I
103D CONGRESS
1ST SESSION
H. R. 255
To amend the Internal Revenue Code of 1986 to provide for floating social
security tax rates for old-age, survivors, and disability insurance.
IN THE HOUSE OF REPRESENTATIVES
JANUARY 5, 1993
Mr. NEAL of North Carolina introduced the following bill; which was referred
to the Committee on Ways and Means
A BILL
To amend the Internal Revenue Code of 1986 to provide
for floating social security tax rates for old-age, survi-
vors, and disability insurance.
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 Long-
Term Protection Act of 1993’’.
SEC. 2. FINDINGS AND PURPOSES.
(a) FINDINGS.—Congress hereby finds that—
(1) public confidence in the old-age, survivors,
and disability insurance program under the Social
Security Act has been undermined by the nature of
the political debate which attends the major deci-
sions affecting the program; and
(2) that the treatment of the old-age, survivors,
and disability insurance program under the Social
Security Act as a political issue is of grave concern
to—
(A) working Americans who bear the ever-
increasing social security tax burden and have
growing doubts about the program’s stability;
and
(B) young Americans, who object to the
social security tax altogether because they do
not believe it will survive long enough for them
to derive any benefits from it.
(b) ADDITIONAL FINDINGS.—Congress further finds
that—
(1) under current projections through the year
2025, surplus income for the old-age, survivors, and
disability insurance program will grow to an amount
equal to two years of outlays by the year 2000, and
to an amount equal to three and one-third years of
outlays by 2015;
(2) at the current rate of social security out-
lays, a reserve of three and one-third years would
total over $1,000,000,000,000;
(3) a reserve in that amount would be unneces-
sary, and would be viewed by both the Congress and
the American people as excessive taxation.
(c) PURPOSES.—The purposes of this Act are—
(1) to permanently ensure the viability and cer-
tainty of the old-age, survivors, and disability insur-
ance program;
(2) to guarantee that social security taxes be no
more than necessary to meet the program’s current
obligations, plus an appropriate reserve.
SEC. 3. FLOATING OASDI TAX RATES AFTER 1994.
(a) RATE OF TAX ON EMPLOYEES.—Subsection (a)
of section 3101 of the Internal Revenue Code of 1986 (re-
lating to rate of tax on employees) is amended to read
as follows:
‘‘(a) OLD-AGE, SURVIVORS, AND DISABILITY INSUR-
ANCE.—
‘‘(1) GENERAL
RULE.—In addition to other
taxes, there is hereby imposed on the income of
every individual a tax equal to the percentage deter-
mined under this subsection of the wages (as defined
in section 3121(a)) received by any individual during
any calendar year with respect to employment (as
defined in section 3121(b)). The percentage deter-
mined under this subsection is—
‘‘(A) in cases of wages received during
1994, 6.2 percent, and
‘‘(B) in cases of wages received during any
calendar year after 1994, the percentage deter-
mined under this subsection for the prior cal-
endar year, unless paragraph (2) or (3) applies
with respect to such wages.
‘‘(2) PERCENTAGE IN THE CASE OF AT LEAST
A 60-PERCENT OASDI TRUST FUND RESERVE.—
‘‘(A) RULE GOVERNING APPLICABILITY OF
PARAGRAPH.—This paragraph applies with re-
spect to wages received during any calendar
year (after 1994) if the OASDI trust fund re-
serve on September 30 of the prior calendar
year is—
‘‘(i) not less than 60.0 percent of the
total amount of the OASDI trust fund ex-
penditures during the fiscal year ending
with such September 30, and
‘‘(ii) not less than the OASDI trust
fund reserve on the last preceding Septem-
ber 30.
‘‘(B) DETERMINATION OF PERCENTAGE.—
If this paragraph applies with respect to wages
received during any calendar year, the percent-
age determined under this subsection with re-
spect to such wages shall be equal to the excess
of—
‘‘(i) the percentage determined under
this subsection for the prior calendar year,
over
‘‘(ii) 0.4 percent.
‘‘(3) PERCENTAGE IN THE CASE OF LESS THAN
A 55-PERCENT OASDI TRUST FUND RESERVE.—
‘‘(A) RULE GOVERNING APPLICABILITY OF
PARAGRAPH.—This paragraph applies with re-
spect to wages received during any calendar
year (after 1994) if the OASDI trust fund re-
serve on September 30 of the prior calendar
year is less than 55.0 percent of the total
amount of the OASDI trust fund expenditures
during the fiscal year ending with such Septem-
ber 30.
‘‘(B) DETERMINATION OF PERCENTAGE.—
The percentage determined for any calendar
year under this paragraph shall be equal to the
sum of—
‘‘(i) the percentage determined under
this subsection for the prior calendar year,
plus
‘‘(ii) 0.4 percent.’’.
(b) RATE OF TAX ON EMPLOYERS.—Subsection (a)
of section 3111 of such Code (relating to rate of tax on
employers) is amended to read as follows:
‘‘(a) OLD-AGE, SURVIVORS, AND DISABILITY INSUR-
ANCE.—
‘‘(1) GENERAL
RULE.—In addition to other
taxes, there is hereby imposed on every employer an
excise tax, with respect to having individuals in his
employ, equal to the percentage determined under
this subsection of the wages (as defined in section
3121(a)) paid by him during any calendar year with
respect to employment (as defined in section
3121(b)). The percentage determined under this
subsection is—
‘‘(A) in cases of wages paid during 1994,
6.2 percent, and
‘‘(B) in cases of wages paid during any
calendar year after 1994, the percentage deter-
mined under this subsection for the prior cal-
endar year, unless paragraph (2) or (3) applies
with respect to such wages.
‘‘(2) PERCENTAGE IN THE CASE OF AT LEAST
A 60-PERCENT OASDI TRUST FUND RESERVE.—
‘‘(A) RULE GOVERNING APPLICABILITY OF
PARAGRAPH.—This paragraph applies with re-
spect to wages paid during any calendar year
(after 1994) if the OASDI trust fund reserve
on September 30 of the prior calendar year is—
‘‘(i) not less than 60.0 percent of the
total amount of the OASDI trust fund ex-
penditures during the fiscal year ending
with such September 30, and
‘‘(ii) not less than the OASDI trust
fund reserve on the last preceding Septem-
ber 30.
‘‘(B) DETERMINATION OF PERCENTAGE.—
If this paragraph applies with respect to wages
paid during any calendar year, the percentage
determined under this subsection with respect
to such wages shall be equal to the excess of—
‘‘(i) the percentage determined under
this subsection for the prior calendar year,
over
‘‘(ii) 0.4 percent.
‘‘(3) PERCENTAGE IN THE CASE OF LESS THAN
A 55-PERCENT OASDI TRUST FUND RESERVE.—
‘‘(A) RULE GOVERNING APPLICABILITY OF
PARAGRAPH.—This paragraph applies with re-
spect to wages paid during any calendar year
(after 1994) if the OASDI trust fund reserve
on September 30 of the prior calendar year is
less than 55.0 percent of the total amount of
the OASDI trust fund expenditures during the
fiscal year ending with such September 30.
‘‘(B) DETERMINATION OF PERCENTAGE.—
The percentage determined for any calendar
year under this paragraph shall be equal to the
sum of—
‘‘(i) the percentage determined under
this subsection for the prior calendar year,
plus
‘‘(ii) 0.4 percent.’’.
(c) RATE OF SELF-EMPLOYMENT TAX.—Subsection
(a) of section 1401 of such Code (relating to rate of tax
on self-employment income for old-age, survivors, and dis-
ability insurance) is amended to read as follows:
‘‘(a) OLD-AGE, SURVIVORS, AND DISABILITY INSUR-
ANCE.—
‘‘(1) GENERAL
RULE.—In addition to other
taxes, there shall be imposed for each taxable year,
on the self-employment income for such taxable year,
a tax equal to the percentage determined under this
subsection of the self-employment income for such
taxable year. The percentage determined under this
subsection is—
‘‘(A) in cases of self-employment income
for the first taxable year beginning after De-
cember 31, 1993, 12.4 percent, and
‘‘(B) in cases of self-employment income
for each subsequent taxable year, the percent-
age determined under this subsection for the
prior taxable year, unless paragraph (2) or (3)
applies with respect to such self-employment in-
come.
‘‘(2) PERCENTAGE IN THE CASE OF AT LEAST
A 60-PERCENT OASDI TRUST FUND RESERVE.—
‘‘(A) RULE GOVERNING APPLICABILITY OF
PARAGRAPH.—This paragraph applies with re-
spect to self-employment income for any taxable
year (referred to in paragraph (1)(B)) if the
OASDI trust fund reserve on September 30 of
the calendar year preceding such taxable year
is—
‘‘(i) not less than 60.0 percent of the
total amount of the OASDI trust fund ex-
penditures during the fiscal year ending
with such September 30, and
‘‘(ii) not less than the OASDI trust
fund reserve on the last preceding Septem-
ber 30.
‘‘(B) DETERMINATION OF PERCENTAGE.—
If this paragraph applies with respect to self-
employment income for any taxable year, the
percentage determined under this subsection
with respect to such self-employment income
shall be equal to the excess of—
‘‘(i) the percentage determined under
this subsection for the prior taxable year,
over
‘‘(ii) 0.8 percent.
‘‘(3) PERCENTAGE IN THE CASE OF LESS THAN
A 55-PERCENT OASDI TRUST FUND RESERVE.—
‘‘(A) RULE GOVERNING APPLICABILITY OF
PARAGRAPH.—This paragraph applies with re-
spect to self-employment income for any taxable
year (referred to in paragraph (1)(B)) if the
OASDI trust fund reserve on September 30 of
the calendar year preceding such taxable year is
less than 55.0 percent of the total amount of
the OASDI trust fund expenditures during the
fiscal year ending with such September 30.
‘‘(B) DETERMINATION OF PERCENTAGE.—
The percentage determined for any calendar
year under this paragraph shall be equal to the
sum of—
‘‘(i) the percentage determined under
this subsection for the prior calendar year,
plus
‘‘(ii) 0.8 percent.’’.
(d) DEFINITIONS.—
(1) AMENDMENT
TO
FICA
PROVISIONS.—Sec-
tion 3121 of such Code (relating to definitions) is
amended by adding at the end thereof the following
new subsections:
‘‘(y) OASDI TRUST FUND RESERVE.—For purposes
of this chapter, the term ‘OASDI trust fund reserve’, on
September 30 of any calendar year, means the sum of—
‘‘(1) the balance in the Federal Old-Age and
Survivors Insurance Trust Fund as of such date,
and
‘‘(2) the balance in the Federal Disability In-
surance Trust Fund as of such date.
‘‘(z) OASDI TRUST FUND EXPENDITURES.—For
purposes of this chapter, the term ‘OASDI trust fund ex-
penditures’, during any fiscal year, means the sum of—
‘‘(1) the total amount which was paid from the
Federal Old-Age and Survivors Insurance Trust
Fund during such fiscal year for all purposes au-
thorized by section 201 of the Social Security Act,
but excluding any transfer payments between such
Trust Fund and the Federal Disability Insurance
Trust Fund and reducing the amount of any trans-
fers to the Railroad Retirement Account by the
amount of any transfers into such Trust Fund from
that Account, and
‘‘(2) the total amount which was paid from the
Federal Disability Insurance Trust Fund during
such fiscal year for all purposes authorized by sec-
tion 201 of such Act, but excluding any transfer
payments between such Trust Fund and the Federal
Old-Age and Survivors Insurance Trust Fund and
reducing the amount of any transfers to the Rail-
road Retirement Account by the amount of any
transfers into such Trust Fund from that Account.’’.
(2) AMENDMENT TO SECA PROVISIONS—Section
1402 of such Code (relating to definitions) is
amended by adding at the end thereof the following
new subsections:
‘‘(k) OASDI TRUST FUND RESERVE.—The term
‘OASDI trust fund reserve’, on September 30 of any cal-
endar year, means the sum of—
‘‘(1) the balance in the Federal Old-Age and
Survivors Insurance Trust Fund, as of such date,
and
‘‘(2) the balance in the Federal Disability In-
surance Trust Fund, as of such date.
‘‘(l) OASDI TRUST FUND EXPENDITURES.—The
term ‘OASDI trust fund expenditures’, during any fiscal
year, means the sum of—
‘‘(1) the total amount which was paid from the
Federal Old-Age and Survivors Insurance Trust
Fund during such fiscal year for all purposes au-
thorized by section 201 of the Social Security Act,
but excluding any transfer payments between such
Trust Fund and the Federal Disability Insurance
Trust Fund and reducing the amount of any trans-
fers to the Railroad Retirement Account by the
amount of any transfers into such Trust Fund from
that Account, and
‘‘(2) the total amount which was paid from the
Federal Disability Insurance Trust Fund during
such fiscal year for all purposes authorized by sec-
tion 201 of such Act, but excluding any transfer
payments between such Trust Fund and the Federal
Old-Age and Survivors Insurance Trust Fund and
reducing the amount of any transfers to the Rail-
road Retirement Account by the amount of any
transfers into such Trust Fund from that Account.’’.
(e) EFFECTIVE DATE.—The amendments made by
this section shall apply with respect to wages received and
wages paid during calendar years after 1993 and self-em-
ployment income for taxable years beginning after Decem-
ber 31, 1993.
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