraph: 

16 ‘‘(C)(i) For individuals who initially become eligible 

17 for old-age insurance benefits (or who die before becoming 

18 eligible for such benefits) in any calendar year after 2011, 

19 the primary insurance amount computed under this para20 graph shall be the product derived by multiplying such 

21 amount as computed under the preceding subparagraphs 

22 of this paragraph by the life expectancy ratio for such cal23 endar year. 

24 ‘‘(ii) The Commissioner of Social Security, using gen25 erally accepted actuarial principles, shall determine and 
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1 publish in the Federal Register on or before November 1 

2 of each calendar year the life expectancy ratio for the fol3 lowing calendar year. 

4 ‘‘(iii) For purposes of clause (ii), the life expectancy 

5 ratio for any calendar year is the ratio of—

6 ‘‘(I) the period life expectancy of an individual 

7 attaining age 62 on January 1, 2008, to 

8 ‘‘(II) the period life expectancy of an individual 

9 attaining age 62 on January 1 of the third calendar 

10 year preceding the calendar year in which the deter11 mination under clause (ii) is made.’’. 

12 (b) STUDY OF THE EFFECT OF INCREASES IN LIFE

13 EXPECTANCY.—

14 (1) STUDY PLAN.—Not later than February 15, 

15 2005, the Commissioner of Social Security shall sub16 mit to Congress a detailed study plan for evaluating 

17 the effects of increases in life expectancy on the ex18 pected level of retirement income from social secu19 rity, pensions, and other sources. The study plan 

20 shall include a description of the methodology, data, 

21 and funding that will be required in order to provide 

22 to the Congress not later than February 15, 2008—

23 (A) an evaluation of trends in mortality 

24 and their relationship to trends in health sta25 tus, among individuals approaching eligibility 
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1 for old-age insurance benefits under title II of 

2 the Social Security Act; 

3 (B) an evaluation of trends in labor force 

4 participation among individuals approaching eli5 gibility for such benefits and among individuals 

6 receiving such benefits, and of the factors that 

7 influence the choice between retirement and 

8 participation in the labor force; 

9 (C) an evaluation of changes, if any, in the 

10 disability insurance program under title II of 

11 the Social Security Act that would reduce the 

12 impact of changes in the retirement income of 

13 workers in poor health or physically demanding 

14 occupations; 

15 (D) an evaluation of the methodology used 

16 to develop projections for trends in mortality, 

17 health status, and labor force participation 

18 among individuals approaching eligibility for 

19 old-age insurance benefits and among individ20 uals receiving such benefits; and 

21 (E) an evaluation of such other matters as 

22 the Commissioner deems appropriate for evalu23 ating the effects of increases in life expectancy. 

24 (2) REPORT ON RESULTS OF STUDY.—Not later 

25 than February 15, 2008, the Commissioner of Social 
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1 Security shall provide to the Congress an evaluation 

2 of the implications of the trends studied under para3 graph (1), along with recommendations, if any, of 

4 the extent to which the conclusions of such evalua5 tions indicate that projected increases in life expect6 ancy require modification in the disability insurance 

7 program under title II of the Social Security Act 

8 and other income support programs. 

9 SEC. 11. TREATMENT OF DISABLED BENEFICIARIES. 

10 Section 215(a) of the Social Security Act (42 U.S.C. 

11 415(a)) is amended by adding at the end the following 

12 new paragraph: 

13 ‘‘(8)(A) Notwithstanding the preceding provisions of 

14 this subsection, in the case of an individual who has or 

15 has had a period of disability and becomes entitled to old16 age insurance benefits under section 202(a) (or dies) in 

17 or after 2006, the primary insurance amount of such indi18 vidual shall be the sum of—

19 ‘‘(i) the amount determined under subpara20 graph (B), and 

21 ‘‘(ii) the product derived by multiplying—

22 ‘‘(I) the excess of the amount determined 

23 under subparagraph (C) over the amount deter24 mined under subparagraph (B), by 
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1 ‘‘(II) the adjustment factor for such indi2 vidual determined under subparagraph (D). 

3 ‘‘(B) The amount determined under this subpara4 graph is the amount of such individual’s primary insur5 ance amount as determined under this section without re6 gard to this paragraph. 

7 ‘‘(C) The amount determined under this subpara8 graph is the amount of such individual’s primary insur9 ance amount as determined under this section as in effect 

10 with respect to individuals becoming eligible for old-age 

11 or disability insurance benefits under section 202(a) in 

12 2004. 

13 ‘‘(D) The adjustment factor determined under this 

14 subparagraph for any individual is the ratio (not greater 

15 than 1) of—

16 ‘‘(i) the number of months, preceding the ear17 lier of such individual’s first month of entitlement to 

18 old-age insurance benefits under section 202(a) or 

19 the month of such individual’s death, which occurred 

20 during a period of disability of such individual, to 

21 ‘‘(ii) 480.’’. 
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1 SEC. 12. MAINTENANCE OF BENEFIT AND CONTRIBUTION 

2 BASE. 

3 (a) IN GENERAL.—So much of section 230 of the So4 cial Security Act (42 U.S.C. 430) as precedes subsection 

5 (d) is amended to read as follows: 

6 ‘‘MAINTENANCE OF BENEFIT AND CONTRIBUTION BASE

7 ‘‘SEC. 230. (a) Not later than November 1 of each 

8 calendar year (beginning with 2004), the Commissioner 

9 shall determine and publish in the Federal Register the 

10 contribution and benefit base determined under sub11 sections (b) and (c) which shall be effective with respect 

12 to remuneration paid after such calendar year and taxable 

13 years beginning after such year. 

14 ‘‘(b) For purposes of this section, and for purposes 

15 of determining wages and self-employment income under 

16 sections 209, 211, 213, and 215 of this Act and sections 

17 54, 1402, 3121, 3122, 3125, 6413, and 6654 of the Inter18 nal Revenue Code of 1986—

19 ‘‘(1) the ‘contribution and benefit base’ with re20 spect to remuneration paid (and taxable years begin21 ning)—

22 ‘‘(A) in 2005 shall be $90,225, 

23 ‘‘(B) in 2006 shall be $110,550, 

24 ‘‘(C) in 2007 shall be $121,875, and 

25 ‘‘(D) in 2008 shall be $133,200, and 
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1 ‘‘(2) the ‘contribution and benefit base’ with re2 spect to remuneration paid (and taxable years begin3 ning) in any calendar year after 2008 shall be equal 

4 to the dollar amount equal to the lowest amount 

5 which, if applied under this title as the benefit and 

6 contribution base for the preceding year, would have 

7 caused the total untaxed covered remuneration for 

8 such year to constitute at least 13 percent of the 

9 total amount of wages paid, and self-employment in10 come derived, in such year by all individuals. 

11 Each contribution and benefit base determined under 

12 paragraph (2) shall (if not a multiple of $25) be rounded 

13 to the nearest multiple of $25. 

14 ‘‘(c) For purposes of this section, the term ‘total 

15 untaxed covered remuneration’ for a calendar year means 

16 the total amount of wages paid to, and self-employment 

17 income derived by, all individuals in such calendar year, 

18 which was, with respect to each individual paid such wages 

19 and deriving such self-employment income, in excess of the 

20 contribution and benefit base for that calendar year.’’. 

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

22 this section shall apply to remuneration paid in (and tax23 able years beginning in) any calendar year after 2004. 
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1 SEC. 13. ACCELERATION OF INCREASE IN SOCIAL SECU2 RITY ELIGIBILITY AGE. 

3 Section 216(l) of the Social Security Act (42 U.S.C. 

4 416(l) is amended—

5 (1) in paragraph (1), by striking subparagraphs 

6 (A), (B), (C), (D), and (E) and inserting the fol7 lowing: 

8 ‘‘(A) with respect to an individual who attains 

9 early retirement age (as defined in paragraph (2)) 

10 before January 1, 2000, 65 years of age; and 

11 ‘‘(B) with respect to an individual who attains 

12 early retirement age after December 31, 1999, and 

before January 1, 2012, 65 years of age plus 2 13 ⁄12 of 

14 the number of months in the period beginning with 

15 January 2000 and ending with December of the 

16 year in which the individual attains early retirement 

17 age; and 

18 ‘‘(C) with respect to an individual who attains 

19 early retirement age after December 31, 2011, 67 

20 years of age.’’; and 

21 (2) by striking paragraph (3). 

22 SEC. 14. MECHANISM FOR REMEDYING UNFORESEEN DETE23 RIORATION IN SOCIAL SECURITY SOLVENCY. 

24 (a) IN GENERAL.—Section 709 of the Social Security 

25 Act (42 U.S.C. 910) is amended—
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•HR 3821 IH 

1 (1) by redesignating subsection (b) as sub2 section (c); and 

3 (2) by striking ‘‘SEC. 709. (a) If the Board of 

4 Trustees’’ and all that follows through ‘‘any such 

5 Trust Fund’’ and inserting the following: 

6 ‘‘SEC. 709. (a)(1)(A) If the Board of Trustees of the 

7 Federal Old-Age and Survivors Insurance Trust Fund and 

8 the Federal Disability Insurance Trust Fund determines 

9 at any time, using intermediate actuarial assumptions, 

10 that the balance ratio of either such Trust Fund for any 

11 calendar year during the succeeding period of 75 calendar 

12 years will be zero, the Board shall promptly submit to each 

13 House of the Congress and to the President a report set14 ting forth its recommendations for statutory adjustments 

15 affecting the receipts and disbursements of such Trust 

16 Fund necessary to maintain the balance ratio of such 

17 Trust Fund at not less than 20 percent, with due regard 

18 to the economic conditions which created such inadequacy 

19 in the balance ratio and the amount of time necessary to 

20 alleviate such inadequacy in a prudent manner. The report 

21 shall set forth specifically the extent to which benefits 

22 would have to be reduced, taxes under section 1401, 3101, 

23 or 3111 of the Internal Revenue Code of 1986 would have 

24 to be increased, or a combination thereof, in order to ob25 tain the objectives referred to in the preceding sentence. 
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•HR 3821 IH 

1 ‘‘(B) In addition to any reports under subparagraph 

2 (A), the Board shall, not later than May 30, 2001, prepare 

3 and submit to Congress and the President recommenda4 tions for statutory adjustments to the disability insurance 

5 program under title II of this Act to modify the changes 

6 in disability benefits under the 21st Century Retirement 

7 Security Act without reducing the balance ratio of the 

8 Federal Disability Insurance Trust Fund. The Board shall 

9 develop such recommendations in consultation with the 

10 National Council on Disability, taking into consideration 

11 the adequacy of benefits under the program, the relation12 ship of such program with old age benefits under such 

13 title, and changes in the process for determining initial 

14 eligibility and reviewing continued eligibility for benefits 

15 under such program. 

16 ‘‘(2)(A) The President shall, no later than 30 days 

17 after the submission of the report to the President, trans18 mit to the Board and to the Congress a report containing 

19 the President’s approval or disapproval of the Board’s rec20 ommendations. 

21 ‘‘(B) If the President approves all the recommenda22 tions of the Board, the President shall transmit a copy 

23 of such recommendations to the Congress as the Presi24 dent’s recommendations, together with a certification of 

25 the President’s adoption of such recommendations. 
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•HR 3821 IH 

1 ‘‘(C) If the President disapproves the recommenda2 tions of the Board, in whole or in part, the President shall 

3 transmit to the Board and the Congress the reasons for 

4 that disapproval. The Board shall then transmit to the 

5 Congress and the President, no later than 60 days after 

6 the date of the submission of the original report to the 

7 President, a revised list of recommendations. 

8 ‘‘(D) If the President approves all of the revised rec9 ommendations of the Board transmitted to the President 

10 under subparagraph (C), the President shall transmit a 

11 copy of such revised recommendations to the Congress as 

12 the President’s recommendations, together with a certifi13 cation of the President’s adoption of such recommenda14 tions. 

15 ‘‘(E) If the President disapproves the revised rec16 ommendations of the Board, in whole or in part, the Presi17 dent shall transmit to the Board and the Congress the 

18 reasons for that disapproval, together with such revisions 

19 to such recommendations as the President determines are 

20 necessary to bring such recommendations within the 

21 President’s approval. The President shall transmit a copy 

22 of such recommendations, as so revised, to the Board and 

23 the Congress as the President’s recommendations, to24 gether with a certification of the President’s adoption of 

25 such recommendations. 
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•HR 3821 IH 

1 ‘‘(3)(A) This paragraph is enacted by Congress—

2 ‘‘(i) as an exercise of the rulemaking power of 

3 the Senate and the House of Representatives, re4 spectively, and as such it is deemed a part of the 

5 rules of each House, respectively, but applicable only 

6 to the extent that it is inconsistent with such rules; 

7 and 

8 ‘‘(ii) with full recognition of the constitutional 

9 right of either House to change the rules (so far as 

10 relating to the procedure of that House) at any time, 

11 in the same manner, and to the same extent as in 

12 the case of any other rule of that House. 

13 ‘‘(B) For purposes of this paragraph, the term ‘joint 

14 resolution’ means only a joint resolution which is intro15 duced within the 10-day period beginning on the date on 

16 which the President transmits the President’s rec17 ommendations, together with the President’s certification, 

18 to the Congress under subparagraph (B), (D), or (E) of 

19 paragraph (2), and—

20 ‘‘(i) which does not have a preamble; 

21 ‘‘(ii) the matter after the resolving clause of 

22 which is as follows: ‘That the Congress approves the 

23 recommendations of the President as transmitted on 

24 llllll pursuant to section 709(a) of the So25 cial Security Act, as follows:llllllll’, the 
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•HR 3821 IH 

1 first blank space being filled in with the appropriate 

2 date and the second blank space being filled in with 

3 the statutory adjustments contained in the rec4 ommendations; and 

5 ‘‘(iii) the title of which is as follows: ‘Joint reso6 lution approving the recommendations of the Presi7 dent regarding social security.’

8 ‘‘(C) A joint resolution described in subparagraph 

9 (B) that is introduced in the House of Representatives 

10 shall be referred to the Committee on Ways and Means 

11 of the House of Representatives. A joint resolution de12 scribed in subparagraph (B) introduced in the Senate 

13 shall be referred to the Committee on Finance of the Sen14 ate. 

15 ‘‘(D) If the committee to which a joint resolution de16 scribed in subparagraph (B) is referred has not reported 

17 such joint resolution (or an identical joint resolution) by 

18 the end of the 20-day period beginning on the date on 

19 which the President transmits the recommendation to the 

20 Congress under paragraph (2), such committee shall be, 

21 at the end of such period, discharged from further consid22 eration of such joint resolution, and such joint resolution 

23 shall be placed on the appropriate calendar of the House 

24 involved. 
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•HR 3821 IH 

1 ‘‘(E)(i) On or after the third day after the date on 

2 which the committee to which such a joint resolution is 

3 referred has reported, or has been discharged (under sub4 paragraph (D)) from further consideration of, such a joint 

5 resolution, it is in order (even though a previous motion 

6 to the same effect has been disagreed to) for any Member 

7 of the respective House to move to proceed to the consider8 ation of the joint resolution. A Member may make the mo9 tion only on the day after the calendar day on which the 

10 Member announces to the House concerned the Member’s 

11 intention to make the motion, except that, in the case of 

12 the House of Representatives, the motion may be made 

13 without such prior announcement if the motion is made 

14 by direction of the committee to which the joint resolution 

15 was referred. All points of order against the joint resolu16 tion (and against consideration of the joint resolution) are 

17 waived. The motion is highly privileged in the House of 

18 Representatives and is privileged in the Senate and is not 

19 debatable. The motion is not subject to amendment, or 

20 to a motion to postpone, or to a motion to proceed to the 

21 consideration of other business. A motion to reconsider the 

22 vote by which the motion is agreed to or disagreed to shall 

23 not be in order. If a motion to proceed to the consideration 

24 of the joint resolution is agreed to, the respective House 

25 shall immediately proceed to consideration of the joint res-
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•HR 3821 IH 

1 olution without intervening motion, order, or other busi2 ness, and the joint resolution shall remain the unfinished 

3 business of the respective House until disposed of. 

4 ‘‘(ii) Debate on the joint resolution, and on all debat5 able motions and appeals in connection therewith, shall be 

6 limited to not more than 2 hours, which shall be divided 

7 equally between those favoring and those opposing the 

8 joint resolution. An amendment to the joint resolution is 

9 not in order. A motion further to limit debate is in order 

10 and not debatable. A motion to postpone, or a motion to 

11 proceed to the consideration of other business, or a motion 

12 to recommit the joint resolution is not in order. A motion 

13 to reconsider the vote by which the joint resolution is 

14 agreed to or disagreed to is not in order. 

15 ‘‘(iii) Immediately following the conclusion of the de16 bate on a joint resolution described in subparagraph (B) 

17 and a single quorum call at the conclusion of the debate 

18 if requested in accordance with the rules of the appro19 priate House, the vote on final passage of the joint resolu20 tion shall occur. 

21 ‘‘(iv) Appeals from the decisions of the Chair relating 

22 to the application of the rules of the Senate or the House 

23 of Representatives, as the case may be, to the procedure 

24 relating to a joint resolution described in subparagraph 

25 (B) shall be decided without debate. 
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•HR 3821 IH 

1 ‘‘(F)(i) If, before the passage by one House of a joint 

2 resolution of that House described in subparagraph (B), 

3 that House receives from the other House a joint resolu4 tion described in subparagraph (B), then the following 

5 procedures shall apply: 

6 ‘‘(I) The joint resolution of the other House 

7 shall not be referred to a committee and may not be 

8 considered in the House receiving it except in the 

9 case of final passage as provided in subclause (II). 

10 ‘‘(II) With respect to a joint resolution de11 scribed in subparagraph (B) of the House receiving 

12 the joint resolution, the procedure in that House 

13 shall be the same as if no joint resolution had been 

14 received from the other House, but the vote on final 

15 passage shall be on the joint resolution of the other 

16 House. 

17 ‘‘(ii) Upon disposition of the joint resolution received 

18 from the other House, it shall no longer be in order to 

19 consider the joint resolution that originated in the receiv20 ing House. 

21 ‘‘(b) If the Board of Trustees of the Federal Hospital 

22 Insurance Trust Fund or the Federal Supplementary 

23 Medical Insurance Trust Fund determines at any time 

24 that the balance ratio of either such Trust Fund.’’. 

25 (b) CONFORMING AMENDMENTS.—
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•HR 3821 IH 

1 (1) Section 709(b) of such Act (as amended by 

2 subsection (a) of this section) is amended by striking 

3 ‘‘any such’’ and inserting ‘‘either such’’. 

4 (2) Section 709(c) of such Act (as redesignated 

5 by subsection (a) of this section) is amended by in6 serting ‘‘or (b)’’ after ‘‘subsection (a)’’. 

7 SEC. 15. INCREASE IN WIDOW’S AND WIDOWER’S INSUR8 ANCE BENEFITS. 

9 (a) WIDOW’S INSURANCE BENEFITS.—Section 

10 202(e) of the Social Security Act (42 U.S.C. 402(e)) is 

11 amended by adding at the end the following new para12 graph: 

13 ‘‘(10)(A) In any case in which the amount of a wid14 ow’s insurance benefit (as determined under the preceding 

15 paragraphs of this subsection) for the entitlement month 

16 of the widow (or surviving divorced wife) is less than the 

17 minimum benefit amount for such month determined 

18 under subparagraph (C), the amount of such benefit for 

19 such month and each succeeding month shall be increased 

20 to such minimum benefit amount (or the amount most re21 cently established in lieu thereof under section 215(i)). 

22 ‘‘(B) For purposes of this paragraph, the term ‘enti23 tlement month’ of a widow (or surviving divorced wife) 

24 means, in connection with her benefit under this sub25 section, the first month of her entitlement to such benefit. 
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•HR 3821 IH 

1 ‘‘(C) For purposes of subparagraph (A), the min2 imum benefit amount determined under this subparagraph 

3 for the entitlement month of the widow (or surviving di4 vorced wife) is an amount equal to the lesser of—

5 ‘‘(i) 75 percent of the sum of—

6 ‘‘(I) the imputed deceased individual’s ben7 efit for such month, as determined under sub8 paragraph (D) or (E) (as applicable), and 

9 ‘‘(II) the imputed survivor benefit for such 

10 month, as determined under subparagraph (F), 

11 or 

12 ‘‘(ii) the increased benefit cap determined under 

13 subparagraph (G) for such month. 

14 ‘‘(D)(i) For purposes of subparagraph (C)(i)(I), if the 

15 deceased individual died in a month for which he was not 

16 entitled to any benefit under this title based on his wages 

17 or self-employment income or the wages and self-employ18 ment income of the widow (or surviving divorced wife), the 

19 imputed deceased individual’s benefit for the entitlement 

20 month of the widow (or surviving divorced wife) is the sum 

21 of—

22 ‘‘(I) the imputed old-age insurance benefit (de23 termined under clause (ii)) of the deceased indi24 vidual for her entitlement month (if any), and 
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•HR 3821 IH 

1 ‘‘(II) the imputed husband’s insurance benefit 

2 (determined under clause (iii)) of the deceased indi3 vidual for her entitlement month (if any). 

4 ‘‘(ii) The amount of the imputed old-age insurance 

5 benefit of the deceased individual for the entitlement 

6 month of the widow (or surviving divorced wife) is the 

7 amount of the old-age insurance benefit to which he would 

8 have been entitled for such month—

9 ‘‘(I) determined, in the case of such a deceased 

10 individual who had attained age 62 as of the date 

11 of his death, as if he had applied for such benefit 

12 in the month of his death and had survived through13 out the subsequent period ending with her entitle14 ment month, or 

15 ‘‘(II) determined, in the case of such a deceased 

16 individual who died before attaining age 62 but 

17 would have attained age 62 before the end of her en18 titlement month, as if he had survived throughout 

19 the subsequent period ending with her entitlement 

20 month, and had applied for such benefit during the 

21 first month for which he would have been eligible for 

22 such benefit (assuming a primary insurance amount 

23 for the deceased individual determined under para24 graph (2)(B) of this subsection). 
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•HR 3821 IH 

1 For purposes of determining the deceased individual’s im2 puted old-age insurance benefit under this clause, the de3 termination of whether the deceased individual was a fully4 insured individual (as defined in section 214(a)) shall be 

5 made as of the date of his death. In any case in which 

6 the deceased individual died before attaining age 62 and 

7 would not have attained age 62 before the end of the enti8 tlement month of the widow (or surviving divorced wife), 

9 the deceased individual’s imputed old-age insurance ben10 efit shall be deemed to be zero. 

11 ‘‘(iii) The amount of the imputed husband’s insur12 ance benefit of the deceased individual for the entitlement 

13 month of the widow (or surviving divorced wife) is the 

14 amount of the husband’s insurance benefit under sub15 section (c) to which he would have been entitled for such 

16 month (assuming, for purposes of reduction under sub17 section (k)(3)(A), the entitlement to an old-age insurance 

18 benefit for such month, if any, as described in clause 

19 (ii))—

20 ‘‘(I) determined, in the case of such a deceased 

21 individual who had attained age 62 as of the date 

22 of his death, as if he had applied for such benefit 

23 in the month of his death and had survived through24 out the subsequent period ending with her entitle25 ment month, or 
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•HR 3821 IH 

1 ‘‘(II) determined, in the case of such a deceased 

2 individual who died before attaining age 62 but 

3 would have attained age 62 before the end of her en4 titlement month, as if he had survived throughout 

5 the subsequent period ending with her entitlement 

6 month and had applied for such benefit during the 

7 first month for which he would have been eligible for 

8 such benefit. 

9 In any case in which the deceased individual died before 

10 he attained age 62 and would not have attained age 62 

11 before the end of the entitlement month of the widow (or 

12 surviving divorced spouse), the deceased individual’s im13 puted husband’s insurance benefit shall be deemed to be 

14 zero. 

15 ‘‘(E)(i) For purposes of subparagraph (C), if the de16 ceased individual died during a month for which he other17 wise would have been entitled (but for his death) to an 

18 old-age insurance benefit under subsection (a) or a dis19 ability insurance benefit under section 223, or to a hus20 band’s insurance benefit under subsection (c) based on the 

21 wages and self-employment income of the widow (or sur22 viving divorced wife), the imputed deceased individual’s 

23 benefit for the entitlement month of the widow (or sur24 viving divorced wife) is the sum of—
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•HR 3821 IH 

1 ‘‘(I) the amount of the old-age or disability in2 surance benefit (if any) to which he would have been 

3 entitled for her entitlement month if he had survived 

4 throughout the period subsequent to his death and 

5 ending with such month, and 

6 ‘‘(II) the amount of the husband’s insurance 

7 benefit (if any) to which he would have been entitled 

8 for her entitlement month based on her wages and 

9 self-employment income if he had survived through10 out the period subsequent to his death and ending 

11 with such month (assuming, for purposes of reduc12 tion under subsection (k)(3)(A), the entitlement to 

13 an old-age or disability insurance benefit for such 

14 month, if any, as described in subclause (I)). 

15 ‘‘(ii) If the deceased individual otherwise would have 

16 been entitled (but for his death) to a disability insurance 

17 benefit under section 223 for the month in which he died, 

18 the amount determined under clause (i) shall be deter19 mined as if he had survived throughout the period com20 mencing with the month of his death and ending with the 

21 entitlement month of the widow (or surviving divorced 

22 wife) and he had remained entitled to disability insurance 

23 benefits throughout such period (or until becoming enti24 tled to old-age insurance benefits under subsection (a) 

25 during such period). 
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•HR 3821 IH 

1 ‘‘(F) For purposes of subparagraph (C)(i)(II)—

2 ‘‘(i) In the case of a widow (or surviving di3 vorced wife) who is entitled for her entitlement 

4 month to an old-age insurance benefit under sub5 section (a) or a disability insurance benefit under 

6 section 223, or otherwise would have been entitled 

7 (but for the deceased individual’s death) to a wife’s 

8 insurance benefit under subsection (b) for such 

9 month, the amount of her imputed survivor benefit 

10 for such month is the sum of—

11 ‘‘(I) the amount of such old-age or dis12 ability insurance benefit (if any), and 

13 ‘‘(II) the amount of such wife’s insurance 

14 benefit (if any), assuming, for purposes of re15 duction under subsection (k)(3)(A), the entitle16 ment to an old-age insurance or disability insur17 ance benefit for such month (if any), as de18 scribed in subclause (I). 

19 ‘‘(ii) In the case of a widow (or surviving di20 vorced wife) who is not described in clause (i) but 

21 has attained (or would attain) age 62 as of the end 

22 of her entitlement month, the amount of her im23 puted survivor benefit is the sum of—

24 ‘‘(I) the amount of the old-age insurance 

25 benefit under subsection (a) to which she would 
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•HR 3821 IH 

1 be entitled for such month if she filed applica2 tion for such benefit during such month, and 

3 ‘‘(II) the amount to which she otherwise 

4 would have been entitled (but for the deceased 

5 individual’s death) as a wife’s insurance benefit 

6 under subsection (b) for such month, based on 

7 the deceased individual’s wages and self-employ8 ment income, if she had filed application for 

9 such benefit during such month (assuming a 

10 primary insurance amount for the deceased in11 dividual determined under paragraph (2)(B) of 

12 this subsection and assuming, for purposes of 

13 reduction under subsection (k)(3)(A), the enti14 tlement to an old-age insurance benefit for such 

15 month, if any, as described in subclause (I)). 

16 In any case in which the widow (or surviving divorced 

17 wife) would not attain age 62 before the end of the her 

18 entitlement month, her imputed survivor benefit shall be 

19 deemed to be zero. 

20 ‘‘(G) The increased benefit cap determined under this 

21 subparagraph for the entitlement month of the widow (or 

22 surviving divorced wife) is the amount which would be the 

23 amount of a theoretical individual’s old-age insurance ben24 efit under subsection (a) (reduced as provided in sub25 section (q)) if—
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•HR 3821 IH 

1 ‘‘(i) such theoretical individual’s primary insur2 ance amount for the first month of entitlement were 

3 equal to the average of the primary insurance 

4 amounts upon which old-age insurance benefits 

5 under subsection (a) are payable for—

6 ‘‘(I) in any case in which the entitlement 

7 month of the widow (or surviving divorced wife) 

8 is the month of December, such month, or 

9 ‘‘(II) in any other case, the latest month of 

10 December preceding such entitlement month, 

11 ‘‘(ii) such first month of such theoretical indi12 vidual’s entitlement to such old-age insurance ben13 efit were the entitlement month of the widow (or 

14 surviving divorced spouse), and 

15 ‘‘(iii) the month in which the theoretical indi16 vidual attained or would attain retirement age (as 

17 defined in section 216(l)) were the month in which 

18 the widow (or surviving divorced wife) attained or 

19 would attain retirement age (as so defined). 

20 ‘‘(H) If, in determining the amount of the benefit 

21 under this section pursuant to this paragraph, the im22 puted old-age insurance benefit or imputed husband’s in23 surance benefit of the deceased individual was deemed to 

24 be zero pursuant to the last sentence of clause (ii) or (iii) 

25 of subparagraph (D), or the imputed survivor benefit of 
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•HR 3821 IH 

1 the widow (or surviving divorced wife) was deemed to be 

2 zero pursuant to the last sentence of subparagraph (F), 

3 effective for any month after the entitlement month of the 

4 widow (or surviving divorced wife) in which the deceased 

5 individual would have attained age 62 or she attains age 

6 62, the Commissioner shall recompute the amount of the 

7 benefit under this paragraph by substituting a reference 

8 to such later month for each reference in the preceding 

9 provisions of this paragraph to her entitlement month. 

10 ‘‘(I)(i) Any reference in this paragraph to the widow’s 

11 insurance benefit (as determined under the preceding 

12 paragraphs of this subsection) shall be deemed a reference 

13 to such benefit, taking into account all applicable reduc14 tions and deductions under this title. 

15 ‘‘(ii) Any reference in this paragraph to the imputed 

16 old-age insurance benefit or imputed husband’s insurance 

17 benefit described in subparagraph (D), the old-age insur18 ance benefit, disability insurance benefit, or husband’s in19 surance benefit described in subparagraph (E), or the old20 age insurance benefit, disability insurance benefit, or 

21 wife’s insurance benefit described in subparagraph (F) 

22 shall be deemed a reference to such benefit, taking into 

23 account applicable reductions under this section but dis24 regarding reductions or deductions otherwise applicable 

25 under this title. 
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•HR 3821 IH 

1 ‘‘(iii) A widow’s insurance benefit which has been in2 creased under this paragraph shall be subject to all reduc3 tions and deductions otherwise applicable to widow’s in4 surance benefits under this title, except that such benefit 

5 shall not be subject to any reduction otherwise applicable 

6 under subsection (q)(1).’’. 

7 (b) WIDOWER’S INSURANCE BENEFITS.—Section 

8 202(f) of such Act (42 U.S.C. 402(f)) is amended by add9 ing at the end the following new paragraph: 

10 ‘‘(10)(A) In any case in which the amount of a wid11 ower’s insurance benefit (as determined under the pre12 ceding paragraphs of this subsection) for the entitlement 

13 month of the widower (or surviving divorced husband) is 

14 less than the minimum benefit amount for such month de15 termined under subparagraph (C), the amount of such 

16 benefit for such month and each succeeding month shall 

17 be increased to such minimum benefit amount (or the 

18 amount most recently established in lieu thereof under 

19 section 215(i)). 

20 ‘‘(B) For purposes of this paragraph, the term ‘enti21 tlement month’ of a widower (or surviving divorced hus22 band) means, in connection with his benefit under this 

23 subsection, the first month of his entitlement to such ben24 efit. 
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•HR 3821 IH 

1 ‘‘(C) For purposes of subparagraph (A), the min2 imum benefit amount determined under this subparagraph 

3 for the entitlement month of the widower (or surviving di4 vorced husband) is an amount equal to the lesser of—

5 ‘‘(i) 75 percent of the sum of—

6 ‘‘(I) the imputed deceased individual’s ben7 efit for such month, as determined under sub8 paragraph (D) or (E) (as applicable), and 

9 ‘‘(II) the imputed survivor benefit for such 

10 month, as determined under subparagraph (F), 

11 or 

12 ‘‘(ii) the increased benefit cap determined under 

13 subparagraph (G) for such month. 

14 ‘‘(D)(i) For purposes of subparagraph (C)(i)(I), if the 

15 deceased individual died in a month for which she was not 

16 entitled to any benefit under this title based on her wages 

17 or self-employment income or the wages and self-employ18 ment income of the widower (or surviving divorced hus19 band), the imputed deceased individual’s benefit for the 

20 entitlement month of the widower (or surviving divorced 

21 husband) is the sum of—

22 ‘‘(I) the imputed old-age insurance benefit (de23 termined under clause (ii)) of the deceased indi24 vidual for his entitlement month (if any), and 
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•HR 3821 IH 

1 ‘‘(II) the imputed wife’s insurance benefit (de2 termined under clause (iii)) of the deceased indi3 vidual for his entitlement month (if any). 

4 ‘‘(ii) The amount of the imputed old-age insurance 

5 benefit of the deceased individual for the entitlement 

6 month of the widower (or surviving divorced husband) is 

7 the amount of the old-age insurance benefit to which she 

8 would have been entitled for such month—

9 ‘‘(I) determined, in the case of such a deceased 

10 individual who had attained age 62 as of the date 

11 of her death, as if she had applied for such benefit 

12 in the month of her death and had survived through13 out the subsequent period ending with his entitle14 ment month, or 

15 ‘‘(II) determined, in the case of such a deceased 

16 individual who died before attaining age 62 but 

17 would have attained age 62 before the end of his en18 titlement month, as if she had survived throughout 

19 the subsequent period ending with his entitlement 

20 month, and had applied for such benefit during the 

21 first month for which she would have been eligible 

22 for such benefit (assuming a primary insurance 

23 amount for the deceased individual determined 

24 under paragraph (2)(B) of this subsection). 
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•HR 3821 IH 

1 For purposes of determining the deceased individual’s im2 puted old-age insurance benefit under this clause, the de3 termination of whether the deceased individual was a fully4 insured individual (as defined in section 214(a)) shall be 

5 made as of the date of her death. In any case in which 

6 the deceased individual died before attaining age 62 and 

7 would not have attained age 62 before the end of the enti8 tlement month of the widower (or surviving divorced hus9 band), the deceased individual’s imputed old-age insurance 

10 benefit shall be deemed to be zero. 

11 ‘‘(iii) The amount of the imputed wife’s insurance 

12 benefit of the deceased individual for the entitlement 

13 month of the widower (or surviving divorced husband) is 

14 the amount of the wife’s insurance benefit under sub15 section (b) to which she would have been entitled for such 

16 month (assuming, for purposes of reduction under sub17 section (k)(3)(A), the entitlement to an old-age insurance 

18 benefit for such month, if any, as described in clause 

19 (ii))—

20 ‘‘(I) determined, in the case of such a deceased 

21 individual who had attained age 62 as of the date 

22 of her death, as if she had applied for such benefit 

23 in the month of her death and had survived through24 out the subsequent period ending with his entitle25 ment month, or 
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•HR 3821 IH 

1 ‘‘(II) determined, in the case of such a deceased 

2 individual who died before attaining age 62 but 

3 would have attained age 62 before the end of his en4 titlement month, as if she had survived throughout 

5 the subsequent period ending with his entitlement 

6 month and had applied for such benefit during the 

7 first month for which she would have been eligible 

8 for such benefit. 

9 In any case in which the deceased individual died before 

10 she attained age 62 and would not have attained age 62 

11 before the end of the entitlement month of the widower 

12 (or surviving divorced husband), the deceased individual’s 

13 imputed husband’s insurance benefit shall be deemed to 

14 be zero. 

15 ‘‘(E)(i) For purposes of subparagraph (C), if the de16 ceased individual died during a month for which she other17 wise would have been entitled (but for her death) to an 

18 old-age insurance benefit under subsection (a) or a dis19 ability insurance benefit under section 223, or to a wife’s 

20 insurance benefit under subsection (b) based on the wages 

21 and self-employment income of the widower (or surviving 

22 divorced husband), the imputed deceased individual’s ben23 efit for the entitlement month of the widower (or surviving 

24 divorced husband) is the sum of—
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•HR 3821 IH 

1 ‘‘(I) the amount of the old-age or disability in2 surance benefit (if any) to which she would have 

3 been entitled for his entitlement month if she had 

4 survived throughout the period subsequent to her 

5 death and ending with such month, and 

6 ‘‘(II) the amount of the wife’s insurance benefit 

7 (if any) to which she would have been entitled for 

8 his entitlement month based on his wages and self9 employment income if she had survived throughout 

10 the period subsequent to her death and ending with 

11 such month (assuming, for purposes of reduction 

12 under subsection (k)(3)(A), the entitlement to an 

13 old-age or disability insurance benefit for such 

14 month, if any, as described in subclause (I)). 

15 ‘‘(ii) If the deceased individual otherwise would have 

16 been entitled (but for her death) to a disability insurance 

17 benefit under section 223 for the month in which she died, 

18 the amount determined under clause (i) shall be deter19 mined as if she had survived throughout the period com20 mencing with the month of her death and ending with the 

21 entitlement month of the widower (or surviving divorced 

22 husband) and she had remained entitled to disability in23 surance benefits throughout such period (or until becom24 ing entitled to old-age insurance benefits under subsection 

25 (a) during such period). 
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1 ‘‘(F) For purposes of subparagraph (C)(i)(II)—

2 ‘‘(i) In the case of a widower (or surviving di3 vorced husband) who is entitled for his entitlement 

4 month to an old-age insurance benefit under sub5 section (a) or a disability insurance benefit under 

6 section 223, or otherwise would have been entitled 

7 (but for the deceased individual’s death) to a hus8 band’s insurance benefit under subsection (c) for 

9 such month, the amount of her imputed survivor 

10 benefit for such month is the sum of—

11 ‘‘(I) the amount of such old-age or dis12 ability insurance benefit (if any), and 

13 ‘‘(II) the amount of such husband’s insur14 ance benefit (if any), assuming, for purposes of 

15 reduction under subsection (k)(3)(A), the enti16 tlement to an old-age insurance or disability in17 surance benefit for such month (if any), as de18 scribed in subclause (I). 

19 ‘‘(ii) In the case of a widower (or surviving di20 vorced husband) who is not described in clause (i) 

21 but has attained (or would attain) age 62 as of the 

22 end of his entitlement month, the amount of his im23 puted survivor benefit is the sum of—

24 ‘‘(I) the amount of the old-age insurance 

25 benefit under subsection (a) to which he would 
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1 be entitled for such month if he filed applica2 tion for such benefit during such month, and 

3 ‘‘(II) the amount to which he otherwise 

4 would have been entitled (but for the deceased 

5 individual’s death) as a husband’s insurance 

6 benefit under subsection (c) for such month, 

7 based on the deceased individual’s wages and 

8 self-employment income, if he had filed applica9 tion for such benefit during such month (as10 suming a primary insurance amount for the de11 ceased individual determined under paragraph 

12 (2)(B) of this subsection and assuming, for 

13 purposes of reduction under subsection 

14 (k)(3)(A), the entitlement to an old-age insur15 ance benefit for such month, if any, as de16 scribed in subclause (I)). 

17 In any case in which the widower (or surviving divorced 

18 husband) would not attain age 62 before the end of the 

19 his entitlement month, his imputed survivor benefit shall 

20 be deemed to be zero. 

21 ‘‘(G) The increased benefit cap determined under this 

22 subparagraph for the entitlement month of the widower 

23 (or surviving divorced husband) is the amount which 

24 would be the amount of a theoretical individual’s old-age 
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1 insurance benefit under subsection (a) (reduced as pro2 vided in subsection (q)) if—

3 ‘‘(i) such theoretical individual’s primary insur4 ance amount for the first month of entitlement were 

5 equal to the average of the primary insurance 

6 amounts upon which old-age insurance benefits 

7 under subsection (a) are payable for—

8 ‘‘(I) in any case in which the entitlement 

9 month of the widower (or surviving divorced 

10 husband) is the month of December, such 

11 month, or 

12 ‘‘(II) in any other case, the latest month of 

13 December preceding such entitlement month, 

14 ‘‘(ii) such first month of such theoretical indi15 vidual’s entitlement to such old-age insurance ben16 efit were the entitlement month of the widower (or 

17 surviving divorced husband), and 

18 ‘‘(iii) the month in which the theoretical indi19 vidual attained or would attain retirement age (as 

20 defined in section 216(l)) were the month in which 

21 the widower (or surviving divorced husband) at22 tained or would attain retirement age (as so de23 fined). 

24 ‘‘(H) If, in determining the amount of the benefit 

25 under this section pursuant to this paragraph, the im-
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1 puted old-age insurance benefit or imputed wife’s insur2 ance benefit of the deceased individual was deemed to be 

3 zero pursuant to the last sentence of clause (ii) or (iii) 

4 of subparagraph (D), or the imputed survivor benefit of 

5 the widower (or surviving divorced husband) was deemed 

6 to be zero pursuant to the last sentence of subparagraph 

7 (F), effective for any month after the entitlement month 

8 of the widower (or surviving divorced husband) in which 

9 the deceased individual would have attained age 62 or he 

10 attains age 62, the Commissioner shall recompute the 

11 amount of the benefit under this paragraph by sub12 stituting a reference to such later month for each ref13 erence in the preceding provisions of this paragraph to her 

14 entitlement month. 

15 ‘‘(I)(i) Any reference in this paragraph to the wid16 ower’s insurance benefit (as determined under the pre17 ceding paragraphs of this subsection) shall be deemed a 

18 reference to such benefit, taking into account all applicable 

19 reductions and deductions under this title. 

20 ‘‘(ii) Any reference in this paragraph to the imputed 

21 old-age insurance benefit or imputed wife’s insurance ben22 efit described in subparagraph (D), the old-age insurance 

23 benefit, disability insurance benefit, or wife’s insurance 

24 benefit described in subparagraph (E), or the old-age in25 surance benefit, disability insurance benefit, or husband’s 
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1 insurance benefit described in subparagraph (F) shall be 

2 deemed a reference to such benefit, taking into account 

3 applicable reductions under this section but disregarding 

4 reductions or deductions otherwise applicable under this 

5 title. 

6 ‘‘(iii) A widower’s insurance benefit which has been 

7 increased under this paragraph shall be subject to all re8 ductions and deductions otherwise applicable to widower’s 

9 insurance benefits under this title, except that such benefit 

10 shall not be subject to any reduction otherwise applicable 

11 under subsection (q)(1).’’. 

12 (c) COST-OF-LIVING ADJUSTMENTS TO GUARANTEED

13 WIDOW’S AND WIDOWER’S INSURANCE BENEFITS.—Sec14 tion 215(i)(2)(A)(ii) of such Act (42 U.S.C. 

15 415(i)(2)(A)(ii)) is amended—

16 (1) in subclause (II), by striking ‘‘and’’ at the 

17 end; 

18 (2) in subclause (III), by striking ‘‘1978.’’ and 

19 inserting ‘‘1979, and’’; 

20 (3) by adding at the end the following new sub21 clause: 

22 ‘‘(IV) the benefit amount to which an individual 

23 is entitled for that month under subsection (e) or (f) 

24 of section 202 if such benefit amount has been in-
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1 creased under paragraph (10) of such subsection.’’; 

2 and 

3 (4) in the matter following subclause (IV) 

4 (added by paragraph (3)), by striking ‘‘(I), (II), and 

5 (III)’’ and inserting ‘‘(I), (II), (III), and (IV)’’. 

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

7 this section shall apply with respect to widow’s and wid8 ower’s insurance benefits for months after November 

9 2005. 

10 SEC. 16. LIMITATION ON BENEFITS OF MARRIED COUPLE 

11 TO LEVEL OF MAXIMUM WORKER BENEFITS. 

12 (a) WIFE’S INSURANCE BENEFITS.—Section 

13 202(b)(2) of the Social Security Act (42 U.S.C. 402(b)(2)) 

14 is amended to read as follows: 

15 ‘‘(2) Except as provided in subsection (q) and para16 graph (4) of this subsection, such wife’s insurance benefit 

17 for each month shall be equal to the excess (not less than 

18 zero) of—

19 ‘‘(A) 150 percent of her husband’s primary in20 surance amount, over 

21 ‘‘(B) the primary insurance amount for such 

22 month of a hypothetical individual who is entitled to 

23 old-age insurance insurance benefits for such month, 

24 who became entitled to such benefit upon attaining 

25 age 62 during the month in which her husband be-
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1 came entitled to old-age insurance benefits, and to 

2 whom wages and self-employment income were cred3 ited in each of such hypothetical individual’s elapsed 

4 years (within the meaning of section 

5 215(b)(2)(B)(iii)) in an amount equal to the max6 imum amount includible under this title as wages 

7 and self-employment income for such year.’’. 

8 (b) HUSBAND’S INSURANCE BENEFITS.—Section 

9 202(c)(2) of such Act (42 U.S.C. 402(c)(2)) is amended 

10 to read as follows: 

11 ‘‘(2) Except as provided in subsection (q) and para12 graph (4) of this subsection, such husband’s insurance 

13 benefit for each month shall be equal to the excess (not 

14 less than zero) of—

15 ‘‘(A) 150 percent of his wife’s primary insur16 ance amount, over 

17 ‘‘(B) the primary insurance amount for such 

18 month of a hypothetical individual who is entitled to 

19 old-age insurance insurance benefits for such month, 

20 who became entitled to such benefit upon attaining 

21 age 62 during the month in which his wife became 

22 entitled to old-age insurance benefits, and to whom 

23 wages and self-employment income were credited in 

24 each of such hypothetical individual’s elapsed years 

25 (within the meaning of section 215(b)(2)(B)(iii)) in 
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1 an amount equal to the maximum amount includible 

2 under this title as wages and self-employment in3 come for such year.’’. 

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

5 this section shall apply with respect to benefits for months 

6 after November 2004.

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