viduals initially becoming entitled to monthly insurance
benefits based on their own wages and self-employment
income as disability insurance benefits, the increase shall
be derived by multiplying each of such amounts (including
each of those amounts as previously increased under this
subparagraph) by the applicable increase percentage.
‘‘(iv) With respect to primary insurance amounts de-
scribed in subclause (II) of clause (ii) (other than primary
insurance amounts described in clause (iii) of this sub-
paragraph), the increase shall be derived by—
‘‘(I) multiplying each of such amounts (includ-
ing each such amount as previously increased under
this subparagraph) by the applicable increase per-
centage,
‘‘(II) determining among all such amounts as
increased under subclause (I) the primary insurance
amount which is at the 30th percentile of such
amounts, and
‘‘(III) reducing each primary insurance amount
as increased under subclause (I) to the sum of such
amount determined as if there had been no reduc-
tion in such amount under this subclause in any pre-
ceding year and the amount of the increase under
subclause (I) in the primary insurance amount de-
scribed in subclause (II).
‘‘(v) Any amount increased under clause (iii) or
clause (iv) which is not a multiple of $0.10 shall be de-
creased to the next lower multiple of $0.10.
‘‘(vi) Any increase’’.
(2) CONFORMING AMENDMENT.—The last sen-
tence of section 215(a)(4) of such Act (42 U.S.C.
415(a)(4)) is amended, in subclause (I), by striking
‘‘clause (iii) of subsection (i)(2)(A)’’ and inserting
‘‘clause (vii) of subsection (i)(2)(A)’’.
(3) CONFORMING AMENDMENTS TO MAINTAIN
CURRENT LEVELS OF COST-OF-LIVING ADJUSTMENT
UNDER OTHER PROGRAMS.—
(A) SUPPLEMENTAL
SECURITY
INCOME
FOR THE AGED, BLIND, AND DISABLED.—Sec-
tion 1617(a)(2) of the Social Security Act (42
U.S.C. 1382f(a)(2)) is amended by striking ‘‘by
the same percentage’’ and all that follows
through ‘‘percentage,’’ and inserting the follow-
ing: ‘‘by the applicable increase percentage
(within the meaning of section 215(i)(1)(C))
used in determining the amount by which bene-
fit amounts under title II are increased for such
month’’.
(B) SUPPLEMENTARY
MEDICAL
INSUR-
ANCE.—Section 1839(a)(3)(B) of such Act (42
U.S.C. 1395r(a)(3)(B)) is amended by striking
‘‘by a percentage’’ and all that follows through
‘‘November 1’’ and inserting the following: ‘‘by
the applicable increase percentage (within the
meaning of section 215(i)(1)(C)) used in deter-
mining the amount by which benefit amounts
under title II are increased for the month of
December preceding the year of the promulga-
tion’’.
(C) CERTAIN VETERAN’S BENEFITS.—Sec-
tion 3112 of title 38, United States Code, is
amended—
(i) in subsection (a), by striking ‘‘by
the same percentage by which such benefit
amounts are increased’’ and inserting ‘‘by
the applicable increase percentage (within
the meaning of section 215(i)(1)(C) of
such Act) used in determining the amount
by which such benefit amounts are in-
creased’’; and
(ii) in subsection (b)(1), by striking
‘‘by the same percentage as the percentage
by which such benefit amounts are in-
creased’’ and inserting ‘‘by the applicable
increase percentage (within the meaning of
section 215(i)(1)(C) of such Act) used in
determining the amount by which such
benefit amounts are increased’’.
(D) COST-OF-LIVING
ADJUSTMENTS
TO
LIMITATIONS
ON
BENEFITS
AND
CONTRIBU-
TIONS UNDER QUALIFIED PLANS.—Subsection
(d) of section 415 of the Internal Revenue Code
of 1986 (relating to cost-of-living adjustments)
is amended by striking ‘‘section 215(i)(2)(A)’’
and inserting ‘‘section 215(i)(2)(A)(iii)’’.
(4) AMENDMENT TO PRIOR APPLICABLE LAW.—
Section 215(i)(4) of the Social Security Act (42
U.S.C. 415(i)(4)) is amended by adding at the end
the following new sentence: ‘‘The Secretary shall
provide by regulation for the continued application
of this subsection as in effect in December 1978 as
provided by the preceding provisions of this para-
graph and the amendments referred to therein. Such
regulations shall provide for the application of the
amendments to the preceding provisions of this sub-
section made by section 606 of the Personal Retire-
ment Accounts Act of 1997 so as to have the same
effect on the corresponding provisions of this sub-
section as in effect in December 1978 and applicable
in accordance with this paragraph.’’.
(b) EFFECTIVE DATE.—The amendments made by
this section shall apply with respect to adjustments effec-
tive with months after November 1999.
SEC. 607. MODIFICATION OF CPI CALCULATION FOR SO-
CIAL SECURITY COLAS.
For purposes of section 215(i) of the Social Security
Act, effective for cost-of-living computation quarters oc-
curring after 1997 and before the year following the year
in which there takes effect a revision by the Bureau of
Labor Statistics in the method of computing the
Consumer Price Index referred to in section 215(i)(1)(D)
of such Act, the Consumer Price Index referred to in such
section 215(i)(1)(D) shall be reduced by 0.5 percentage
points.
SEC. 608. PHASED REDUCTION IN SPOUSAL BENEFITS
OTHER THAN SURVIVOR’S BENEFITS TO 33
PERCENT OF PRIMARY INSURANCE AMOUNT.
(a) 
WIFE’S
INSURANCE
BENEFITS.—Section
202(b)(2) of the Social Security Act (42 U.S.C. 402(b)(2))
is amended to read as follows:
‘‘(2)(A) Except as provided in subsection (q) and
paragraph (4) of this subsection, such wife’s insurance
benefit for each month shall be equal to the applicable per-
centage of the primary insurance amount of her husband
(or, in the case of a divorced wife, her former husband)
in connection with the calendar year in which such individ-
ual becomes eligible for such benefit, as specified in the
following table:
‘‘If 
the 
calendar 
year 
in
which the individual be-
comes eligible is:
The applicable percentage shall
be:
Before calendar year 2000 ................................................
50 percent
Calendar year 2000 ...........................................................
49 percent
Calendar year 2001 ...........................................................
48 percent
Calendar year 2002 ...........................................................
47 percent
Calendar year 2003 ...........................................................
46 percent
Calendar year 2004 ...........................................................
45 percent
Calendar year 2005 ...........................................................
44 percent
Calendar year 2006 ...........................................................
43 percent
Calendar year 2007 ...........................................................
42 percent
Calendar year 2008 ...........................................................
41 percent
Calendar year 2009 ...........................................................
40 percent
Calendar year 2010 ...........................................................
39 percent
Calendar year 2011 ...........................................................
38 percent
Calendar year 2012 ...........................................................
37 percent
Calendar year 2013 ...........................................................
36 percent
Calendar year 2014 ...........................................................
35 percent
Calendar year 2015 ...........................................................
34 percent
After calendar year 2015 ..................................................
33 percent.’’.
‘‘(B) For purposes of subparagraph (A)—
‘‘(i) an individual shall be treated as eligible for
a wife’s insurance benefit if such individual meets
the requirements of subparagraphs (B), (C), and
(D) of paragraph (1), and
‘‘(ii) in determining when an individual becomes
eligible for a wife’s insurance benefit, any break in
eligibility of less than 12 consecutive months shall
not be taken into account.’’.
(b) HUSBAND’S
INSURANCE
BENEFITS.—Section
202(c)(3) of such Act (42 U.S.C. 402(c)(3)) is amended
to read as follows:
quirements of paragraph (2) are met with respect to
such service, or
‘‘(B) the requirements of paragraph (3) are met
with respect to such service.
‘‘(2) EXCEPTION
FOR
CURRENT
EMPLOYMENT
WHICH CONTINUES.—
‘‘(A) IN GENERAL.—Except as provided in sub-
paragraph (B), the requirements of this paragraph
are met with respect to service for any employer if—
‘‘(i) such service is performed by an indi-
vidual—
‘‘(I) who was performing substantial
and regular service for remuneration for
that employer before January 1, 2000,
‘‘(II) who is a bona fide employee of
that employer on December 31, 1999, and
‘‘(III) whose employment relationship
with that employer was not entered into
for purposes of meeting the requirements
of this subparagraph, and
‘‘(ii) the employment relationship with that
employer has not been terminated after Decem-
ber 31, 1999.
‘‘(B) ELECTIONS
FOR
INCLUSION.—The re-
quirements of this paragraph shall be deemed not
100
met with respect to service performed by an individ-
ual if such individual elects in writing before Janu-
ary 1, 2000, in such form and manner as shall be
prescribed in regulations of the Commissioner of So-
cial Security, that the requirements of this para-
graph be deemed not to be met with respect to such
service.
‘‘(C) TREATMENT OF MULTIPLE AGENCIES AND
INSTRUMENTALITIES.—For purposes of subpara-
graph (A), under regulations (consistent with regula-
tions established under section 3121(t)(2)(B) of the
Internal Revenue Code of 1986)—
‘‘(i) all agencies and instrumentalities of a
State (as defined in section 218(b)) or of the
District of Columbia shall be treated as a single
employer, and
‘‘(ii) all agencies and instrumentalities of a
political subdivision of a State (as so defined)
shall be treated as a single employer and shall
not be treated as described in clause (i).
‘‘(3) EXCEPTION FOR CERTAIN SERVICES.—
‘‘(A) IN GENERAL.—The requirements of this
paragraph are met with respect to service if such
service is performed—
101
‘‘(i) by an individual who is employed by a
State or political subdivision thereof to relieve
such individual from unemployment,
‘‘(ii) in a hospital, home, or other institu-
tion by a patient or inmate thereof as an em-
ployee of a State or political subdivision thereof
or of the District of Columbia,
‘‘(iii) by an individual, as an employee of
a State or political subdivision thereof or of the
District of Columbia, serving on a temporary
basis in case of fire, storm, snow, earthquake,
flood, or other similar emergency,
‘‘(iv) by any individual as an employee in-
cluded under section 5351(2) of title 5, United
States Code (relating to certain interns, student
nurses, and other student employees of hos-
pitals of the District of Columbia Government),
other than as a medical or dental intern or a
medical or dental resident in training,
‘‘(v) by an election official or election
worker if the remuneration paid in a calendar
year for such service is less than $1,000 with
respect to service performed during calendar
year 2000, and the adjusted amount determined
under subparagraph (C) for any subsequent
102
year with respect to service performed during
such subsequent year, except to the extent that
service by such election official or election work-
er is included in employment under an agree-
ment under section 218, or
‘‘(vi) by an employee in a position com-
pensated solely on a fee basis which is treated
pursuant to section 211(c)(2)(E) as a trade or
business for purposes of inclusion of such fees
in net earnings from self-employment.
‘‘(B) DEFINITIONS.—As used in this para-
graph, the terms ‘State’ and ‘political subdivision’
have the meanings given those terms in section
218(b).
‘‘(C) ADJUSTMENTS TO DOLLAR AMOUNT FOR
ELECTION
OFFICIALS
AND
ELECTION
WORKERS.—
For each year after 2000, the Commissioner of So-
cial Security shall adjust the amount referred to in
subparagraph (A)(v) at the same time and in the
same 
manner 
as 
is 
provided 
under 
section
215(a)(1)(B)(ii) with respect to the amounts re-
ferred to in section 215(a)(1)(B)(i), except that—
‘‘(i) for purposes of this subparagraph,
1997 shall be substituted for the calendar year
referred to in section 215(a)(1)(B)(ii)(II), and
103
‘‘(ii) such amount as so adjusted, if not a
multiple of $100, shall be rounded to the next
higher multiple of $100 where such amount is
a multiple of $50 and to the nearest multiple
of $100 in any other case.
The Commissioner of Social Security shall determine
and publish in the Federal Register each adjusted
amount determined under this subparagraph not
later than November 1 preceding the year for which
the adjustment is made.’’.
(B) CONFORMING AMENDMENTS.—
(i) Subsection (k) of section 210 of
such Act (42 U.S.C. 410(k)) (relating to
covered transportation service) is repealed.
(ii) Section 210(p) of such Act (42
U.S.C. 410(p)) is amended—
(I) in paragraph (2), by striking
‘‘service is performed’’ and all that
follows and inserting ‘‘service is serv-
ice described in subsection (s)(3)(A).’’;
and
(II) in paragraph (3)(A), by in-
serting ‘‘under subsection (a)(7) as in
effect in December 1999’’ after ‘‘sec-
tion’’.
104
(iii) Section 218(c)(6) of such Act (42
U.S.C. 418(c)(6)) is amended—
(I) by striking subparagraph (C);
(II) by redesignating subpara-
graphs (D) and (E) as subparagraphs
(C) and (D), respectively; and
(III) by striking subparagraph
(F) and inserting the following:
‘‘(E) service which is included as employment
under section 210(a).’’
(b) AMENDMENTS
TO
THE INTERNAL REVENUE
CODE OF 1986.—
(1) IN
GENERAL.—Paragraph (7) of section
3121(b) of the Internal Revenue Code of 1986 (re-
lating to employment) is amended to read as follows:
‘‘(7) excluded State or local government em-
ployment (as defined in subsection (t));’’.
(2) EXCLUDED STATE OR LOCAL GOVERNMENT
EMPLOYMENT.—Section 3121 of such Code is
amended by inserting after subsection (s) the follow-
ing new subsection:
‘‘(t) EXCLUDED STATE OR LOCAL GOVERNMENT EM-
PLOYMENT.—
‘‘(1) IN GENERAL.—For purposes of this chap-
ter, the term ‘excluded State or local government
106
‘‘(II) who is a bona fide employee
of that employer on December 31,
2000, and
‘‘(III) whose employment rela-
tionship with that employer was not
entered into for purposes of meeting
the requirements of this subpara-
graph, and
‘‘(ii) the employment relationship with
that employer has not been terminated
after December 31, 1999.
‘‘(B) TREATMENT OF MULTIPLE AGENCIES
AND
INSTRUMENTALITIES.—For purposes of
subparagraph (A), under regulations—
‘‘(i) all agencies and instrumentalities
of a State (as defined in section 218(b) of
the Social Security Act) or of the District
of Columbia shall be treated as a single
employer, and
‘‘(ii) all agencies and instrumentalities
of a political subdivision of a State (as so
defined) shall be treated as a single em-
ployer and shall not be treated as de-
scribed in clause (i).
‘‘(3) EXCEPTION FOR CERTAIN SERVICES.—
107
‘‘(A) IN GENERAL.—The requirements of
this paragraph are met with respect to service
if such service is performed—
‘‘(i) by an individual who is employed
by a State or political subdivision thereof
to relieve such individual from unemploy-
ment,
‘‘(ii) in a hospital, home, or other in-
stitution by a patient or inmate thereof as
an employee of a State or political subdivi-
sion thereof or of the District of Columbia,
‘‘(iii) by an individual, as an employee
of a State or political subdivision thereof
or of the District of Columbia, serving on
a temporary basis in case of fire, storm,
snow, earthquake, flood, or other similar
emergency,
‘‘(iv) by any individual as an employee
included under section 5351(2) of title 5,
United States Code (relating to certain in-
terns, student nurses, and other student
employees of hospitals of the District of
Columbia Government), other than as a
medical or dental intern or a medical or
dental resident in training,
108
‘‘(v) by an election official or election
worker if the remuneration paid in a cal-
endar year for such service is less than
$1,000 with respect to service performed
during 2000, and the adjusted amount de-
termined under section 210(s)(3)(C) of the
Social Security Act for any subsequent
year with respect to service performed dur-
ing such subsequent year, except to the ex-
tent that service by such election official or
election worker is included in employment
under an agreement under section 218 of
the Social Security Act, or
‘‘(vi) by an employee in a position
compensated solely on a fee basis which is
treated pursuant to section 1402(c)(2)(E)
as a trade or business for purposes of in-
clusion of such fees in net earnings from
self-employment.
‘‘(B) DEFINITIONS.—As used in this para-
graph, the terms ‘State’ and ‘political subdivi-
sion’ have the meanings given those terms in
section 218(b) of the Social Security Act.’’.
(3) CONFORMING AMENDMENTS.—
109
(A) Subsection (j) of such section 3121
(relating to covered transportation service) is
repealed.
(B) Paragraph (2) of section 3121(u) of
such Code (relating to application of hospital
insurance tax to Federal, State, and local em-
ployment) is amended—
(i) in subparagraph (B), by striking
‘‘service is performed’’ in clause (ii) and all
that follows through the end of such sub-
paragraph and inserting ‘‘service is service
described in subsection (t)(3)(A).’’; and
(ii) in subparagraph (C)(i), by insert-
ing ‘‘under subsection (b)(7) as in effect in
July 1996’’ after ‘‘chapter’’.
(c) EFFECTIVE DATE.—Except as otherwise provided
in this section, the amendments made by this section shall
apply with respect to service performed after December
31, 1997.
SEC. 610. ADJUSTMENTS IN FORMULA FOR DETERMINING
PRIMARY INSURANCE AMOUNT.
(a) ADDITIONAL
EARNINGS
BRACKET.—Section
215(a)(1)(A) of the Social Security Act (42 U.S.C.
415(a)(1)(A)) is amended—
(1) in clause (ii), by striking ‘‘and’’;
110
(2) in clause (iii), by striking ‘‘clause (ii),’’ and
inserting the following: ‘‘clause (ii), but, in the case
of an individual who initially becomes eligible for
old-age insurance benefits (other than solely by rea-
son of prior entitlement to disability insurance bene-
fits), or who dies (before becoming eligible for such
benefits), after calendar year 2001, do not exceed
the amount established for purposes of this clause
by subparagraph (B), and’’; and
(3) by inserting after clause (iii) the following
new clause:
‘‘(iv) in the case of an individual who initially
becomes eligible for old-age insurance benefits (other
than solely by reason of prior entitlement to disabil-
ity insurance benefits), or who dies (before becoming
eligible for such benefits), after calendar year 2001,
10 percent of the individual’s average indexed
monthly earnings to the extent that such earnings
exceed the amount established for purposes of clause
(iii),’’.
(b) BEND POINT AMOUNTS.—Section 215(a)(1)(B)
of the Social Security Act (42 U.S.C. 415(a)(1)(B)) is
amended—
(1) in clause (ii), by inserting ‘‘and before
2002’’ after ‘‘1979’’ the first place it appears, and
111
by striking ‘‘by dividing—’’ and all that follows and
inserting ‘‘under clause (ix) of this subparagraph.’’;
(2) by redesignating clause (iii) as clause (xii);
(3) by inserting after clause (ii) the following
new clauses:
‘‘(iii) For individuals who initially become eligible for
old-age insurance benefits (other than solely by reason of
prior entitlement to disability insurance benefits), or who
die (before becoming eligible for such benefits), in any cal-
endar year after 2001, the amount established for pur-
poses of clause (i) of subparagraph (A) shall be an amount
equal to the product of the following factors:
‘‘(I) the amount established with respect to cal-
endar year 1979 under clause (i) of this subpara-
graph for purposes of clause (i) of subparagraph
(A), and
‘‘(II) the quotient obtained under clause (ix) of
this subparagraph.
‘‘(iv) For individuals who initially become eligible for
old-age insurance benefits (other than solely by reason of
prior entitlement to disability insurance benefits), or who
die (before becoming eligible for such benefits), in any cal-
endar year after 2001 and before 2026, the amount estab-
lished for purposes of clause (ii) of subparagraph (A) shall
be an amount equal to the product of the following factors:
112
‘‘(I) the amount established with respect to the
preceding calendar year under this subparagraph for
purposes of clause (ii) of subparagraph (A),
‘‘(II) the quotient obtained under clause (x) of
this subparagraph, and
‘‘(III) 0.99.
‘‘(v) For individuals who initially become eligible for
old-age insurance benefits (other than solely by reason of
prior entitlement to disability insurance benefits), or who
die (before becoming eligible for such benefits), in any cal-
endar year after 2025, the amount established for pur-
poses of clause (ii) of subparagraph (A) shall be an
amount equal to the product of the following factors:
‘‘(I) the amount established with respect to the
calendar year 2025 under clause (iv) of this sub-
paragraph for purposes of clause (ii) of subpara-
graph (A), and
‘‘(II) the quotient obtained under clause (xi) of
this subparagraph.
‘‘(vi) For individuals who initially become eligible for
old-age insurance benefits (other than solely by reason of
prior entitlement to disability insurance benefits), or who
die (before becoming eligible for such benefits), in the cal-
endar year 2002, the amount established for purposes of
113
clause (iii) of subparagraph (A) shall be an amount equal
to the quotient derived by dividing—
‘‘(I) the amount established with respect to the
calendar year 2002 under clause (iv) of this sub-
paragraph for purposes of clause (ii) of subpara-
graph (A), by
‘‘(II) 0.9950.
‘‘(vii) For individuals who initially become eligible for
old-age insurance benefits (other than solely by reason of
prior entitlement to disability insurance benefits), or who
die (before becoming eligible for such benefits), in any cal-
endar year after 2002 and before 2026, the amount estab-
lished for purposes of clause (iii) of subparagraph (A)
shall be an amount equal to the product of the following
factors:
‘‘(I) the amount established with respect to the
preceding calendar year under this subparagraph for
purposes of clause (iii) of subparagraph (A),
‘‘(II) the quotient obtained under clause (x) of
this subparagraph, and
‘‘(III) 0.99.
‘‘(viii) For individuals who initially become eligible for
old-age insurance benefits (other than solely by reason of
prior entitlement to disability insurance benefits), or who
die (before becoming eligible for such benefits), in any cal-
114
endar year after 2025, the amount established for pur-
poses of clause (iii) of subparagraph (A) shall be an
amount equal to the product of the following factors:
‘‘(I) the amount established with respect to cal-
endar year 2025 under clause (vii) of this subpara-
graph for purposes of clause (iii) of subparagraph
(A), and
‘‘(II) the quotient obtained under clause (xi) of
this subparagraph.
‘‘(ix) The quotient obtained under this clause is the
quotient obtained by dividing—
‘‘(I) the deemed average total wages (as defined
in section 209(k)(1)) for the second calendar year
preceding the calendar year for which the determina-
tion is made, by
‘‘(II) the average of the total wages (as defined
in regulations of the Secretary and computed with-
out regard to the limitations specified in section
209(a)(1)) reported to the Secretary of the Treasury
or his delegate for the calendar year 1977.
‘‘(x) The quotient obtained under this clause is the
quotient obtained by dividing—
‘‘(I) the deemed average total wages (as defined
in section 209(k)(1)) for the second calendar year
115
preceding the calendar year for which the determina-
tion is made, by
‘‘(II) the deemed average total wages (as de-
fined in section 209(k)(1)) for the third calendar
year preceding the calendar year for which the de-
termination is made.
‘‘(xi) The quotient obtained under this clause is the
quotient obtained by dividing—
‘‘(I) the deemed average total wages (as defined
in section 209(k)(1)) for the second calendar year
preceding the calendar year for which the determina-
tion is made, by
‘‘(II) the average of the total wages (as defined
in regulations of the Secretary and computed with-
out regard to the limitations specified in section
209(a)(1)) reported to the Secretary of the Treasury
or his delegate for the calendar year 2024.’’; and
(4) in clause (xii) (as redesignated), by striking
‘‘clause (ii)’’ and inserting ‘‘the preceding clauses of
this subparagraph’’.
(c) EFFECTIVE DATE.—The amendments made by
this section shall apply with respect to individuals who ini-
tially become eligible (within the meaning of section
215(a)(3)(B) of the Social Security Act) for old-age insur-
ance benefits under title II of the Social Security Act, or
116
who die (before becoming eligible for such benefits), in any
calendar year after 2001.
SEC. 611. ANNUAL STATEMENT OF ACCRUED LIABILITY OF
THE OLD–AGE AND SURVIVORS INSURANCE
PROGRAM.
(a) IN GENERAL.—Section 1105(a) of title 31, Unit-
ed States Code (relating to budget contents and submis-
sion to Congress) is amended by adding at the end the
following new paragraph:
‘‘(31) a statement of the current accrued liabil-
ity of the Federal Government for future benefit
payments under the Old-Age and Survivors Insur-
ance Program under title II of the Social Security
Act.’’.
(b) EFFECTIVE DATE.—The amendment made by
subsection (a) shall apply with respect to budgets submit-
ted for fiscal years beginning on or after October 1, 1998.
TITLE VII—PROVISIONS RELAT-
ING TO FEDERAL CIVILIAN
AND MILITARY PERSONNEL
SEC. 701. FEDERAL CIVILIAN AND MILITARY PERSONNEL.
(a) IN GENERAL.—Not later than December 31,
1998, the Office of Personnel Management, after appro-
priate study, shall submit to the President and each House
of Congress a written report containing recommendations
117
on how to provide for the application of this Act with re-
spect to Federal civilian and military personnel.
(b) REQUIREMENTS.—The report—
(1) shall be prepared in consultation with the
Social Security Administration, the Securities and
Exchange Commission, and other appropriate agen-
cies; and
(2) shall be accompanied by draft legislation
which, if enacted, would carry out the recommenda-
tions contained in such report.
SEC. 702. PROVISIONS RELATING TO THE CONTINUED OP-
ERATION OF EXISTING RETIREMENT SYS-
TEMS.
To the extent that the report and draft legislation
relate to provisions of law in effect before the date of en-
actment of this Act, each shall address at least the follow-
ing:
(1) FEDERAL EMPLOYEES’ RETIREMENT SYS-
TEM.—
(A) Section 8401(11) of title 5, United
States Code (relating to the definition of an
‘‘employee’’), which includes the requirement
that the individual concerned be someone whose
civilian service is employment for the purposes
118
of title II of the Social Security Act and chap-
ter 21 of the Internal Revenue Code of 1986.
(B) Section 8421 of such title (relating to
annuity supplement), which includes provisions
incorporating the notion of the period of time
for which the individual is or would be entitled
to old-age insurance benefits under title II of
the Social Security Act, and provisions for com-
puting the amount of such supplement based on
the amount of certain benefits to which the in-
dividual would be entitled under such Act.
(C) Section 8442 of such title (relating to
rights of a widow or widower), which includes
provisions under which a supplementary annu-
ity for a widow or widower is not payable to
anyone who would not be entitled to certain
benefits under the Social Security Act, and pro-
visions for the computation of any such annuity
based on the amount of certain benefits which
would be payable to that individual under the
Social Security Act.
(D) Section 8443 of such title (relating to
rights of a child), which includes provisions
under which, as part of the formula for comput-
ing the amount of a survivor annuity for a
119
child, there is incorporated the notion of the
amount of child’s insurance benefits which are
or would be payable under title II of the Social
Security Act.
(2) CIVIL SERVICE RETIREMENT SYSTEM.—
(A) Section 8334(k) of such title (relating
to special rules for determining deductions and
contributions for individuals subject to ‘‘offset-
83’’ treatment), which incorporates the notion
of the OASDI contribution made from Federal
wages of the individual concerned.
(B) Section 8349 of such title (relating to
offset based on certain benefits under the Social
Security Act), which incorporates notions relat-
ing to actual or constructive eligibility for bene-
fits under the Social Security Act, and the
amount of those benefits.
(3) COORDINATION PROVISIONS.—Provisions of
law involving a reduction or other adjustment in re-
tirement benefits (or eligibility therefor), based on
any individual’s eligibility for benefits under title II
of the Social Security Act.
(4) OTHER
RETIREMENT
SYSTEMS.—Similar
provisions of law under other retirement systems
covering Federal civilian or military personnel.
120
SEC. 703. PROVISIONS RELATING TO THE NEW SYSTEM.
To the extent that the report and draft legislation
relate to the implementation of any other title of this Act,
each shall address at least the following:
(1) What the specifications for the personal re-
tirement account payroll deduction program or pro-
grams covering Federal civilian and military person-
nel shall be or, alternatively, how those specifications
shall be developed.
(2) Which agencies or instrumentalities of the
Federal Government shall be responsible for operat-
ing or maintaining which aspects of the program or
programs referred to in paragraph (1).
(3) Which penalty provisions are appropriate or
inappropriate with respect to the Federal Govern-
ment in its capacity as a ‘‘covered employer’’, sub-
ject to what modifications (if any).
(4) With respect to the enforcement provisions
under title V, issues similar to those referred to in
paragraph (3).
TITLE VIII—SOCIAL SECURITY
TRANSITION COMMISSION
SEC 801. ESTABLISHMENT OF COMMISSION.
There is established a commission to be known as the
Social Security Transition Commission (in this title re-
ferred to as the ‘‘Commission’’).
121
SEC. 802. DUTIES.
(a) FINDINGS.—The Commission shall make findings
regarding the most appropriate actions which should be
taken, together with the implementation of the provisions
of this Act, so that any increases in budget outlays result-
ing from the implementation of such provisions are mini-
mized and are adequately funded. Such findings shall in-
clude specific findings with respect to each of the following
possible actions:
(1) The sale of Federal assets.
(2) Budget outlay reductions.
(3) Increases in revenue.
(4) Issuance of additional obligations.
(b) RECOMMENDATIONS.—
(1) IN GENERAL.—The Commission shall make
specific recommendations to the Congress regarding
its findings under subsection (a) not later than Jan-
uary 1, 2001, and shall include with such rec-
ommendations legislative language necessary for car-
rying out such recommendations. The Commission
shall develop such legislative language after conduct-
ing such public hearings regarding the issues ad-
dressed as the Commission considers appropriate.
The Commission shall actively consult with the ap-
propriate Committees of each House of the Con-
gress, the Comptroller General of the United States,
122
and the Director of the Office of Management and
Budget in compiling such legislative language. The
Commission shall promptly provide, upon request, to
any Member of Congress a description of any infor-
mation used by the Commission in making its rec-
ommendations.
(2) BUDGET
OUTLAY
REDUCTIONS
PERMA-
NENT.—All reductions in obligational authority con-
tained in the legislative language included in the
Commission’s recommendations shall be done in a
manner that makes such reductions permanent.
(3) ACCOMPANYING
REPORT
BY
CBO.—The
Comptroller General of the United States shall pro-
vide appropriate assistance to the Commission in the
preparation of the Commission’s report and shall
transmit to each House of the Congress at the time
of the Commission’s transmittal a report containing
a detailed analysis of the Commission’s rec-
ommendations.
SEC. 803. MEMBERSHIP.
(a) APPOINTMENT.—
(1) IN
GENERAL.—The Commission shall be
composed of 7 members appointed by the President,
by and with the advice and consent of the Senate.
123
(2) 
TRANSMITTAL
OF
NOMINATIONS.—The
President shall transmit to the Senate the nomina-
tions for appointment to the Commission by no later
than June 30, 1999.
(3) RECOMMENDATIONS.—In selecting individ-
uals for nominations for appointments to the Com-
mission, the President shall take into consider-
ation—
(A) with respect to the nomination of 3 of
the members of the Commission, recommenda-
tions which shall be jointly submitted by the
Speaker of the House of Representatives and
the minority leader of the House of Representa-
tives, and
(B) with respect to the nomination of 3
other 
members 
of 
the 
Commission, 
rec-
ommendations which shall be jointly submitted
by the majority leader of the Senate and the
minority leader of the Senate.
Not more than 4 members of the Commission may
be of the same political party.
(b) CHAIRMAN.—At the time the President nomi-
nates individuals for appointment to the Commission, the
President shall designate one such individual who shall
serve as Chairman of the Commission.
124
(c) DISQUALIFICATION.—No individual may serve as
a member of the Commission while such individual serves
as a Member of Congress or as an officer or employee of
the Executive branch. No individual may serve as a mem-
ber of the Commission if such individual is or has been
a registered lobbyist.
(d) VACANCIES.—Any vacancy in the membership of
the Commission shall be filled in the manner in which the
original appointment was made and shall not affect the
power of the remaining members to execute the duties of
the Commission.
(e) QUORUM.—A quorum shall consist of 4 members
of the Commission, except that 3 members may conduct
a hearing under section 804(a).
(f) MEETINGS.—The Commission shall meet at the
call of the Chairman or a majority of its members. Each
meeting of the Commission, other than meetings in which
classified information is to be discussed, shall be open to
the public. All the proceedings, information, and delibera-
tions of the Commission shall be open, upon request, to
the Chairmen and the ranking minority members of the
Committee on Government Reform and Oversight, the
Committee on the Budget, and the Committee on Appro-
priations of the House of Representatives and the Com-
mittee on Governmental Affairs, the Committee on the
125
Budget, and the Committee on Appropriations of the Sen-
ate.
(g) COMPENSATION AND REIMBURSEMENT OF EX-
PENSES.—
(1) COMPENSATION.—The members of the
Commission shall be paid for each day (including
travel time) during which they are engaged in the
actual performance of duties vested in the Commis-
sion. The members shall be paid—
(A) in the case of the Chairman, at a rate
not to exceed the daily equivalent of the mini-
mum annual rate of basic pay payable for level
III of the Executive Schedule under section
5314 of title 5, United States Code, and
(B) in the case of the other members, at
a rate not to exceed the daily equivalent of the
minimum annual rate of basic pay payable for
level IV of the Executive Schedule under section
5315 of such title.
(2) REIMBURSEMENT OF EXPENSES.—Members
of the Commission shall receive travel expenses, in-
cluding per diem in lieu of subsistence, in accord-
ance with sections 5702 and 5703 of title 5, United
States Code.
(h) STAFF DIRECTOR AND STAFF.—
126
(1) STAFF DIRECTOR.—The Commission shall
appoint a Staff Director who is not otherwise, and
has not during the 1-year period preceding the date
of such appointment served as, an officer or em-
ployee in the Executive branch and who is not and
has not been Member of Congress or a registered
lobbyist. The Staff Director shall be paid at a rate
not to exceed the rate of basic pay payable for level
IV of the Executive Schedule under section 5315 of
title 5, United States Code.
(2) STAFF.—
(A) IN
GENERAL.—The Staff Director,
with the approval of the Commission, may ap-
point and fix pay of additional personnel. The
Staff Director may take such appointments
without regard to the provisions of title 5, Unit-
ed States Code, governing appointment in the
competitive service, and any personnel so ap-
pointed may be paid without regard to the pro-
visions of chapter 51 and subchapter III of
chapter 53 of such title relating to classification
and General Schedule pay rates, except that an
individual so appointed may not receive pay in
excess of the annual rate of basic pay payable
127
for level V of the Executive Schedule under sec-
tion 5316 of such title.
(B) DETAILEES.—Upon request of the
Staff Director, the head of any Federal depart-
ment or agency may detail any of the personnel
of that department or agency to the Commis-
sion to assist the Commission in carrying out
its duties under this Act. Not more than one-
third of the personnel employed by or detailed
to the Commission may be on detail from any
Government agency.
(3) EXPERTS AND CONSULTANTS.—The Com-
mission may procure by contract, to the extent funds
are available, the temporary or intermittent services
of experts or consultants pursuant to section 3109
of title 5, United States Code.
(i) OFFICES AND PROPERTY.—The Commission may
lease space and acquire personal property to the extent
funds are available.
(j) ASSISTANCE FROM GAO.—The Comptroller Gen-
eral of the United States shall provide assistance, includ-
ing the detailing of employees, to the Commission in ac-
cordance with an agreement entered into with the Com-
mission.