SEC. 109. REDUCTION OF FICA RATES RESULTING FROM 
PERSONAL SOCIAL SECURITY SAVINGS PRO-
GRAM. 
(a) EMPLOYEE CONTRIBUTION.—Section 3101 of the 
Internal Revenue Code of 1986 (relating to tax on employ-
ees) is amended by adding at the end the following new 
subsection: 
‘‘(d) REDUCTION IN OLD-AGE, SURVIVORS, AND DIS-
ABILITY INSURANCE TAX RATE.— 
‘‘(1) IN GENERAL.—In any year which follows 
a reduction year and each year thereafter, the rate 
of tax imposed under subsection (a) shall be reduced 
by the reduction percentage. 
‘‘(2) REDUCTION YEAR.—For purposes of this 
section— 
‘‘(A) IN GENERAL.—The term ‘reduction 
year’ means any year after the transition year 
in which the OASDI rate ratio exceeds 125 per-
cent. 
‘‘(B) TRANSITION YEAR.—The term ‘tran-
sition year’ means the first full calendar year 
following the termination year (as defined in 
section 201(p)(3) of the Social Security Act). 
‘‘(3) REDUCTION PERCENTAGE.—For purposes 
of this section, the term ‘reduction percentage’ 
means the excess of—
‘‘(A) the rate in effect under subsection (a) 
for the reduction year, over 
‘‘(B) the rate (rounded up to the nearest 
one tenth of a percent) under which the OASDI 
rate ratio for the reduction year would have 
been 125 percent if— 
‘‘(i) such rate had been applicable 
under subsection (a) and section 3111(a) 
during such year, and 
‘‘(ii) the rate under section 1401(a) 
during such year were twice such rate. 
‘‘(4) OASDI RATE RATIO.—The term ‘OASDI 
rate ratio’ means, with respect to any calendar year, 
the ratio— 
‘‘(A) the numerator of which is the com-
bined balance in the Old-Age and Survivors In-
surance Trust Fund and the Federal Disability 
Insurance Trust Fund, as of the last day of 
such calendar year, and 
‘‘(B) the denominator of which is the 
amount paid from such Trust Funds during 
such calendar year for all purposes authorized 
by section 201 of the Social Security Act (ex-
cluding any transfer payments between such 
Trust Funds and reducing the amount of any
transfer to the Railroad Retirement Account by 
the amount of any transfers into either such 
Trust Fund from such Account). 
‘‘(5) LIMITATION ON REDUCTION.—Paragraph 
(1) shall not apply to any reduction to the extent 
that such reduction would cause the rate of tax im-
posed under subsection (a) to be less than 4.95 per-
cent.’’. 
(b) EMPLOYER CONTRIBUTION.—Section 3111 of the 
Internal Revenue Code of 1986 (relating to tax on employ-
ers) is amended by adding at the end the following new 
subsection: 
‘‘(d) REDUCTION IN OLD-AGE, SURVIVORS, AND DIS-
ABILITY INSURANCE TAX RATE.— 
‘‘(1) IN GENERAL.—In any year which follows 
a reduction year and each year thereafter, the rate 
of tax imposed under subsection (a) shall be reduced 
by the reduction percentage. 
‘‘(2) REDUCTION YEAR; REDUCTION PERCENT-
AGE.—For purposes of this section, the terms ‘re-
duction year’ and ‘reduction percentage’ have the 
meanings given such terms by section 3101(d). 
‘‘(3) LIMITATION ON REDUCTION.—Paragraph 
(1) shall not apply to any reduction to the extent 
that such reduction would cause the rate of tax im-
posed under subsection (a) to be less than 4.95 per-
cent.’’. 
(c) SELF-EMPLOYMENT
CONTRIBUTION.—Section 
1401 of the Internal Revenue Code of 1986 (relating to 
tax on self-employment income) is amended by adding at 
the end the following new subsection: 
‘‘(d) REDUCTION IN OLD-AGE, SURVIVORS, AND DIS-
ABILITY INSURANCE TAX RATE.— 
‘‘(1) IN GENERAL.—In any year which follows 
a reduction year and each year thereafter, the rate 
of tax imposed under subsection (a) shall be reduced 
by the reduction percentage. 
‘‘(2) REDUCTION YEAR; REDUCTION PERCENT-
AGE.—For purposes of this section, the terms ‘re-
duction year’ and ‘reduction percentage’ have the 
meanings given such terms by section 3101(d). 
‘‘(3) LIMITATION ON REDUCTION.—Paragraph 
(1) shall not apply to any reduction to the extent 
that such reduction would cause the rate of tax im-
posed under subsection (a) to be less than 9.9 per-
cent.’’.
TITLE II—PUTTING A LID ON 
THE FEDERAL BUDGET 
Subtitle A—Spending Safeguards 
on the Growth of Entitlements 
and Mandatories 
SEC. 201. SPENDING CAPS ON GROWTH OF ENTITLEMENTS 
AND MANDATORIES. 
(a) 
CONTROL
OF
ENTITLEMENTS
AND 
MANDATORIES.—The Balanced Budget and Emergency 
Deficit Control Act of 1985 is amended by adding after 
section 252 the following new section: 
‘‘SEC. 252A. ENFORCING CONTROLS ON DIRECT SPENDING. 
‘‘(a) CAP ON GROWTH OF ENTITLEMENTS.—Effec-
tive for fiscal year 2007 and for each ensuing fiscal year, 
the total level of direct spending for all direct spending 
programs, projects, and activities (excluding social secu-
rity) for any such fiscal year shall not exceed the total 
level of spending for all such programs, projects, and ac-
tivities for the previous fiscal year after the direct spend-
ing for each such program, project, or activity is increased 
by the higher of the change in the Consumer Price Index 
for All Urban Consumers or the inflator (if any) applicable 
to that program, project, or activity and the growth in 
eligible population for such, project, or activity.