I 
109TH CONGRESS 
1ST SESSION H. R. 3913 
To provide for investment and protection of the Social Security surplus. 
IN THE HOUSE OF REPRESENTATIVES 
SEPTEMBER 27, 2005 
Mr. KUHL of New York introduced the following bill; which was referred to 
the Committee on Ways and Means, and in addition to the Committees 
on the Budget and Rules, for a period to be subsequently determined by 
the Speaker, in each case for consideration of such provisions as fall with-
in the jurisdiction of the committee concerned 
A BILL 
To provide for investment and protection of the Social 
Security surplus. 
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 ‘‘Social Security Surplus 
Protection Act of 2005’’.
SEC. 2. INVESTMENT OF THE ANNUAL SURPLUS OF THE 
FEDERAL OLD-AGE AND SURVIVORS INSUR-
ANCE TRUST FUND AND THE FEDERAL DIS-
ABILITY INSURANCE TRUST FUND. 
(a) IN GENERAL.—Section 201(d) of the Social Secu-
rity Act (42 U.S.C. 401(d)) is amended— 
(1) by inserting ‘‘(1)’’ after ‘‘(d)’’; 
(2) by striking ‘‘Such investments may be made 
only’’ and inserting the following: ‘‘Except as pro-
vided in paragraph (2), such investments may be 
made only’’; 
(3) by striking the last sentence; and 
(4) by adding at the end the following new 
paragraph: 
‘‘(2)(A) The Managing Trustee shall, in accordance 
with policies prescribed in regulations of the Social Secu-
rity Surplus Investment Board prescribed under sub-
section (o), ensure that amounts in each of the Trust 
Funds equivalent to the annual surplus for such Trust 
Fund for any calendar year are made available to the 
Board on a timely basis for purposes of investment in ac-
cordance with subsection (o). Such amounts shall be made 
available in at least monthly installments and shall be de-
termined on the basis of estimates, by the Commissioner 
and certified to the Secretary of the Treasury, and proper 
adjustments shall be made in amounts subsequently made
available to the extent prior estimates were in excess of 
or were less than actual amounts. 
‘‘(B) For purposes of this paragraph, the ‘annual sur-
plus’ for either of the Trust Funds for a calendar year 
is the excess (if any) of— 
‘‘(i) the sum of— 
‘‘(I) in the case of the Federal Old-Age 
and Survivors Insurance Trust Fund, the 
amounts appropriated to such Trust Fund 
under paragraphs (3) and (4) of subsection (a) 
and attributable to such calendar year, 
‘‘(II) in the case of the Federal Disability 
Insurance Trust Fund, the amounts appro-
priated to such Trust Fund under paragraphs 
(1) and (2) of subsection (b) and attributable to 
such calendar year, and 
‘‘(III) in either case, the amount appro-
priated to such Trust Fund under section 
121(e) of the Social Security Amendments of 
1983 and attributable to such calendar year, 
and any amounts otherwise credited to or de-
posited in such Trust Fund under this title at-
tributable to such calendar year, over 
‘‘(ii) the amount estimated by the Commis-
sioner to be the total amount to be paid from such
Trust Fund during such calendar year for all pur-
poses authorized by section 201 (other than pay-
ments of interest on, and repayments of, loans from 
the Federal Hospital Insurance Trust Fund under 
section 201(l)(1), and excluding any transfer pay-
ments between the Trust Funds and reducing the 
amount of any transfer from either of the Trust 
Funds to the Railroad Retirement Account by the 
amount of any transfer into such Trust Fund from 
such Account). 
‘‘(C) Amounts of either Trust Fund made available 
to the Social Security Surplus Investment Board under 
subparagraph (A)(ii) for purposes of investment under 
subsection (o), and any proceeds from such investment, 
shall continue to be treated as assets of such Trust 
Fund.’’. 
(b) EFFECTIVE DATE.—The amendments made by 
this section shall apply with respect to annual surpluses 
for calendar years beginning on or after January 1, 2006. 
SEC. 3. SOCIAL SECURITY SURPLUS INVESTMENT BOARD. 
Section 201 of the Social Security Act (42 U.S.C. 
401) is amended by adding at the end the following new 
subsection: 
‘‘(o) SOCIAL
SECURITY
SURPLUS
INVESTMENT 
BOARD.—
‘‘(1) ESTABLISHMENT OF THE BOARD.— 
‘‘(A) ESTABLISHMENT.—There is estab-
lished in the Executive branch of the Govern-
ment a Social Security Surplus Investment 
Board. 
‘‘(B) NUMBER
AND
APPOINTMENT.—The 
Board shall be composed of 7 members as fol-
lows: 
‘‘(i) 3 members appointed by the 
President, of whom 1 shall be designated 
by the President as Chairman; and 
‘‘(ii) 4 members appointed by the 
President, of whom— 
‘‘(I) 2 shall be appointed by the 
President after taking into consider-
ation the recommendations made by 
the Speaker of the House of Rep-
resentatives in consultation with the 
minority leader of the House of Rep-
resentatives; and 
‘‘(II) 2 shall be appointed by the 
President after taking into consider-
ation the recommendations made by 
the majority leader of the Senate in
consultation with the minority leader 
of the Senate. 
‘‘(C) 
MEMBERSHIP
REQUIREMENTS.— 
Members of the Board shall have substantial 
experience, training, and expertise in the man-
agement of financial investments and pension 
benefit plans. No more than 4 of the members 
of the Board may be of the same political party. 
‘‘(D) TERMS.—Each member of the Board 
shall be appointed for a term of 4 years, except 
that of the members first appointed— 
‘‘(i) the Chairman shall be appointed 
for a term of 4 years; 
‘‘(ii) the remaining members ap-
pointed under subsection (B)(i) shall be 
appointed for terms of 3 years; 
‘‘(iii) one of the members appointed 
under subsection (B)(ii)(I) shall be ap-
pointed for a term of 4 years and the other 
for a term of two years; and 
‘‘(iv) one of the members appointed 
under subsection (B)(ii)(II) shall be ap-
pointed for a term of 4 years and the other 
for a term of 2 years.
‘‘(E) VACANCIES.—A vacancy on the 
Board shall be filled in the manner in which the 
original appointment was made and shall be 
subject to any conditions which applied with re-
spect to the original appointment. An individual 
chosen to fill a vacancy shall be appointed for 
the unexpired term of the member replaced. 
The term of any member shall not expire before 
the date on which the member’s successor takes 
office. 
‘‘(2) POWERS AND DUTIES OF THE BOARD.— 
‘‘(A) IN GENERAL.—The Board shall have 
powers and duties solely as provided in this 
subsection. The Board shall by regulation pro-
vide for investment of amounts in the Federal 
Old-Age and Survivors Insurance Trust Fund 
and the Federal Disability Insurance Trust 
Fund made available to the Board under sub-
section (d)(2)(A)(ii) for purposes of investment, 
including policies to be followed in allocating in-
vestments among different forms of investment 
and meeting the requirements of subparagraph 
(F) of this paragraph and of paragraph (4). 
‘‘(B) BUDGETARY
REQUIREMENTS.—The 
Board shall prepare and submit to the Presi-
dent and to the appropriate committees of Con-
gress an annual budget of the expenses and 
other items relating to the Board which shall be 
included as a separate item in the budget re-
quired to be transmitted to the Congress under 
section 1105 of title 31, United States Code. 
The Board shall provide for low administrative 
costs such that, to the extent practicable, over-
all administrative costs of the Board in connec-
tion with investments made pursuant to sub-
paragraph (A) do not exceed 30 basis points 
per year in relation to assets under manage-
ment by the Board. 
‘‘(C) ADDITIONAL
AUTHORITIES
OF
THE 
BOARD.—The Board may— 
‘‘(i) adopt, alter, and use a seal; 
‘‘(ii) establish policies under this sub-
section with which the Commissioner shall 
comply; and 
‘‘(iii) appoint and remove the Execu-
tive Director, as provided in paragraph (2). 
‘‘(D) MEETINGS
OF
THE
BOARD.—The 
Board shall meet at the call of the Chairman or 
upon the request of a quorum of the Board. 
The Board shall perform the functions and ex-
ercise the powers of the Board on a majority 
vote of a quorum of the Board. Four members 
of the Board shall constitute a quorum for the 
transaction of business. 
‘‘(E) COMPENSATION
OF
BOARD
MEM-
BERS.— 
‘‘(i) IN GENERAL.—Each member of 
the Board who is not an officer or em-
ployee of the Federal Government shall be 
compensated at the daily rate of basic pay 
for level IV of the Executive Schedule for 
each day during which such member is en-
gaged in performing a function of the 
Board. Any member who is such an officer 
or employee shall not suffer any loss of pay 
or deduction from annual leave on the 
basis of any time used by such member in 
performing such a function. 
‘‘(ii) TRAVEL, PER
DIEM, AND
EX-
PENSES.—A member of the Board shall be 
paid travel, per diem, and other necessary 
expenses under subchapter I of chapter 57 
of title 5, United States Code, while trav-
eling away from such member’s home or
regular place of business in the perform-
ance of the duties of the Board. 
‘‘(F) STANDARD FOR BOARD’S DISCHARGE 
OF
RESPONSIBILITIES.—The members of the 
Board shall discharge their responsibilities sole-
ly in the interest of the Federal Old-Age and 
Survivors Insurance Trust Fund and the Fed-
eral Disability Insurance Trust Fund. 
‘‘(G) ANNUAL REPORT.—The Board shall 
submit an annual report to the President, to 
each House of the Congress, and to the Board 
of Trustees of the Federal Old-Age and Sur-
vivors Insurance Trust Fund and the Federal 
Disability Insurance Trust Fund regarding the 
exercise of its duties under this subsection. 
‘‘(H) PUBLIC ACCOUNTANT.— 
‘‘(i) DEFINITION.—For purposes of 
this subparagraph, the term ‘qualified pub-
lic accountant’ shall have the same mean-
ing as provided in section 103(a)(3)(D) of 
the Employee Retirement Income Security 
Act of 1974 (29 U.S.C. 1023(a)(3)(D)). 
‘‘(ii) ENGAGEMENT.—The Executive 
Director, in consultation with the Board, 
shall annually engage an independent
qualified public accountant, who shall con-
duct an examination of all records main-
tained in the administration of the require-
ments of this subsection that the public ac-
countant considers necessary. 
‘‘(iii) DUTIES.—The public account-
ant conducting an examination under 
clause (ii) shall determine whether the 
records referred to in such clause have 
been maintained in conformity with gen-
erally accepted accounting principles. The 
public accountant shall transmit to the 
Board a report on his examination. 
‘‘(iv) RELIANCE ON CERTIFIED ACTU-
ARIAL MATTERS.—In making a determina-
tion under clause (iii), a public accountant 
may rely on the correctness of any actu-
arial matter certified by an enrolled actu-
ary if the public accountant states his reli-
ance in the report transmitted to the 
Board under such clause. 
‘‘(3) EXECUTIVE DIRECTOR.— 
‘‘(A) APPOINTMENT AND REMOVAL.—The 
Board shall appoint, without regard to the pro-
visions of law governing appointments in the
competitive service, an Executive Director by 
action agreed to by a majority of the members 
of the Board. The Executive Director shall have 
substantial experience, training, and expertise 
in the management of financial investments and 
pension benefit plans. The Board may, with the 
concurrence of 4 members of the Board, remove 
the Executive Director from office for good 
cause shown. 
‘‘(B) POWERS AND DUTIES OF EXECUTIVE 
DIRECTOR.—The Executive Director shall— 
‘‘(i) carry out the policies established 
by the Board, 
‘‘(ii) administer the provisions of this 
subsection in accordance with the policies 
of the Board, and 
‘‘(iii) meet from time to time with the 
Board upon request of the Board. 
‘‘(C) ADMINISTRATIVE
AUTHORITIES
OF 
EXECUTIVE DIRECTOR.—The Executive Direc-
tor may— 
‘‘(i) appoint such personnel as may be 
necessary to carry out the provisions of 
this subsection,
‘‘(ii) subject to approval by the Board, 
procure the services of experts and consult-
ants under section 3109 of title 5, United 
States Code, 
‘‘(iii) secure directly from any agency 
or instrumentality of the Federal Govern-
ment on a reimbursable basis any informa-
tion which, in the judgment of the Execu-
tive Director, is necessary to carry out the 
provisions of this subsection and the poli-
cies of the Board, and which shall be pro-
vided by such agency or instrumentality 
upon the request of the Executive Director, 
‘‘(iv) pay the compensation, per diem, 
and travel expenses of individuals ap-
pointed under clauses (i), (ii), and (v) of 
this subparagraph, subject to such limits 
as may be established by the Board, 
‘‘(v) accept and use the services of in-
dividuals employed intermittently in the 
Government service and reimburse such in-
dividuals for travel expenses, as authorized 
by section 5703 of title 5, United States 
Code, including per diem as authorized by 
section 5702 of such title, and
‘‘(vi) except as otherwise expressly 
prohibited by law or the policies of the 
Board, delegate any of the Executive Di-
rector’s functions to such employees under 
the Board as the Executive Director may 
designate and authorize such successive re-
delegations of such functions to such em-
ployees under the Board as the Executive 
Director may consider to be necessary or 
appropriate. 
‘‘(4) FIDUCIARY RESPONSIBILITIES.— 
‘‘(A) IN GENERAL.—Rules similar to the 
provisions of section 8477 of title 5, United 
States Code (relating to fiduciary responsibil-
ities; liability and penalties) shall apply in con-
nection assets placed under the control of the 
Board for purposes of investment, in accord-
ance with regulations which shall be issued by 
the Board. The Board shall issue regulations 
with respect to the investigative authority of ap-
propriate Federal agencies in cases involving 
such assets. 
‘‘(B) EXCULPATORY
PROVISIONS
VOID-
ED.—Any provision in an agreement or instru-
ment which purports to relieve a fiduciary from
responsibility or liability for any responsibility, 
obligation, or duty under this subsection shall 
be void. 
‘‘(5) CIVIL ACTIONS BY BOARD.—If any person 
fails to meet any requirement of this subsection or 
regulations prescribed thereunder or of any contract 
entered into under this subsection, the Board may 
bring a civil action in any district court of the 
United States within the jurisdiction of which such 
person’s assets are located or in which such person 
resides or is found, without regard to the amount in 
controversy, for appropriate relief to redress the vio-
lation or enforce the requirement, and process in 
such an action may be served in any district. 
‘‘(6) AUTHORIZATION
OF
APPROPRIATIONS.— 
There are authorized to be appropriated to the 
Board, for fiscal years beginning on or after October 
1, 2005, such sums as are necessary to carry out the 
Board’s duties under this subsection.’’. 
SEC. 4. PROTECTION OF SOCIAL SECURITY SURPLUSES. 
(a) PROTECTION
OF
SOCIAL
SECURITY
SUR-
PLUSES.—Title III of the Congressional Budget Act of 
1974 is amended by adding at the end the following new 
section: 
‘‘SAFEGUARDING SOCIAL SECURITY SURPLUSES 
‘‘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 is 
a projected net surplus in the Federal Old-Age and 
Survivors Insurance Trust Fund and the Federal 
Disability Insurance Trust 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 
‘‘(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 is a projected net surplus in the Federal Old- 
Age and Survivors Insurance Trust Fund and the 
Federal Disability Insurance Trust Fund. 
‘‘(b) ENFORCEMENT.—