I 
108TH CONGRESS 
1ST SESSION 
H. R. 75
To amend the Social Security Act and the Internal Revenue Code of 1986 
to preserve and strengthen the Social Security program through the 
creation of personal Social Security guarantee accounts ensuring full 
benefits for all workers and their families, restoring long-term Social 
Security solvency, to make certain benefit improvements, and for other 
purposes. 
IN THE HOUSE OF REPRESENTATIVES 
JANUARY 7, 2003
Mr. SHAW (for himself, Mr. FOLEY, Mr. LEWIS of Kentucky, Mr. NORWOOD, 
and Mr. SMITH of Michigan) introduced the following bill; which was re-
ferred to the Committee on Ways and Means 
A BILL 
To amend the Social Security Act and the Internal Revenue 
Code of 1986 to preserve and strengthen the Social 
Security program through the creation of personal Social 
Security guarantee accounts ensuring full benefits for 
all workers and their families, restoring long-term Social 
Security solvency, to make certain benefit improvements, 
and for other purposes.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE; TABLE OF CONTENTS. 
(a) SHORT TITLE.—This Act may be cited as the 
‘‘Social Security Guarantee Plus Act of 2003’’. 
(b) TABLE OF CONTENTS.—The table of contents is 
as follows:
Sec. 1. Short title; table of contents. 
Sec. 2. Findings and statement of purpose. 
TITLE I—SOCIAL SECURITY GUARANTEE PROGRAM 
Sec. 101. Social security guarantee refundable credit. 
Sec. 102. Establishment of the social security guarantee program. 
‘‘PART B—SOCIAL SECURITY GUARANTEE PROGRAM 
‘‘Sec. 251. Definitions. 
‘‘Sec. 252. Establishment of program. 
‘‘Sec. 253. Social Security guarantee accounts. 
‘‘Sec. 254. Investment of accounts. 
‘‘Sec. 255. Determination of monthly annuity amounts and use in deter-
mining account distribution supplements. 
‘‘Sec. 256. Disposition of account assets. 
‘‘Sec. 257. Administration of the program.
Sec. 103. Benefit increases. 
Sec. 104. Tax treatment. 
Sec. 105. Annual account Statements. 
Sec. 106. Report on use of social security surpluses. 
TITLE II—BENEFIT UPDATES 
Sec. 201. Elimination of the social security earnings test for individuals who 
have attained age 62 (age 60 in the case of widow’s and wid-
ower’s insurance benefits). 
Sec. 202. Increase in widow’s and widower’s insurance benefits. 
Sec. 203. Benefits for disabled widows and widowers without regard to age. 
Sec. 204. Repeal of 7-year restriction on eligibility for widow’s and widower’s 
insurance benefits based on disability. 
Sec. 205. Exemption from two-year waiting period for divorced spouse’s bene-
fits upon other spouse’s remarriage. 
Sec. 206. Increase in amount of wages and self-employment income credited to 
years taken into account in determining average indexed 
monthly earnings for beneficiaries precluded from remunerative 
work occasioned by need to provide child care. 
Sec. 207. Government pension offset reduced from two-thirds to one-third of 
the government pension.
SEC. 2. FINDINGS AND STATEMENT OF PURPOSE. 
(a) FINDINGS.—The Congress finds as follows:
(1) The Social Security program provides essen-
tial income security for over 46 million Americans of 
all ages through its retirement, disability, and sur-
vivor benefits. Without these benefits, close to half 
of seniors would live in poverty. 
(2) Social Security’s benefit structure, which is 
designed to help lower-wage workers, and its family 
benefits are of particular importance to women and 
minorities. Without these benefits, about 53 percent 
of elderly women and 55 to 60 percent of elderly 
Hispanics and African-Americans would live in pov-
erty. 
(3) The Board of Trustees of the Social Secu-
rity trust funds project that, because people are liv-
ing longer, families are having fewer children, and 
the baby boom generation is approaching retirement, 
the Social Security program’s benefit costs will ex-
ceed its tax revenues beginning in 2017. By 2041, 
the Social Security trust funds will be depleted and 
the program will be able to honor only 73 percent 
of benefit commitments, and even less thereafter. 
(4) Each payday, American workers send their 
hard-earned payroll taxes to Social Security and in 
return are promised protection for themselves and
their families upon retirement, disability, or death. 
That commitment must be kept. 
(5) Reducing benefits will result in more seniors 
and individuals with disabilities living in poverty. 
(6) Workers who are more in need of early re-
tirement, such as police officers, firefighters, and 
manual laborers, would be especially harmed by in-
creases in the age of eligibility for Social Security 
benefits. 
(7) Inasmuch as payroll taxes already con-
stitute the single largest tax burden for most Amer-
ican families, further tax increases would contribute 
to erosion in public support for Social Security, 
would not result in sustainable financing for the 
long term, and would further burden employers and 
harm job creation. 
(8) Allowing the Federal Government to invest 
workers’ payroll taxes in private financial assets 
risks political interference in investment decisions 
and may reduce economic efficiency. 
(9) Workers’ ability to save and invest for their 
own economic security in retirement will continue to 
be particularly important, especially for younger 
workers.
(10) The creation of Social Security guarantee 
accounts as provided for in this Act is a critical goal 
in light of Social Security’s financial challenges, the 
options available to address these challenges, and 
the Nation’s interest in preserving and strength-
ening Social Security for the next 75 years and be-
yond. 
(b) STATEMENT OF PURPOSE.—The purpose of this 
Act is to preserve and strengthen the Social Security pro-
gram through the creation of Social Security guarantee 
accounts that will—
(1) ensure the payment of Social Security bene-
fits promised under current law, or greater benefits, 
to all eligible workers and their families; 
(2) provide for the long-run sustainability of the 
Social Security program; and 
(3) provide personal account assets to be used 
exclusively for the financial security of the account 
holder and his or her family that this and future 
Congresses cannot redirect for any other purpose.
‘‘(i) wages (as defined in section 
3121(a)) received by such individual dur-
ing such year on which tax is imposed by 
section 3101, and 
‘‘(ii) self-employment income (as de-
fined in 1402(b)) of such individual for the 
taxable year of such individual ending in 
such calendar year on which tax is imposed 
by section 1401, or 
‘‘(B) $1,000 (in the case of the calendar 
year ending after the date of the enactment of 
the Social Security Guarantee Plus Act of 
2003) and the amount determined under para-
graph (2) for the calendar year (in the case of 
subsequent calendar years). 
‘‘(2) WAGE-BASED
ADJUSTMENTS.—The Sec-
retary shall, on or before November 1 of the first 
calendar year ending after the date of the enactment 
of the Social Security Guarantee Plus Act of 2003 
and of every calendar year thereafter, determine and 
publish in the Federal Register the dollar amount 
under paragraph (1)(B) for the succeeding calendar 
year. Such amount shall be the larger of—
‘‘(A) the amount in effect in the calendar 
year in which the determination under this 
paragraph is made, or 
‘‘(B) the product of $1,000 and the ratio 
of the national average wage index (as defined 
in section 209(k)(1) of the Social Security Act) 
for the calendar year before the year in which 
the determination under this paragraph is made 
to the national average wage index (as so de-
fined) for the first of the 2 calendar years pre-
ceding the calendar year ending after the date 
of the enactment of the Social Security Guar-
antee Plus Act of 2003, 
with such product, if not a multiple of $10, being 
rounded to the next higher multiple of $10 where 
such amount is a multiple of $5 but not of $10 and 
to the nearest multiple of $10 in any other case. 
‘‘(c) SPECIAL RULES.—
‘‘(1) AGREEMENTS BY AMERICAN EMPLOYERS 
OF FOREIGN AFFILIATES.—Any amounts paid pur-
suant to an agreement under section 3121(l) (relat-
ing to agreements entered into by American employ-
ers with respect to foreign affiliates) which are 
equivalent to the taxes referred to in subsection
(b)(1)(A) shall be treated as taxes referred to in 
such subsection. 
‘‘(2) COORDINATION WITH SPECIAL REFUND OF 
SOCIAL
SECURITY
TAXES.—For purposes of sub-
section (b)(1)(A), tax imposed by section 3101 shall 
not include any taxes to the extent the individual is 
entitled to a special refund of such taxes under sec-
tion 6413(c). 
‘‘(d) PAYMENT.—Notwithstanding any other provi-
sion of this title, the payment under subsection (a) shall 
be paid only as provided in section 253 of the Social Secu-
rity Act.’’. 
(b) CONFORMING AMENDMENT.—The table of sec-
tions for chapter 25 of such Code is amended by adding 
at the end the following new item:
‘‘Sec. 3511. Social Security guarantee refundable credit.’’.
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to remuneration received, and net 
earnings for self-employment for services performed, in 
calendar years ending after the date of the enactment of 
this Act.
SEC. 102. ESTABLISHMENT OF THE SOCIAL SECURITY 
GUARANTEE PROGRAM. 
(a) IN GENERAL.—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 of such title the fol-
lowing new part: 
‘‘PART B—SOCIAL SECURITY GUARANTEE PROGRAM 
‘‘DEFINITIONS 
‘‘SEC. 251. For purposes of this part—
‘‘(1) COVERED
INDIVIDUAL.—The term ‘cov-
ered individual’ means an individual who has filed 
an election under section 253(b). 
‘‘(2) ACCOUNT ASSETS.—The term ‘account as-
sets’ means, with respect to a Social Security guar-
antee account, the total amount transferred to such 
account, increased by earnings credited under this 
part and reduced by losses and administrative ex-
penses under this part. 
‘‘(3) CERTIFIED
ACCOUNT
MANAGER.—The 
term ‘certified account manager’ means a person 
who is certified under section 257(b). 
‘‘(4) BOARD.—The term ‘Board’ means the So-
cial Security Guarantee Board established under sec-
tion 257(a).
‘‘(5) 
COMMISSIONER.—The 
term 
‘Commis-
sioner’ means the Commissioner of Social Security. 
‘‘(6) PROGRAM.—The term ‘Program’ means 
the Social Security Guarantee Program established 
under this part. 
‘‘(7) COVERED
MONTHLY
INSURANCE
BEN-
EFIT.—The term ‘covered monthly insurance benefit’ 
means a monthly insurance benefit under section 
202 or 223, other than a child’s insurance benefit 
under section 202(d) of a child who has not attained 
age 18 (or who is a full-time elementary or sec-
ondary school student (as defined in section 
202(d)(7)(A)) and has not attained age 19). 
‘‘ESTABLISHMENT OF PROGRAM 
‘‘SEC. 252. There is hereby established a Social Secu-
rity Guarantee Program. The Program shall be governed 
by regulations which shall be prescribed by the Social Se-
curity Guarantee Board. The Board, the Executive Direc-
tor appointed by the Board, the Commissioner, and the 
Secretary of the Treasury shall consult with each other 
in issuing regulations relating to their respective duties 
under this part. Such regulations shall provide for appro-
priate exchange of information to assist them in per-
forming their duties under this part.
‘‘SOCIAL SECURITY GUARANTEE ACCOUNTS 
‘‘SEC. 253. (a) ESTABLISHMENT OF ACCOUNTS.—
Under regulations which shall be prescribed by the Board 
in consultation with the Secretary of the Treasury—
‘‘(1) the Board shall establish a Social Security 
guarantee account for each covered individual (for 
whom a Social Security guarantee account has not 
otherwise been established under this part) upon ini-
tial receipt of a transfer under subsection (c) with 
respect to such covered individual, and 
‘‘(2) in any case described in paragraph (2) of 
section 256(d), the Board shall establish a Social 
Security guarantee account for the divorced spouse 
referred to in such paragraph (2). 
‘‘(b) ELECTION
OF STATUS
AS COVERED INDI-
VIDUAL.—
‘‘(1) IN GENERAL.—Any individual who has at-
tained age 18 and has been assigned a social secu-
rity account number under section 205(c) may elect 
to be a covered individual under this part upon filing 
an election under this subsection in a form and man-
ner which shall be prescribed in regulations of the 
Commissioner of Social Security, in consultation 
with the Board. Such regulations shall provide for 
the filing of such elections during regularly sched-
uled intervals. Such an election shall be irrevocable 
and shall be effective with respect to wages earned, 
and self-employment income derived, on or after 
January 1 following the date of such filing. 
‘‘(2) REQUIREMENTS.—An election by an indi-
vidual under this subsection is an election, filed with 
the Commissioner, in such form and manner as shall 
be prescribed in regulations of the Commissioner, 
consisting of a written and signed declaration of 
such individual’s intention to become a covered indi-
vidual under this part. The Commissioner shall pro-
vide for immediate notification to the Board and the 
Executive Director of such election. 
‘‘(c) TRANSFERS OF SOCIAL SECURITY GUARANTEE 
REFUNDABLE CREDITS.—
‘‘(1) IN
GENERAL.—Under regulations which 
shall be prescribed by the Secretary of the Treasury 
in consultation with the Board, as soon as prac-
ticable during the 1-year period after each calendar 
year, while minimizing capital market distortions, 
the Secretary of the Treasury shall transfer to each 
covered individual’s Social Security guarantee ac-
count, from amounts otherwise available in the gen-
eral fund of the Treasury, an amount equal to the 
sum of—
‘‘(A) the amount payable to the covered in-
dividual’s Social Security guarantee account 
under section 3511 of the Internal Revenue 
Code of 1986 (relating to the Social Security 
guarantee refundable credit) with respect to 
wages received during such calendar year by the 
covered individual and self-employment income 
derived by the covered individual during the 
such individual’s taxable year ending in such 
calendar year, and 
‘‘(B) deemed interest on the amount deter-
mined under subparagraph (A) for the period 
commencing with July 1 of such calendar year 
and ending with the date of the transfer, com-
puted at a 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 transfer) on all marketable interest-bearing 
obligations of the United States then forming a 
part of the public debt which are not due or 
callable earlier than 4 years after the end of 
such calendar month (rounding any average 
market yield computed under this paragraph
which is not a multiple of 1⁄8 of 1 percent to the 
nearest multiple of 1⁄8 of 1 percent). 
‘‘(2) 
TRANSITION
RULE.—Notwithstanding 
paragraph (1), amounts payable to Social Security 
guarantee accounts under paragraph (1) with re-
spect to the first calendar year described in para-
graph (1)(A) ending after the date of the enactment 
of the Social Security Guarantee Plus Act of 2003 
shall be paid by the Secretary of the Treasury as 
soon as practicable after such Secretary determines 
that the administrative mechanisms necessary to 
provide for accurate and efficient payment of such 
amounts have been established. 
‘‘(3) AVAILABILITY
OF
TRUST
FUNDS
FOR 
TRANSFERS.—
‘‘(A) RECOMMENDATIONS
BY
MANAGING 
TRUSTEE.—As determined appropriate from 
time to time by the Managing Trustee of the 
Federal Old-Age and Survivors Insurance Trust 
Fund and the Federal Disability Insurance 
Trust Fund, the Managing Trustee shall trans-
mit to each House of the Congress the Man-
aging Trustee’s recommendation that amounts 
to be transferred to Social Security guarantee 
accounts under paragraph (1) be transferred
from such Trust Funds in lieu of the general 
fund. Any such recommendation shall take ef-
fect only upon ratification thereof by an Act of 
Congress. 
‘‘(B) 
DETERMINATIONS
OF
AVAIL-
ABILITY.—The Managing Trustee may not de-
termine that any such transfer from the Trust 
Funds is appropriate at any time unless the 
Managing 
Trustee 
has 
determined 
that 
amounts in such Trust Fund are available at 
such time for such transfers. For purposes of 
this subparagraph, amounts in either of the 
Trust Funds shall be considered to be available 
for such transfers at any time only to the ex-
tent that the balance in such Trust Fund at 
such time exceeds the best estimate of the Man-
aging Trustee of the projected withdrawals oth-
erwise required from such Trust Fund during 
the next following 1-year period. 
‘‘(C) 
ASSUMPTIONS.—In 
making 
rec-
ommendations under this paragraph, the Man-
aging Trustee shall utilize the intermediate ac-
tuarial assumptions utilized by the Board of 
Trustees of the Trust Funds for its most recent 
annual report issued under section 201(c).
‘‘(D) REPORT ON USE OF SOCIAL SECU-
RITY SURPLUSES.—The Managing Trustee shall 
annually prepare a report consisting of—
‘‘(i) the Managing Trustee’s deter-
mination of the extent to which amounts 
have been appropriated from the Trust 
Funds under this paragraph in connection 
with Social Security guarantee refundable 
credits under section 3511 of such Code, 
and 
‘‘(ii) the Managing Trustee’s rec-
ommendations, based on the Managing 
Trustee’s review of the financial status of 
such Trust Funds, with respect to whether 
or to what extent that portion of the taxes 
under chapters 2 and 21 of the Internal 
Revenue Code of 1986 to which surpluses 
in the Trust Funds may be attributed 
should be reduced or should be maintained 
so as to allow for continued appropriations 
from the Trust Funds under this para-
graph in connection with such credits. 
The Board of Trustees of the Trust Funds 
shall include such report in the Board’s annual
report to the President and the Congress under 
section 201(c)(2). 
‘‘(d) REQUIREMENTS
FOR
ACCOUNTS.—The fol-
lowing requirements shall be met with respect to each So-
cial Security guarantee account: 
‘‘(1) Amounts transferred to the account con-
sist solely of amounts transferred pursuant to this 
part. 
‘‘(2) In accordance with section 254, the ac-
count assets are held for purposes of investment 
under the Program by a certified account manager 
designated by (or on behalf of) the covered indi-
vidual for whom such account is established under 
the Program. 
‘‘(3) Disposition of the account assets is made 
solely in accordance with section 256. 
‘‘(e) ACCOUNTING
OF RECEIPTS
AND DISBURSE-
MENTS UNDER THE PROGRAM.—The Board shall provide 
by regulation for an accounting system for purposes of 
this part—
‘‘(1) which shall be maintained by or under the 
Executive Director, 
‘‘(2) which shall provide for crediting of earn-
ings from, and debiting of losses and administrative
expenses from, amounts held in Social Security 
guarantee accounts, and 
‘‘(3) under which receipts and disbursements 
under the Program which are attributable to each 
account are separately accounted for with respect to 
such account. 
‘‘(f) CORRECTION
OF ERRONEOUS TRANSFERS.—
The Board, in consultation with the Commissioner, shall 
provide by regulation rules similar to paragraphs (4) 
through (7) and (9) of section 205(c) and section 205(g) 
with respect to the correction of erroneous or omitted 
transfers of amounts to Social Security guarantee ac-
counts. 
‘‘INVESTMENT OF ACCOUNTS 
‘‘SEC. 254. (a) DESIGNATION OF CERTIFIED AC-
COUNT MANAGERS.—Under the Program, a certified ac-
count manager shall be designated by or on behalf of each 
covered individual to hold for investment under this sec-
tion such individual’s Social Security guarantee account 
assets. 
‘‘(b) PROCEDURE FOR DESIGNATION.—Any designa-
tion made under subsection (a) shall be made in such form 
and manner as shall be prescribed in regulations pre-
scribed by the Board, following the initiation of an edu-
cational campaign as provided in section 257(a)(3)(C). 
Such regulations shall provide for annual selection periods
during which covered individuals may make designations 
pursuant to subsection (a). Designations made pursuant 
to subsection (a) during any such period shall be irrev-
ocable for the one-year period following such period, ex-
cept that such regulations shall provide for such interim 
designations as may be necessitated by the decertification 
of a certified account manager. Such regulations shall pro-
vide for such designations made by the Board on behalf 
of a covered individual in any case in which a timely des-
ignation is not made by the covered individual. 
‘‘(c) INVESTMENT GUIDELINES.—
‘‘(1) IN GENERAL.—For purposes of investment 
of amounts held in each Social Security guarantee 
account, the Board shall provide by regulation for 3 
investment options. Such options shall consist of the 
60/40 investment option, the 65/35 investment op-
tion, and the 70/30 investment option. 
‘‘(2) ALTERNATIVE INVESTMENT OPTIONS.—
‘‘(A) THE
60/40
INVESTMENT
OPTION.—
Under the 60/40 investment option, amounts 
are held in the Social Security guarantee ac-
count so as to ensure, to the maximum extent 
practicable, that, of the total balance credited 
to the account and available for investment 
(after allowing for administrative expenses)—
‘‘(i) 60 percent is invested in common 
stock as provided in paragraph (4), and 
‘‘(ii) 40 percent is invested in fixed in-
come securities as provided in paragraph 
(5). 
For such purpose, certified account managers 
shall offer each account holder a choice of one 
or more portfolios of each such type of invest-
ment. Except as provided in an election under 
paragraph (3), amounts held in a Social Secu-
rity guarantee account shall be invested under 
the 60/40 investment option. 
‘‘(B) THE
65/35
INVESTMENT
OPTION.—
Under the 65/35 investment option, amounts 
are held in the Social Security guarantee ac-
count so as to ensure, to the maximum extent 
practicable, that, of the total balance credited 
to the account and available for investment 
(after allowing for administrative expenses)—
‘‘(i) 65 percent is invested in common 
stock as provided in paragraph (4), and 
‘‘(ii) 35 percent is invested in fixed in-
come securities as provided in paragraph 
(5).
For such purpose, certified account managers 
shall offer each account holder a choice of one 
or more portfolios of each such type of invest-
ment. 
‘‘(C) THE
70/30
INVESTMENT
OPTION.—
Under the 70/30 investment option, amounts 
are held in the Social Security guarantee ac-
count so as to ensure, to the maximum extent 
practicable, that, of the total balance credited 
to the account and available for investment 
(after allowing for administrative expenses)—
‘‘(i) 70 percent is invested in common 
stock as provided in paragraph (4), and 
‘‘(ii) 30 percent is invested in fixed in-
come securities as provided in paragraph 
(5). 
For such purpose, certified account managers 
shall offer each account holder a choice of one 
or more portfolios of each such type of invest-
ment. 
‘‘(3) ELECTIONS
AMONG
INVESTMENT
OP-
TIONS.—Pursuant to any individual’s written elec-
tion filed in accordance with regulations of the 
Board during annual open seasons specified in such 
regulations, the certified account manager of the in-
dividual’s Social Security guarantee account shall, in 
accordance with such regulations, provide for dis-
investment and reinvestment of amounts held in the 
account under any of the investment options de-
scribed in paragraph (2) so as to provide for invest-
ment of amounts held in the account in any of the 
other such investment options specified in such elec-
tion. 
‘‘(4) COMMON STOCK INDEX REQUIREMENTS.—
The Board shall establish by regulation standards 
which must be met by any portfolio of common stock 
selected for investment of account assets as provided 
in subparagraph (A)(i), (B)(i), or (C)(i) of para-
graph (2), consistent with the requirement that such 
portfolio replicate the performance of one or more 
common stock indices comprised of common stock 
the aggregate market value of which is, in each case, 
a reasonably broad representation of publicly held 
companies whose shares are traded on the equity 
markets. 
‘‘(5) FIXED
INCOME
SECURITIES
REQUIRE-
MENTS.—The Board shall establish by regulation 
standards which must be met by fixed income securi-
ties selected for investment of account assets as pro-
vided in subparagraph (A)(ii), (B)(ii), or (C)(ii) of
paragraph (2). Amounts invested in fixed income se-
curities by a certified account manager under the 
Program shall be held in a portfolio which shall con-
sist of a diverse range of high-grade corporate 
bonds. 
‘‘(d) DIVERSIFICATION
STANDARDS.—The Board 
shall specify by regulation standards governing invest-
ments under this section to ensure prudent diversification 
among the investments under the Program. 
‘‘DETERMINATION OF MONTHLY ANNUITY AMOUNTS AND 
USE IN DETERMINING ACCOUNT DISTRIBUTION SUP-
PLEMENTS 
‘‘SEC. 255. (a) MONTHLY ANNUITY AMOUNTS.—
‘‘(1) IN GENERAL.—In accordance with regula-
tions of the Board meeting the requirements of this 
section, the Commissioner shall determine a monthly 
annuity amount in connection with such covered in-
dividual’s Social Security guarantee account, for 
each month—
‘‘(A) which commences after such indi-
vidual becomes a covered individual, 
‘‘(B) for which such individual is entitled 
to a covered monthly insurance benefit under 
part A, and 
‘‘(C) which ends prior to or with—
‘‘(3) ASSUMPTIONS.—The assumptions under 
this subsection include the probability of survival for 
persons born in the same year as the covered indi-
vidual (and the spouse, in the case of a joint annu-
ity), future projection of investment earnings based 
on investment of the account assets in the 65/35 in-
vestment option under section 254(c)(2)(B), and ex-
pected price inflation. Determinations under this 
subsection shall be made in accordance with regula-
tions which shall be prescribed by the Board, other-
wise using generally accepted actuarial assumptions, 
except that no differentiation shall be made in such 
assumptions on the basis of sex, race, health status, 
or other characteristics other than age. 
‘‘(4) ADJUSTMENTS BASED ON ADDITIONAL SO-
CIAL
SECURITY
GUARANTEE
REFUNDABLE
CRED-
ITS.—The Board shall annually augment the month-
ly annuity amount in connection with each Social 
Security guarantee account by an additional monthly 
annuity amount, determined under this subsection 
on the basis of any additional transfer to the ac-
count of a Social Security guarantee refundable 
credit for the year (plus deemed interest) under sec-
tion 253(c), after subtracting the amount of the an-
nual lump sum payment made from such account 
under section 256(c)(2). 
‘‘(5) TREATMENT
OF
CHANGES
IN
MARITAL 
STATUS
AND
BENEFIT
ELIGIBILITY
AFTER
COM-
MENCEMENT OF ENTITLEMENT TO BENEFITS.—The 
Board shall provide by regulation for recalculation 
or adjustment of the monthly annuity amount deter-
mined under this subsection in connection with any 
covered individual’s Social Security guarantee ac-
count so as to appropriately take into account any 
entry into marriage or divorce or changes in eligi-
bility for benefits. 
‘‘(b) AMOUNT OF ACCOUNT DISTRIBUTION SUPPLE-
MENT.—The Board shall determine for each month the 
amount of the monthly account distribution supplement 
(if any) in connection with a covered individual’s Social 
Security guarantee account and shall certify such amount 
to the Commissioner so as to allow inclusion of such sup-
plement in each covered monthly insurance benefit pay-
ment pursuant to section 202(z) or 223(j). The amount 
of the supplement for each benefit shall be the excess (if 
any) of—
‘‘(1) the sum of—
‘‘(A) the monthly annuity amount in con-
nection with such account, plus
‘‘(B) in the case of a covered individual 
surviving a deceased spouse, a monthly amount 
which would be the monthly equivalent of the 
survivor annuity described in paragraph (2)(B) 
in connection with the Social Security guar-
antee account of the deceased spouse, over 
‘‘(2) the amount of the benefit (as determined 
before applying sections 202(z) and 223(j) and be-
fore applying any reduction or deduction applicable 
under part A). 
‘‘DISPOSITION OF ACCOUNT ASSETS 
‘‘SEC. 256. (a) IN GENERAL.—Account assets with 
respect to covered individuals shall be distributed solely 
as provided in this section. 
‘‘(b) ACCOUNT MANAGER TRANSFERS TO THE TRUST 
FUNDS.—
‘‘(1) IN
GENERAL.—In accordance with a 
schedule which shall be prescribed in regulations of 
the Board, each certified account manager holding 
account assets shall make account manager trans-
fers to the Secretary of the Treasury. Such Sec-
retary shall immediately credit each such transfer to 
the Federal Old-Age and Survivors Insurance Trust 
Fund or the Federal Disability Insurance Trust 
Fund, according to an appropriate distribution for-
mula which shall be prescribed in regulations of the
Executive Director. The Executive Director shall 
provide to the certified account manager timely in-
formation necessary to carry out such account man-
ager’s duties under this section. 
‘‘(2) DETERMINATION OF AMOUNT OF ACCOUNT 
MANAGER TRANSFER.—The amount of each account 
manager transfer due from a certified account man-
ager for any period shall be an amount equal to the 
sum of—
‘‘(A) 
the 
aggregate 
monthly 
annuity 
amount or amounts determined under para-
graph (3) for the month or months ending dur-
ing such period in connection with the Social 
Security guarantee accounts under the manage-
ment of the certified account manager under 
the Program, and
‘‘(B) the aggregate monthly account remit-
tance for such period described in paragraph 
(4) in connection with such accounts. 
‘‘(3) 
AGGREGATE
MONTHLY
ANNUITY 
AMOUNT.—The aggregate monthly annuity amount 
for any month in connection with the Social Security 
guarantee accounts under the management of any 
certified account manager under the Program is 
equal to the sum of all monthly annuity amounts in
connection with such accounts, determined under 
section 255. 
‘‘(4) AGGREGATE MONTHLY ACCOUNT REMIT-
TANCE.—The aggregate monthly account remittance 
for any month in connection with the Social Security 
guarantee accounts under the management of any 
certified account manager under the Program is 
equal to the sum of all the amounts required to be 
transferred during such month from the certified ac-
count manager to the Secretary of the Treasury for 
crediting to the Federal Old-Age and Survivors In-
surance Trust Fund or the Federal Disability Insur-
ance Trust Fund under subsection (e)(2) in connec-
tion with the deaths of covered individuals for whom 
such accounts were established under this part. 
‘‘(5) WITHDRAWALS FROM ACCOUNT BALANCES 
FOR
PURPOSES
OF
ACCOUNT
MANAGER
TRANS-
FERS.—In advance of each account manager trans-
fer required under this subsection to be made by a 
certified account manager managing one or more 
Social Security guarantee accounts under the Pro-
gram, the Commissioner shall certify to the Execu-
tive Director and to such certified account manager 
the monthly annuity amount in connection with each 
such account for each month during the period for
which such transfer is to be made. At the time of 
such transfer, the certified account manager may 
withdraw from the assets of each such account the 
monthly annuity amount in connection with such ac-
count taken into account in determining each of the 
aggregate monthly annuity amounts included in the 
amount of the account manager transfer. Such with-
drawn assets shall be available to the certified ac-
count manager solely for purposes of making such 
account manager transfer. 
‘‘(c) LUMP SUM PAYMENTS.—Upon initial entitle-
ment of a covered individual to monthly insurance benefits 
under part A, such individual shall be entitled to—
‘‘(1) an initial lump sum payment, from such 
individual’s Social Security guarantee account, equal 
to 5 percent of the balance in such account, and 
‘‘(2) a lump sum payment in connection with 
each subsequent transfer to such account (pursuant 
to section 253(c)) of such individual’s social security 
guarantee refundable credits for years beginning 
after commencement of such initial entitlement, pay-
able as soon as practicable after the transfer, equal 
to 5 percent of the transferred amount (including 
deemed interest).
an amount equal to one-half of the difference be-
tween the amounts of such accruals in such ac-
counts, or 
‘‘(2) if a Social Security guarantee account has 
not been established for the divorced spouse, the 
Board shall establish a Social Security guarantee ac-
count for the divorced spouse, and shall direct the 
appropriate certified account manager to transfer—
‘‘(A) from the Social Security guarantee 
account of the covered individual, 
‘‘(B) to the Social Security guarantee ac-
count of the divorced spouse, 
an amount equal to one-half of the amount of accru-
als (including earnings) during the time of the mar-
riage in the Social Security guarantee account of the 
covered individual. 
In the case of any transfer directed under this subsection, 
the Executive Director shall certify to the appropriate cer-
tified account manager the information necessary to make 
such transfer. 
‘‘(e) CLOSING OF ACCOUNT UPON THE DEATH OF 
THE COVERED INDIVIDUAL.—
‘‘(1) TRANSFERS UPON DEATH BEFORE ENTI-
TLEMENT.—Upon the death of a covered individual 
before the individual has become entitled to covered
monthly insurance benefits, the Executive Director 
shall close out the covered individual’s Social Secu-
rity guarantee account. In closing out the account, 
the Executive Director shall certify to the certified 
account manager the amount of the account assets, 
and, upon receipt of such certification, such certified 
account manager shall transfer from such account 
an amount equal to such certified amount to the 
Secretary of the Treasury for subsequent transfer to 
the estate of such covered individual. 
‘‘(2) TRANSFERS
UPON
DEATH
AFTER
ENTI-
TLEMENT.—
‘‘(A) IN GENERAL.—In any case in which 
the covered individual dies after the individual 
has become entitled to covered monthly insur-
ance benefits, the Executive Director shall, ex-
cept as provided in subparagraph (B), close out 
the covered individual’s Social Security guar-
antee account upon such covered individual’s 
death. 
‘‘(B) DELAYED CLOSING IN THE CASE OF 
SURVIVING SPOUSE.—If the covered individual 
was married at the time of the covered individ-
ual’s death, the Executive Director shall close 
out the covered individual’s Social Security
guarantee account with the close, upon the sur-
viving spouse’s death, of the period to which the 
survivor annuity portion of the monthly annuity 
amount in connection with such account is ap-
plicable under section 255(a). The Board shall 
from time to time propose to the Congress rec-
ommendations for legislative changes necessary 
to provide for closing of the account in a man-
ner and time consistent with regulations pre-
scribed pursuant to section 255(a)(5). 
‘‘(C) CERTIFICATION
AND
TRANSFER
TO 
TRUST FUNDS.—In closing out the account, the 
Executive Director shall certify to the certified 
account manager holding the covered individ-
ual’s account assets the amount of the account 
assets, and such certified account manager shall 
transfer an amount equal to such certified 
amount to the Secretary of the Treasury for 
crediting to the Federal Old-Age and Survivors 
Insurance Trust Fund or the Federal Disability 
Insurance Trust Fund, as determined appro-
priate under regulations of the Board. 
‘‘(f) CLOSING OF ACCOUNT OF COVERED INDIVID-
UALS WHO ARE INELIGIBLE FOR BENEFITS UPON AT-
TAINING RETIREMENT AGE.—In any case in which, as of
the date on which a covered individual attains retirement 
age (as defined in section 216(l)), such individual is not 
eligible for a covered monthly insurance benefit, the Com-
missioner shall so certify to the Executive Director and, 
upon receipt of such certification, the Executive Director 
shall close out the covered individual’s Social Security 
guarantee account. In closing out the account, the Execu-
tive Director shall certify to the certified account manager 
the amount of the account assets, and upon receipt of such 
certification from the Executive Director, the account 
manager shall transfer from such account an amount 
equal to such certified amount to the Secretary of the 
Treasury for subsequent transfer to the covered indi-
vidual. 
‘‘(g) ADMINISTRATIVE EXPENSES.—
‘‘(1) IN
GENERAL.—Under regulations which 
shall be prescribed by the Board, account assets are 
available for payment of the reasonable administra-
tive costs of the Program (including reasonable ad-
ministration fees charged by certified account man-
agers under the Program), but in no event to exceed 
25 basis points per year of the assets under manage-
ment. 
‘‘(2) TEMPORARY AUTHORIZATION OF APPRO-
PRIATIONS FOR STARTUP ADMINISTRATIVE COSTS.—
For any such administrative costs that remain after 
applying paragraph (1) for each of the first five fis-
cal years that end after the date of the enactment 
of this part, there are authorized to be appropriated 
such sums as may be necessary for each of such fis-
cal years. 
‘‘ADMINISTRATION OF THE PROGRAM 
‘‘SEC. 257. (a) GENERAL PROVISIONS.—
‘‘(1) ESTABLISHMENT AND DUTIES OF THE SO-
CIAL SECURITY GUARANTEE BOARD.—
‘‘(A) ESTABLISHMENT.—There is estab-
lished in the Social Security Administration a 
Social Security Guarantee Board. 
‘‘(B) MEMBERSHIP.—The Board shall be 
composed of 6 members appointed by the Board 
of Trustees of the Federal Old-Age and Sur-
vivors Insurance Trust Fund and the Federal 
Disability Insurance Trust Fund. One member 
shall serve as Chairman, as designated by the 
Board of Trustees. Members of the Board shall 
have substantial experience, training, and ex-
pertise in the area of pension benefits, finance, 
investment, or insurance. 
‘‘(C) TERMS.—
‘‘(i) IN GENERAL.—A member of the 
Board shall be appointed for a term of 9
years, subject only to removal by the 
Board of Trustees for cause, except that of 
the members first appointed—
‘‘(I) two shall be appointed for a 
term of 3 years; 
‘‘(II) two shall be appointed for a 
term of 6 years; and 
‘‘(III) two shall be appointed for 
a term of 9 years. 
‘‘(ii) VACANCIES.— A vacancy on the 
Board shall be filled in the manner in 
which the original appointment was made 
and shall be subject to any conditions 
which applied with respect to the original 
appointment. An individual chosen to fill a 
vacancy shall be appointed for the unex-
pired term of the member replaced. The 
term of any member shall not expire before 
the date on which the member’s successor 
takes office. 
‘‘(D) POWERS
AND
DUTIES
OF
THE 
BOARD.—
‘‘(i) IN GENERAL.—The Board shall 
have powers and duties solely as provided 
in this part. The Board shall prescribe by
regulation the terms of the Social Security 
Guarantee Program established under this 
part, including policies for investment 
under the Program of account assets, and 
policies for the certification and decerti-
fication of account managers under the 
Program, which shall include consideration 
of the appropriateness of the marketing 
materials and plans of such person. 
‘‘(ii) BUDGETARY
REQUIREMENTS.—
The Board shall prepare and submit to the 
President and to the appropriate commit-
tees of Congress an annual budget of the 
expenses and other items relating to the 
Board which shall be included as a sepa-
rate item in the budget required to be 
transmitted to the Congress under section 
1105 of title 31, United States Code. The 
Board shall provide for low administrative 
costs such that, to the extent practicable, 
overall administrative costs of the Program 
do not exceed 25 basis points in relation to 
assets under management under the Pro-
gram.
‘‘(E) ADDITIONAL
AUTHORITIES
OF
THE 
BOARD.—The Board may—
‘‘(i) adopt, alter, and use a seal; 
‘‘(ii) establish policies with which the 
Commissioner shall comply under this 
part; and 
‘‘(iii) appoint and remove the Execu-
tive Director, as provided in paragraph (2). 
‘‘(F) INDEPENDENCE
OF
CERTIFIED
AC-
COUNT MANAGERS.—The policies of the Board 
may not require a certified account manager to 
invest or to cause to be invested any account 
assets in a specific asset or to dispose of or 
cause to be disposed of any specific asset so 
held. 
‘‘(G) MEETINGS
OF
THE
BOARD.—The 
Board shall meet at the call of the Chairman or 
upon the request of a quorum of the Board. 
The Board shall perform the functions and ex-
ercise the powers of the Board on a majority 
vote of a quorum of the Board. Four members 
of the Board shall constitute a quorum for the 
transaction of business. 
‘‘(H) COMPENSATION
OF
BOARD
MEM-
BERS.—
‘‘(i) IN GENERAL.—Each member of 
the Board who is not an officer or em-
ployee of the Federal Government shall be 
compensated at the daily rate of basic pay 
for level I of the Executive Schedule for 
each day during which such member is en-
gaged in performing a function of the 
Board. Any member who is such an officer 
or employee shall not suffer any loss of pay 
or deduction from annual leave on the 
basis of any time used by such member in 
performing such a function. 
‘‘(ii) TRAVEL, PER
DIEM, AND
EX-
PENSES.—A member of the Board shall be 
paid travel, per diem, and other necessary 
expenses under subchapter I of chapter 57 
of title 5, United States Code, while trav-
eling away from such member’s home or 
regular place of business in the perform-
ance of the duties of the Board. 
‘‘(I) STANDARD FOR BOARD’S DISCHARGE 
OF
RESPONSIBILITIES.—The members of the 
Board shall discharge their responsibilities sole-
ly in the interest of covered individuals and the 
Program.
‘‘(J) ANNUAL REPORT.—The Board shall 
submit an annual report to the President, to 
each House of the Congress, and to the Board 
of Trustees of the Federal Old-Age and Sur-
vivors Insurance Trust Fund and the Federal 
Disability Insurance Trust Fund regarding the 
financial and operating condition of the Pro-
gram. 
‘‘(K) PUBLIC ACCOUNTANT.—
‘‘(i) DEFINITION.—For purposes of 
this subparagraph, the term ‘qualified pub-
lic accountant’ shall have the same mean-
ing as provided in section 103(a)(3)(D) of 
the Employee Retirement Income Security 
Act of 1974 (29 U.S.C. 1023(a)(3)(D)). 
‘‘(ii) ENGAGEMENT.—The Executive 
Director, in consultation with the Board, 
shall annually engage, on behalf of all indi-
viduals for whom a Social Security guar-
antee account is established under this 
part, an independent qualified public ac-
countant, who shall conduct an examina-
tion of all records maintained in the ad-
ministration of this part that the public ac-
countant considers necessary.
‘‘(iii) DUTIES.—The public account-
ant conducting an examination under 
clause (ii) shall determine whether the 
records referred to in such clause have 
been maintained in conformity with gen-
erally accepted accounting principles. The 
public accountant shall transmit to the 
Board a report on his examination. 
‘‘(iv) RELIANCE ON CERTIFIED ACTU-
ARIAL MATTERS.—In making a determina-
tion under clause (iii), a public accountant 
may rely on the correctness of any actu-
arial matter certified by an enrolled actu-
ary if the public accountant states his reli-
ance in the report transmitted to the 
Board under such clause. 
‘‘(2) EXECUTIVE DIRECTOR.—
‘‘(A) APPOINTMENT AND REMOVAL.—The 
Board shall appoint, without regard to the pro-
visions of law governing appointments in the 
competitive service, an Executive Director by 
action agreed to by a majority of the members 
of the Board. The Executive Director shall have 
substantial experience, training, and expertise 
in the management of financial investments and
pension benefit plans. The Board may, with the 
concurrence of 4 members of the Board, remove 
the Executive Director from office for good 
cause shown. 
‘‘(B) POWERS AND DUTIES OF EXECUTIVE 
DIRECTOR.—The Executive Director shall—
‘‘(i) carry out the policies established 
by the Board, 
‘‘(ii) administer the provisions of this 
part in accordance with the policies of the 
Board, 
‘‘(iii) in consultation with the Board, 
prescribe such regulations (other than reg-
ulations relating to fiduciary responsibil-
ities) as may be necessary for the adminis-
tration of this part, and 
‘‘(iv) meet from time to time with the 
Board upon request of the Board. 
‘‘(C) ADMINISTRATIVE
AUTHORITIES
OF 
EXECUTIVE DIRECTOR.—The Executive Direc-
tor may—
‘‘(i) appoint such personnel as may be 
necessary to carry out the provisions of 
this part,
‘‘(ii) subject to approval by the Board, 
procure the services of experts and consult-
ants under section 3109 of title 5, United 
States Code, 
‘‘(iii) secure directly from any agency 
or instrumentality of the Federal Govern-
ment any information which, in the judg-
ment of the Executive Director, is nec-
essary to carry out the provisions of this 
part and the policies of the Board, and 
which shall be provided by such agency or 
instrumentality upon the request of the 
Executive Director, 
‘‘(iv) pay the compensation, per diem, 
and travel expenses of individuals ap-
pointed under clauses (i), (ii), and (v) of 
this subparagraph, subject to such limits 
as may be established by the Board, 
‘‘(v) accept and use the services of in-
dividuals employed intermittently in the 
Government service and reimburse such in-
dividuals for travel expenses, as authorized 
by section 5703 of title 5, United States 
Code, including per diem as authorized by 
section 5702 of such title, and
‘‘(vi) except as otherwise expressly 
prohibited by law or the policies of the 
Board, delegate any of the Executive Di-
rector’s functions to such employees under 
the Board as the Executive Director may 
designate and authorize such successive re-
delegations of such functions to such em-
ployees under the Board as the Executive 
Director may consider to be necessary or 
appropriate. 
‘‘(3) ROLE OF THE COMMISSIONER OF SOCIAL 
SECURITY.—The Commissioner shall—
‘‘(A) prescribe such regulations (supple-
mentary to and consistent with the regulations 
prescribed by the Board and the Executive Di-
rector) as may be necessary for carrying out the 
duties of the Commissioner under this part, 
‘‘(B) meet from time to time with, and 
provide information to, the Board upon request 
of the Board regarding matters relating to the 
Social Security Guarantee Program, and 
‘‘(C) in consultation with the Board and 
utilizing available Federal agencies and re-
sources, develop a campaign to educate workers 
about the Program.
‘‘(b) CERTIFICATION AND OVERSIGHT OF ACCOUNT 
MANAGERS.—
‘‘(1) CERTIFICATION BY THE BOARD.—
‘‘(A) IN GENERAL.—Any person that is a 
qualified professional asset manager (as defined 
in section 8438(a)(8) of title 5, United States 
Code) may apply to the Board (in such form 
and manner as shall be provided by the Board 
by regulation) for certification under this sub-
section as a certified account manager. In mak-
ing certification decisions, the Board shall con-
sider the applicant’s general character and fit-
ness, financial history and future earnings pros-
pects, and ability to serve covered individuals 
under the Program, and such other criteria as 
the Board deems necessary to carry out this 
part. Certification of any person under this sub-
section shall be contingent upon entry into a 
contractual arrangement between the Board 
and such person. 
‘‘(B) NONDELEGATION
REQUIREMENT.—
The authority of the Board to make any deter-
mination to deny any application under this 
subsection may not be delegated by the Board.
‘‘(2) OVERSIGHT OF CERTIFIED ACCOUNT MAN-
AGERS.—
‘‘(A) ROLE OF REGULATORY AGENCIES.—
The Board may enter into cooperative arrange-
ments with Federal and State regulatory agen-
cies identified by the Board as having jurisdic-
tion over persons eligible for certification under 
this subsection so as to ensure that the provi-
sions of this part are enforced with respect to 
certified account managers in a manner con-
sistent with and supportive of the requirements 
of other provisions of Federal law applicable to 
them. Such Federal regulatory agencies shall 
cooperate with the Board to the extent that the 
Board determines that such cooperation is nec-
essary and appropriate to ensure that the provi-
sions of this part are effectively implemented. 
‘‘(B) ACCESS
TO
RECORDS.—The Board 
may from time to time require any certified ac-
count manager to file such reports as the Board 
may specify by regulation as necessary for the 
administration of this part. In prescribing such 
regulations, the Board shall minimize the regu-
latory burden imposed upon certified account 
managers while taking into account the benefit
of the information to the Board in carrying out 
its functions under this part. 
‘‘(3) REVOCATION
OF
CERTIFICATION.—The 
Board shall provide, in the contractual arrangements 
entered into under this subsection with each certified 
account manager, for revocation of such person’s 
status as a certified account manager upon deter-
mination by the Board of such person’s failure to 
comply with the requirements of such contractual ar-
rangements. Such arrangements shall include provi-
sion for notice and opportunity for review of any 
such revocation. 
‘‘(c) FIDUCIARY RESPONSIBILITIES.—
‘‘(1) IN GENERAL.—Rules similar to the provi-
sions of section 8477 of title 5, United States Code 
(relating to fiduciary responsibilities; liability and 
penalties) shall apply in connection with account as-
sets, in accordance with regulations which shall be 
issued by the Board. The Board shall issue regula-
tions with respect to the investigative authority of 
appropriate Federal agencies in cases involving ac-
count assets. 
‘‘(2) EXCULPATORY PROVISIONS VOIDED.—Any 
provision in an agreement or instrument which pur-
ports to relieve a fiduciary from responsibility or li-
ability for any responsibility, obligation, or duty 
under this part shall be void. 
‘‘(d) CIVIL ACTIONS BY BOARD.—If any person fails 
to meet any requirement of this part or of any contract 
entered into under this part, the Board may bring a civil 
action in any district court of the United States within 
the jurisdiction of which such person’s assets are located 
or in which such person resides or is found, without regard 
to the amount in controversy, for appropriate relief to re-
dress the violation or enforce the provisions of this part, 
and process in such an action may be served in any dis-
trict. 
‘‘(e) PREEMPTION OF INCONSISTENT STATE LAW.—
A provision of this part shall not be construed to preempt 
any provision of the law of any State or political subdivi-
sion thereof, or prevent a State or political subdivision 
thereof from enacting any provision of law with respect 
to the subject matter of this part, except to the extent 
that such provision of State law is inconsistent with this 
part, and then only to the extent of the inconsistency.’’. 
(b) 
CONFORMING
AMENDMENTS.—(1) 
Section 
701(b) of the Social Security Act (42 U.S.C. 901(b)) is 
amended by striking ‘‘title II’’ and inserting ‘‘part A of 
title II, the Social Security Guarantee Program under part 
B of title II,’’.
(2) Section 702(a)(4) of the Social Security Act (42 
U.S.C. 902(a)(4)) is amended by inserting ‘‘other than 
those of the Social Security Guarantee Board’’ after ‘‘Ad-
ministration’’, and by striking ‘‘thereof’’ and inserting ‘‘of 
the Administration in connection with the exercise of such 
powers and the discharge of such duties’’. 
SEC. 103. BENEFIT INCREASES. 
(a) OLD-AGE INSURANCE BENEFITS
AND OTHER 
BENEFITS UNDER SECTION 202.—Section 202 of the So-
cial Security Act (42 U.S.C. 402) is amended by adding 
at the end the following new subsection: 
‘‘Account Distribution Supplements 
‘‘(z) Each monthly insurance benefit under this sec-
tion (after application of any reduction or deduction appli-
cable under this section or under any other provision of 
this part) shall be increased by the amount of the account 
distribution supplement determined for such benefit under 
section 255.’’. 
(b) DISABILITY INSURANCE BENEFITS.—Section 223 
of such Act (42 U.S.C. 423) is amended by adding at the 
end the following new subsection: 
‘‘Account Distribution Supplements 
‘‘(j) Each monthly insurance benefit under this sec-
tion (after application of any reduction or deduction appli-
cable under this part) shall be increased by the amount
of the account distribution supplement determined for 
such benefit under section 255.’’. 
SEC. 104. TAX TREATMENT. 
(a) TAX TREATMENT OF SOCIAL SECURITY GUAR-
ANTEE ACCOUNTS.—Section 7701 of the Internal Revenue 
Code of 1986 (relating to definitions) is amended by redes-
ignating subsection (n) as subsection (o) and by inserting 
after (m) the following new subsection: 
‘‘(n) TAX TREATMENT OF SOCIAL SECURITY GUAR-
ANTEE ACCOUNTS.—All Social Security guarantee ac-
counts established under part B of title II of the Social 
Security Act shall be exempt from taxation under this 
title.’’. 
(b) BENEFITS TAXABLE AS SOCIAL SECURITY BENE-
FITS.—
(1) MONTHLY
BENEFITS.—Section 86(d) of 
such Code (relating to definition of Social Security 
benefit) is amended to read as follows: 
‘‘(A) a monthly benefit under part A of 
title II of the Social Security Act (including an 
account distribution supplement referred to in 
section 202(z) and 223(j) of such Act), or’’. 
(2) SPECIAL RULES RELATING TO LUMP SUM 
PAYMENT UNDER SECTION 256(c) OF SOCIAL SECU-
RITY ACT.—
(A) Section 86(a) of such Code is amended 
by adding at the end the following new para-
graph: 
‘‘(3) INCLUSION IN GROSS INCOME OF LUMP 
SUM PAYMENT UNDER SECTION 256(c) OF SOCIAL 
SECURITY ACT.—
‘‘(A) IN GENERAL.—A lump sum payment 
received under section 256(c) of the Social Se-
curity Act shall be includible in gross income in 
the amount provided by subparagraph (B). 
Such payment shall not be treated as a social 
security benefit for purposes of this section. 
‘‘(B) AMOUNT
INCLUDED
IN
INCOME.—
The portion of such lump sum payment that is 
includible in gross income shall be equal to an 
amount which bears the same ratio to the total 
amount of such payment as the portion of so-
cial security benefits included in gross income 
under paragraphs (1) and (2) bears to the total 
amount of such benefits.’’. 
(B) SPECIAL
RULE
RELATING
TO
NON-
RESIDENT
ALIEN
INDIVIDUALS.—Section 
871(a)(3) of such Code is amended by inserting 
‘‘and of any lump sum payment received under
section 256(c) of the Social Security Act’’ after 
‘‘section 86(d))’’. 
(C) TRANSFERS TO TRUST FUNDS.—
(i) IN
GENERAL.—Paragraph (1) of 
section 121(e) of the Social Security 
Amendments of 1983 (Public Law 98–21; 
42 U.S.C. 401 note) is amended by adding 
at the end the following new subparagraph: 
‘‘(C) There are hereby appropriated to each 
payor fund amounts equivalent to the aggregate in-
crease in tax liabilities under chapter 1 of the Inter-
nal Revenue Code of 1986 which is attributable to 
the application of section 86 and section 871(a)(3) 
of such Code to lump sum payments received under 
section 256(c) of the Social Security Act by individ-
uals entitled to benefits payable from such payor 
fund.’’. 
(ii) CONFORMING AMENDMENT.—Sec-
tion 121(e)(2) of such Act is amended by 
striking ‘‘paragraph (1)(A)’’ and inserting 
‘‘paragraphs (1)(A) and (B)’’. 
(3) SPECIAL RULES RELATING TO DISTRIBU-
TION OF CLOSED ACCOUNT UNDER SECTION 256(f) 
OF SOCIAL SECURITY ACT.—Section 86(a) of such
Code is amended by adding at the end the following 
new paragraph: 
‘‘(4) EXTENSION OF PARAGRAPH (2)(B) TO DIS-
TRIBUTIONS OF CLOSED ACCOUNT UNDER SECTION 
256(f) OF SOCIAL SECURITY ACT.—Notwithstanding 
any other provision of this subsection, in the case of 
any amount received pursuant to the closing of an 
account under section 256(f) of the Social Security 
Act, paragraph (2)(B) shall apply to such amounts, 
and for such purposes the amount allocated to the 
investment in the contract shall be zero.’’. 
(4) EFFECTIVE DATE.—The amendments made 
by this subsection shall apply to taxable years begin-
ning after the end of the calendar year in which this 
Act is enacted. 
(c) ESTATE TAX NOT TO APPLY TO ASSETS OF SO-
CIAL SECURITY GUARANTEE ACCOUNTS.—
(1) IN GENERAL.—Part IV of subchapter A of 
chapter 11 of the Internal Revenue Code of 1986 
(relating to taxable estate) is amended by adding at 
the end the following new section: 
‘‘SEC. 2059. SOCIAL SECURITY GUARANTEE ACCOUNTS. 
‘‘For purposes of the tax imposed by section 2001, 
the value of the taxable estate shall be determined by de-
ducting from the value of the gross estate an amount
equal to the value of the assets of a Social Security guar-
antee account transferred by the Secretary to the estate 
of the decedent under section 256 of the Social Security 
Act.’’. 
(2) CLERICAL AMENDMENT.—The table of sec-
tions for part IV of subchapter A of chapter 11 of 
such Code is amended by adding at the end the fol-
lowing new item:
‘‘Sec. 2059. Social Security guarantee accounts.’’.
(3) EFFECTIVE DATE.—The amendments made 
by this subsection shall apply to decedents dying in 
or after the calendar year in which this Act is en-
acted. 
SEC. 105. ANNUAL ACCOUNT STATEMENTS. 
Section 1143 of the Social Security Act (42 U.S.C. 
1320b–13) is amended by adding at the end the following 
new subsection: 
‘‘Performance of Social Security Guarantee Accounts 
‘‘(d) Beginning not later than 1 year after the date 
of the first deposit is made to an eligible individual’s So-
cial Security guaranty account, each statement provided 
to such eligible individual under this section shall include 
information determined by the Social Security Guarantee 
Board as sufficient to fully inform such eligible individual 
annually of the balance, investment performance, and ad-
ministrative expenses of such account.’’.
TITLE II—BENEFIT UPDATES 
SEC. 201. ELIMINATION OF THE SOCIAL SECURITY EARN-
INGS TEST FOR INDIVIDUALS WHO HAVE AT-
TAINED AGE 62. 
(a) IN GENERAL.—Section 203 of the Social Security 
Act (42 U.S.C. 403) is amended—
(1) in subsection (c)(1), by striking ‘‘retirement 
age (as defined in section 216(l))’’ and inserting 
‘‘the age of 62’’; 
(2) in clause (B) of the last sentence of sub-
section (f)(1), by striking ‘‘retirement age (as de-
fined in section 216(l))’’ and inserting ‘‘the age of 
62’’; 
(3) in subsection (f)(3), by striking ‘‘retirement 
age (as defined in section 216(l))’’ and inserting 
‘‘the age of 62’’; 
(4) in subsection (h)(1)(A), by striking ‘‘retire-
ment age (as defined in section 216(l))’’ each place 
it appears and inserting ‘‘the age of 62’’; and 
(5) in subsection (j)—
(A) in the heading, by striking ‘‘Retire-
ment Age’’ and inserting ‘‘Age 62’’; and 
(B) by striking ‘‘retirement age (as defined 
in section 216(l))’’ and inserting ‘‘the age of 
62’’.
(b) CONFORMING AMENDMENTS ELIMINATING THE 
SPECIAL EXEMPT AMOUNT FOR YEAR OF ATTAINING RE-
TIREMENT AGE.—
(1) 
UNIFORM
EXEMPT
AMOUNT.—Section 
203(f)(8)(A) of such Act (42 U.S.C. 403(f)(8)(A)) is 
amended by striking ‘‘the new exempt amounts (sep-
arately stated for individuals described in subpara-
graph (D) and for other individuals) which are to be 
applicable’’ and inserting ‘‘a new exempt amount 
which shall be applicable’’. 
(2) 
CONFORMING
AMENDMENTS.—Section 
203(f)(8)(B) of such Act (42 U.S.C. 403(f)(8)(B)) 
is amended—
(A) in the matter preceding clause (i), by 
striking ‘‘Except’’ and all that follows through 
‘‘whichever’’ and inserting ‘‘The exempt amount 
which is applicable for each month of a par-
ticular taxable year shall be whichever’’; 
(B) in clause (i), by striking ‘‘cor-
responding’’; 
(C) in clause (ii)—
(i) by striking ‘‘the product’’ and all 
that follows through ‘‘other individuals), 
and’’ and inserting ‘‘the product derived by 
multiplying the exempt amount which is in
effect with respect to months in the tax-
able year ending after 1993 and before 
1995, by’’; and 
(ii) by striking subclause (II) and in-
serting the following: 
‘‘(II) the national average wage index 
(as so defined) for 1992,’’; and 
(D) in the last sentence, by striking ‘‘an 
exempt amount’’ and inserting ‘‘the exempt 
amount’’. 
(3) REPEAL OF BASIS FOR COMPUTATION OF 
SPECIAL
EXEMPT
AMOUNT.—Subparagraphs (D) 
and (E) of section 203(f)(8) of such Act (42 U.S.C. 
(f)(8)(D), (E)) are repealed. 
(c) ADDITIONAL CONFORMING AMENDMENTS.—
(1) Section 203 of such Act (42 U.S.C. 403) is 
amended—
(A) in subsection (b)(1)—
(i) by striking ‘‘(b)(1) Deductions’’ 
and inserting ‘‘(b) Deductions’’; 
(ii) by striking ‘‘and from any pay-
ment or payments to which any other per-
sons are entitled on the basis of such indi-
vidual’s wages and self-employment in-
come,’’;
(iii) by striking ‘‘until the total’’ and 
all that follows through ‘‘if for such 
month’’ and inserting the following: ‘‘until 
the total of such deductions equals such in-
dividual’s benefit or benefits under section 
202 for any month, if for such month’’; 
(iv) by striking ‘‘total of benefits re-
ferred to in clauses (A) and (B)’’ and in-
serting ‘‘the total of such benefits’’; and 
(v) by striking ‘‘If a child’’ and all 
that follows through ‘‘have been made.’’; 
(B) by striking subsection (b)(2); 
(C) by striking subsection (d); 
(D) in subsection (f)(1), by striking ‘‘The 
amount of’’ and all that follows through ‘‘Not-
withstanding’’ and inserting the following: ‘‘The 
amount of an individual’s excess earnings (as 
defined in paragraph (3)) shall be charged to 
months as follows: There shall be charged to 
the first month of such taxable year an amount 
of his excess earnings equal to the payment to 
which he is entitled for such month under sec-
tion 202 (or the total of his excess earnings if 
such excess earnings are less than such pay-
ment), and the balance, if any, of such excess
earnings shall be charged to each succeeding 
month in such year to the extent, in the case 
of each such month, of the payment to which 
such individual is entitled for such month under 
section 202, until the total of such excess has 
been so charged. Notwithstanding’’; 
(E) in subsection (f)(3), by striking ‘‘331⁄3 
percent’’ and all that follows through ‘‘other in-
dividual,’’ and inserting ‘‘50 percent of such in-
dividual’s earnings for such year in excess of 
the product of the exempt amount as deter-
mined under paragraph (8),’’; 
(F) by striking subsection (f)(7); 
(G) by striking subsection (f)(9); and 
(H) in subsection (h)(1)(A)(ii), by striking 
subclauses (I), (II), and (III) and inserting the 
following: 
‘‘(I) such individual’s benefits under sec-
tion 202 are reduced under subsection (a) of 
this section for any month in such taxable year, 
and 
‘‘(II) in any such month there is another 
person who also is entitled to benefits under 
subsection (b), (c), (d), (e), (f), (g), or (h) of 
section 202 on the basis of the same wages and
self-employment income and who does not live 
in the same household as such individual.’’. 
(2) The second sentence of section 223(d)(4) of 
such Act (42 U.S.C. 423(d)(4)) is amended by strik-
ing ‘‘if section 102 of the Senior Citizens’ Right to 
Work Act of 1996 had not been enacted’’ and insert-
ing the following: ‘‘if the amendments to section 203 
made by section 102 of the Senior Citizens’ Right to 
Work Act of 1996 and by section 4 of the Social Se-
curity Guarantee Plus Act of 2003 had not been en-
acted’’. 
(d) EFFECTIVE DATE AND TRANSITIONAL RULE.—
(1) EFFECTIVE DATE.—The amendments and 
repeals made by this section shall apply with respect 
to taxable years ending after December 31, 2008. 
(2) 
TRANSITIONAL
RULE.—Notwithstanding 
paragraph (8) of section 203(f) of the Social Secu-
rity Act (42 U.S.C. 403(f)(8)), the exempt amount 
which is applicable, for purposes of such section 
203(f), to an individual who is entitled to monthly 
insurance benefits under section 202 of such Act but 
who has not attained retirement age (as defined in 
section 216(l) of such Act) before the close of the 
taxable year involved shall be—
(A) for each month of any taxable year 
ending after 2003 and before 2005, $1,250.00, 
(B) for each month of any taxable year 
ending 
after 
2004 
and 
before 
2006, 
$1,666.662⁄3, 
(C) for each month of any taxable year 
ending 
after 
2005 
and 
before 
2007, 
$2,083.331⁄3, 
(D) for each month of any taxable year 
ending after 2006 and before 2008, $2,500.00, 
and 
(E) for each month of any taxable year 
ending 
after 
2007 
and 
before 
2009, 
$2,916.662⁄3.
SEC. 202. INCREASE IN WIDOW’S AND WIDOWER’S INSUR-
ANCE BENEFITS. 
(a) 
WIDOW’S
INSURANCE
BENEFITS.—Section 
202(e) of the Social Security Act (42 U.S.C. 402(e)) is 
amended by adding at the end the following new para-
graph: 
‘‘(10)(A) In any case in which the amount of a wid-
ow’s insurance benefit (as determined under the preceding 
paragraphs of this subsection) for the entitlement month 
of the widow (or surviving divorced wife) is less than the 
minimum benefit amount for such month determined
under subparagraph (C), the amount of such benefit for 
such month and each succeeding month shall be increased 
to such minimum benefit amount (or the amount most re-
cently established in lieu thereof under section 215(i)). 
‘‘(B) For purposes of this paragraph, the term ‘enti-
tlement month’ of a widow (or surviving divorced wife) 
means, in connection with her benefit under this sub-
section, the first month of her entitlement to such benefit. 
‘‘(C) For purposes of subparagraph (A), the min-
imum benefit amount determined under this subparagraph 
for the entitlement month of the widow (or surviving di-
vorced wife) is an amount equal to the lesser of—
‘‘(i) 75 percent of the sum of—
‘‘(I) the imputed deceased individual’s ben-
efit for such month, as determined under sub-
paragraph (D) or (E) (as applicable), and 
‘‘(II) the imputed survivor benefit for such 
month, as determined under subparagraph (F), 
or 
‘‘(ii) the increased benefit cap determined under 
subparagraph (G) for such month. 
‘‘(D)(i) For purposes of subparagraph (C)(i)(I), if the 
deceased individual died in a month for which he was not 
entitled to any benefit under this title based on his wages 
or self-employment income or the wages and self-employ-
ment income of the widow (or surviving divorced wife), the 
imputed deceased individual’s benefit for the entitlement 
month of the widow (or surviving divorced wife) is the sum 
of—
‘‘(I) the imputed old-age insurance benefit (de-
termined under clause (ii)) of the deceased indi-
vidual for her entitlement month (if any), and 
‘‘(II) the imputed husband’s insurance benefit 
(determined under clause (iii)) of the deceased indi-
vidual for her entitlement month (if any). 
‘‘(ii) The amount of the imputed old-age insurance 
benefit of the deceased individual for the entitlement 
month of the widow (or surviving divorced wife) is the 
amount of the old-age insurance benefit to which he would 
have been entitled for such month—
‘‘(I) determined, in the case of such a deceased 
individual who had attained age 62 as of the date 
of his death, as if he had applied for such benefit 
in the month of his death and had survived through-
out the subsequent period ending with her entitle-
ment month, or 
‘‘(II) determined, in the case of such a deceased 
individual who died before attaining age 62 but 
would have attained age 62 before the end of her en-
titlement month, as if he had survived throughout
‘‘(I) determined, in the case of such a deceased 
individual who had attained age 62 as of the date 
of his death, as if he had applied for such benefit 
in the month of his death and had survived through-
out the subsequent period ending with her entitle-
ment month, or 
‘‘(II) determined, in the case of such a deceased 
individual who died before attaining age 62 but 
would have attained age 62 before the end of her en-
titlement month, as if he had survived throughout 
the subsequent period ending with her entitlement 
month and had applied for such benefit during the 
first month for which he would have been eligible for 
such benefit. 
In any case in which the deceased individual died before 
he attained age 62 and would not have attained age 62 
before the end of the entitlement month of the widow (or 
surviving divorced spouse), the deceased individual’s im-
puted husband’s insurance benefit shall be deemed to be 
zero.
‘‘(E)(i) For purposes of subparagraph (C), if the de-
ceased individual died during a month for which he other-
wise would have been entitled (but for his death) to an 
old-age insurance benefit under subsection (a) or a dis-
ability insurance benefit under section 223, or to a hus-
band’s insurance benefit under subsection (c) based on the 
wages and self-employment income of the widow (or sur-
viving divorced wife), the imputed deceased individual’s 
benefit for the entitlement month of the widow (or sur-
viving divorced wife) is the sum of—
‘‘(I) the amount of the old-age or disability in-
surance benefit (if any) to which he would have been 
entitled for her entitlement month if he had survived 
throughout the period subsequent to his death and 
ending with such month, and 
‘‘(II) the amount of the husband’s insurance 
benefit (if any) to which he would have been entitled 
for her entitlement month based on her wages and 
self-employment income if he had survived through-
out the period subsequent to his death and ending 
with such month (assuming, for purposes of reduc-
tion under subsection (k)(3)(A), the entitlement to 
an old-age or disability insurance benefit for such 
month, if any, as described in subclause (I)). 
‘‘(ii) If the deceased individual otherwise would have 
been entitled (but for his death) to a disability insurance 
benefit under section 223 for the month in which he died, 
the amount determined under clause (i) shall be deter-
mined as if he had survived throughout the period com-
mencing with the month of his death and ending with the
entitlement month of the widow (or surviving divorced 
wife) and he had remained entitled to disability insurance 
benefits throughout such period (or until becoming enti-
tled to old-age insurance benefits under subsection (a) 
during such period). 
‘‘(F) For purposes of subparagraph (C)(i)(II)—
‘‘(i) In the case of a widow (or surviving di-
vorced wife) who is entitled for her entitlement 
month to an old-age insurance benefit under sub-
section (a) or a disability insurance benefit under 
section 223, or otherwise would have been entitled 
(but for the deceased individual’s death) to a wife’s 
insurance benefit under subsection (b) for such 
month, the amount of her imputed survivor benefit 
for such month is the sum of—
‘‘(I) the amount of such old-age or dis-
ability insurance benefit (if any), and 
‘‘(II) the amount of such wife’s insurance 
benefit (if any), assuming, for purposes of re-
duction under subsection (k)(3)(A), the entitle-
ment to an old-age insurance or disability insur-
ance benefit for such month (if any), as de-
scribed in subclause (I). 
‘‘(ii) In the case of a widow (or surviving di-
vorced wife) who is not described in clause (i) but
has attained (or would attain) age 62 as of the end 
of her entitlement month, the amount of her im-
puted survivor benefit is the sum of—
‘‘(I) the amount of the old-age insurance 
benefit under subsection (a) to which she would 
be entitled for such month if she filed applica-
tion for such benefit during such month, and 
‘‘(II) the amount to which she otherwise 
would have been entitled (but for the deceased 
individual’s death) as a wife’s insurance benefit 
under subsection (b) for such month, based on 
the deceased individual’s wages and self-employ-
ment income, if she had filed application for 
such benefit during such month (assuming a 
primary insurance amount for the deceased in-
dividual determined under paragraph (2)(B) of 
this subsection and assuming, for purposes of 
reduction under subsection (k)(3)(A), the enti-
tlement to an old-age insurance benefit for such 
month, if any, as described in subclause (I)). 
In any case in which the widow (or surviving divorced 
wife) would not attain age 62 before the end of the her 
entitlement month, her imputed survivor benefit shall be 
deemed to be zero.
‘‘(G) The increased benefit cap determined under this 
subparagraph for the entitlement month of the widow (or 
surviving divorced wife) is the amount which would be the 
amount of a theoretical individual’s old-age insurance ben-
efit under subsection (a) (reduced as provided in sub-
section (q)) if—
‘‘(i) such theoretical individual’s primary insur-
ance amount for the first month of entitlement were 
equal to the average of the primary insurance 
amounts upon which old-age insurance benefits 
under subsection (a) are payable for—
‘‘(I) in any case in which the entitlement 
month of the widow (or surviving divorced wife) 
is the month of December, such month, or 
‘‘(II) in any other case, the latest month of 
December preceding such entitlement month, 
‘‘(ii) such first month of such theoretical indi-
vidual’s entitlement to such old-age insurance ben-
efit were the entitlement month of the widow (or 
surviving divorced spouse), and 
‘‘(iii) the month in which the theoretical indi-
vidual attained or would attain retirement age (as 
defined in section 216(l)) were the month in which 
the widow (or surviving divorced wife) attained or 
would attain retirement age (as so defined).
‘‘(H) If, in determining the amount of the benefit 
under this section pursuant to this paragraph, the im-
puted old-age insurance benefit or imputed husband’s in-
surance benefit of the deceased individual was deemed to 
be zero pursuant to the last sentence of clause (ii) or (iii) 
of subparagraph (D), or the imputed survivor benefit of 
the widow (or surviving divorced wife) was deemed to be 
zero pursuant to the last sentence of subparagraph (F), 
effective for any month after the entitlement month of the 
widow (or surviving divorced wife) in which the deceased 
individual would have attained age 62 or she attains age 
62, the Commissioner shall recompute the amount of the 
benefit under this paragraph by substituting a reference 
to such later month for each reference in the preceding 
provisions of this paragraph to her entitlement month. 
‘‘(I)(i) Any reference in this paragraph to the widow’s 
insurance benefit (as determined under the preceding 
paragraphs of this subsection) shall be deemed a reference 
to such benefit, taking into account all applicable reduc-
tions and deductions under this title. 
‘‘(ii) Any reference in this paragraph to the imputed 
old-age insurance benefit or imputed husband’s insurance 
benefit described in subparagraph (D), the old-age insur-
ance benefit, disability insurance benefit, or husband’s in-
surance benefit described in subparagraph (E), or the old-
age insurance benefit, disability insurance benefit, or 
wife’s insurance benefit described in subparagraph (F) 
shall be deemed a reference to such benefit, taking into 
account applicable reductions under this section but dis-
regarding reductions or deductions otherwise applicable 
under this title. 
‘‘(iii) A widow’s insurance benefit which has been in-
creased under this paragraph shall be subject to all reduc-
tions and deductions otherwise applicable to widow’s in-
surance benefits under this title, except that such benefit 
shall not be subject to any reduction otherwise applicable 
under subsection (q)(1).’’. 
(b) WIDOWER’S
INSURANCE
BENEFITS.—Section 
202(f) of such Act (42 U.S.C. 402(f)) is amended by add-
ing at the end the following new paragraph: 
‘‘(10)(A) In any case in which the amount of a wid-
ower’s insurance benefit (as determined under the pre-
ceding paragraphs of this subsection) for the entitlement 
month of the widower (or surviving divorced husband) is 
less than the minimum benefit amount for such month de-
termined under subparagraph (C), the amount of such 
benefit for such month and each succeeding month shall 
be increased to such minimum benefit amount (or the 
amount most recently established in lieu thereof under 
section 215(i)).
‘‘(B) For purposes of this paragraph, the term ‘enti-
tlement month’ of a widower (or surviving divorced hus-
band) means, in connection with his benefit under this 
subsection, the first month of his entitlement to such ben-
efit. 
‘‘(C) For purposes of subparagraph (A), the min-
imum benefit amount determined under this subparagraph 
for the entitlement month of the widower (or surviving di-
vorced husband) is an amount equal to the lesser of—
‘‘(i) 75 percent of the sum of—
‘‘(I) the imputed deceased individual’s ben-
efit for such month, as determined under sub-
paragraph (D) or (E) (as applicable), and 
‘‘(II) the imputed survivor benefit for such 
month, as determined under subparagraph (F), 
or 
‘‘(ii) the increased benefit cap determined under 
subparagraph (G) for such month. 
‘‘(D)(i) For purposes of subparagraph (C)(i)(I), if the 
deceased individual died in a month for which she was not 
entitled to any benefit under this title based on her wages 
or self-employment income or the wages and self-employ-
ment income of the widower (or surviving divorced hus-
band), the imputed deceased individual’s benefit for the
entitlement month of the widower (or surviving divorced 
husband) is the sum of—
‘‘(I) the imputed old-age insurance benefit (de-
termined under clause (ii)) of the deceased indi-
vidual for his entitlement month (if any), and 
‘‘(II) the imputed wife’s insurance benefit (de-
termined under clause (iii)) of the deceased indi-
vidual for his entitlement month (if any). 
‘‘(ii) The amount of the imputed old-age insurance 
benefit of the deceased individual for the entitlement 
month of the widower (or surviving divorced husband) is 
the amount of the old-age insurance benefit to which she 
would have been entitled for such month—
‘‘(I) determined, in the case of such a deceased 
individual who had attained age 62 as of the date 
of her death, as if she had applied for such benefit 
in the month of her death and had survived through-
out the subsequent period ending with his entitle-
ment month, or 
‘‘(II) determined, in the case of such a deceased 
individual who died before attaining age 62 but 
would have attained age 62 before the end of his en-
titlement month, as if she had survived throughout 
the subsequent period ending with his entitlement 
month, and had applied for such benefit during the
of her death, as if she had applied for such benefit 
in the month of her death and had survived through-
out the subsequent period ending with his entitle-
ment month, or 
‘‘(II) determined, in the case of such a deceased 
individual who died before attaining age 62 but 
would have attained age 62 before the end of his en-
titlement month, as if she had survived throughout 
the subsequent period ending with his entitlement 
month and had applied for such benefit during the 
first month for which she would have been eligible 
for such benefit. 
In any case in which the deceased individual died before 
she attained age 62 and would not have attained age 62 
before the end of the entitlement month of the widower 
(or surviving divorced husband), the deceased individual’s 
imputed wife’s insurance benefit shall be deemed to be 
zero. 
‘‘(E)(i) For purposes of subparagraph (C), if the de-
ceased individual died during a month for which she other-
wise would have been entitled (but for his death) to an 
old-age insurance benefit under subsection (a) or a dis-
ability insurance benefit under section 223, or to a wife’s 
insurance benefit under subsection (c) based on the wages 
and self-employment income of the widower (or surviving
divorced husband), the imputed deceased individual’s ben-
efit for the entitlement month of the widower (or surviving 
divorced husband) is the sum of—
‘‘(I) the amount of the old-age or disability in-
surance benefit (if any) to which she would have 
been entitled for his entitlement month if she had 
survived throughout the period subsequent to her 
death and ending with such month, and 
‘‘(II) the amount of the wife’s insurance benefit 
(if any) to which she would have been entitled for 
his entitlement month based on his wages and self-
employment income if she had survived throughout 
the period subsequent to her death and ending with 
such month (assuming, for purposes of reduction 
under subsection (k)(3)(A), the entitlement to an 
old-age or disability insurance benefit for such 
month, if any, as described in subclause (I)). 
‘‘(ii) If the deceased individual otherwise would have 
been entitled (but for her death) to a disability insurance 
benefit under section 223 for the month in which she died, 
the amount determined under clause (i) shall be deter-
mined as if she had survived throughout the period com-
mencing with the month of her death and ending with the 
entitlement month of the widower (or surviving divorced 
husband) and she had remained entitled to disability in-
surance benefits throughout such period (or until becom-
ing entitled to old-age insurance benefits under subsection 
(a) during such period). 
‘‘(F) For purposes of subparagraph (C)(i)(II)—
‘‘(i) In the case of a widower (or surviving di-
vorced husband) who is entitled for his entitlement 
month to an old-age insurance benefit under sub-
section (a) or a disability insurance benefit under 
section 223, or otherwise would have been entitled 
(but for the deceased individual’s death) to a hus-
band’s insurance benefit under subsection (b) for 
such month, the amount of his imputed survivor 
benefit for such month is the sum of—
‘‘(I) the amount of such old-age or dis-
ability insurance benefit (if any), and 
‘‘(II) the amount of such husband’s insur-
ance benefit (if any), assuming, for purposes of 
reduction under subsection (k)(3)(A), the enti-
tlement to an old-age insurance or disability in-
surance benefit for such month (if any), as de-
scribed in subclause (I). 
‘‘(ii) In the case of a widower (or surviving di-
vorced husband) who is not described in clause (i) 
but has attained (or would attain) age 62 as of the
end of his entitlement month, the amount of his im-
puted survivor benefit is the sum of—
‘‘(I) the amount of the old-age insurance 
benefit under subsection (a) to which he would 
be entitled for such month if he filed applica-
tion for such benefit during such month, and 
‘‘(II) the amount to which he otherwise 
would have been entitled (but for the deceased 
individual’s death) as a husband’s insurance 
benefit under subsection (c) for such month, 
based on the deceased individual’s wages and 
self-employment income, if he had filed applica-
tion for such benefit during such month (as-
suming a primary insurance amount for the de-
ceased individual determined under paragraph 
(2)(B) of this subsection and assuming, for 
purposes 
of 
reduction 
under 
subsection 
(k)(3)(A), the entitlement to an old-age insur-
ance benefit for such month, if any, as de-
scribed in subclause (I)). 
In any case in which the widower (or surviving di-
vorced husband) would not attain age 62 before the 
end of his entitlement month, his imputed survivor 
benefit shall be deemed to be zero.
‘‘(G) The increased benefit cap determined under this 
subparagraph for the entitlement month of the widower 
(or surviving divorced husband) is the amount which 
would be the amount of a theoretical individual’s old-age 
insurance benefit under subsection (a) (reduced as pro-
vided in subsection (q)) if—
‘‘(i) such theoretical individual’s primary insur-
ance amount for the first month of entitlement were 
equal to the average of the primary insurance 
amounts upon which old-age insurance benefits 
under subsection (a) are payable for—
‘‘(I) in any case in which the entitlement 
month of the widower (or surviving divorced 
husband) is the month of December, such 
month, or 
‘‘(II) in any other case, the latest month of 
December preceding such entitlement month, 
‘‘(ii) such first month of such theoretical indi-
vidual’s entitlement to such old-age insurance ben-
efit were the entitlement month of the widower (or 
surviving divorced husband), and 
‘‘(iii) the month in which the theoretical indi-
vidual attained or would attain retirement age (as 
defined in section 216(l)) were the month in which 
the widower (or surviving divorced husband) at-
tained or would attain retirement age (as so de-
fined). 
‘‘(H) If, in determining the amount of the benefit 
under this section pursuant to this paragraph, the im-
puted old-age insurance benefit or imputed wife’s insur-
ance benefit of the deceased individual was deemed to be 
zero pursuant to the last sentence of clause (ii) or (iii) 
of subparagraph (D), or the imputed survivor benefit of 
the widower (or surviving divorced husband) was deemed 
to be zero pursuant to the last sentence of subparagraph 
(F), effective for any month after the entitlement month 
of the widower (or surviving divorced husband) in which 
the deceased individual would have attained age 62 or he 
attains age 62, the Commissioner shall recompute the 
amount of the benefit under this paragraph by sub-
stituting a reference to such later month for each ref-
erence in the preceding provisions of this paragraph to his 
entitlement month. 
‘‘(I)(i) Any reference in this paragraph to the wid-
ower’s insurance benefit (as determined under the pre-
ceding paragraphs of this subsection) shall be deemed a 
reference to such benefit, taking into account all applicable 
reductions and deductions under this title. 
‘‘(ii) Any reference in this paragraph to the imputed 
old-age insurance benefit or imputed wife’s insurance ben-
efit described in subparagraph (D), the old-age insurance 
benefit, disability insurance benefit, or wife’s insurance 
benefit described in subparagraph (E), or the old-age in-
surance benefit, disability insurance benefit, or husband’s 
insurance benefit described in subparagraph (F) shall be 
deemed a reference to such benefit, taking into account 
applicable reductions under this section but disregarding 
reductions or deductions otherwise applicable under this 
title. 
‘‘(iii) A widower’s insurance benefit which has been 
increased under this paragraph shall be subject to all re-
ductions and deductions otherwise applicable to widower’s 
insurance benefits under this title, except that such benefit 
shall not be subject to any reduction otherwise applicable 
under subsection (q)(1).’’. 
(c) COST-OF-LIVING ADJUSTMENTS TO GUARANTEED 
WIDOW’S AND WIDOWER’S INSURANCE BENEFITS.—Sec-
tion 
215(i)(2)(A)(ii) 
of 
such 
Act 
(42 
U.S.C. 
415(i)(2)(A)(ii)) is amended—
(1) in subclause (II), by striking ‘‘and’’ at the 
end; 
(2) in subclause (III), by striking ‘‘1978.’’ and 
inserting ‘‘1979, and’’; 
(3) by adding at the end the following new sub-
clause:
‘‘(IV) the benefit amount to which an individual 
is entitled for that month under subsection (e) or (f) 
of section 202 if such benefit amount has been in-
creased under paragraph (10) of such subsection.’’; 
and 
(4) in the matter following subclause (IV) 
(added by paragraph (3)), by striking ‘‘(I), (II), and 
(III)’’ and inserting ‘‘(I), (II), (III), and (IV)’’. 
(d) EFFECTIVE DATE.—The amendments made by 
this section shall apply with respect to widow’s and wid-
ower’s insurance benefits for months after November of 
the calendar year in which this Act is enacted. 
SEC. 203. BENEFITS FOR DISABLED WIDOWS AND WID-
OWERS WITHOUT REGARD TO AGE. 
(a) ELIGIBILITY FOR WIDOW’S INSURANCE BENE-
FITS.—Section 202(e)(1)(B)(ii) of the Social Security Act 
(42 U.S.C. 402(e)(1)(B)(ii)) is amended by striking ‘‘has 
attained age 50 but has not attained age 60 and’’. 
(b) ELIGIBILITY FOR WIDOWER’S INSURANCE BENE-
FITS.—Section 202(f)(1)(B)(ii) of such Act (42 U.S.C. 
402(f)(1)(B)(ii)) is amended by striking ‘‘has attained age 
50 but has not attained age 60 and’’. 
(c) 
CONFORMING
AMENDMENT.—Section 
202(q)(3)(A) of such Act (42 U.S.C. 402(q)(3)(A)) is 
amended by striking ‘‘If the first month’’ and all that fol-
lows through ‘‘widow’s or widower’s insurance benefit)’’ 
and inserting ‘‘If the first month for which an individual 
both is entitled to a wife’s or husband’s insurance benefit 
and has attained age 62 or for which an individual is enti-
tled to a widow’s or widower’s insurance benefit’’. 
(d) EFFECTIVE DATE.—The amendments made by 
this section shall apply with respect to monthly insurance 
benefits payable under title II of the Social Security Act 
for months after November of the calendar year in which 
this Act is enacted and for which applications are filed 
or pending after November of such year. 
SEC. 204. REPEAL OF 7-YEAR RESTRICTION ON ELIGIBILITY 
FOR WIDOW’S AND WIDOWER’S INSURANCE 
BENEFITS BASED ON DISABILITY. 
(a) WIDOW’S INSURANCE BENEFITS.—
(1) IN GENERAL.—Section 202(e) of the Social 
Security Act (42 U.S.C. 402(e)) is amended—
(A) in paragraph (1)(B)(ii), by striking 
‘‘which began before the end of the period spec-
ified in paragraph (4)’’; 
(B) in paragraph (1)(F)(ii), by striking 
‘‘(I) in the period specified in paragraph (4) 
and (II)’’;
(C) by striking paragraph (4) and by re-
designating paragraphs (5) through (9) as 
paragraphs (4) through (8), respectively; and 
(D) in paragraph (4)(A)(ii) (as redesig-
nated), by striking ‘‘whichever’’ and all that fol-
lows through ‘‘begins’’ and inserting ‘‘the first 
day of the seventeenth month before the month 
in which her application is filed’’. 
(2) CONFORMING AMENDMENTS.—
(A) Section 202(e)(1)(F)(i) of such Act 
(42 U.S.C. 402(e)(1)(F)(i)) is amended by 
striking ‘‘paragraph (5)’’ and inserting ‘‘para-
graph (4)’’. 
(B) Section 202(e)(1)(C)(ii)(III) of such 
Act (42 U.S.C. 402(e)(2)(C)(ii)(III)) is amend-
ed by striking ‘‘paragraph (8)’’ and inserting 
‘‘paragraph (7)’’. 
(C) Section 202(e)(2)(A) of such Act (42 
U.S.C. 402(e)(2)(A)) is amended by striking 
‘‘paragraph (7)’’ and inserting ‘‘paragraph 
(6)’’. 
(D) Section 226(e)(1)(A)(i) of such Act 
(42 U.S.C. 426(e)(1)(A)(i)) is amended by 
striking ‘‘202(e)(4),’’. 
(b) WIDOWER’S INSURANCE BENEFITS.—
(1) IN GENERAL.—Section 202(f) of such Act 
(42 U.S.C. 402(f)) is amended—
(A) in paragraph (1)(B)(ii), by striking 
‘‘which began before the end of the period spec-
ified in paragraph (5)’’;
(B) in paragraph (1)(F)(ii), by striking 
‘‘(I) in the period specified in paragraph (5) 
and (II)’’; 
(C) by striking paragraph (5) and by re-
designating paragraphs (6) through (9) as 
paragraphs (5) through (8), respectively; and 
(D) in paragraph (5)(A)(ii) (as redesig-
nated), by striking ‘‘whichever’’ and all that fol-
lows through ‘‘begins’’ and inserting ‘‘the first 
day of the seventeenth month before the month 
in which his application is filed’’. 
(2) CONFORMING AMENDMENTS.—
(A) Section 202(f)(1)(F)(i) of such Act (42 
U.S.C. 402(f)(1)(F)(i)) is amended by striking 
‘‘paragraph (6)’’ and inserting ‘‘paragraph 
(5)’’. 
(B) Section 202(f)(1)(C)(ii)(III) of such 
Act (42 U.S.C. 402(f)(2)(C)(ii)(III)) is amend-
ed by striking ‘‘paragraph (8)’’ and inserting 
‘‘paragraph (7)’’.
(C) Section 226(e)(1)(A)(i) of such Act (as 
amended by subsection (a)(2)) is further 
amended by striking ‘‘202(f)(1)(B)(ii), and 
202(f)(5)’’ 
and 
inserting 
‘‘and 
202(f)(1)(B)(ii)’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply with respect to benefits for months 
after November of the calendar year in which this Act is 
enacted and for which applications are filed or pending 
after November of such year.
SEC. 205. EXEMPTION FROM TWO-YEAR WAITING PERIOD 
FOR DIVORCED SPOUSE’S BENEFITS UPON 
OTHER SPOUSE’S REMARRIAGE. 
(a) 
WIFE’S
INSURANCE
BENEFITS.—Section 
202(b)(5)(A) of the Social Security Act (42 U.S.C. 
402(b)(5)(A)) is amended by adding at the end the fol-
lowing new sentence: ‘‘The criterion for entitlement under 
clause (ii) shall be deemed met upon the remarriage of 
the insured individual to someone other than the applicant 
during the 2-year period referred to in such clause.’’. 
(b) HUSBAND’S
INSURANCE
BENEFITS.—Section 
202(c)(5)(A) of such Act (42 U.S.C. 402(c)(5)(A)) is 
amended by adding at the end the following new sentence: 
‘‘The criterion for entitlement under clause (ii) shall be 
deemed met upon the remarriage of the insured individual
to someone other than the applicant during the 2-year pe-
riod referred to in such clause.’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply with respect to benefits for months 
after November of the calendar year in which this Act is 
enacted and for which applications are filed or pending 
after November of such year. 
SEC. 206. INCREASE IN AMOUNT OF WAGES AND SELF-EM-
PLOYMENT INCOME CREDITED TO YEARS 
TAKEN INTO ACCOUNT IN DETERMINING AV-
ERAGE INDEXED MONTHLY EARNINGS FOR 
BENEFICIARIES PRECLUDED FROM REMU-
NERATIVE WORK OCCASIONED BY NEED TO 
PROVIDE CHILD CARE. 
(a) IN GENERAL.—Section 215(b)(3) of the Social 
Security Act (42 U.S.C. 415(b)(3)) is amended—
(1) in subparagraph (A), by striking ‘‘subpara-
graph (B)’’ and inserting ‘‘subparagraphs (B) and 
(C)’’, and 
(2) by adding at the end the following new sub-
paragraph: 
‘‘(C)(i) Subject to clause (iii), in any case in which—
‘‘(I) in any calendar year which is included in 
an individual’s elapsed years, such individual was
living with a child (of such individual or his or her 
spouse) under the age of 7, and 
‘‘(II) at any time during or after such calendar 
year and on or before the date of the application by 
such individual for benefits based on such individ-
ual’s wages and self-employment income, such indi-
vidual submits to the Commissioner, in such form as 
the Commissioner shall prescribe by regulation, a 
written statement that the requirements of subclause 
(I) are met with respect to such calendar year, 
the amount of the wages and self-employment income paid 
in or credited to such year under subparagraph (A), if less 
than the minimum credit amount for such individual for 
such year, shall be deemed equal to such minimum credit 
amount. 
‘‘(ii) For purposes of clause (i), the minimum credit 
amount for an individual described in clause (i) for any 
calendar year shall be an amount equal to the product de-
rived by multiplying—
‘‘(I) subject to clause (iii), 1⁄4 of the average in-
dexed monthly earnings of such individual, deter-
mined as if such individual became entitled to dis-
ability insurance benefits on January 1 of such year 
(disregarding any elapsed year with respect to which 
wages and self-employment income of such indi-
vidual are deemed to be increased under this sub-
paragraph), by 
‘‘(II) the number of months in such year during 
which such individual meets the requirements of 
clause (i)(I). 
‘‘(iii) In any case in which a minimum credit amount 
for an individual is determined under clause (ii) for 2 or 
more elapsed years, the amount determined in the case 
of such individual under clause (ii)(I) in connection with 
each such elapsed year shall not be less than the amount 
determined under clause (ii)(I) for such individual under 
clause (ii)(I) in connection with the latest of such 2 or 
more elapsed years. 
‘‘(iv) Clause (i) shall apply only with respect to not 
more than 5 elapsed years designated by the individual 
described in clause (i) with respect to which such indi-
vidual submits a statement under clause (i)(II). 
‘‘(v) Clause (i) shall not apply in the case of an indi-
vidual with respect to any calendar year referred to in 
clause (i)(I), if such individual’s spouse referred to in such 
clause was also living with the child referred to in such 
clause in such year, and—
‘‘(I) the amount of such individual’s wages and 
self-employment income paid in or credited to such 
year (as determined before the application of this