I 

108TH CONGRESS 

2D SESSION H. R. 5179

To amend title II of the Social Security Act and the Internal Revenue 

Code of 1986 to provide for modest adjustments necessary to restore 

the old-age, survivors, and disability insurance program to long-term 

actuarial balance. 

IN THE HOUSE OF REPRESENTATIVES 

SEPTEMBER 29, 2004

Mr. OBEY introduced the following bill; which was referred to the Committee 

on Ways and Means 

A BILL

To amend title II of the Social Security Act and the Internal 

Revenue Code of 1986 to provide for modest adjustments 

necessary to restore the old-age, survivors, and disability 

insurance program to long-term actuarial balance.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Social Security Sol5 vency Act of 2004’’. 
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1 SEC. 2. ADJUSTMENT TO RATE OF INCREASE IN CONTRIBU2 TION AND BENEFIT BASE. 

3 Section 230(b)(2) of the Social Security Act (42 

4 U.S.C. 430(b)(2)) is amended to read as follows: 

5 ‘‘(2) the sum of—

6 ‘‘(A) the ratio (expressed as a percentage) 

7 of (i) the national average wage index (as de8 fined in section 209(k)(1)) for the calendar year 

9 before the calendar year in which the deter10 mination under subsection (a) is made to (ii) 

11 the national average wage index (as so defined) 

12 for 1992, plus 

13 ‘‘(B) for purposes of determining the con14 tribution and benefit base effective with respect 

15 to remuneration paid during calendar years 

16 after 2005 and before 2037 and self-employ17 ment income derived in taxable years beginning 

18 with or during such calendar years, 2 percent19 age points,’’. 

20 SEC. 3. APPLICATION OF THE CHAINED CONSUMER PRICE 

21 INDEX FOR ALL URBAN CONSUMERS IN DE22 TERMINING COST-OF-LIVING INCREASES IN 

23 BENEFITS. 

24 (a) IN GENERAL.—Section 215(i)(1) of the Social Se25 curity Act (42 U.S.C. 425(i)(1)) is amended—
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1 (1) in subparagraph (G), by striking the period 

2 and inserting ‘‘; and’’; and 

3 (2) by adding at the end the following new sub4 paragraph: 

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

6 the chained consumer price index for all urban con7 sumers, published by the Bureau of Labor Statis8 tics.’’. 

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

10 this section shall apply with respect to increases described 

11 in section 215(i)(2)(A) of the Social Security Act effective 

12 with the month of December of calendar years after 2005. 

13 SEC. 4. RETENTION OF ESTATE TAX; TRANSFERS TO SO14 CIAL SECURITY TRUST FUND. 

15 (a) EXCLUSION EQUIVALENT MADE PERMANENT AT

16 2009 AMOUNT.—The item relating to 2009 in the table 

17 in section 2010(c) of the Internal Revenue Code of 1986 

18 (relating to applicable credit amount) is amended by strik19 ing all that follows ‘‘the applicable exclusion amount’’ and 

20 inserting ‘‘. For purposes of the preceding sentence, the 

21 applicable exclusion amount is $3,500,000.’’. 

22 (b) CONFORMING AMENDMENTS.—

23 (1) Subtitles A and E of title V of the Eco24 nomic Growth and Tax Relief Reconciliation Act of 

25 2001, and the amendments made by such subtitles, 
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1 are hereby repealed; and the Internal Revenue Code 

2 of 1986 shall be applied as if such subtitles, and 

3 amendments, had never been enacted. 

4 (2)(A) Subsection (a) of section 901 of the Eco5 nomic Growth and Tax Relief Reconciliation Act of 

6 2001 is amended by striking ‘‘this Act’’ and all that 

7 follows and inserting ‘‘this Act (other than title V) 

8 shall not apply to taxable, plan, or limitation years 

9 beginning after December 31, 2010.’’. 

10 (B) Subsection (b) of such section 901 is 

11 amended by striking ‘‘, estates, gifts, and transfers’’. 

12 (3) Subsections (d) and (e) of section 511 of 

13 the Economic Growth and Tax Relief Reconciliation 

14 Act of 2001, and the amendments made by such 

15 subsections, are hereby repealed; and the Internal 

16 Revenue Code of 1986 shall be applied as if such 

17 subsections, and amendments, had never been en18 acted. 

19 (c) TRANSFERS TO TRUST FUND.—

20 (1) IN GENERAL.—There are hereby appro21 priated to the Federal Old-Age and Survivors Insur22 ance Trust Fund amounts equivalent to the taxes re23 ceived in the Treasury under chapters 11 and 13 of 

24 the Internal Revenue Code of 1986 (relating to es-
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1 tate tax and tax on generation-skipping transfers, 

2 respectively). 

3 (2) TRANSFERS.—The amounts appropriated 

4 by paragraph (1) shall be transferred from time to 

5 time (but not less frequently than quarterly) from 

6 the general fund of the Treasury on the basis of es7 timates made by the Secretary of the Treasury of 

8 the amounts referred to in such paragraph. Any 

9 such quarterly payment shall be made on the first 

10 day of such quarter. Proper adjustments shall be 

11 made in the amounts subsequently transferred to the 

12 extent prior estimates were in excess of or less than 

13 the amounts required to be transferred. 

14 (3) REPORTS.—The Secretary of the Treasury 

15 shall submit annual reports to the Congress and to 

16 the Commissioner of Social Security regarding—

17 (A) the transfers made under this sub18 section during the year, and the methodology 

19 used in determining the amount of such trans20 fers, and 

21 (B) the anticipated operation of this sub22 section during the next 5 years. 
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1 SEC. 5. FUTURE ADJUSTMENT OF EMPLOYMENT TAX 

2 RATES TO KEEP SOCIAL SECURITY TRUST 

3 FUNDS IN BALANCE. 

4 (a) STATEMENT OF PROJECTED INSOLVENCY IN AN5 NUAL REPORT OF BOARD OF TRUSTEES.—Section 201(c) 

6 of the Social Security Act (42 U.S.C. 401(c)) is amended, 

7 in the second sentence following clause (5), by striking 

8 ‘‘Trustees).’’ and inserting ‘‘Trustees), the Board’s best 

9 estimate of the date as of which, using intermediate as10 sumptions, the Trust Funds will, with no change in rates 

11 of tax under chapters 2 and 21 of the Internal Revenue 

12 Code of 1986, first have assets insufficient to pay sched13 uled benefits in full on a timely basis, and, if such date 

14 is within 2 years after the date of the filing of the report, 

15 the minimum increase necessary in such rates of tax 

16 (using such assumptions and assuming pro rata adjust17 ments in the taxes applicable under sections 1401(a), 

18 3101(a), and 3111(a) of such Code) necessary to take ef19 fect (effective for the calendar year and applicable taxable 

20 years in which such date occurs) to preclude such an insuf21 ficiency (rounded, if not a multiple of 0.01 percent, to the 

22 next higher multiple of 0.01 percent).’’. 

23 (b) EMPLOYEE CONTRIBUTION.—Subsection (a) of 

24 section 3101 of the Internal Revenue Code of 1986 (relat25 ing to rate of tax for old-age, survivors, and disability in26 surance) is amended by adding at the end the following 
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1 flush sentence: ‘‘In the case of the year in which occurs 

2 the date determined under section 201(c) of the Social Se3 curity Act to be the date as of which the Trust Funds 

4 will first have assets insufficient to pay scheduled benefits 

5 in full on a timely basis, the rate in effect under the pre6 ceding sentence for such year and each year thereafter 

7 (without regard for this sentence) shall be increased to 

8 the extent determined under section 201(c) of such Act 

9 to be necessary to preclude such an insufficiency. Such 

10 increase shall be prescribed by the Secretary.’’. 

11 (c) EMPLOYER CONTRIBUTION.—Subsection (a) of 

12 section 3111 of such Code (relating to rate of tax for old13 age, survivors, and disability insurance) is amended by 

14 adding at the end the following flush sentence: ‘‘In the 

15 case of the year in which occurs the date determined under 

16 section 201(c) of the Social Security Act to be the date 

17 as of which the Trust Funds will first have assets insuffi18 cient to pay scheduled benefits in full on a timely basis, 

19 the rate in effect under the preceding sentence for such 

20 year and each year thereafter (without regard for this sen21 tence) shall be increased to the extent determined under 

22 section 201(c) of such Act to be necessary to preclude such 

23 an insufficiency. Such increase shall be prescribed by the 

24 Secretary.’’. 
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1 (d) SELF-EMPLOYMENT CONTRIBUTION.—Sub2 section (a) of section 1401 of such Code (relating to rate 

3 of tax for old-age, survivors, and disability insurance) is 

4 amended by adding at the end the following flush sen5 tence: ‘‘In the case of the year in which occurs the date 

6 determined under section 201(c) of the Social Security Act 

7 to be the date as of which the Trust Funds will first have 

8 assets insufficient to pay scheduled benefits in full on a 

9 timely basis, the rate in effect under the preceding sen10 tence for such year and each year thereafter (without re11 gard for this sentence) shall be increased to the extent 

12 determined under section 201(c) of such Act to be nec13 essary to preclude such an insufficiency. Such increase 

14 shall be prescribed by the Secretary.’’.

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