I 
114TH CONGRESS 
1ST SESSION H. R. 1984 
To amend the Internal Revenue Code of 1986 and title II of the Social 
Security Act to repeal the cap on compensation subject to the payroll 
tax, to reallocate payroll tax revenue to the Social Security Trust Funds, 
to apply the CPI–E to Social Security cost-of-living increases, and for 
other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
APRIL 23, 2015 
Mr. DEFAZIO (for himself, Mr. CONYERS, Ms. DELBENE, Mr. GRIJALVA, Ms. 
PINGREE, and Ms. SLAUGHTER) introduced the following bill; which was 
referred to the Committee on Ways and Means, and in addition to the 
Committee on Education and the Workforce, for a period to be subse-
quently determined by the Speaker, in each case for consideration of such 
provisions as fall within the jurisdiction of the committee concerned 
A BILL 
To amend the Internal Revenue Code of 1986 and title 
II of the Social Security Act to repeal the cap on com-
pensation subject to the payroll tax, to reallocate payroll 
tax revenue to the Social Security Trust Funds, to apply 
the CPI–E to Social Security cost-of-living increases, 
and for other purposes. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
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SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Fair Adjustment and 
Income Revenue for Social Security Act’’ or the ‘‘FAIR 
Social Security Act’’. 
SEC. 2. REPEAL OF CAP ON COMPENSATION SUBJECT TO 
FEDERAL INSURANCE CONTRIBUTIONS ACT. 
(a) WAGES.—Section 3121(a) of the Internal Rev-
enue Code of 1986 is amended by striking paragraph (1). 
(b) SELF-EMPLOYMENT INCOME.—The first sentence 
of section 1402(b) of the Internal Revenue Code of 1986 
is amended by striking ‘‘include—’’ and all that follows 
and inserting ‘‘include the net earnings from self-employ-
ment if such net earnings for the taxable year are less 
than $400.’’. 
(c) CONFORMING AMENDMENTS.— 
(1) Section 6413(c) of the Internal Revenue 
Code of 1986 is amended— 
(A) by striking paragraph (1), and 
(B) in paragraph (2)(A) by striking ‘‘, not 
to exceed an amount equal to the contribution 
and benefit base (as determined under section 
230 of the Social Security Act) for any calendar 
year with respect to which such contribution 
and benefit base is effective,’’. 
(2) Section 3122 of the Internal Revenue Code 
of 1986 is amended by striking ‘‘The person making 
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such return may, for convenience of administration, 
make payments of the tax imposed under section 
3111 with respect to such service without regard to 
the contribution and benefit base limitation in sec-
tion 3121(a)(1), and he shall not be required to ob-
tain a refund of the tax paid under section 3111 on 
that part of the remuneration not included in wages 
by reason of section 3121(a)(1).’’. 
(3) Section 3125 of the Internal Revenue Code 
of 1986 is amended by striking ‘‘without regard to 
the contribution and benefit base limitation in sec-
tion 3121(a)(1)’’ each place it appears. 
(4) Section 3231(e)(2)(C) of the Internal Rev-
enue Code of 1986 is amended by inserting ‘‘(as in 
effect on the date of the enactment of the Fair Ad-
justment and Income Revenue for Social Security 
Act’’ after ‘‘employers)’’. 
(5) Section 3511(b) of the Internal Revenue 
Code of 1986 is amended by striking ‘‘3121(a)(1), 
3231(e)(2)(C),’’ and inserting ‘‘3231(e)(2)(C)’’. 
(d) EFFECTIVE DATE.—The amendments made by 
this section shall apply with respect to remuneration re-
ceived, and taxable years beginning, after December 31, 
2015. 
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SEC. 3. REALLOCATION OF PAYROLL TAX REVENUE. 
(a) ALLOCATION
OF 2016 PAYROLL TAX REV-
ENUE.—With respect to that portion of wages (as defined 
in section 3121 of the Internal Revenue Code of 1986) 
paid during calendar year 2016 that would not be consid-
ered wages but for the amendment made by section 2(a), 
and with respect to that portion of self-employment in-
come (as defined in section 1402 of the Internal Revenue 
Code of 1986) reported for any taxable year beginning 
during such calendar year that would not be considered 
self-employment income but for the amendment made by 
section 2(b), paragraphs (1)(R) and (2)(R) of section 
201(b) of the Social Security Act (42 U.S.C. 401(b)) shall 
each be applied by substituting ‘‘12.40 per centum’’ for 
‘‘1.80 per centum’’. 
(b) WAGES.—Section 201(b)(1) of the Social Security 
Act (42 U.S.C. 401(b)(1)) is amended by striking ‘‘and 
(R) 1.80 per centum of the wages (as so defined) paid 
after December 31, 1999, and so reported’’ and inserting 
‘‘(R) 1.80 per centum of the wages (as so defined) paid 
after December 31, 1999, and before January 1, 2033, 
and so reported, (S) 1.60 per centum of the wages (as 
so defined) paid after December 31, 2032, and before Jan-
uary 1, 2050, and so reported, and (T) 1.80 per centum 
of the wages (as so defined) paid after December 31, 
2049, and so reported’’. 
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(c) SELF-EMPLOYMENT INCOME.—Section 201(b)(2) 
of such Act (42 U.S.C. 401(b)(2)) is amended by striking 
‘‘and (R) 1.80 per centum of the amount of self-employ-
ment income (as so defined) so reported for any taxable 
year beginning after December 31, 1999’’ and inserting 
‘‘(R) 1.80 per centum of the amount of self-employment 
income (as so defined) so reported for any taxable year 
beginning after December 31, 1999, and before January 
1, 2033, (S) 1.60 per centum of the amount of self-em-
ployment income (as so defined) so reported for any tax-
able year beginning after December 31, 2032, and before 
January 1, 2050, (T) 1.80 per centum of the amount of 
self-employment income (as so defined) so reported for 
any taxable year beginning after December 31, 2049’’. 
(d) EFFECTIVE DATE.—The amendments made by 
this section shall apply with respect to wages paid after 
December 31, 2015, and self-employment income for tax-
able years beginning after such date. 
SEC. 4. CONSUMER PRICE INDEX FOR ELDERLY CON-
SUMERS. 
(a) PUBLICATION.— 
(1) IN GENERAL.—The Bureau of Labor Statis-
tics of the Department of Labor shall prepare and 
publish an index for each calendar month to be 
known as the ‘‘Consumer Price Index for Elderly 
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Consumers’’ that indicates changes over time in ex-
penditures for consumption which are typical for in-
dividuals in the United States who are 62 years of 
age or older. 
(2) EFFECTIVE
DATE.—Subsection (a) shall 
apply with respect to calendar months ending on or 
after July 31 of the calendar year following the cal-
endar year in which this Act is enacted. 
(3) AUTHORIZATION
OF
APPROPRIATIONS.— 
There are authorized to be appropriated such sums 
as are necessary to carry out the provisions of this 
section. 
(b) 
COMPUTATION
OF
COST-OF-LIVING
IN-
CREASES.— 
(1) AMENDMENTS TO TITLE II.— 
(A) IN GENERAL.—Section 215(i)(1) of the 
Social Security Act (42 U.S.C. 415(i)(1)) is 
amended by adding at the end the following 
new subparagraph: 
‘‘(H) the term ‘Consumer Price Index’ means 
the Consumer Price Index for Elderly Consumers 
(CPI–E, as published by the Bureau of Labor Sta-
tistics of the Department of Labor).’’. 
(B) APPLICATION TO PRE-1979 LAW.— 
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(i) IN GENERAL.—Section 215(i)(1) of 
the Social Security Act as in effect in De-
cember 1978, and as applied in certain 
cases under the provisions of such Act as 
in effect after December 1978, is amended 
by adding at the end the following new 
subparagraph: 
‘‘(D) the term ‘Consumer Price Index’ means 
the Consumer Price Index for Elderly Consumers 
(CPI–E, as published by the Bureau of Labor Sta-
tistics of the Department of Labor).’’. 
(ii) CONFORMING
CHANGE.—Section 
215(i)(4) of the Social Security Act (42 
U.S.C. 415(i)(4)) is amended by inserting 
‘‘and by section 4 of the Fair Adjustment 
and Income Revenue for Social Security 
Act’’ after ‘‘1986’’. 
(C) EFFECTIVE DATE.—The amendments 
made by subparagraphs (A) and (B) shall apply 
to determinations made with respect to cost-of- 
living computation quarters ending on or after 
September 30 of the second calendar year fol-
lowing the calendar year in which this Act is 
enacted. 
(2) AMENDMENTS TO TITLE XVIII.— 
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(A) IN GENERAL.—Title XVIII of such Act 
(42 U.S.C. 1395 et seq.) is amended— 
(i) 
in 
section 
1814(i)(2)(B) 
(42 
U.S.C. 1395f(i)(2)(B)), by inserting ‘‘(i) 
for accounting years ending before October 
1 of the second calendar year following the 
calendar year in which the Fair Adjust-
ment and Income Revenue for Social Secu-
rity Act was enacted,’’ after ‘‘for a year 
is’’, and by inserting after ‘‘fifth month of 
the accounting year’’ the following: ‘‘, and 
(ii) for accounting years ending after Octo-
ber 1 of such calendar year, the cap 
amount determined under clause (i) for the 
last accounting year referred to in such 
clause, increased or decreased by the same 
percentage as the percentage increase or 
decrease, respectively, in the medical care 
expenditure category (or corresponding 
category) of the Consumer Price Index for 
Elderly Consumers, published by the Bu-
reau of Labor Statistics, from March of 
such calendar year to the fifth month of 
the accounting year’’; 
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(ii) in section 1821(c)(2)(C)(ii)(II) 
(42 U.S.C. 1395i–5(c)(2)(C)(ii)(II)), by 
striking ‘‘consumer price index for all 
urban consumers (all items; United States 
city average)’’ and inserting ‘‘Consumer 
Price Index for Elderly Consumers’’; 
(iii) in section 1833(h)(2)(A)(i) (42 
U.S.C. 
1395l(h)(2)(A)(i)) 
by 
striking 
‘‘Consumer Price Index for All Urban Con-
sumers (United States city average)’’ and 
inserting ‘‘Consumer Price Index for El-
derly Consumers’’; 
(iv) in section 1833(i)(2)(C)(i) (42 
U.S.C. 
1395l(i)(2)(C)(i)), 
by 
striking 
‘‘Consumer Price Index for all urban con-
sumers (U.S. city average)’’ and inserting 
‘‘Consumer Price Index for Elderly Con-
sumers’’; 
(v) in section 1834(a)(14)(L) (42 
U.S.C. 
1395m(a)(14)(L)), 
by 
striking 
‘‘consumer price index for all urban con-
sumers (U.S. urban average)’’ and insert-
ing ‘‘applicable consumer price index’’; 
(vi) in section 1834(h)(4)(A)(xi)(I) 
(42 U.S.C. 1395m(h)(4)(A)(xi)(I)), by 
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striking ‘‘consumer price index for all 
urban consumers (United States city aver-
age)’’ and inserting ‘‘Consumer Price 
Index for Elderly Consumers’’; 
(vii) in section 1834(l)(3)(B) (42 
U.S.C. 1395m(l)(3)(B)), by striking ‘‘con-
sumer price index for all urban consumers 
(U.S. city average)’’ and inserting ‘‘Con-
sumer Price Index for Elderly Con-
sumers’’; 
(viii) in section 1839(i)(5)(A)(ii) (42 
U.S.C. 
1395r(i)(5)(A)(ii)), 
by 
striking 
‘‘Consumer Price Index (United States city 
average)’’ and inserting ‘‘Consumer Price 
Index for Elderly Consumers’’; 
(ix) in section 1842(s)(1)(B)(ii)(I) (42 
U.S.C. 1395u(s)(1)(B)(ii)(I)), by striking 
‘‘consumer price index for all urban con-
sumers (United States city average)’’ and 
inserting ‘‘Consumer Price Index for El-
derly Consumers’’; 
(x) in each of subparagraphs (D)(ii) 
and (E)(i)(II) of section 1860D–14(a)(3) 
(42 U.S.C. 1395w–114(a)(3)) and in sec-
tion 1860D–14(a)(4)(A)(ii) (42 U.S.C. 
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1395w–114(a)(4)(A)(ii)), by striking ‘‘con-
sumer price index (all items; U.S. city av-
erage)’’ and inserting ‘‘Consumer Price 
Index for Elderly Consumers’’; 
(xi) in section 1882(p)(11)(C)(ii) (42 
U.S.C. 1395ss(p)(11)(C)(ii)), by striking 
‘‘Consumer Price Index for all urban con-
sumers (all items; U.S. city average)’’ and 
inserting ‘‘Consumer Price Index for El-
derly Consumers’’; 
(xii) in each of clauses (iv) and 
(vi)(II) of section 1886(h)(2)(E) (42 
U.S.C. 1395ww(h)(2)(E)), by striking ‘‘for 
all urban consumers’’; and 
(xiii) in section 1886(h)(5)(B) (42 
U.S.C. 
1395ww(h)(5)(B)), 
by 
striking 
‘‘Consumer Price Index for All Urban Con-
sumers (United States city average)’’ and 
inserting ‘‘Consumer Price Index for El-
derly Consumers’’. 
(B) EFFECTIVE DATE.—The amendments 
made by subparagraph (A) shall apply with re-
spect to determinations made for periods ending 
after December 31 of the second calendar year 
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