I 
109TH CONGRESS 
1ST SESSION H. R. 1123 
To amend title II of the Social Security Act to establish an effective real 
annual rate of interest at 4.7 percent for special obligations issued 
to the Social Security trust funds. 
IN THE HOUSE OF REPRESENTATIVES 
MARCH 3, 2005 
Mr. SABO introduced the following bill; which was referred to the Committee 
on Ways and Means 
A BILL 
To amend title II of the Social Security Act to establish 
an effective real annual rate of interest at 4.7 percent 
for special obligations issued to the Social Security trust 
funds. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Preserving Social Se-
curity Act of 2005’’.
SEC. 2. INTEREST BORNE BY, AND INCREASES IN PAR 
VALUE OF, SPECIAL OBLIGATIONS ISSUED TO 
THE SOCIAL SECURITY TRUST FUNDS. 
Section 201(d) of the Social Security Act (42 U.S.C. 
401(d)) is amended— 
(1) by inserting ‘‘(1)’’ after ‘‘(d)’’; 
(2) by striking the fifth sentence and inserting 
the following new sentences: ‘‘Such obligations 
issued for purchase by the Trust Funds shall have 
maturities fixed with due regard for the needs of the 
Trust Funds and shall bear interest at an effective 
annual rate equal to 4.7 percent, which shall be paid 
to the Trust Funds semiannually. On June 30 and 
December 31 of each calendar year, and (with re-
spect to each obligation) on its date of maturity (or 
date of redemption, if prior to maturity), the Man-
aging Trustee shall adjust (subject to paragraph 
(2)) the par value of each obligation then held by ei-
ther of the Trust Funds and issued for purchase by 
such Trust Fund so as to equal the product derived 
by multiplying the current par value as of imme-
diately before the applicable date by the CPI adjust-
ment factor (defined in paragraph (3)(A)) for the 
obligation in connection with the month in which the 
applicable date occurs (rounded, if not a multiple of 
$0.01, to the nearest multiple of $0.01).’’; and
(3) by adding at the end the following new 
paragraphs: 
‘‘(2)(A) In any case in which the number of days in 
the actual adjustment period (defined in subparagraph 
(B)(i)) for an obligation differs from the number of days 
in the computation period (defined in subparagraph 
(B)(ii)) for the obligation, the amount by which the par 
value of an obligation is adjusted pursuant to paragraph 
(1) shall be an amount which bears the same ratio to the 
amount that would otherwise apply under paragraph (1) 
as the number of days in the actual adjustment period 
bears to the number of days in the computation period. 
‘‘(B) For purposes of subparagraph (A)— 
‘‘(i) The term ‘actual adjustment period’ for an 
obligation means the period beginning with— 
‘‘(I) the date following the date of the last 
previous adjustment in the par value of the ob-
ligation under paragraph (1), or 
‘‘(II) if no such adjustment in the par 
value of the obligation has occurred, the date of 
the issuance of the obligation, 
and ending with the date of the increase in par value 
to be determined under paragraph (1). 
‘‘(ii) The term ‘computation period’ for an obli-
gation means the period beginning with the date fol-