I
106TH CONGRESS
2D SESSION
H. R. 5659
To amend title II of the Social Security Act provide for personal Social
Security accounts and to maintain the solvency of the old-age, survivors,
and disability insurance program.
IN THE HOUSE OF REPRESENTATIVES
DECEMBER 14, 2000
Mr. KASICH 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 provide for
personal Social Security accounts and to maintain the
solvency of the old-age, survivors, and disability insur-
ance program.
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 ‘‘Personal Social Secu-
rity Account Act of 2000’’.
TITLE I—PERSONAL SOCIAL
SECURITY ACCOUNTS
SEC. 101. PERSONAL SOCIAL SECURITY ACCOUNTS.
Title II of the Social Security Act is amended—
(1) by inserting before section 201 the fol-
lowing:
‘‘PART A—INSURANCE BENEFITS’’;
and
(2) by adding at the end the following new part:
‘‘PART B—PERSONAL SOCIAL SECURITY ACCOUNTS
‘‘PERSONAL SOCIAL SECURITY ACCOUNT FUND
‘‘SEC. 251. (a) ESTABLISHMENT.—There is estab-
lished in the Treasury of the United States a Personal
Social Security Account Fund. Subject to, and to the ex-
tent consistent with, the provisions of this part, the Com-
missioner of Social Security shall exercise the same pow-
ers, duties, and responsibilities with respect to the Fund
as the powers, duties and responsibilities exercised by the
Executive Director with respect to the Thrift Savings
Fund.
‘‘(b) AMOUNTS HELD BY FUND.—The Personal So-
cial Security Account Fund consists of the sum of all
amounts transferred to the Fund under section 252, in-
creased by the total net earnings from investments of
sums held in the Fund or reduced by the total net losses
from investments of sums held in the Fund, and reduced
by the total amount of payments made from the Fund (in-
cluding payments for administrative expenses).
‘‘(c) USE OF FUND.—
‘‘(1) IN GENERAL.—The sums in the Personal
Social Security Account Fund are appropriated and
shall 
remain 
available 
without 
fiscal 
year
limitation—
‘‘(A) to invest under section 253,
‘‘(B) to make distributions under section
254,
‘‘(C) to pay the administrative expenses of
this part, and
‘‘(D) to purchase insurance as provided in
section 255(c)(2).
‘‘(2) EXCLUSIVE PURPOSES.—The sums in the
Personal Social Security Account Fund shall not be
appropriated for any purpose other than the pur-
poses specified in this section and may not be used
for any other purpose.
‘‘PERSONAL SOCIAL SECURITY ACCOUNTS
‘‘SEC. 252. (a) ESTABLISHMENT OF PERSONAL SO-
CIAL SECURITY PLUS ACCOUNTS.—As soon as practicable
after the submission by an eligible individual of the re-
quest referred to in subsection (b)(3), the Commissioner
of Social Security shall establish in the Personal Social
Security Account Fund a personal social security account
for such eligible individual. Each account shall be identi-
fied to its account holder by means of the account holder’s
social security account number.
‘‘(b) ELIGIBLE INDIVIDUAL.—For purposes of this
part, the term ‘eligible individual’ means an individual
who—
‘‘(1) was born after December 31, 1945,
‘‘(2) has been credited for any calendar year
with 4 quarters of coverage, and
‘‘(3) has submitted to the Commissioner of So-
cial Security a written request for the establishment
of a personal social security account for such indi-
vidual.
‘‘(c) FORM OF WRITTEN REQUEST.—The request de-
scribed in subsection (b)(3) shall be made in such form
and manner as the Commissioner of Social Security may
prescribe by regulation in order to ensure ease of adminis-
tration.
‘‘(d) ACCOUNT BALANCE.—The balance in an indi-
vidual’s personal social security account at any time is the
excess of—
‘‘(1) the sum of—
‘‘(A) all deposits made to the Personal So-
cial Security Account Fund and credited to the
account under subsection (e), and
‘‘(B) the total amount of allocations made
to and reductions made in the account pursuant
to subsection (f),
over
‘‘(2) the amounts paid out of the account with
respect to such individual under this part.
‘‘(e) AMOUNTS TRANSFERRED FROM THE FEDERAL
OLD-AGE AND SURVIVORS INSURANCE TRUST FUND.—
‘‘(1) IN GENERAL.—Not later than 9 months
after each calendar year after 2000, the Secretary of
the Treasury shall transfer from the Federal Old-
Age and Survivors Insurance Trust Fund to the
Personal Social Security Account Fund, for crediting
by the Commissioner of Social Security to each per-
sonal social security account established in the Per-
sonal Social Security Account Fund for such indi-
vidual as of the end of such calendar year, an
amount 
equal 
to 
the 
product 
derived 
by
multiplying—
‘‘(A) such individual’s wages paid, and
self-employment income derived, in such cal-
endar year, by
‘‘(B) such individual’s transfer percentage
for such calendar year.
Proper adjustments shall be made in amounts trans-
ferred for subsequent calendar years to the extent
that amounts transferred for prior calendar years
were greater or less than the proper amounts.
‘‘(2) TRANSFER
PERCENTAGE.—For purposes
of paragraph (1)(B), the term ‘transfer percentage’
of an individual for a calendar year means the ex-
cess (not less than zero) of—
‘‘(A) 3.5 percent, over
‘‘(B) the product derived by multiplying
2.5 percent by a fraction—
‘‘(i) the numerator of which is the
amount of such individual’s wages paid,
and self-employment income derived, in
such calendar year (as certified to the Sec-
retary of the Treasury by the Commis-
sioner of Social Security), and
‘‘(ii) the denominator of which is the
contribution and benefit base (determined
under section 230) for such calendar year.
‘‘(f) ALLOCATION OF EARNINGS AND LOSSES.—Pur-
suant to regulations which shall be prescribed by the Com-
missioner, the Commissioner shall allocate to each per-
sonal social security account an amount equal to the net
earnings and net losses from each investment of sums in
the Social Security Account Fund which are attributable,
on a pro rata basis, to sums credited to such account, re-
duced by an appropriate share of the administrative ex-
penses paid out of the net earnings, as determined by the
Commissioner.
‘‘RULES
GOVERNING
PERSONAL
SOCIAL
SECURITY
AC-
COUNTS RELATING TO INVESTMENT, ACCOUNTING,
REPORTING, AND TAXATION
‘‘SEC. 253. (a) IN GENERAL.—Under regulations
which shall be prescribed by the Commissioner of Social
Security, and subject to the provisions of this part, the
provisions of—
‘‘(1) section 8438 of title 5, United States Code
(relating to investment of the Thrift Savings Fund),
‘‘(2) section 8439(b) of such title (relating to
engagement of independent qualified public account-
ant),
‘‘(3) section 8439(c) of such title (relating to
periodic statements and summary descriptions of in-
vestment options),
‘‘(4) section 8439(d) of such title (relating to
assumption of risk), and
‘‘(5) section 8440 of such title (relating to tax
treatment of the Thrift Savings Fund), other than
subsection (c) thereof,
shall apply with respect to the Personal Social Security
Fund and accounts maintained in such Fund in the same
manner and to the same extent as such provisions relate
to the Thrift Savings Fund and personal social security
accounts maintained in such Fund.
‘‘(b) RELATED RULES.—For purposes of subsection
(a)—
‘‘(1) the Board of Trustees shall exercise with
respect to the Personal Social Security Fund the
same powers, duties, and responsibilities as are re-
quired to be exercised by the Federal Retirement
Thrift Investment Board under the provisions re-
ferred to in subsection (a) with respect to the Thrift
Savings Fund,
‘‘(2) the Commissioner of Social Security shall
exercise with respect to the Personal Social Security
Fund the same powers, duties, and responsibilities
as are required to be exercised by the Executive Di-
rector under the provisions referred to in subsection
(a) with respect to the Thrift Savings Fund, and
‘‘(3) references in such sections 8438 and 8439
to an employee, Member, former employee, or former
Member shall be deemed references to an account
holder of a social security account in the Personal
Social Security Fund.
‘‘DISTRIBUTIONS FROM PERSONAL SOCIAL SECURITY
ACCOUNTS
‘‘SEC. 254. (a) IN GENERAL.—Except as provided in
subsections (b) and (c), the balance in a personal social
security account—
‘‘(1) shall be distributed to the account holder
commencing with the date of the commencement of
such account holder’s entitlement to old-age insur-
ance benefits under section 202(a), and
‘‘(2) shall be paid, as elected by the account
holder (in such form and manner as shall be pre-
scribed in regulations of the Commissioner of Social
Security) in the form of—
‘‘(A) equal annual installments over the
life expectancy of the account holder (deter-
mined as of the date of the distribution under
reasonable actuarial assumptions), or
‘‘(B) otherwise in the form of an imme-
diate annuity (as shall be prescribed in regula-
tions of the Commissioner of Social Security).
‘‘(b) DISABILITY BENEFICIARIES.—Upon application
made to the Commissioner under this subsection (in such
form and manner as shall be prescribed by the Commis-
sioner) by an individual who is entitled to disability insur-
ance benefits under section 223, the balance in such indi-
vidual’s personal social security account shall be paid to
such individual in the form of equal monthly installments
over the life expectancy of the individual (determined as
of the date of the commencement of such payments under
reasonable actuarial assumptions), except that such pay-
ments shall be payable under this subsection only for
months for which such individual is entitled to such bene-
fits.
‘‘(c) LUMP
SUM
DISTRIBUTIONS
OF
MINIMAL
AMOUNTS.—
‘‘(1) 
IN
GENERAL.—Notwithstanding 
sub-
sections (a) and (b), if distributions from an individ-
ual’s personal social security account would other-
wise commence under subsection (a) or (b), and the
balance in the account is $3,500 or less, the Com-
missioner of Social Security shall pay the balance to
the account holder in a single payment.
‘‘(2) COST-OF-LIVING
ADJUSTMENTS.—Under
regulations of the Commissioner of Social Security,
effective January 1 of each calendar year after
2000, the dollar amount referred to in paragraph
(1) shall be adjusted annually by the same percent-
age change as the percentage change then taking ef-
fect under section 230.
‘‘FIDUCIARY RESPONSIBILITIES
‘‘SEC 255. (a) IN GENERAL.—Under regulations of
the Secretary of Labor, the provisions of sections 8477
and 8478 of title 5, United States Code, shall apply in
connection with the Personal Social Security Fund and the
personal social security accounts maintained in such Fund
in the same manner and to the same extent as such provi-
sions apply in connection with the Thrift Savings Fund
and accounts maintained in the Thrift Savings Fund.
‘‘(b) INVESTIGATIVE AUTHORITY.—Any authority
available to the Secretary of Labor under section 504 of
the Employee Retirement Income Security Act of 1974 is
hereby made available to the Secretary of Labor, and any
officer designated by the Secretary of Labor, to determine
whether any person has violated, or is about to violate,
any provision applicable under subsection (a).
‘‘(c) EXCULPATORY PROVISIONS; INSURANCE.—
‘‘(1) IN GENERAL.—Any provision in an agree-
ment or instrument which purports to relieve a fidu-
ciary from responsibility or liability for any responsi-
bility, obligation, or duty under this part shall be
void.
‘‘(2) INSURANCE.—Amounts in the Personal
Social Security Fund available for administrative ex-
penses shall be available and may be used at the dis-
cretion of the Commissioner of Social Security to
purchase insurance to cover potential liability of per-
sons who serve in a fiduciary capacity with respect
to the Fund and personal social security accounts
maintained therein, without regard to whether a pol-
icy of insurance permits recourse by the insurer
against the fiduciary in the case of a breach of a fi-
duciary obligation.
‘‘ASSIGNMENT, ALIENATION, AND TREATMENT OF
DECEASED INDIVIDUALS
‘‘SEC. 256. (a) ASSIGNMENT AND ALIENATION.—
Under regulations which shall be prescribed by the Com-
missioner of Social Security, rules relating to assignment
and alienation applicable under chapter 84 of title 5,
United States Code, with respect to amounts held in ac-
counts in the Thrift Savings Fund shall apply with respect
to amounts held in personal social security accounts in the
Personal Social Security Fund.
‘‘(b) TREATMENT OF ACCOUNTS OF DECEASED INDI-
VIDUALS.—In the case of a deceased individual who is the
account holder with respect to a personal social security
account and who dies before distributions from the ac-
count have commenced under section 254, upon receipt
of notification of such individual’s death, the Commis-
sioner of Social Security shall close the account and shall
transfer the balance in such account to the personal social
security account of such account holder’s surviving spouse
or, if there is no such account of a surviving spouse, to
the duly appointed legal representative of the estate of the
deceased account holder, or if there is no such representa-
tive, to the person or persons determined to be entitled
thereto under the laws of the domicile of the deceased ac-
count holder.’’.
TITLE 
II—MAINTAINING 
THE
SOLVENCY OF THE OLD-AGE,
SURVIVORS, AND DISABILITY
INSURANCE PROGRAM
SEC. 201. MODIFICATION OF INDEXATION OF INITIAL BENE-
FITS.
Section 215(a)(1)(B) of the Social Security Act (42
U.S.C. 415(a)(1)(B)) is amended—
(1) by redesignating clause (iii) as clause (vi);
(2) in clause (ii), by striking ‘‘For individuals’’
and inserting ‘‘Subject to clause (iii), for individ-
uals’’;
(3) by inserting after clause (ii) the following
new clauses:
‘‘(iii) For individuals who were born after December
31, 1945, and who either initially meet all requirements
for entitlement to old-age insurance benefits or disability
insurance benefits (other than applying therefor), or die
(before meeting such requirements for such benefits), in
any calendar year after 2002, each of the amounts so es-
tablished under the preceding provisions of this subpara-
graph shall be equal to the product derived by multiplying
such amount (as determined before the application of this
clause) by the quotient derived by dividing—
‘‘(I) the applicable change in the CPI for the
first of the 2 preceding calendar years, by
‘‘(II) applicable change in the national average
wage index for the first of the 2 preceding calendar
years.
‘‘(iv) For purposes of clause (iii)(I), the term ‘appli-
cable change in the CPI’ for a calendar year means the
excess of—
‘‘(I) the arithmetical mean of the Consumer
Price Index for Urban Wage Earners and Clerical
Workers (issued by the Bureau of Labor Statistics)
for the 12 months in such calendar year, over
‘‘(II) the arithmetical mean of such Consumer
Price Index for the 12 months in calendar year
2000.
‘‘(v) For purposes of clause (iii)(II), the term ‘appli-
cable change in the national average wage index’ for a cal-
endar year means the excess of—
‘‘(I) the national average wage index (as de-
fined in section 209(k)(1)) for such calendar year,
over
‘‘(II) the national average wage index (as so de-
fined) for calendar year 2000.’’; and
(4) in clause (vi) (as redesignated), by striking
‘‘under clause (ii)’’ and inserting ‘‘under the pre-
ceding provisions of this subparagraph’’.
SEC. 202. BENEFIT REDUCTION BY REASON OF TRANSFER
TO PERSONAL SOCIAL SECURITY ACCOUNT.
Subparagraph (A) of section 215(a)(1) of the Social
Security Act (42 U.S.C. 415(a)(1)(A)) is amended, in the
matter following clause (iii), by striking ‘‘rounded’’ and
inserting the following:
‘‘reduced by a percentage equal to the product derived by
multiplying 1⁄36 percent by the number of months begin-
ning with or after the first month in which occurs a trans-
fer to the individual’s personal social security account pur-
suant to section 252(e)(1) and ending before the first
month for which such individual is entitled to old-age or
disability insurance benefits (or in which such individual
dies before becoming so entitled). The amount determined
under this subparagraph shall be rounded’’.
SEC. 203. BORROWING AUTHORITY FOR THE SOCIAL SECU-
RITY TRUST FUNDS TAKING INTO ACCOUNT
PRESENT VALUE OF FUTURE BENEFIT RE-
DUCTIONS.
Section 201(l) of the Social Security Act (42 U.S.C.
401(l)) is amended—
(1) in paragraph (1), by striking ‘‘January
1988’’ and inserting ‘‘January 2050’’, and by strik-
ing ‘‘the other such Trust Fund, or, subject to para-
graph (5), from the Federal Hospital Insurance
Trust Fund established under section 1817,’’ and in-
serting ‘‘the general fund of the Treasury, subject to
paragraph (5),’’;
(2) in paragraph (2), by striking ‘‘the lending
Trust Fund’’ and inserting ‘‘the general fund’’, and
by striking ‘‘a rate’’ and all that follows and insert-
ing ‘‘the rate equal to the average market yield
(computed by the Managing Trustee on the basis of
market quotations as of the end of the calendar
month next preceding the date of the loan) on all
marketable interest-bearing obligations of the United
States then forming a part of the public debt which
are not due or callable until after the expiration of
four years from the end of such calendar month; ex-
cept that where such average market yield is not a
multiple of one-eighth of 1 per centum, the rate of
interest of such loan shall be the multiple of one-
eighth of 1 per centum nearest such market yield.’’;
(3) in paragraph (3)(B)(i), in the matter pre-
ceding subclause (I), by striking ‘‘Federal Hospital
Insurance Trust Fund’’ each place it appears and
inserting ‘‘general fund’’, and by striking ‘‘15 per-
cent’’ and inserting ‘‘100 percent’’;
(4) in paragraph (3)(B)(i)(I), by striking ‘‘to-
gether with’’ and all that follows through ‘‘year,’’,
and by striking ‘‘15 percent’’ and inserting ‘‘100
percent’’;
(5) in paragraph (3)(B)(iii)(II), by striking
‘‘other than payments of interest on, and repay-
ments of loans from the Federal Hospital Insurance
Trust Fund under paragraph (1),’’;
(6) in paragraph (3)(C)(i), by striking ‘‘(i)’’, by
striking ‘‘(whether made before or after January 1,
1983)’’, and by striking ‘‘and in any event no later
than December 31, 1989’’;
(7) by striking paragraph (3)(C)(ii); and
(8) by amending paragraph (5) to read as fol-
lows:
‘‘(5) The amounts borrowed from the general fund
of the Treasury under paragraph (1) shall not exceed the
discounted present value of the future reductions in bene-
fits payable from such trust funds by reason of the amend-
ments made by section 202 of the Personal Social Security
Account Act of 2000.’’.
Æ