social security accounts of such participating indi-
vidual into a single personal social security account. 
‘‘(f) TRANSFERS BETWEEN ACCOUNTS UPON TERMI-
NATION OF EMPLOYMENT.— 
‘‘(1) IN
GENERAL.—Not later than 90 days 
after the date of the termination of employment of 
a participating individual by an employer, such indi-
vidual shall, in accordance with regulations of the 
Board, arrange for disinvestment of amounts held in 
the personal social security account established by 
such employer for such individual and transfer of 
the amounts held in such account to— 
‘‘(A) any personal social security account 
established by the employer in connection with 
subsequent employment of such individual com-
mencing within such 90-day period, or 
‘‘(B) in any case in which, during such 90- 
day period, no personal social security account 
is established in connection with subsequent 
employment of such individual, a personal social 
security account established by such individual 
as provided in subsection (b)(1) as if such indi-
vidual were self-employed. 
‘‘(2) DISREGARD OF CERTAIN BREAKS IN SERV-
ICE.—The Board shall provide rules for determining 
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whether an individual’s employment has been termi-
nated for purposes of this subsection under which 
breaks in service for any period occurring on a sea-
sonal or other regular basis each year are dis-
regarded in the case of any type of service with re-
spect to which the customary period of employment 
during each calendar year excludes such period. 
‘‘(3) PROCEDURE.—In accordance with regula-
tions of the Board, in the case of any termination 
of employment by an employer of a participating em-
ployee, the terms of the personal social security ac-
count of the participating employee maintained by 
such employer and of the qualified social security 
mutual fund designated for purposes of investment 
of amounts held in such account shall provide for 
any disinvestment and transfer required under para-
graph (1). 
‘‘(g) DISTRIBUTIONS.—Distributions of amounts held 
in personal social security accounts (other than reasonable 
investment fees and administrative expenses) shall be 
made— 
‘‘(1) only as provided in section 254(d) (except 
as otherwise provided in section 254(e)), or 
‘‘(2) for purposes of effecting mergers of ac-
counts pursuant to subsection (e)(2) or transfers to 
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other personal social security accounts pursuant to 
subsection (f). 
‘‘(h) PROPERTY RIGHTS OF PARTICIPATING INDI-
VIDUAL.—Amounts held in a participating individual’s 
personal social security account— 
‘‘(1) are the property of such participating indi-
vidual, and 
‘‘(2) except as provided in subsections (e)(2) 
and (f)(3) of section 254, shall not be transferrable 
or assignable, at law or in equity, and shall not be 
subject to execution, levy, attachment, garnishment, 
or other legal process, or to the operation of any 
bankruptcy or insolvency law. 
‘‘SEC. 253. DESIGNATION OF QUALIFIED SOCIAL SECURITY 
MUTUAL FUNDS. 
‘‘(a) IN GENERAL.—The Board shall establish a pro-
gram for designating entities as qualified social security 
mutual funds for purposes of investment of amounts held 
in personal social security accounts. 
‘‘(b) APPLICATION PROCESS.—An entity may be des-
ignated by the Board as a qualified social security mutual 
fund only upon the filing by such entity of an application 
to the Board at such time, in such manner, and containing 
such information as the Board may require. 
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‘‘(c) MINIMUM QUALIFICATIONS OF QUALIFIED SO-
CIAL SECURITY MUTUAL FUNDS.— 
‘‘(1) IN
GENERAL.—An entity may be des-
ignated by the Board as a qualified social security 
mutual fund only if such entity— 
‘‘(A) is an investment company; 
‘‘(B) is registered with the Securities and 
Exchange Commission as an investment com-
pany and has been so registered for no fewer 
than 10 years; 
‘‘(C) has been publicly traded or available 
to the public for purchase and redemption for 
no fewer than 10 years; 
‘‘(D) at the time of application, has a mar-
ket capitalization of at least $100,000,000; 
‘‘(E) has not been subject to civil or crimi-
nal penalty with respect to its securities or in-
vestment operations by any government agency 
within the past 10 years; and 
‘‘(F) is managed by a corporation, partner-
ship, limited liability company, or other person 
that— 
‘‘(i) is incorporated, created, or orga-
nized in the United States, and 
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‘‘(ii) has not been subject to civil or 
criminal penalty with respect to its securi-
ties or investment operations by any gov-
ernment agency within the past 10 years. 
‘‘(2) INVESTMENT COMPANY.—For purposes of 
this subsection, the term ‘investment company’ has 
the meaning provided in section 3 of the Investment 
Company Act of 1940. 
‘‘(d) OPERATIONAL REQUIREMENTS OF QUALIFIED 
SOCIAL SECURITY MUTUAL FUNDS.—Each qualified so-
cial security mutual fund shall— 
‘‘(1) comply with all regulations prescribed by 
the Board; 
‘‘(2) enter into any agreement with the Board 
that the Board may require; 
‘‘(3) provide the Commissioner of Social Secu-
rity with such information as the Commissioner may 
require to meet the requirements of section 254(b); 
‘‘(4) comply with all securities laws (as defined 
in section 3(a)(47) of the Securities Exchange Act 
of 1934); 
‘‘(5) comply with the fiduciary standards estab-
lished by section 404(a) of the Employee Retirement 
Income Security Act of 1974 (29 U.S.C. 1104(a)); 
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‘‘(6) maintain its registration described in sub-
section (c)(1); 
‘‘(7) invest in the securities of no fewer than 50 
issuers; 
‘‘(8) allow no single security to account for 
more than 5 percent of the fund’s net asset value; 
‘‘(9) invest solely in securities issued by cor-
porations, trusts, partnerships, or limited liability 
companies whose principal place of business is lo-
cated in the United States (or, in the case of invest-
ments made in investment companies, solely in in-
vestment companies in which at least 90 percent of 
the underlying securities are those of corporations, 
trusts, partnerships, or limited liability companies 
whose principal place of business is located in the 
United States); 
‘‘(10) not invest in government securities; 
‘‘(11) provide quarterly statements to each par-
ticipating individual invested in the qualified social 
security mutual fund of the value of the partici-
pating individual’s investment and the change in 
value during the preceding quarter and preceding 
year (if applicable); and 
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‘‘(12) provide to the Board (in a form pre-
scribed by the Board) at least the following informa-
tion— 
‘‘(A) not later than March 1 of each cal-
endar year, the value of each participating indi-
vidual’s investment in the qualified social secu-
rity mutual fund at the end of the preceding 
calendar year; 
‘‘(B) within 30 days after any transfer to 
another qualified social security mutual fund, 
notification of such transfer; and 
‘‘(C) within 30 days after any distribution 
to a participating individual, notification of 
such distribution. 
‘‘(e) REQUIRED NUMBER AND TYPES OF QUALIFIED 
SOCIAL SECURITY MUTUAL FUNDS.— 
‘‘(1) MINIMUM NUMBER.—The Board shall take 
such actions as are necessary to maintain a number 
of entities designated as qualified social security mu-
tual funds of not fewer than 150. 
‘‘(2) TYPE.—The Board shall ensure that, of 
entities which are currently designated qualified so-
cial security mutual funds as of any time— 
‘‘(A) not fewer than 75 maintain a port-
folio invested solely in common stocks; and 
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‘‘(B) not fewer than 50 maintain a port-
folio invested in a mix of bonds and debentures 
and common stocks such that at least 50 per-
cent (by value) is invested in common stocks. 
‘‘(f) CRITERIA FOR DESIGNATION AS QUALIFIED SO-
CIAL SECURITY MUTUAL FUND.— 
‘‘(1) LIMITATION
ON
COMMON
INVESTMENT 
MANAGERS.—Under regulations which shall be pre-
scribed by the Board, not more than 15 entities 
managed by the same investment manager may be 
currently treated as of any time as qualified social 
security mutual funds. For purposes of this para-
graph, the reference to an investment manager shall 
include a reference to any affiliated person thereof 
(as defined in section 2(a)(3) of the Investment 
Company Act of 1940). 
‘‘(2) CRITERIA FOR DESIGNATION.—In deter-
mining whether to designate an entity as a qualified 
social security mutual fund, the Board shall include 
in matters taken into account at least the following: 
‘‘(A) the investment fees and administra-
tive expenses that such entity will incur; 
‘‘(B) the financial performance of such en-
tity; 
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‘‘(C) appropriateness of the entity’s diver-
sification; and 
‘‘(D) the administrative efficiency and ac-
curacy of the entity. 
‘‘(3) ADDITIONAL CRITERIA.—The Board may 
establish additional criteria for designation as a 
qualified social security mutual fund and shall pub-
lish such criteria in advance of initiating the applica-
tion process. 
‘‘(g) ENFORCEMENT; LOSS
OF DESIGNATION
AS 
QUALIFIED SOCIAL SECURITY MUTUAL FUND.— 
‘‘(1) LOSS OF DESIGNATION FOR NON-COMPLI-
ANCE.—The Board shall withdraw the designation of 
any entity as a qualified social security mutual fund 
if the entity fails to substantially comply with this 
section. Any such withdrawal shall be effective im-
mediately upon a finding of non-compliance by the 
Board, after notice and opportunity for an adminis-
trative hearing. 
‘‘(2) INTERMEDIATE
OR
ADDITIONAL
SANC-
TIONS.— 
‘‘(A) IN GENERAL.—The Board may im-
pose fines on any person who manages a quali-
fied social security mutual fund for any viola-
tion of this section with respect to such fund. 
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Any such fine may not exceed the investment 
fees and other income to such person arising 
from the management of the qualified social se-
curity mutual fund for the 3 preceding calendar 
years (or, in the case of a qualified social secu-
rity mutual fund that has not been so des-
ignated for the 3 preceding years, 3 times the 
projected or actual investment fees and other 
income arising from the management of the 
qualified social security mutual fund for the 
most recent calendar year for which such fund 
was so designated). Such fines may be imposed 
in addition to loss of designation as a qualified 
social security mutual fund or in lieu of loss of 
such designation, at the discretion of the 
Board. 
‘‘(B) ENFORCEMENT.—The Board may 
bring a civil action against any person referred 
to in subparagraph (A) to enforce any fine im-
posed under such subparagraph. Such action 
may be brought in the United States District 
Court for the District of Columbia or in any 
district court of the United States within the 
jurisdiction of which such person resides or 
does business, and process may be served in 
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any district where such person resides, does 
business, or may be found. 
‘‘(3) LOSS OF DESIGNATION FOR POOR PER-
FORMANCE.—The Board may withdraw the designa-
tion of those qualified social security mutual funds, 
equal in number to 10 percent of the total number 
of qualified social security mutual funds, determined 
annually by the Board to be the lowest performing, 
except that the designation of any such fund may be 
withdrawn under this paragraph only if the Board 
determines that the entity that would be newly des-
ignated by the Board as a replacement would be 
more qualified. The determination of performance 
shall be made by comparing total return, taking into 
account, together with any other factors determined 
relevant by the Board, all investment income, gains 
or losses, administrative expenses, and investment 
fees over a period of time to be determined by the 
Board. A withdrawal under this paragraph shall be 
effective at the end of the calendar year in which the 
withdrawal determination is made, after notice and 
opportunity for an administrative hearing. 
‘‘(4) TRANSFERS.—The Board shall seek in-
structions by mail from all participating individuals 
whose personal social security account is invested, in 
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whole or in part, in a qualified social security mu-
tual fund that has had its designation withdrawn 
pursuant to paragraph (1) or (3) regarding other 
qualified social security mutual funds to which the 
participating individual would like the invested funds 
transferred. If such instructions are not received by 
the Board within 45 days (in case of a withdrawal 
of designation under paragraph (1)) or within 1 year 
(in the case of a withdrawal of designation under 
paragraph (3)), then the distribution shall be made 
to a randomly selected qualified social security mu-
tual fund that is invested in a mix of bonds and de-
bentures and common stocks such that at least 80 
percent (by value) is invested in common stocks. 
‘‘SEC. 254. DISTRIBUTION OF SOCIAL SECURITY RETIRE-
MENT BENEFITS. 
‘‘(a) ELECTION OF PART A RETIREMENT BENEFITS 
IN LIEU OF PART B BENEFITS AT RETIREMENT.— 
‘‘(1) IN GENERAL.—Unless a participating indi-
vidual elects, not later than 30 days after the date 
on which such individual attains retirement age (and 
not later than the date on which such individual 
commences distribution from his or her personal so-
cial security account as provided in subsection (d), 
if such date is earlier than the date on which such 
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individual attains retirement age), part A retirement 
benefits based on such individual’s wages and self- 
employment income, such individual shall be deemed 
to have elected to receive part B benefits and to 
have forfeited any entitlement of such individual or 
such individual’s wife, husband, divorced wife, or di-
vorced husband to such part A retirement benefits. 
Any such election may be made only in a form and 
manner which shall be prescribed by the Commis-
sioner of Social Security. If such individual makes a 
timely election of part A retirement benefits, such 
individual shall be deemed to have forfeited such in-
dividual’s part B benefits. No such election of part 
A retirement benefits may be made by any individual 
attaining retirement age after the end of the period 
of 42 calendar years following the date of the enact-
ment of the SMART Act of 2009. Any such election 
shall be effective only if it is in writing and signed 
by the participating individual, his or her wife or 
husband (if any), and each divorced wife or divorced 
husband of such individual (if any). A deemed elec-
tion of part B benefits under this paragraph shall 
take effect only upon the mailing of a written notice 
of such deemed election to the spouse (if any) and 
each former spouse (if any) of such deemed election, 
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in such form as shall be prescribed by the Commis-
sioner, to the last known mailing address of such 
spouse or former spouse. 
‘‘(2) DISPOSITION
OF
PART
B
BENEFITS
OF 
PARTICIPATING INDIVIDUALS ELECTING PART A RE-
TIREMENT BENEFITS.—Not later than 30 days after 
an election by a participating individual under para-
graph (1) of part A retirement benefits, the Com-
missioner of Social Security shall notify the qualified 
social security mutual fund in which amounts held 
in any personal social security account of such indi-
vidual are invested that such individual has elected 
part A retirement benefits. Not later than 30 days 
after receiving such notice, the qualified social secu-
rity mutual fund shall transfer the amount of such 
individual’s part B benefits to the Social Security 
Escrow Fund, and such amount shall be treated as 
a part of the balance of such Fund. 
‘‘(b) INFORMATION TO BE PROVIDED TO PARTICI-
PATING INDIVIDUALS.— 
‘‘(1) IN GENERAL.—During— 
‘‘(A) the 90-day period beginning 180 days 
before the date on which any participating indi-
vidual attains retirement age, and 
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‘‘(B) the 90-day period following a request 
filed by a participating individual with the Com-
missioner, in such form and manner as shall be 
prescribed by the Commissioner, after 180 days 
before the date on which the individual attains 
age 62, 
the Commissioner of Social Security shall provide 
such individual with a retirement distribution esti-
mate described in paragraph (2). The Commissioner 
shall not be required to respond to more than 1 re-
quest described in subparagraph (B) made by a par-
ticipating individual during any 1-year period. 
‘‘(2) RETIREMENT DISTRIBUTION ESTIMATE.— 
The retirement distribution estimate described in 
this paragraph is the Commissioner’s written esti-
mate of— 
‘‘(A) the part A retirement benefits that 
the participating individual would receive, and 
the part A retirement benefits that any other 
individual would receive on the basis of the 
wages and self-employment income of such par-
ticipating individual, if the participating indi-
vidual elected part A retirement benefits pursu-
ant to subsection (a); 
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‘‘(B) the part B benefits that the partici-
pating individual would receive (including any 
transitional part A retirement benefits under 
subsection (c) of such participating individual 
and each individual receiving on the basis of 
such participating individual’s wages and self- 
employment income) if such participating indi-
vidual does not make an election of part A re-
tirement benefits pursuant to subsection (a); 
‘‘(C) the estimated amount of the median 
qualified social security annuity that the part B 
benefits could purchase, given the current in-
surance market, if such benefits were used en-
tirely to purchase such an annuity; and 
‘‘(D) the maximum permissible annual 
withdrawal of such part B benefits allowable 
under subsection (d). 
‘‘(c) TRANSITIONAL PART A RETIREMENT BENE-
FITS.—Notwithstanding subsection (a), a participating in-
dividual born before 1970 who does not elect part A retire-
ment benefits pursuant to subsection (a), and each indi-
vidual who would be entitled to any such benefit on the 
basis of such participating individual’s wages and self-em-
ployment income if such participating individual had made 
such an election, shall be entitled to a transitional part 
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A retirement benefit. The transitional part A retirement 
benefit shall be equal to the product of the part A retire-
ment benefit that would have been received if such an elec-
tion had been made and the part A retirement benefit per-
centage set forth in connection with the participating indi-
vidual’s year of birth, as set forth in the following table: 
The part A 
retirement benefit 
‘‘If the year of birth is: 
percentage is: 
1946 ..................................................................................
98 percent
1947 ..................................................................................
96 percent
1948 ..................................................................................
94 percent
1949 ..................................................................................
92 percent
1950 ..................................................................................
90 percent
1951 ..................................................................................
87 percent
1952 ..................................................................................
84 percent
1953 ..................................................................................
81 percent
1954 ..................................................................................
78 percent
1955 ..................................................................................
75 percent
1956 ..................................................................................
71 percent
1957 ..................................................................................
67 percent
1958 ..................................................................................
63 percent
1959 ..................................................................................
59 percent
1960 ..................................................................................
55 percent
1961 ..................................................................................
50 percent
1962 ..................................................................................
45 percent
1963 ..................................................................................
40 percent
1964 ..................................................................................
35 percent
1965 ..................................................................................
30 percent
1966 ..................................................................................
24 percent
1967 ..................................................................................
18 percent
1968 ..................................................................................
12 percent
1969 ..................................................................................
6 percent. 
‘‘(d) DISTRIBUTIONS OF PART B BENEFITS AND 
DISTRIBUTION LIMITS.— 
‘‘(1) IN GENERAL.—Subject to the limitations 
provided in this subsection, a participating indi-
vidual who has not made a timely election of part A 
retirement benefits under subsection (a) may with-
draw from any personal social security account of 
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such individual all or any portion of the balance in 
such account. 
‘‘(2) MINIMUM AGE FOR WITHDRAWAL.—With-
drawals by an individual from such individual’s per-
sonal social security account may be made only after 
such individual has attained age 62. 
‘‘(3) ANNUAL 10-PERCENT LIMITATION.— 
‘‘(A) IN GENERAL.—Except as provided in 
subsection (f) and paragraph (4), the maximum 
permissible total withdrawal during any 1-year 
period by a participating individual from all of 
such individual’s personal social security ac-
counts is 10 percent of the aggregate value of 
the amounts held in such accounts at the close 
of the preceding calendar year. 
‘‘(B) LIMITATION
WITH
RESPECT
TO 
QUALIFIED SOCIAL SECURITY MUTUAL FUND.— 
The terms governing the qualified social secu-
rity mutual fund in which are invested a par-
ticipating individual’s part B benefits held in 
any personal social security account shall pro-
hibit distributions to such individual during any 
1-year period of such part B benefits to the ex-
tent that the total amount of such distributions 
exceed 10 percent of the value of the part B 
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benefits held in such account at the close of the 
preceding calendar year. 
‘‘(C) INTERCHANGE
OF
INFORMATION.— 
The Board shall provide by regulation for the 
interchange of information between the man-
agers of personal social security accounts and 
between qualified social security mutual funds 
that is necessary to implement the requirements 
of this paragraph. 
‘‘(4) PURCHASE OF QUALIFIED SOCIAL SECU-
RITY ANNUITIES.— 
‘‘(A) IN
GENERAL.—Notwithstanding the 
paragraph (3), a participating individual may 
use any withdrawal permitted under paragraph 
(2) to purchase, in accordance with regulations 
which shall be prescribed by the Board, a quali-
fied social security annuity. 
‘‘(B) QUALIFIED SOCIAL SECURITY ANNU-
ITY.—For purposes of this paragraph, the term 
‘qualified social security annuity’ means an an-
nuity contract between an insurance company 
and a participating individual that complies 
with the following requirements: 
‘‘(i) The annuity contract is offered 
by an insurance company whose principal 
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which is not less than 50 percent of 
(and is not greater than 100 percent 
of) the amount of the annuity which 
is payable during the joint lives of the 
participating 
individual 
and 
the 
spouse, and 
‘‘(II) which is the actuarial 
equivalent of a single annuity for the 
life of the participating individual. 
‘‘(v) The terms of the annuity con-
tract must have been approved as fair and 
reasonable by the Board. 
‘‘(e) PART B BENEFITS SUBJECT TO DOMESTIC RE-
LATIONS ORDERS.— 
‘‘(1) IN GENERAL.—A participating individual’s 
part B benefits (including any qualified social secu-
rity annuity purchased with part B benefits) shall be 
subject to, and payable in accordance with the re-
quirements of, any qualified domestic relations 
order. 
‘‘(2) 
QUALIFIED
DOMESTIC
RELATIONS 
ORDER.—For purposes of this subsection— 
‘‘(A) IN
GENERAL.—The term ‘qualified 
domestic relations order’ means a domestic rela-
tions order— 
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‘‘(i) which creates or recognizes the 
existence of an alternate payee’s right to, 
or assigns to an alternate payee the right 
to, receive all or a portion of the part B 
benefits payable with respect to a partici-
pating individual, and 
‘‘(ii) with respect to which the re-
quirements of paragraphs (3) and (4) are 
met. 
‘‘(B) DOMESTIC RELATIONS ORDER.—The 
term ‘domestic relations order’ means any judg-
ment, decree, or order (including approval of a 
property settlement agreement) which— 
‘‘(i) relates to the provision of child 
support, alimony payments, or marital 
property rights to a spouse, former spouse, 
child, or other dependent of a participating 
individual, and 
‘‘(ii) is made pursuant to a State do-
mestic relations law (including a commu-
nity property law). 
‘‘(3) REQUIREMENTS.—A domestic relations 
order meets the requirements of this paragraph only 
if— 
‘‘(A) such order clearly specifies— 
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‘‘(i) the name and the last known 
mailing address (if any) of the partici-
pating individual and the name and mail-
ing address of each alternate payee covered 
by the order, 
‘‘(ii) the amount or percentage of the 
participating individual’s part B benefits to 
be paid from the participating individual’s 
personal social security account (including 
any qualified social security mutual fund in 
which they are invested) or qualified social 
security annuity to each such alternate 
payee, or the manner in which such 
amount or percentage is to be determined, 
‘‘(iii) the number of payments or pe-
riod to which such order applies, and 
‘‘(iv) each personal social security ac-
count or qualified social security annuity to 
which such order applies, and 
‘‘(B) such order is directed at— 
‘‘(i) one or more qualified social secu-
rity mutual funds in which amounts cred-
ited to the participating individual’s per-
sonal social security account are invested, 
or 
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‘‘(ii) if some or all of the participating 
individual’s part B benefits have been used 
to purchase a qualified social security an-
nuity, the insurance company offering such 
annuity. 
‘‘(4) REQUIRED SCOPE.—A domestic relations 
order meets the requirements of this paragraph only 
if such order— 
‘‘(A) does not require the provision of any 
type or form of benefit, or any option, not oth-
erwise provided under the terms of the personal 
social security account (including the qualified 
social security mutual fund) or the qualified so-
cial security annuity, 
‘‘(B) does not require payments from the 
account or annuity of increased benefits (deter-
mined on the basis of actuarial value), and 
‘‘(C) does not require the payment of part 
B benefits to an alternate payee which are re-
quired to be paid to another alternate payee 
under another order previously determined to 
be a qualified domestic relations order. 
‘‘(5) TIMING
AND
FORM
REQUIREMENTS.—A 
domestic relations order shall not be treated as fail-
ing to meet the requirements of subparagraph (A) of 
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paragraph (4) solely because such order requires 
that payment of benefits be made to an alternate 
payee— 
‘‘(A) on or after the date on which the par-
ticipating attains (or would have attained) re-
tirement age, 
‘‘(B) as if the participating individual had 
attained retirement age on the date on which 
such payment is to begin under such order (but 
taking into account only the present value of 
benefits actually accrued), and 
‘‘(C) in any form in which such benefits 
may be paid to the participating individual 
under this part (other than in the form of a 
joint and survivor annuity with respect to the 
alternate payee and his or her subsequent 
spouse). 
‘‘(6) RESPONSIBILITIES OF QUALIFIED SOCIAL 
SECURITY MUTUAL FUNDS AND INSURANCE COMPA-
NIES.— 
‘‘(A) ACTIONS REQUIRED UPON RECEIPT 
OF ORDER.—In the case of any domestic rela-
tions order received by any person that is a 
qualified social security mutual fund or insur-
ance company referred to in paragraph (3)(B) 
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with respect to a personal social security ac-
count maintained for a participating indi-
vidual— 
‘‘(i) such person shall promptly notify 
the participating individual and each alter-
nate payee of the receipt of such order and 
such person’s procedures for determining 
the qualified status of domestic relations 
orders, and 
‘‘(ii) within a reasonable period after 
receipt of such order, such person shall de-
termine whether such order is a qualified 
domestic relations order and notify the 
participant and each alternate payee of 
such determination. 
‘‘(B) PROCEDURES
FOR
DETERMINING 
QUALIFIED STATUS.—Each person referred to 
in subparagraph (A) shall establish reasonable 
procedures to determine the qualified status of 
domestic relations orders with respect to per-
sonal social security accounts and to administer 
distributions of part B benefits under such 
qualified orders. Such procedures— 
‘‘(i) shall be in writing, 
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‘‘(ii) shall provide for the notification 
of each alternate payee specified in a do-
mestic relations order as entitled to pay-
ment of part B benefits with respect to the 
personal social security account (at the ad-
dress included in the domestic relations 
order) of such procedures promptly upon 
receipt by such person of the domestic re-
lations order, and 
‘‘(iii) shall permit an alternate payee 
to designate a representative for receipt of 
copies of notices that are sent to the alter-
nate payee with respect to a domestic rela-
tions order. 
‘‘(f) DISTRIBUTION UPON DEATH OF PARTICIPATING 
INDIVIDUAL.— 
‘‘(1) IN GENERAL.—If the participating indi-
vidual dies before all amounts consisting of such in-
dividual’s part B benefits held in a personal social 
security account are otherwise distributed in accord-
ance with this section, subject to paragraph (3), 
such amounts shall be distributed, under regulations 
which shall be prescribed by the Board— 
‘‘(A) in any case in which one or more 
beneficiaries have been designated in advance, 
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to such beneficiaries in accordance with such 
designation as provided in such regulations, and 
‘‘(B) in the case of any amount not distrib-
uted as described in paragraph (1), to such in-
dividual’s estate. 
‘‘(2) SPOUSAL
RIGHTS.—Notwithstanding any 
beneficiary designation made by a participating indi-
vidual pursuant to paragraph (1), subject to para-
graph (3), a surviving spouse of the participating in-
dividual shall be entitled to not less than one half of 
the deceased participating individual’s part B bene-
fits payable from the personal social security ac-
count. In any case in which compliance with the pre-
ceding sentence results in remaining amounts in the 
personal social security account which are insuffi-
cient to provide for distribution to other beneficiaries 
as provided in the terms governing the account, dis-
tributions to such other beneficiaries shall be re-
duced as necessary on a pro rata basis. 
‘‘(3) APPLICATION
TOWARDS
DEBTS.—Upon 
the death of the accountholder for a personal social 
security account, the amount in such account shall 
be passed through to the estate of such deceased 
accountholder and, as part of such estate, shall be 
available, in accordance with State law, to pay debts 
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of the accountholder, including debts of medical 
creditors of the accountholder. 
‘‘SEC. 255. ENFORCEMENT OF CONTRIBUTION REQUIRE-
MENTS. 
‘‘(a) PENALTIES FOR FAILURE TO ESTABLISH SO-
CIAL SECURITY PAYROLL DEDUCTION PLAN.—Any em-
ployer who fails to meet the requirements of section 
252(b) for any calendar year shall be subject to a civil 
penalty of not to exceed the greater of— 
‘‘(1) $50,000, or 
‘‘(2) $1,000 for each eligible individual of such 
employer as of the beginning of such calendar year. 
‘‘(b) PENALTIES FOR FAILURE TO MAKE DEDUC-
TIONS REQUIRED UNDER PLAN.—Any employer who fails 
to timely deduct in full, pursuant to section 252(a)(1), the 
amount from the wages of a participating individual re-
quired under an applicable social security payroll deduc-
tion plan, shall be subject to a civil penalty of not to ex-
ceed $50 for each such failure. 
‘‘(c) PENALTIES FOR FAILURE TO PAY DEDUCTED 
WAGES TO INDIVIDUAL SOCIAL SECURITY RETIREMENT 
ACCOUNT.— 
‘‘(1) IN GENERAL.—Any employer who— 
‘‘(A) fails to timely pay in full, in accord-
ance with section 252(a)(1), such individual’s 
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part B personal social security contribution de-
scribed in section 251(7)(B) to a personal social 
security account established and maintained for 
such individual pursuant to section 252(b), or 
‘‘(B) fails to timely provide for investment 
of any such amount, pursuant to section 
252(d), 
shall be liable as described in paragraph (2). 
‘‘(2) LIABILITY.—In the case of any failure de-
scribed in paragraph (1) by an employer to pay or 
invest any amount deducted from the wages of a 
participating individual under a social security pay-
roll deduction plan, the employer— 
‘‘(A) shall be subject to a civil penalty of 
not to exceed 20 percent of the unpaid or 
uninvested amount, in addition to any penalty 
under subsection (a), and 
‘‘(B) shall be liable to the participating in-
dividual 
for 
interest 
on 
the 
unpaid 
or 
uninvested amount at a rate equal to 133 per-
cent of the Federal short-term rate under sec-
tion 1274(d)(1) of the Internal Revenue Code 
of 1986, calculated from the last day by which 
such amount was required to be so paid or in-
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vested to the date on which such amount is so 
paid or invested. 
‘‘(d) PENALTIES FOR FAILURE BY SELF-EMPLOYED 
INDIVIDUALS TO PAY CONTRIBUTIONS.— 
‘‘(1) IN GENERAL.—Any individual who— 
‘‘(A) fails to timely pay in full, as required 
under section 252(a)(2), such individual’s part 
B personal social security contribution de-
scribed in section 251(7)(B) to a personal social 
security account established and maintained by 
such individual pursuant to section 252(c), or 
‘‘(B) fails to timely provide for investment 
of any such amount, pursuant to section 
252(d), 
shall be liable as described in paragraph (2). 
‘‘(2) LIABILITY.—In the case of any failure de-
scribed in paragraph (1) by an individual to pay an 
amount or provide for investment of such amount, 
the individual shall be subject to a civil penalty of 
not to exceed 20 percent of the unpaid or uninvested 
amount, plus interest on the unpaid amount at a 
rate equal to 133 percent of the Federal short-term 
rate under section 1274(d)(1) of the Internal Rev-
enue Code of 1986, calculated from the last day by 
which such amount was required to be so paid or in-
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vested to the date on which such amount is so paid 
or invested. 
‘‘(e) RULES FOR APPLICATION OF SECTION.— 
‘‘(1) PENALTIES ASSESSED BY COMMISSIONER 
OF SOCIAL SECURITY.—Any civil penalty assessed by 
this section shall be imposed by the Commissioner of 
Social Security and collected in a civil action. 
‘‘(2) COMPROMISES.—The Commissioner may 
compromise the amount of any civil penalty imposed 
by this section. 
‘‘(3) AUTHORITY TO WAIVE PENALTY IN CER-
TAIN CASES.—The Commissioner may waive the ap-
plication of this section with respect to any failure 
if the Commissioner determines that such failure is 
due to reasonable cause and not to intentional dis-
regard of rules and regulations. 
‘‘SEC. 256. PERSONAL ACCOUNTS MANAGEMENT AND RE-
VIEW BOARD. 
‘‘(a) PERSONAL ACCOUNTS MANAGEMENT AND RE-
VIEW BOARD ESTABLISHED.—There is hereby estab-
lished, as an independent agency in the executive branch 
of the Government, a Personal Accounts Management and 
Review Board. 
‘‘(b) COMPOSITION AND APPOINTMENT.— 
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‘‘(III) the two remaining inde-
pendent trustees shall be appointed 
for a term of one year. 
‘‘(ii) VACANCIES.— 
‘‘(I) IN GENERAL.—A vacancy on 
the Board shall be filled in the man-
ner in which the original appointment 
was made and shall be subject to any 
conditions that applied with respect to 
the original appointment. 
‘‘(II) COMPLETION
OF
TERM.— 
An individual chosen to fill a vacancy 
shall be appointed for the unexpired 
term of the trustee replaced. 
‘‘(iii) EXPIRATION.—The term of any 
trustee shall not expire before the date on 
which the trustee’s successor takes office. 
‘‘(C) COMMENCEMENT
OF
TERMS.—The 
terms of the independent trustees first ap-
pointed under this paragraph shall commence 
on July 1 of the calendar year following the 
date of the enactment of the SMART Act of 
2009. 
‘‘(4) EXPENSES.—A trustee shall be paid trav-
el, per diem, and other necessary expenses under 
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subchapter I of chapter 57 of title 5 of the United 
States Code while traveling away from such trustee’s 
home or regular place of business in the perform-
ance of duties for the Board. 
‘‘(c) DUTIES.—The Personal Accounts Management 
and Review Board shall— 
‘‘(1) operate the Social Security Escrow Fund; 
‘‘(2) carry out its duties and responsibilities 
under this title; 
‘‘(3) designate and regulate qualified social se-
curity mutual funds; 
‘‘(4) designate and regulate qualified social se-
curity annuities; and 
‘‘(5) make such recommendations to the Presi-
dent and the Congress as it may from time to time 
deem advisable with respect to the operation of the 
programs established under this title (relating to the 
old age, survivors, and disability insurance program 
and the personal social security savings program), 
title VIII (relating to special benefits relating to cer-
tain World War II veterans), title XVI (relating to 
supplemental security income for the aged, blind, 
and disabled), title XVIII (relating to Medicare), 
and title XIX (relating to Medicaid). 
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The power of the Board to regulate qualified social secu-
rity mutual funds and qualified social security annuities 
shall not be construed to limit the regulatory authority 
of other Federal and State agencies that may regulate 
such funds or annuities. 
‘‘(d) SEAL.—The Board may adopt, alter, and use 
a seal. 
‘‘(e) EXERCISE OF POWERS.— 
‘‘(1) ACTION
BY
QUORUM.—The Board shall 
perform the duties and exercise the powers of the 
Board on a majority vote of a quorum of the Board. 
Two of the Government trustees plus four of the 
independent trustees shall constitute a quorum for 
the transaction of business. 
‘‘(2) VACANCIES.—A vacancy on the Board 
shall not impair the authority of a quorum of the 
Board to perform the functions and exercise the 
powers of the Board. 
‘‘(f) MEETINGS.—The Board shall meet— 
‘‘(1) not less than once during each month, and 
‘‘(2) at additional times at the call of the Chair-
man or a quorum of the Board. 
‘‘(g) LIMITATIONS ON INVESTMENTS.—The Board 
may not direct any person to invest or to cause to be in-
vested any amounts held in the personal social security 
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account of any individual in a specific qualified social secu-
rity mutual fund or to dispose of or cause to be disposed 
of any such investment. 
‘‘(h) DISCHARGE OF RESPONSIBILITIES.—The trust-
ees shall discharge their responsibilities solely in the inter-
est of the participating individuals and their beneficiaries 
under this part.’’. 
(b) SOCIAL SECURITY ESCROW FUND.— 
(1) MERGER OF FEDERAL OLD-AGE AND SUR-
VIVORS INSURANCE TRUST FUND AND FEDERAL DIS-
ABILITY INSURANCE TRUST FUND INTO SOCIAL SE-
CURITY ESCROW FUND.—Section 201 is amended by 
striking all that precedes subsection (g) and insert-
ing the following: 
‘‘SOCIAL SECURITY ESCROW FUND 
‘‘Establishment of Social Security Escrow Fund 
‘‘SEC. 201. (a)(1) IN GENERAL.—There is estab-
lished in the Treasury of the United States a trust fund 
to be known as the ‘Social Security Escrow Fund’. 
‘‘(2) BALANCE OF FUND.— 
‘‘(A) IN
GENERAL.—Subject to subparagraph 
(B), the Social Security Escrow Fund shall consist 
of— 
‘‘(i) the securities held by the Federal Old- 
Age and Survivors Insurance Trust Fund and 
the Federal Disability Insurance Trust Fund 
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and the amount standing to the credit of such 
Trust Funds on the effective date specified in 
section 2(g)(1) of the SMART Act of 2009, 
which securities and amount the Secretary of 
the Treasury shall transfer to the Social Secu-
rity Escrow Fund on such date, 
‘‘(ii) such gifts and bequests as may be 
made as provided in subsection (i)(1), and 
‘‘(iii) all amounts transferred to or depos-
ited into the Social Security Escrow Fund pur-
suant to subsection (b). 
‘‘(B) INVESTMENTS
AND
DISBURSEMENTS.— 
The balance in the Social Security Escrow Fund 
shall reflect the performance of investments of 
amounts in the Social Security Escrow Fund attrib-
utable to transferred or deposited amounts described 
in subparagraph (A) and reductions incurred 
through any disbursements from the Social Security 
Escrow Fund pursuant to subsection (d). 
‘‘(3) TRUSTEES.—The Personal Accounts Manage-
ment and Review Board (hereinafter in this section re-
ferred to as the ‘Board’) shall serve as trustees of the So-
cial Security Escrow Fund. The Secretary of the Treasury 
shall serve as Managing Trustee of the Social Security Es-
crow Fund. 
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‘‘(4) BUDGET AUTHORITY; APPROPRIATION.—This 
part constitutes budget authority in advance of appropria-
tions Acts and represents the obligation of the Board to 
provide for the payment of amounts provided under this 
part. The amounts held in the Social Security Escrow 
Fund are hereby appropriated for payment of such 
amounts and shall remain available without fiscal year 
limitation. 
‘‘Deposits Into Social Security Escrow Fund 
‘‘(b)(1) IN GENERAL.—During each calendar year 
commencing with or after the effective date specified in 
section 2(g)(1) of the SMART Act of 2009, the Secretary 
of the Treasury shall deposit into the Social Security Es-
crow Fund, from amounts available in the general fund 
of the Treasury, a total amount equal to the sum of— 
‘‘(A) 100 percent of the employer contribution 
(as defined in paragraph (3)) for the calendar year; 
‘‘(B) the amount of the taxes imposed under 
section 3101(b) of the Internal Revenue Code of 
1986 on the wages paid during the calendar year 
and the amount of the taxes imposed under section 
1401(b) of such Code on self-employment income de-
rived during taxable years ending with or during the 
calendar year; 
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‘‘(C) amounts received pursuant to section 
254(a) (relating to disposition of part B benefits of 
participating individuals electing to receive part A 
retirement benefits); 
‘‘(D) the budget reform amount (as defined in 
section 6(a) of the SMART Act of 2009) for the fis-
cal year ending during such calendar year; and 
‘‘(E) all amounts appropriated for periods dur-
ing such calendar year pursuant to section 1601 (re-
lating to supplemental security income). 
‘‘(2) TRANSFERS BASED ON ESTIMATES.— 
‘‘(A) IN
GENERAL.—The amounts deposited 
pursuant to paragraph (1) shall be transferred in at 
least monthly installments to the Social Security Es-
crow Fund. 
‘‘(B) DETERMINATION
OF
AMOUNTS.—The 
amounts transferred under subparagraph (A) shall 
be transferred from time to time from the general 
fund of the Treasury, such amounts to be deter-
mined on the basis of estimates, made by the Com-
missioner of Social Security based on the best infor-
mation available and certified to the Secretary of the 
Treasury, of the total amount specified in paragraph 
(1). Proper adjustments shall be made in amounts 
subsequently transferred to the extent prior esti-
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mates were in excess of or were less than the actual 
amounts to be transferred. The Secretary of the 
Treasury and the Board shall timely provide to the 
Commissioner of Social Security any information re-
quested by the Commissioner that the Commissioner 
deems necessary to make the estimates and deter-
minations required by this subparagraph. 
‘‘(3) EMPLOYER CONTRIBUTION.—For purposes of 
paragraph (1)(A), the term ‘employer contribution’ means, 
for any calendar year, the sum of— 
‘‘(A) the amount of the taxes imposed under 
section 3111 of the Internal Revenue Code of 1986 
with respect to the wages paid during the calendar 
year, and 
‘‘(B) 50 percent of the amount of the taxes im-
posed under section 1401 of such Code on self-em-
ployment income derived during taxable years ending 
with or during such calendar year. 
‘‘Investment of Amounts Held in the Social Security 
Escrow Fund 
‘‘(c) The Board shall invest the amounts held in the 
Social Security Escrow Fund in a diversified portfolio of 
investment grade bonds and debentures issued by corpora-
tions, partnerships, limited liability companies, or trusts, 
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whose principal places of business are located in the 
United States. 
‘‘Disbursements From Social Security Escrow Fund 
‘‘(d)(1) IN GENERAL.—Except as provided in this 
section, the sums in the Social Security Escrow Fund shall 
be available for disbursement solely— 
‘‘(A) for payment by the Board, in accordance 
with certifications by the Commissioner of Social Se-
curity pursuant to section 205(i), of— 
‘‘(i) part A retirement benefits; 
‘‘(ii) monthly insurance benefits under sub-
sections (d), (e), (f), (g), and (h) of section 202; 
‘‘(iii) disability insurance benefits under 
section 223; 
‘‘(iv) lump sum death benefits under sec-
tion 202(i); 
‘‘(B) for payment by the Board, in accordance 
with certifications which shall be made by the Com-
missioner of Social Security, of supplemental secu-
rity income benefits under title XVI; 
‘‘(C) for transfers to the Federal Hospital In-
surance Trust Fund, in the amount of Medicare 
benefits provided under part A of title XVIII; 
‘‘(D) for administrative expenses payable pursu-
ant to subsection (f); and 
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‘‘(E) to the extent there are excess funds as of 
the end of any fiscal year, for transfer to the general 
fund of the Treasury pursuant to paragraph (2)(A). 
‘‘(2) TREATMENT OF EXCESS FUNDS IN THE SOCIAL 
SECURITY ESCROW FUND.— 
‘‘(A) IN GENERAL.—In any case in which there 
are excess funds in the Social Security Escrow Fund 
as of the end of any fiscal year, the Secretary of the 
Treasury shall, as soon as practicable after the end 
of such fiscal year, transfer from the such Fund to 
the general fund of the Treasury an amount equal 
to the amount of such excess funds. 
‘‘(B) BUDGETARY RULES IN CONNECTION WITH 
EXCESS FUNDS.—For budgetary rules relating to ex-
cess funds in the Social Security Escrow Fund, see 
section 316 of the Congressional Budget Act of 
1974 (relating to dedication of social security sur-
pluses to reduction in the public debt). 
‘‘(3) EXCESS FUNDS.—For purposes of this sub-
section, the term ‘excess funds’ means, in connection with 
any fiscal year, funds held by the Social Security Escrow 
Fund as of the end of the fiscal year in excess of $100 
billion that the Commissioner of Social Security deter-
mines will not be necessary in the Social Security Escrow 
Fund, taking into account projected receipts of such Fund 
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and projected outlays of such Fund, to meet the obliga-
tions set forth in subparagraphs (A) through (D) of para-
graph (1) within the next 20 years. 
‘‘(4) LIMITATION.—The sums in the Social Security 
Escrow Fund shall not be appropriated for any purpose 
other than the purposes specified in this section and may 
not be used for any other purpose. 
‘‘Borrowing Authorized 
‘‘(e) If the amounts held by Social Security Escrow 
Fund are insufficient to pay the disbursements authorized 
and required by this section, the Board may issue to the 
Secretary of the Treasury notes or other obligations in an 
aggregate amount equal to the amount of the insuffi-
ciency, in such forms and denominations, bearing such 
maturities, and subject to such terms and conditions as 
may be prescribed by such Secretary. Such notes or other 
obligations shall bear interest at a rate determined by such 
Secretary, taking into consideration the current average 
market yield on outstanding marketable obligations of the 
United States of comparable maturities during the month 
preceding the issuance of such notes or other obligations 
of the Board. Such Secretary shall purchase any notes or 
other obligations issued by the Board under this sub-
section, and for that purpose such Secretary may use as 
a public debt transaction the proceeds from the sale of 
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any securities issued under chapter 31 of title 31, United 
States Code, and the purposes for which securities may 
be issued under that chapter are extended to include any 
purchase of such notes and obligations. Such Secretary 
may at any time sell any of the notes or other obligations 
acquired by such Secretary under this subsection. All re-
demptions, purchases, and sales by such Secretary of such 
notes or other obligations shall be treated as public debt 
transactions of the United States. 
‘‘Government Accountability Office Report 
‘‘(f)(1) IN GENERAL.—The Comptroller General of 
the United States shall annually audit the financial state-
ments of the Social Security Escrow Fund and report to 
each House of the Congress on— 
‘‘(A) the operations of the Social Security Es-
crow Fund, 
‘‘(B) the reasonableness of the administrative 
expenses incurred, 
‘‘(C) the advisability of the investments made 
with funds in the Social Security Escrow Fund, and 
‘‘(D) such other matters as the Comptroller 
General may deem desirable. 
‘‘(2) RECOMMENDATIONS.—The Secretary of the 
Treasury, the Commissioner of Social Security, and the 
Board shall timely provide the Comptroller General with 
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whatever information is requested by the Comptroller Gen-
eral. The Comptroller General shall, in the Comptroller 
General’s report, make recommendations to each House 
of the Congress and the Board as he deems appropriate 
or advisable.’’. 
(2) CONFORMING AMENDMENTS; RULE OF CON-
STRUCTION.— 
(A) AMENDMENTS TO SECTION 201.—Sec-
tion 201 of such Act is amended further— 
(i) in subsection (g)(1)(A), by striking 
‘‘Managing Trustee of the Trust Funds’’ 
and all that follows through ‘‘into the 
Treasury’’ and inserting ‘‘Secretary of the 
Treasury shall pay from the Social Secu-
rity Escrow Fund, the Federal Hospital 
Insurance Trust Fund, and the Federal 
Supplementary 
Insurance 
Trust 
Fund 
(hereinafter in this paragraph referred to 
as the ‘Trust Funds’) into the Treasury’’; 
(ii) by striking ‘‘Managing Trustee’’ 
each place such term otherwise appears 
and inserting ‘‘Secretary of the Treasury’’; 
(iii) by striking the last 2 sentences of 
subsection (g)(1)(A); 
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inserting ‘‘Board considers such action ad-
visable, the Board’’; 
(x) by striking subsection (h); 
(xi) in subsection (i)(1), by striking 
‘‘the Federal Old-Age and Survivors Insur-
ance Trust Fund, the Federal Disability 
Insurance Trust Fund,’’ and inserting ‘‘the 
Social Security Escrow Fund,’’; 
(xii) in subsection (i)(2)(B), by strik-
ing ‘‘Federal Old-Age and Survivors Insur-
ance Trust Fund’’ and inserting ‘‘Social 
Security Escrow Fund’’; 
(xiii) in subsection (j), by striking 
‘‘the Federal Old-Age and Survivors Insur-
ance Trust Fund, or the Federal Disability 
Insurance Trust Fund (as determined ap-
propriate by the Commissioner of Social 
Security)’’ and inserting ‘‘the Social Secu-
rity Escrow Fund’’; 
(xiv) in subsection (k), by striking 
‘‘the Federal Disability Insurance Trust 
Fund and the Federal Old-Age Insurance 
Trust Fund, as determined appropriate by 
the Commissioner of Social Security’’ and 
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inserting ‘‘the Social Security Escrow 
Fund’’; 
(xv) by striking subsection (l); 
(xvi) in subsection (m)(3), by striking 
‘‘one of the Trust Funds’’ and inserting 
‘‘the Social Security Escrow Fund’’, and 
by striking ‘‘such Trust Fund’’ each place 
it appears and inserting ‘‘such Fund’’; 
(xvii) by striking subsection (n); and 
(xviii) by redesignating subsections 
(i), (j), (k), and (m) (as amended by this 
subparagraph) as subsections (h), (i), (j), 
and (k), respectively. 
(B) OTHER CONFORMING AMENDMENTS.— 
(i) Title II of the Social Security Act 
is amended— 
(I) in section 202(x)(2)(B)(iii) 
(42 
U.S.C. 
402(x)(2)(B)(iii)), 
by 
striking ‘‘the Federal Old-Age and 
Survivors Insurance Trust Fund and 
the 
Federal 
Disability 
Insurance 
Trust Fund, as appropriate,’’ and in-
serting ‘‘the Social Security Escrow 
Fund’’; 
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(II) in section 206(d)(5) (42 
U.S.C. 406(d)(5)), by striking ‘‘the 
Federal Old-Age and Survivors Insur-
ance Trust Fund and the Federal 
Disability Insurance Trust Fund, as 
appropriate’’ and inserting ‘‘the Social 
Security Escrow Fund’’; 
(III) in section 208(b)(5) (42 
U.S.C. 408(b)(5)), by striking ‘‘the 
Federal Old-Age and Survivors Insur-
ance Trust Fund, or the Federal Dis-
ability Insurance Trust Fund, as ap-
propriate’’ and inserting ‘‘the Social 
Security Escrow Fund’’; 
(IV) in section 215(i)(1)(F) (42 
U.S.C. 415(i)(1)(F)), by striking ‘‘the 
Federal Old-Age and Survivors Insur-
ance Trust Fund’’ each place it ap-
pears and inserting ‘‘the Social Secu-
rity Escrow Fund’’; 
(V) in section 217(g)(1)(A) (42 
U.S.C. 417(g)(1)(A)), by striking ‘‘the 
Federal Old-Age and Survivors Insur-
ance Trust Fund, the Federal Dis-
ability Insurance Trust Fund, and’’ 
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and inserting ‘‘the Social Security Es-
crow Fund and’’; 
(VI) in section 221(e) (42 U.S.C. 
421(e)), by striking the last sentence; 
(VII) in section 222(d)(1) (42 
U.S.C. 422(d)(1)), by striking ‘‘the 
Federal Old-Age and Survivors Insur-
ance Trust Fund and the Federal 
Disability Insurance Trust Fund’’ and 
inserting ‘‘the Social Security Escrow 
Fund’’; 
(VIII) 
by 
striking 
section 
222(d)(4) (42 U.S.C. 422(d)(4)) and 
inserting the following: 
‘‘(4) The Commissioner of Social Security shall 
determine according to such methods and procedures 
as the Commissioner may deem appropriate the total 
amount to be reimbursed by money paid from the 
Social Security Escrow Fund for the cost of services 
under this subsection.’’; and 
(IX) in section 228(g) (42 U.S.C. 
428(g)), by striking ‘‘the Federal Old- 
Age and Survivors Insurance Trust 
Fund’’ and inserting ‘‘the Social Se-
curity Escrow Fund’’. 
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(ii) Title VII of such Act is amend-
ed— 
(I) in section 703(j) (42 U.S.C. 
903(j)), by striking ‘‘the Federal Dis-
ability Insurance Trust Fund, the 
Federal Old-Age and Survivors Insur-
ance Trust Fund,’’ and inserting ‘‘the 
Social Security Escrow Fund’’; 
(II) in section 709 (42 U.S.C. 
910), by striking ‘‘the Board of 
Trustees of the Federal Old-Age and 
Survivors Insurance Trust Fund and 
the 
Federal 
Disability 
Insurance 
Trust Fund, the Federal Hospital In-
surance Trust Fund, or the Federal 
Supplementary 
Medical 
Insurance 
Trust Fund determines at any time 
that the balance ratio of any such 
Trust Fund’’ in subsection (a) and in-
serting ‘‘the Personal Accounts Man-
agement and Review Board or the 
Board of Trustees of the Federal 
Hospital Insurance Trust Fund or the 
Federal Supplementary Medical In-
surance Trust Fund determines at 
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any time that the balance ratio of the 
trust fund consisting of the Social Se-
curity Escrow Fund (in the case of 
the Personal Accounts Management 
and Review Board) or either the Fed-
eral Hospital Insurance Trust Fund 
or the Federal Supplementary Medical 
Insurance Trust Fund (in the case of 
such Board of Trustees)’’, by striking 
‘‘for amounts which will be paid from 
the Federal Old-Age and Survivors 
Insurance Trust Fund and the Fed-
eral 
Disability 
Insurance 
Trust 
Fund,’’ and inserting ‘‘for amounts 
which will be paid from the Social Se-
curity Escrow Fund,’’ and by striking 
‘‘Trust Fund’’ each other place it ap-
pears and inserting ‘‘trust fund’’; and 
(III) 
in 
section 
710(a) 
(42 
U.S.C. 911(a)) by striking ‘‘the Fed-
eral Old-Age and Survivors Insurance 
Trust Fund and the Federal Dis-
ability Insurance Trust Fund’’ and in-
serting ‘‘the Social Security Escrow 
Fund’’. 
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(IV) in section 1148(j)(1)(A) (42 
U.S.C. 1320b–19(j)(1)(A)), by strik-
ing ‘‘the Federal Old-Age and Sur-
vivors Insurance Trust Fund and the 
Federal Disability Insurance Trust 
Fund’’ and inserting ‘‘the Social Se-
curity Escrow Fund’’, and by striking 
the last sentence. 
(iv) Title XVIII of such Act is amend-
ed— 
(I) in section 1817(g) (42 U.S.C. 
1395i(g)), by striking ‘‘from the Fed-
eral Old-Age and Survivors Insurance 
Trust Fund and from the Federal 
Disability Insurance Trust Fund’’ and 
inserting ‘‘from the Social Security 
Escrow Fund’’; 
(II) in section 1817(j)(1) (42 
U.S.C. 1395i(j)(1)), by striking ‘‘from 
either the Federal Old-Age and Sur-
vivors Insurance Trust Fund or the 
Federal Disability Insurance Trust 
Fund’’ and inserting ‘‘from the Social 
Security Escrow Fund’’; 
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(III) in section 1817(j)(3)(B)(i) 
(42 
U.S.C. 
1395i(j)(3)(B)(i)), 
by 
striking ‘‘the Federal Old-Age and 
Survivors Insurance Trust Fund or 
the 
Federal 
Disability 
Insurance 
Trust Fund’’ and inserting ‘‘the So-
cial Security Escrow Fund’’; 
(IV) in section 1817(j)(3)(B)(i) 
(42 
U.S.C. 
1395i(j)(3)(B)(i)), 
by 
striking ‘‘the Federal Old-Age and 
Survivors Insurance Trust Fund and 
the 
Federal 
Disability 
Insurance 
Trust Fund’’ and inserting ‘‘the So-
cial Security Escrow Fund’’; 
(V) in section 1817(j)(5)(B)(i) 
(42 
U.S.C. 
1395i(j)(5)(B)(i)), 
by 
striking ‘‘the Federal Old-Age and 
Survivors Insurance Trust Fund and 
the 
Federal 
Disability 
Insurance 
Trust Fund’’ and inserting ‘‘the So-
cial Security Escrow Fund’’; 
(VI) in section 1817(j)(3)(B)(ii) 
(42 U.S.C. 1395i(j)(3)(B)(ii)), by 
striking ‘‘the Federal Old-Age and 
Survivors Insurance Trust Fund and 
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the 
Federal 
Disability 
Insurance 
Trust Fund’’ and inserting ‘‘the So-
cial Security Escrow Fund’’; 
(VII) in section 1817, by adding 
at the end the following new sub-
section: 
‘‘(l) TRANSFERS FROM SOCIAL SECURITY ESCROW 
FUND.—There are hereby transferred periodically to the 
Trust Fund from the Social Security Escrow Fund 
amounts provided under section 201(d)(1)(C).’’; 
(VIII) in section 1840(a)(2) (42 
U.S.C. 1395s(a)(2)), by striking ‘‘the 
Federal Old-Age and Survivors Insur-
ance Trust Fund and the Federal 
Disability Insurance Trust Fund’’ and 
inserting ‘‘the Social Security Escrow 
Fund’’; and 
(IX) in section 1841(f) (42 
U.S.C. 1395t(f)), by striking ‘‘from 
the Federal Old-Age and Survivors 
Insurance Trust Fund and from the 
Federal Disability Insurance Trust 
Fund’’ and inserting ‘‘from the Social 
Security Escrow Fund’’. 
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(v) AMENDMENTS TO THE RAILROAD 
RETIREMENT ACT OF 1974.—Section 7 of 
the Railroad Retirement Act of 1974 (45 
U.S.C. 231e) is amended— 
(I) in subsection (b)(2) (45 
U.S.C. 231e(b)(2)), by striking ‘‘the 
Managing Trustee of the Federal Old- 
Age and Survivors Insurance Trust 
Fund and the Federal Disability In-
surance Trust Fund’’ and inserting 
‘‘the Secretary of the Treasury’’; 
(II) in subsection (c)(2) (45 
U.S.C. 231e(c)(2)), by striking ‘‘the 
Federal Old-Age and Survivors Insur-
ance Trust Fund, the Federal Dis-
ability Insurance Trust Fund, and the 
Federal Hospital Insurance Trust 
Fund would place each such Trust 
Fund’’ and inserting ‘‘either of the 
trust funds consisting of the Social 
Security Escrow Fund and the Fed-
eral Hospital Insurance Trust Fund 
would place such trust fund’’, by 
striking ‘‘from the Federal Old-Age 
and Survivors Insurance Trust Fund, 
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the 
Federal 
Disability 
Insurance 
Trust Fund, or the Federal Hospital 
Insurance Trust or to any such Trust 
Fund’’ and inserting ‘‘from the Social 
Security Escrow Fund or the Federal 
Hospital Insurance Trust Fund or to 
either such trust fund’’ and by strik-
ing ‘‘Trust Fund’’ each other place it 
appears and inserting ‘‘trust fund’’; 
and 
(III) in subsection (c)(4) (45 
U.S.C. 231(c)(4)), by striking ‘‘the 
Federal Old-Age and Survivors Insur-
ance Trust Fund, the Federal Dis-
ability Insurance Trust Fund, and the 
Federal Hospital Insurance Trust 
Fund’’ and inserting ‘‘the trust funds 
consisting of the Social Security Es-
crow Fund and the Federal Hospital 
Insurance Trust Fund’’, and by strik-
ing ‘‘Trust Funds’’ each place it ap-
pears and inserting ‘‘trust funds’’. 
(vi) 
RULE
OF
CONSTRUCTION.— 
Whenever any reference is made in any 
provision of law (other than this title or a 
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provision of law amended by this title), 
regulation, rule, record, or document to the 
Federal Old-Age and Survivors Insurance 
Trust Fund, the Federal Disability Insur-
ance Trust Fund, or both such Trust 
Funds, such reference shall be considered 
a reference to the Social Security Escrow 
Fund. 
(c) AMOUNTS DEDUCTED TO BE SHOWN ON W–2 
STATEMENTS.—Subsection (a) of section 6051 of the In-
ternal Revenue Code of 1986 (relating to receipts for em-
ployees) is amended— 
(1) by striking ‘and’ at the end of paragraph 
(8); 
(2) by striking the period at the end of para-
graph (9) and inserting ‘‘, and’’; and 
(3) by inserting after paragraph (9) the fol-
lowing new paragraph: 
‘‘(10) the total amount deducted from the em-
ployee’s wages under a social security payroll deduc-
tion plan established under part B of title II of the 
Social Security Act.’’. 
(d) EXEMPTION FROM ERISA REQUIREMENTS.— 
Subsection (b) of section 4 of the Employee Retirement 
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Income Security Act of 1974 (29 U.S.C. 1003(b)) is 
amended— 
(1) by striking ‘‘or’’ at the end of paragraph 
(4); 
(2) by striking the period at the end of para-
graph (5) and inserting ‘‘; or’’; and 
(3) by adding at the end the following new 
paragraph: 
‘‘(6) such plan is a social security payroll de-
duction plan established under part B of title II of 
the Social Security Act.’’. 
(e) COMPENSATION OF PERSONAL ACCOUNTS MAN-
AGEMENT AND REVIEW BOARD.— 
(1) COMPENSATION
OF
CHAIRMAN.—Section 
5314 of title 5 of the United States Code (relating 
to positions at level III of the Executive Schedule) 
is amended by adding at the end the following ‘‘.’’ 
‘‘Chairman, Personal Accounts Management 
and Review Board.’’. 
(2) COMPENSATION OF INDEPENDENT TRUST-
EES.—Section 5315 of such title 5 (relating to posi-
tions at level IV of the Executive Schedule) is 
amended by adding at the end the following: 
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‘‘Independent Trustee (other than Chairman), 
Personal 
Accounts 
Management 
and 
Review 
Board.’’. 
(f) CONFORMING AMENDMENTS.—Section 201(h) of 
such Act (42 U.S.C. 401(h)) is amended— 
(1) by striking ‘‘All other’’ in the second sen-
tence and inserting ‘‘Except as provided in section 
256, all other’’; and 
(2) by adding at the end the following new sen-
tence: ‘‘Any reference in this part to benefits under 
this title shall be deemed a reference to benefits en-
titlement to which arises under this part.’’. 
(g) EFFECTIVE DATES.— 
(1) IN GENERAL.—Except as provided in para-
graph (2), the amendments made by this section 
shall take effect January 1 of the second calendar 
year following the date of the enactment of this Act. 
(2) ESTABLISHMENT OF PERSONAL ACCOUNTS 
MANAGEMENT AND REVIEW BOARD.—Section 256 of 
the Social Security Act (as added by this section) 
shall take effect on the date of the enactment of this 
Act. 
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SEC. 3. MEDICARE PROGRAM REVISION. 
(a) IN GENERAL.—Title XVIII of the Social Security 
Act is amended by inserting after section 1808 the fol-
lowing new section: 
‘‘MEDICARE PROGRAM REVISIONS IN CONNECTION WITH 
ESTABLISHMENT
OF
PERSONAL
SOCIAL
SECURITY 
ACCOUNTS 
‘‘SEC. 1809. (a) PHASE-IN OF INCREASED COINSUR-
ANCE.— 
‘‘(1) IN GENERAL.—Notwithstanding any other 
provision of law, there is hereby imposed, with re-
spect to the amount of benefits for items and serv-
ices furnished in a year (beginning with 2034) under 
this title, coinsurance in the participation percentage 
specified in paragraph (2) for the year. Such coin-
surance shall apply after the application of any cost- 
sharing (including deductibles and copayments) that 
are otherwise applicable under this title. 
‘‘(2) PARTICIPATION PERCENTAGE.—The par-
ticipation percentage for any year shall be deter-
mined in accordance with the following: 
‘‘Participation 
percentage is: 
Year: 
2.00 percent .......................................................................................
2034
4.00 percent .......................................................................................
2035
6.00 percent .......................................................................................
2036
8.00 percent .......................................................................................
2037
11.00 percent .....................................................................................
2038
14.00 percent .....................................................................................
2039
17.00 percent .....................................................................................
2040
20.00 percent .....................................................................................
2041
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‘‘Participation 
percentage is: 
Year: 
24.00 percent .....................................................................................
2042
28.00 percent .....................................................................................
2043
32.00 percent .....................................................................................
2044
36.00 percent .....................................................................................
2045
40.00 percent .....................................................................................
2046
45.00 percent .....................................................................................
2047
50.00 percent .....................................................................................
2048
55.00 percent .....................................................................................
2049
60.00 percent .....................................................................................
2050
65.00 percent .....................................................................................
2051
70.00 percent .....................................................................................
2052
75.00 percent .....................................................................................
2053
80.00 percent .....................................................................................
2054
85.00 percent .....................................................................................
2055
90.00 percent .....................................................................................
2056
95.00 percent .....................................................................................
2057
100.00 percent ...................................................................................
2058. 
‘‘(b) RULES RELATING TO APPLICATION OF ADDI-
TIONAL COINSURANCE.— 
‘‘(1) PART
D.—In applying subsection (a) 
under part D (and under part C to MA–PD 
plans)— 
‘‘(A) the standard prescription drug cov-
erage under section 1860D–2(b) shall be modi-
fied through the application of the additional 
coinsurance under subsection (a); and 
‘‘(B) in applying section 1860D–14, such 
coinsurance shall be treated as beneficiary coin-
surance described in section 1860D–2(b)(2). 
‘‘(2) MEDICARE SAVINGS PROGRAM.—In apply-
ing title XIX, the additional coinsurance under sub-
section (a) shall be treated as coinsurance described 
in section 1905(p)(3)(B). 
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‘‘(3) MEDIGAP.—The benefits required of medi-
care supplemental policies under section 1882 shall 
be determined without regard to such additional co-
insurance and no payments shall be made under 
such a policy for such additional coinsurance. 
‘‘(4) GROUP HEALTH PLANS.—Unless otherwise 
specifically provided after the date of the enactment 
of this section, no provision of any group health plan 
that refers to coinsurance or cost-sharing under this 
title shall be treated as including such additional co-
insurance. 
‘‘(5) COVERAGE.—Nothing in this section shall 
be construed as preventing the payment of addi-
tional coinsurance under subsection (a) from being 
made— 
‘‘(A) from proceeds from a personal social 
security account under section 252; or 
‘‘(B) from coverage under a high deduct-
ible health plan (as defined in section 223(c)(2) 
of the Internal Revenue Code of 1986) or under 
any other health policy or plan, other than a 
medicare supplemental policy. 
‘‘(c) LIMITATION ON REELECTION OF PART B OR 
PART D COVERAGE.—On or after January 1, 2034, if an 
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individual is eligible for coverage under part B or part D 
and— 
‘‘(1) does not elect such coverage, or 
‘‘(2) elects such coverage and subsequently 
change the election so as to no longer have such cov-
erage, 
such an election shall be irrevocable and the individual 
may not subsequently elect the respective coverage.’’. 
(b) REQUIREMENT FOR HIGH DEDUCTIBLE INSUR-
ANCE FOR MEDICARE RETIREES.— 
(1) IN GENERAL.—For each month (beginning 
with January following the period of 25 calendar 
years following the date of the enactment of this 
Act) in which an individual is 65 years of age or 
older and is eligible for benefits under part A, or to 
enroll for benefits under part B, of title XVIII of the 
Social Security Act, the individual is required to be 
enrolled under a high deductible health plan (as de-
fined in section 223(c)(2) of the Internal Revenue 
Code of 1986) or under another health benefits plan 
that includes benefits at least as comprehensive as 
those provided in such a high deductible health plan. 
(2) IMPOSITION OF TAX ON FAILURE TO OB-
TAIN COVERAGE.—Subchapter A of chapter 1 of the 
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Internal Revenue Code of 1986 is amended by add-
ing at the end the following new part: 
‘‘PART VIII—TAX ON FAILURE OF MEDICARE RE-
TIREES TO OBTAIN QUALIFIED HEALTH IN-
SURANCE COVERAGE 
‘‘Sec. 59B. Failure of Medicare retirees to obtain qualified health insurance 
coverage. 
‘‘SEC. 59B. FAILURE OF MEDICARE RETIREES TO OBTAIN 
QUALIFIED HEALTH INSURANCE COVERAGE. 
‘‘(a) IN GENERAL.—In the case of any individual who 
is eligible for benefits under part A, or to enroll for bene-
fits under part B, of title XVIII of the Social Security 
Act, there is hereby imposed a tax with respect to each 
month beginning in the taxable year with respect to which 
such individual is not covered under qualified health insur-
ance at all times during such month. 
‘‘(b) AMOUNT OF TAX.—The tax imposed under sub-
section (a) with respect to any individual for any month 
shall be equal to the greater of— 
‘‘(1) the amount determined by the Secretary of 
Health and Human Services to be equal to the cost 
of coverage under a high deductible health plan for 
such month, or 
‘‘(2) 1⁄12 of the increase in such individual’s tax 
liability which would occur under section 1 for the 
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taxable year in which such month begins if section 
139B did not apply for such taxable year. 
‘‘(c) EXCEPTION FOR MONTHS BEFORE INDIVIDUAL 
ATTAINS AGE 65.—Subsection (a) shall not apply with re-
spect to any individual for any month unless such indi-
vidual has attained age 65 as of the first day of such 
month. 
‘‘(d) QUALIFIED HEALTH INSURANCE.—For pur-
poses of this section, the term ‘qualified health insurance’ 
means a high deductible health plan (as defined in section 
223(c)(2) of the Internal Revenue Code of 1986) or an-
other health benefits plan that includes benefits at least 
as comprehensive as those provided in such a high deduct-
ible health plan.’’. 
(3) NOTIFICATION OF TREASURY BY HHS OF 
FAILURES.—If the Secretary of Health and Human 
Services determines that an individual has failed to 
meet the requirement of paragraph (1) for a month, 
the Secretary shall inform the Secretary of the 
Treasury of such fact. 
(4) 
AVAILABILITY
OF
TAX
RECEIPTS.— 
Amounts collected under section 59B of the Internal 
Revenue Code of 1986 shall be deposited into an ac-
count in the Treasury that shall be available to the 
Secretary of Health and Human Services to reim-
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burse hospitals and other health care providers for 
bad debts related to the provision of health care 
services to individuals with respect to whom a tax is 
imposed under such section. 
SEC. 4. EMPLOYMENT TAXES, TAX ON SELF-EMPLOYMENT 
INCOME. 
(a) FICA TAX ON EMPLOYERS.—Section 3111 of the 
Internal Revenue Code of 1986 is amended by adding at 
the end the following new subsection: 
‘‘(d) REDUCTION IN RATE OF TAX TO REFLECT 
FUNDING OF SOCIAL SECURITY ESCROW FUND.— 
‘‘(1) IN GENERAL.—If the Secretary makes the 
certification described in paragraph (2) in any cal-
endar year, the rate of tax imposed by subsection (a) 
shall be reduced by the Secretary for the next cal-
endar year to a rate such that— 
‘‘(A) the Social Security Escrow Fund is 
projected not to have excess funds during such 
next calendar year, and 
‘‘(B) the rate of tax imposed by section 
1401(a) is equal to the sum of the tax imposed 
by subsection (a) and section 3101(a). 
‘‘(2) CERTIFICATION.—If in any calendar year 
the Social Security Escrow Fund is projected— 
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‘‘(A) to have excess funds during the next 
calendar year, and 
‘‘(B) to have no need to borrow funds for 
the next 10 calendar years, 
then the Secretary shall certify such projection not 
later than September 30th of calendar year in which 
such projection was made. 
‘‘(3) EXCESS
FUNDS.—For purposes of this 
subsection, the term ‘excess funds’ means that the 
Social Security Escrow Fund will not have a balance 
below $100 billion at any time during the calendar 
year.’’. 
(b) TAX ON SELF-EMPLOYMENT INCOME.—Section 
1401 of such Code is amended by adding at the end the 
following new subsections: 
‘‘(d) REDUCTION IN RATE OF TAX TO REFLECT 
FUNDING OF SOCIAL SECURITY ESCROW FUND.— 
‘‘(1) IN GENERAL.—If the Secretary makes the 
certification described in paragraph (2) in any cal-
endar year, the rate of tax imposed by subsection (a) 
shall be reduced by the Secretary for taxable years 
beginning in the next calendar year to a rate such 
that— 
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‘‘(A) the Social Security Escrow Fund is 
projected not to have excess funds during such 
next calendar year, and 
‘‘(B) the rate of tax imposed by subsection 
(a) is equal to the sum of the tax imposed by 
section 3111(a) and section 3101(a). 
‘‘(2) CERTIFICATION.—If in any calendar year 
the Social Security Escrow Fund is projected by the 
Social Security Administration— 
‘‘(A) to have excess funds during the next 
calendar year, and 
‘‘(B) to have no need to borrow funds for 
the next 10 calendar years, 
then the Secretary shall certify such projection not 
later than September 30th of calendar year in which 
such projection was made. 
‘‘(3) EXCESS FUNDS.—For purposes of the pre-
ceding paragraph, excess funds means that the So-
cial Security Escrow Fund will not have a balance 
below $100 billion at any time during the calendar 
year. 
‘‘(e) REDUCTION IN RATE OF TAX TO REFLECT 
FUNDING OF PERSONAL SOCIAL SECURITY ACCOUNT.— 
The amount of the tax which would (but for this sub-
section) be imposed by subsection (a) on the self-employ-
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ment income of an individual for a taxable year shall be 
reduced (but not below zero) by any amount the self-em-
ployed individual deposits in the personal social security 
account of the individual under section 251(b)(1) of the 
Social Security Act for the taxable year.’’. 
(c) FICA TAX ON EMPLOYEES.—Section 3101 of 
such Code is amended by adding at the end the following 
new subsection: 
‘‘(d) REDUCTION IN RATE OF TAX TO REFLECT 
FUNDING OF PERSONAL SOCIAL SECURITY ACCOUNT.— 
The amount of the tax which would (but for this sub-
section) be imposed by subsection (a) on the income of 
any individual for any calendar year shall be reduced (but 
not below zero) by any amount the employer of such indi-
vidual pays to the individual’s personal social security ac-
count under section 251(a)(2)(B) of the Social Security 
Act for the calendar year.’’. 
(d) SOCIAL SECURITY AND MEDICARE CONTRIBU-
TIONS NOT REQUIRED WITH RESPECT TO RETIREES.— 
(1) Section 3101 of such Code is amended by 
adding at the end the following new subsection: 
‘‘(e) NO FICA TAX WITH RESPECT TO INDIVIDUAL 
WHO HAS ATTAINED RETIREMENT AGE.—The tax im-
posed by this section shall not be imposed on the income 
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benefit) is amended by adding at the end the fol-
lowing new flush sentence: 
‘‘Such term does not include any distribution from 
a personal social security account or any amount re-
ceived as an annuity under a qualified social security 
annuity.’’. 
(2) Part III of subchapter B of chapter 1 of 
such Code (relating to items specifically excluded 
from gross income) is amended by inserting after 
section 139A the following new section: 
‘‘SEC. 139B. DISTRIBUTIONS FROM PERSONAL SOCIAL SE-
CURITY ACCOUNTS AND QUALIFIED SOCIAL 
SECURITY ANNUITIES. 
‘‘Gross income shall not include any distribution from 
a personal social security account or any amount received 
as an annuity under a qualified social security annuity, 
including any disinvestment and transfer pursuant to sec-
tion 252(f) of the Social Security Act.’’. 
(b) EFFECTIVE DATE.—The amendments made by 
this section shall apply to distributions and amounts re-
ceived as an annuity after the date of the enactment of 
this Act. 
SEC. 6. FEDERAL BUDGET REFORMS. 
(a) ANNUAL
TRANSFER
OF
BUDGET
REFORM 
AMOUNT.—Not later than November 30 of each calendar 
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year commencing with or after the effective date referred 
to in section 2(g)(1) of this Act, the Secretary of Treasury 
shall transfer, from funds available in the general fund 
of the Treasury to the Social Security Escrow Fund, the 
budget reform amount (if any) for the fiscal year ending 
on September 30 of such year. Such budget reform 
amount for each such fiscal year is hereby appropriated, 
and shall remain available without fiscal year limitation, 
for the purposes set forth in section 252(b)(1)(D) of the 
Social Security Act (as amended by this Act). 
(b) BUDGET REFORM AMOUNT DEFINED.—For pur-
poses of this section, the term ‘‘budget reform amount’’ 
means, for any fiscal year, any tax revenues received by 
the Government of the United States during the previous 
fiscal year in excess of the target revenue amount for such 
previous fiscal year. 
(c) TARGET REVENUE AMOUNT.—For purposes of 
this section, the target revenue amount for a fiscal year 
is the amount set forth in connection with such fiscal year 
in the following table: 
For the following 
The target 
fiscal year: 
revenue amount is: 
2010 ..................................................................................
$2,226,583,000 
2011 ..................................................................................
$2,289,781,000 
2012 ..................................................................................
$2,351,340,000 
2013 ..................................................................................
$2,414,388,000 
2014 ..................................................................................
$2,476,624,000 
2015 ..................................................................................
$2,539,686,000 
2016 ..................................................................................
$2,602,374,000 
2017 ..................................................................................
$2,661,620,000 
2018 ..................................................................................
$2,713,839,000 
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For the following 
The target 
fiscal year: 
revenue amount is: 
2019 ..................................................................................
$2,759,941,000 
2020 ..................................................................................
$2,801,574,000 
2021 ..................................................................................
$2,844,392,000 
2022 ..................................................................................
$2,883,904,000 
2023 ..................................................................................
$2,930,783,000 
2024 ..................................................................................
$2,979,408,000 
2025 ..................................................................................
$3,025,851,000 
2026 ..................................................................................
$3,076,055,000 
2027 ..................................................................................
$3,125,712,000 
2028 ..................................................................................
$3,176,333,000 
2029 ..................................................................................
$3,223,483,000 
2030 ..................................................................................
$3,274,179,000 
2031 ..................................................................................
$3,323,715,000 
2032 ..................................................................................
$3,372,756,000 
2033 ..................................................................................
$3,426,555,000 
2034 ..................................................................................
$3,485,485,000 
2035 ..................................................................................
$3,541,705,000 
2036 ..................................................................................
$3,599,813,000 
2037 ..................................................................................
$3,666,494,000 
2038 ..................................................................................
$3,735,584,000 
2039 ..................................................................................
$3,809,846,000 
2040 ..................................................................................
$3,883,455,000 
2041 ..................................................................................
$3,955,701,000 
2042 ..................................................................................
$4,033,543,000 
2043 ..................................................................................
$4,113,343,000 
2044 ..................................................................................
$4,188,523,000 
2045 ..................................................................................
$4,270,982,000 
2046 ..................................................................................
$4,351,604,000 
2047 ..................................................................................
$4,434,549,000 
2048 ..................................................................................
$4,517,034,000 
2049 ..................................................................................
$4,600,903,000 
2050 ..................................................................................
$4,689,922,000 
2051 ..................................................................................
$4,783,922,000 
2052 ..................................................................................
$4,873,926,000 
2053 ..................................................................................
$4,969,960,000 
2054 ..................................................................................
$5,062,068,000 
2055 ..................................................................................
$5,159,031,000 
2056 ..................................................................................
$5,256,136,000 
2057 ..................................................................................
$5,354,613,000 
2058 ..................................................................................
$5,447,721,000 
2059 ..................................................................................
$5,549,438,000 
2060 ..................................................................................
$5,651,129,000 
2061 ..................................................................................
$5,752,442,000 
2062 ..................................................................................
$5,864,053,000 
2063 ..................................................................................
$5,978,264,000 
2064 ..................................................................................
$6,091,036,000 
2065 ..................................................................................
$6,217,270,000 
2066 ..................................................................................
$6,338,021,000 
2067 ..................................................................................
$6,454,702,000 
2068 ..................................................................................
$6,577,762,000 
2069 ..................................................................................
$6,698,285,000 
2070 ..................................................................................
$6,819,665,000. 
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(d) DEDICATION OF SOCIAL SECURITY SURPLUSES 
TO REDUCTION IN THE PUBLIC DEBT.— 
(1) IN
GENERAL.—Title III of the Congres-
sional Budget Act of 1974 is amended by adding at 
the end the following new section: 
‘‘DEDICATION OF SOCIAL SECURITY SURPLUSES TO 
REDUCTION IN THE PUBLIC DEBT 
‘‘SEC. 316. (a) IN GENERAL.— 
‘‘(1) CONCURRENT
RESOLUTIONS
ON
THE 
BUDGET.—It shall not be in order in the House of 
Representatives or the Senate to consider any con-
current resolution on the budget, or an amendment 
thereto or conference report thereon, that would set 
forth a deficit for any fiscal year for which there are 
projected excess assets in the Social Security Escrow 
Fund. 
‘‘(2) SPENDING
AND
TAX
LEGISLATION.—It 
shall not be in order in the House of Representatives 
or the Senate to consider any bill, joint resolution, 
amendment, motion, or conference report if— 
‘‘(A) the enactment of that bill or resolu-
tion, as reported; 
‘‘(B) the adoption and enactment of that 
amendment; or 
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‘‘(C) the enactment of that bill or resolu-
tion in the form recommended in that con-
ference report, 
would cause a deficit for any fiscal year for which 
there are projected excess assets in the Social Secu-
rity Escrow Fund. 
‘‘(b) ENFORCEMENT.— 
‘‘(1) BUDGETARY LEVELS WITH RESPECT TO 
CONCURRENT RESOLUTIONS ON THE BUDGET.—For 
purposes of enforcing any point of order under sub-
section (a)(1), the extent to which there is a deficit 
for any fiscal year shall be determined on the basis 
of budgetary aggregates set forth in the later of the 
concurrent resolution on the budget, as reported, or 
in the conference report on the concurrent resolution 
on the budget, adjusted to the maximum extent al-
lowable under all procedures that allow budgetary 
aggregates to be adjusted for legislation that would 
cause a decrease in any surplus or an increase in 
any deficit for any fiscal year covered by the concur-
rent resolution on the budget (other than procedures 
described in paragraph (2)(A)(ii)). 
‘‘(2) CURRENT
LEVELS
WITH
RESPECT
TO 
SPENDING AND TAX LEGISLATION.— 
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‘‘(A) IN GENERAL.—For purposes of en-
forcing subsection (a)(2), the extent to which 
there is a deficit for any fiscal year shall be— 
‘‘(i) calculated using the following as-
sumptions— 
‘‘(I) direct spending and revenue 
levels at the baseline levels underlying 
the most recently agreed to concur-
rent resolution on the budget; and 
‘‘(II) for the budget year, discre-
tionary spending levels at current law 
levels and, for outyears, discretionary 
spending levels at the baseline levels 
underlying the most recently agreed to 
concurrent resolution on the budget; 
and 
‘‘(ii) adjusted for changes in the sur-
plus or deficit levels set forth in the most 
recently agreed to concurrent resolution on 
the budget pursuant to procedures in such 
resolution that authorize adjustments in 
budgetary aggregates for updated economic 
and technical assumptions in the mid-ses-
sion report of the Director of the Congres-
sional Budget Office. 
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Such revisions shall be included in the first cur-
rent level report on the congressional budget 
submitted for publication in the Congressional 
Record after the release of such mid-session re-
port. 
‘‘(B) ADJUSTMENT IN ASSUMED REVENUE 
LEVELS TO REFLECT PROJECTED EXCESS AS-
SETS IN SOCIAL SECURITY ESCROW FUND.—For 
any fiscal year for which there are projected ex-
cess assets in the Social Security Escrow Fund, 
the amount of revenue levels assumed under 
subparagraph (A) shall be reduced, below the 
amount which would otherwise be assumed but 
for this subparagraph, by the amount of such 
projected excess assets. 
‘‘(C) EXCESS
ASSETS.—For purposes of 
this paragraph, the term ‘excess assets’ shall, in 
connection with any fiscal year, have the mean-
ing provided in 201(d)(3) of the Social Security 
Act in connection with such fiscal year. 
‘‘(c) WAIVER AND APPEAL.—Subsection (a) may be 
waived or suspended in the Senate only by an affirmative 
vote of three-fifths of the Members, duly chosen and 
sworn. An affirmative vote of three-fifths of the Members 
of the Senate, duly chosen and sworn, shall be required 
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in the Senate to sustain an appeal of the ruling of the 
Chair on a point of order raised under this section.’’. 
(2) CONFORMING AMENDMENT.—The item re-
lating to section 316 in the table of contents set 
forth in section 1(b) of the Congressional Budget 
and Impoundment Control Act of 1974 is amended 
to read as follows: 
‘‘Sec. 316. Dedication of social security surpluses to reduction in the public 
debt.’’. 
SEC. 7. CHANGE IN CONSUMER PRICE INDEX USED FOR 
COST-OF-LIVING INCREASES. 
(a) IN GENERAL.—Section 215(i)(1)(D) of the Social 
Security Act (42 U.S.C. 415(i)(1)(D)) is amended by 
striking ‘‘Consumer Price Index’’ and inserting ‘‘Chained 
Consumer Price Index for all Urban Consumers’’. 
(b) EFFECTIVE DATE.—The amendment made by 
subsection (a) shall apply with respect to increases under 
section 215(i)(2)(A)(ii) of the Social Security Act effective 
with the month of December of each calendar year begin-
ning after the date of the enactment of this Act. 
Æ 
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