Provide for the Common Defense Act of 2013

To eliminate sequestration for the security-related functions, to be offset through reductions in payments under Medicare, agricultural subsidies, federal retirement, and the application of chained CPI, and for other purposes. 1. Short title; table of contents (a) Short title This Act may be cited as the Provide for the Common Defense Act of 2013 (b) Table of contents The table of contents of this Act is as follows: Sec. 1. Short title; table of contents. Title I—Elimination of sequestration for revised security category Sec. 101. Elimination of 251A reductions for revised security category in fiscal years 2014 and 2015. Title II—Offsetting Payment Changes Subtitle A—Medicare Sec. 201. Adjustments to calculation of Medicare part B and part D premiums for high-income beneficiaries. Sec. 202. Increase in part B deductible for new enrollees. Subtitle B—Agriculture Sec. 211. Cap on overall rate of return for crop insurance providers. Sec. 212. Cap on reimbursements for administrative and operating expenses of crop insurance providers. Sec. 213. Reduction in share of crop insurance premium paid by Federal Crop Insurance Corporation. Subtitle C—Federal Retirement Sec. 221. Retirement contributions. Sec. 222. Annuity supplement. Sec. 223. Use of Chained Consumer Price Index. Subtitle D—Chained CPI Sec. 231. Change in index used to calculate Social Security cost-of-living adjustments. I Elimination of sequestration for revised security category 101. Elimination of 251A reductions for revised security category in fiscal years 2014 and 2015 (a) Elimination of the adjustment under section 251A for fiscal years 2014 and 2015 Section 251A of the Balanced Budget and Emergency Deficit Control Act of 1985 ( 2 U.S.C. 901a (1) in paragraphs (7)(B) and (8), by striking On the date Subject to paragraph (12), on the date (2) by adding at the end the following new paragraph: (12) No reductions for revised security category in fiscal years 2014 and 2015 Paragraphs (7)(B) and (8) shall have no force or effect for fiscal years 2014 and 2015 with respect to the revised security category. . (b) Discretionary spending limits for the revised security category in fiscal years 2014 and 2015 For purposes of section 251(c) of the Balanced Budget and Emergency Deficit Control Act of 1985 (as modified by section 251A(2) of such Act), for fiscal years 2014 and 2015, the discretionary spending limit for the revised security category in each such fiscal year shall be $552,000,000,000 and $566,000,000,000, respectively. II Offsetting Payment Changes A Medicare 201. Adjustments to calculation of Medicare part B and part D premiums for high-income beneficiaries (a) Increase in applicable percentage used To calculate premiums Section 1839(i)(3)(C)(i) of the Social Security Act ( 42 U.S.C. 1395r(i)(3)(C)(i) (1) by inserting after In general.— (I) Years before 2017 For calendar years prior to 2017: ; and (2) by adding at the end the following new subclause: (II) 2017 and subsequent years For calendar year 2017 and each subsequent calendar year: If the modified adjusted The applicable gross income is: percentage is: More than $85,000 but not more than $107,000 40 More than $107,000 but not more than $160,000 55 More than $160,000 but not more than $214,000 70 More than $214,000 90. . (b) Temporary adjustment to income thresholds used To calculate premiums (1) In general Section 1839(i)(6) of the Social Security Act ( 42 U.S.C. 1395r(i)(6) December 31, 2019 December 31 of the year after 2019 that is the first year after the year in which at least 25 percent of individuals enrolled under this part are subject to a reduction under this subsection to the monthly amount of the premium subsidy applicable to the premium under this section. (2) Application of inflation adjustment Section 1839(i)(5) of the Social Security Act ( 42 U.S.C. 1395r(i)(5) (A) in subparagraph (A), by striking In the case Subject to subparagraph (C), in the case (B) by adding at the end the following new subparagraph: (C) Treatment of years after temporary adjustment period In applying subparagraph (A) for the first year beginning after the period described in paragraph (6) and for each subsequent year, the 12-month period ending with August 2006 described in clause (ii) of such subparagraph shall be deemed to be the 12-month period ending with August of the last year of such period described in paragraph (6). . 202. Increase in part B deductible for new enrollees Section 1833 of the Social Security Act ( 42 U.S.C. 1395l (1) in the first sentence of subsection (b), by inserting (subject to subsection (z)) for a subsequent year (2) by adding at the end the following: (z) Higher deductible for new enrollees In the case of an individual who is not enrolled under this part before January 1, 2017, the amount of the deductible under subsection (b)— (1) for 2017 shall be the amount otherwise determined under such subsection for 2017 increased by $25; (2) for 2018 shall be the amount otherwise determined under such subsection for 2018, taking into account the application of the previous paragraph; (3) for 2019 shall be the amount otherwise determined under such subsection for 2019, taking into the application of the previous paragraphs, , increased by $25; (4) for 2020 shall be the amount otherwise determined under such subsection for 2020, taking into account the application of the previous paragraphs, increased by $25; (5) for 2021 shall be the amount otherwise determined under such subsection for 2021, taking into account the application of the previous paragraphs, increased by $25; and (6) for any subsequent year shall be the amount otherwise determined under such subsection for such year, taking into account the application of the previous paragraphs and this paragraph for previous years. . B Agriculture 211. Cap on overall rate of return for crop insurance providers Section 508(k) of the Federal Crop Insurance Act ( 7 U.S.C. 1508(k) (1) by designating paragraph (3) as subparagraph (A) (and adjusting the margin two ems to the right); (2) by inserting before subparagraph (A) (as so designated) the following: (3) Risk ; and (3) by adding at the end the following new subparagraph: (B) Cap on overall rate of return The target rate of return for all the companies combined for the 2014 and subsequent reinsurance years shall be 12.8 percent of retained premium. . 212. Cap on reimbursements for administrative and operating expenses of crop insurance providers Section 508(k)(4) of the Federal Crop Insurance Act ( 7 U.S.C. 1508(k)(4) (G) Additional cap on reimbursements Notwithstanding subparagraphs (A) through (F), total reimbursements for administrative and operating costs for the 2014 insurance year for all types of policies and plans of insurance shall not exceed $935,000,000. For each subsequent insurance year, the dollar amount in effect pursuant to the preceding sentence shall be increased by the same inflation factor as established for the administrative and operating costs cap in the 2011 Standard Reinsurance Agreement. . 213. Reduction in share of crop insurance premium paid by Federal Crop Insurance Corporation (a) Catastrophic risk protection Section 508(d)(2)(A) of the Federal Crop Insurance Act ( 7 U.S.C. 1508(d)(2)(A) sufficient to cover anticipated losses and a reasonable reserve for all crops for which catastrophic risk protection coverage is available shall be reduced by the percentage equal to the difference between the average loss ratio for such crop and 100 percent, plus a reasonable reserve (b) Additional coverage Section 508(e)(2) of the Federal Crop Insurance Act ( 7 U.S.C. 1508(e)(2) (1) in subparagraph (B)(i), by striking 67 64 (2) in subparagraph (C)(i), by striking 64 61 (3) in subparagraph (D)(i), by striking 59 56 (4) in subparagraph (E)(i), by striking 55 52 (c) Enterprise and whole farm units Section 508(e)(5)(C) of the Federal Crop Insurance Act ( 7 U.S.C. 1508(e)(5)(C) 80 77 (d) Area revenue plans Section 508(e)(6) of the Federal Crop Insurance Act ( 7 U.S.C. 1508(e)(6) (1) in subparagraph (A)(i), by striking 59 56 (2) in subparagraph (B)(i), by striking 55 52 (e) Area yield plans Section 508(e)(7) of the Federal Crop Insurance Act ( 7 U.S.C. 1508 (1) in subparagraph (A)(i), by striking 59 56 (2) in subparagraph (B)(i), by striking 55 52 (3) in subparagraph (C)(i), by striking 51 48 (f) Effective date The amendments made by this section shall apply with respect to the first contract change date for a contract under the Federal Crop Insurance Act occurring after the date of the enactment of this Act. C Federal Retirement 221. Retirement contributions (a) Civil Service Retirement System (1) Individual contributions Section 8334(c) (A) by striking (c) Each (c)(1) Each (B) by adding at the end the following: (2) Notwithstanding any other provision of this subsection, the applicable percentage of basic pay under this subsection for civilian service by an employee or Member shall, for purposes of computing an amount— (A) for a period in calendar year 2014, be equal to the applicable percentage under this subsection for calendar year 2013 plus an additional 0.4 percentage point; (B) for a period in calendar year 2015, be equal to the applicable percentage under this subsection for calendar year 2014 (as determined under subparagraph (A)) plus an additional 0.4 percentage point; (C) for a period in calendar year 2016, be equal to the applicable percentage under this subsection for calendar year 2015 (as determined under subparagraph (B)) plus an additional 0.4 percentage point; and (D) for a period in any calendar year after 2016, be equal to the applicable percentage under this subsection for calendar year 2015 (as determined under subparagraph (C)). (3) (A) Notwithstanding subsection (a)(2), any excess contributions under subsection (a)(1)(A) (including the portion of any deposit under this subsection allocable to excess contributions) shall, if made by an employee of the United States Postal Service or the Postal Regulatory Commission, be deposited to the credit of the Postal Service Fund under section 2003 (B) For purposes of this paragraph, the term excess contributions (i) deductions from basic pay of such employee which are made under subsection (a)(1)(A), exceed (ii) deductions from basic pay of such employee which would have been so made if paragraph (2) had not been enacted. . (2) Government contributions Section 8334(a)(1)(B) (A) in clause (i), by striking Except as provided in clause (ii), Except as provided in clause (ii) or (iii), (B) by adding at the end the following: (iii) The amount to be contributed under clause (i) shall, with respect to a period in any year beginning after December 31, 2013, be equal to— (I) the amount which would otherwise apply under clause (i) with respect to such period, reduced by (II) the amount by which, with respect to such period, the withholding under subparagraph (A) exceeds the amount which would otherwise have been withheld from the basic pay of the employee or elected official involved under subparagraph (A) based on the percentage applicable under subsection (c) for calendar year 2013. . (b) Individual contributions under the Federal Employees’ Retirement System Section 8422(a)(3) (1) by redesignating subparagraph (B) as subparagraph (C); and (2) by inserting after subparagraph (A) the following: (B) Notwithstanding any other provision of this paragraph, the applicable percentage under this paragraph for civilian service by employees or Members other than revised annuity employees shall— (i) for a period in calendar year 2014, be equal to the applicable percentage under this paragraph for calendar year 2013 plus an additional 0.4 percentage point; (ii) for a period in calendar year 2015, be equal to the applicable percentage under this paragraph for calendar year 2014 (as determined under clause (i)) plus an additional 0.4 percentage point; (iii) for a period in calendar year 2016, be equal to the applicable percentage under this paragraph for calendar year 2015 (as determined under clause (ii)) plus an additional 0.4 percentage point; and (iv) for a period in any calendar year after 2016, be equal to the applicable percentage under this paragraph for calendar year 2016 (as determined under clause (iii)). . 222. Annuity supplement Section 8421(a) (1) in paragraph (1), by striking paragraph (3) paragraphs (3) and (4) (2) in paragraph (2), by striking paragraph (3) paragraphs (3) and (4) (3) by adding at the end the following: (4) No annuity supplement under this section shall be payable in the case of an individual who first becomes subject to this chapter after December 31, 2013. . 223. Use of Chained Consumer Price Index (a) In general Paragraph (15) of section 8331 (15) the term price index . (b) Effective date The amendment made by subsection (a) shall take effect on January 1, 2015, and shall apply with respect to any cost-of-living adjustment taking effect under section 8340 8462 D Chained CPI 231. Change in index used to calculate Social Security cost-of-living adjustments (a) In general Section 215(i)(1) of the Social Security Act ( 42 U.S.C. 415(i)(1) (1) in subparagraph (G), by striking the period at the end and inserting ; and (2) by adding at the end the following new subparagraph: (H) the term Consumer Price Index . (b) Application to pre-1979 law (1) In general Section 215(i)(1) of the Social Security Act as in effect in December 1978, and as applied in certain cases under the provisions of such Act as in effect after December 1978, is amended— (A) in subparagraph (C), by striking the period at the end and inserting ; and (B) by adding at the end the following new subparagraph: (D) the term Consumer Price Index . (2) Conforming change Section 215(i)(4) of the Social Security Act ( 42 U.S.C. 415(i)(4) and by section 231 of the Provide for the Common Defense Act of 2013 1986 (c) Effective date The amendments made by this section shall apply with respect to adjustments effective with or after December 2014.

Summary: Provide for the Common Defense Act of 2013 - Amends the Balanced Budget and Emergency Deficit Control Act of 1985 (Gramm-Rudman-Hollings Act) to nullify the presidential sequestration order issued for the revised security category (discretionary appropriations in budget function 050) for FY2014-FY2015 to enforce a specified budget goal. Establishes the discretionary spending limit for the revised security category for each such fiscal year. Amends part B (Supplemental Medical Insurance) of title XVIII (Medicare) of the Social Security Act (SSA) with respect to adjustments to the calculation of Medicare parts B and D (Voluntary Prescription Drug Benefit Program) premiums for high income beneficiaries for 2017 and subsequent years. Reduces the monthly amount of the Medicare parts B and D premium subsidies (with a corresponding increase in the monthly premium amount) for individuals whose modified adjusted gross income exceeds the threshold amount by specified applicable percentages for modified adjusted gross incomes in certain ranges starting at $85,000 (40%) and finally exceeding $214,000 (90%). Revises the temporary adjustment to income thresholds used to calculate premiums between January 1, 2011, and December 31, 2019, to extend it through December 31 of the first year after 2019 after the year in which at least 25% of individuals enrolled in the Medicare parts B and D are subject to a reduction to the monthly amount of the applicable premium subsidy. Increases by $25 per year the part B deductible for new enrollees after January 1, 2017, and subsequent years. Amends the Federal Crop Insurance Act to establish caps beginning with FY2014 for: (1) combined crop insurance provider rates of return, and (2) reimbursements for crop insurance provider administrative and operating expenses. Reduces according to a specified formula the crop insurance premium for catastrophic risk protection coverage. Reduces the portion of premium paid by the Federal Crop Insurance Corporation (premium subsidies) for the following coverages: (1) additional insurance, (2) enterprise and whole farm units, (3) area revenue plans, and (4) area yield plans. Requires an additional .4% increase per year, beginning in calendar 2014, in the percentage of basic pay that federal employees or Members of Congress must contribute to their pension plans under the Civil Service Retirement System (CSRS) or the Federal Employees Retirement System (FERS). Reduces government contributions to CSRS and FERS by the amount of such increased employee contributions. Eliminates annuity supplements for federal employees hired after 2013. Revises the definition of “price index,” for purposes of cost-of-living adjustments to federal employee benefits, to mean the Chained Consumer Price Index for All Urban Consumers (Chained CPI) instead of the Consumer Price Index. Amends SSA title II (Old Age, Surivors, and Disability Insurance) (OASDI) to require the use of the Chained CPI for calculation of Social Security cost-of-living adjustments.