I
104TH CONGRESS
1ST SESSION
H. R. 164
To amend titles II and XVIII of the Social Security Act to ensure the
integrity of the social security trust funds by reconstituting the Boards
of Trustees of such trust funds and the Managing Trustee of such
trust funds to increase their independence, by providing for annual in-
vestment plans to guide investment of amounts in such trust funds,
and by removing unnecessary restrictions on investment and disinvest-
ment of amounts in such trust funds.
IN THE HOUSE OF REPRESENTATIVES
JANUARY 4, 1995
Mr. SOLOMON introduced the following bill; which was referred to the Commit-
tee on Ways and Means and, in addition, to the Committee on Commerce
and, for a period to be subsequently determined by the Speaker, in each
case for consideration of such provisions as fall within the jurisdiction of
the committee concerned
A BILL
To amend titles II and XVIII of the Social Security Act
to ensure the integrity of the social security trust funds
by reconstituting the Boards of Trustees of such trust
funds and the Managing Trustee of such trust funds
to increase their independence, by providing for annual
investment plans to guide investment of amounts in such
trust funds, and by removing unnecessary restrictions
on investment and disinvestment of amounts in such
trust funds.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ‘‘Social Security Trust
Funds Integrity Act of 1995’’.
SEC. 2. INDEPENDENT MANAGING TRUSTEE AND BOARD OF
TRUSTEES.
(a) IN GENERAL.—Section 201(c) of the Social Secu-
rity Act is amended—
(1) in the seventh sentence, by redesignating
paragraphs (1), (2), (3), (4), and (5) as subpara-
graphs (A), (B), (C), (D), and (E), respectively, and
(2) by striking ‘‘(c) With respect to’’ and all
that follows through ‘‘It shall be the duty’’ in the
seventh sentence and inserting the following:
‘‘(c)(1) With respect to the Federal Old-Age and Sur-
vivors Insurance Trust Fund and the Federal Disability
Insurance Trust Fund (hereinafter in this title referred
to as the ‘Trust Funds’) there is hereby created a body
to be known as the Board of Trustees of the Trust Funds
(hereinafter in this title called the ‘Board of Trustees’).
The Board of Trustees shall be composed of—
‘‘(A) 10 members appointed by the President,
by and with the advice and consent of the Senate,
as follows:
‘‘(i) 2 shall be appointed after taking into
account recommendations by the Speaker of the
House of Representatives;
‘‘(ii) 2 shall be appointed after taking into
account recommendations by the President pro
tempore of the Senate;
‘‘(iii) 2 shall be appointed after taking into
account recommendations by the Minority
Leader of the House of Representatives;
‘‘(iv) 2 shall be appointed after taking into
account recommendations by the Minority
Leader of the Senate; and
‘‘(v) 2 shall be appointed after taking into
account recommendations by private organiza-
tions determined by the President to consist of
the 5 largest such organizations representing
the interests of senior citizens in the United
States; and
‘‘(B) the Managing Trustee of the Social Secu-
rity Trust Funds appointed under paragraph (3)
(hereinafter in this title referred to as the ‘Managing
Trustee’).
The Managing Trustee shall serve as Chair of the Board
of Trustees. The Commissioner of Social Security shall
serve as Secretary of the Board of Trustees. The Board
of Trustees shall meet not less frequently than once each
calendar year.
‘‘(2)(A) Of the members of the Board of Trustees ap-
pointed under paragraph (1)(A), not more than 5 shall
be of the same political party.
‘‘(B) The members of the Board of Trustees ap-
pointed under paragraph (1)(A) shall serve for a term of
6 years, except that, of the first individuals appointed, one
individual appointed under each of clauses (i), (ii), (iii),
(iv), and (v) of paragraph (1)(A) shall serve for a term
ending December 31, 1996, and the other individual ap-
pointed under each of such clauses shall serve for a term
ending December 31, 1999, as designated by the President
at the time of appointment. An individual may serve as
such a member of the Board of Trustees after the expira-
tion of his or her term until his or her successor has taken
office. An individual appointed to fill a vacancy occurring
other than by the expiration of a term of office shall be
appointed only for the unexpired term of the individual
he or she succeeds. An individual may be removed as such
a member of the Board of Trustees only for cause and
only after such cause has been reported in writing to the
Speaker of the House of Representatives and the Presi-
dent pro tempore of the Senate.
‘‘(C) Each member of the Board of Trustees ap-
pointed under paragraph (1)(A) shall receive compensa-
tion at the daily equivalent of the rate payable for level
IV of the Executive Schedule under section 5314 of title
5, United States Code, for each day on which such mem-
ber is engaged in the performance of his or her duties on
the Board of Trustees, and shall in addition be reimbursed
for the actual and necessary expenses incurred by him or
her in the performance of his or her duties.
‘‘(3)(A) The Managing Trustee shall be appointed by
the President, by and with the advice and consent of the
Senate.
‘‘(B) The Managing Trustee shall serve for a term
of four years, except that the first individual appointed
as Managing Trustee under this paragraph shall serve for
a term ending December 31, 1997. An individual may
serve as Managing Trustee after the expiration of his or
her term until his or her successor has taken office as
Managing Trustee. An individual appointed to fill a va-
cancy occurring other than by the expiration of a term
of office shall be appointed only for the unexpired term
of the individual he or she succeeds. An individual may
be removed as Managing Trustee only for cause and only
after such cause has been reported in writing to the
Speaker of the House of Representatives and the Presi-
dent pro tempore of the Senate.
‘‘(C) The Managing Trustee shall not engage in any
other business, vocation, or employment. Any individual
who is engaging in any other business, vocation, or em-
ployment at the time of his or her appointment as Manag-
ing Trustee shall terminate or liquidate such activity no
later than 90 days after such appointment.
‘‘(D) The Managing Trustee shall receive compensa-
tion at the rate payable for level III of the Executive
Schedule under section 5314 of title 5, United States
Code, and shall in addition be reimbursed for the actual
and necessary expenses incurred by him or her in the per-
formance of his or her duties.
‘‘(4) The Managing Trustee and the other members
of the Board of Trustees shall be chosen, on the basis of
their integrity, impartiality, and good judgment, from
among individuals who, by reason of their education, expe-
rience, and attainments, are exceptionally qualified to per-
form their duties prescribed under this Act and who have
no conflicting interest which would hinder the performance
of disinterested public service either in the investment of
either of the Trust Funds, the Federal Hospital Insurance
Trust Fund, or the Federal Supplementary Medical Insur-
ance Trust Fund or in the other functions and duties vest-
ed in them under this Act.
‘‘(5)(A) The Commissioner of Social Security shall
make available to the Managing Trustee and the Board
of Trustees, from the personnel, facilities, and services of
the Social Security Administration, such secretarial, cleri-
cal, technical, and other assistance as may be necessary
or appropriate to the performance of their duties.
‘‘(B) The Commissioner of Social Security and the
Secretary of the Treasury shall make available to the Man-
aging Trustee and the Board of Trustees such information
and data held by their respective agencies as may be nec-
essary or appropriate to the performance of the duties of
the Managing Trustee and the Board of Trustees.
‘‘(6) It shall be the duty’’.
(b) CONFORMING AMENDMENTS.—
(1) FEDERAL
HOSPITAL
INSURANCE
TRUST
FUND.—Section 1817(b) of such Act is amended—
(A) in the seventh sentence, by redesignat-
ing paragraphs (1), (2), (3), and (4) as sub-
paragraphs (A), (B), (C), and (D), respectively,
and
(B) by striking ‘‘(b) With respect to’’ and
all that follows through ‘‘It shall be the duty’’
in the seventh sentence and inserting the follow-
ing:
‘‘(b)(1) With respect to the Trust Fund, there is
hereby created a body to be known as the Board of Trust-
ees of the Trust Fund (hereinafter in this section referred
to as the ‘Board of Trustees’). The Board of Trustees
shall be composed of—
‘‘(A) the individuals serving as members of the
Board of Trustees of the Federal Old-Age and Sur-
vivors Insurance Trust Fund and the Federal Dis-
ability 
Insurance 
Trust 
Fund 
under 
section
201(c)(1)(A), and
‘‘(B) the Managing Trustee of the Social Secu-
rity Trust Funds (hereinafter in this section referred
to as the ‘Managing Trustee’) appointed under sec-
tion 201(c)(2).
The Managing Trustee shall serve as Chair of the Board
of Trustees. The Commissioner of Social Security shall
serve as Secretary of the Board of Trustees. The Board
of Trustees shall meet not less frequently than once each
calendar year. The Managing Trustee and the other mem-
bers of the Board of Trustees shall serve under this sub-
section without compensation in addition to compensation
received for their service under section 201(c).
‘‘(3) It shall be the duty’’.
(2) FEDERAL
SUPPLEMENTARY
MEDICAL
IN-
SURANCE TRUST FUND.—Section 1841(b) of such
Act is amended—
(A) in the seventh sentence, by redesignat-
ing paragraphs (1), (2), (3), and (4) as sub-
paragraphs (A), (B), (C), and (D), respectively,
and
(B) by striking ‘‘(b) With respect to’’ and
all that follows through ‘‘It shall be the duty’’
in the seventh sentence and inserting the follow-
ing:
‘‘(b)(1) With respect to the Trust Fund, there is
hereby created a body to be known as the Board of Trust-
ees of the Trust Fund (hereinafter in this section referred
to as the ‘Board of Trustees’). The Board of Trustees
shall be composed of—
‘‘(A) the individuals serving as members of the
Board of Trustees of the Federal Old-Age and Sur-
vivors Insurance Trust Fund and the Federal Dis-
ability 
Insurance 
Trust 
Fund 
under 
section
201(c)(1)(A), and
‘‘(B) the Managing Trustee of the Social Secu-
rity Trust Funds (hereinafter in this section referred
to as the ‘Managing Trustee’) appointed under sec-
tion 201(c)(2).
The Managing Trustee shall serve as Chair of the Board
of Trustees. The Commissioner of Social Security shall
serve as Secretary of the Board of Trustees. The Board
of Trustees shall meet not less frequently than once each
calendar year. The Managing Trustee and the other mem-
bers of the Board of Trustees shall serve under this sub-
section without compensation in addition to compensation
received for their service under section 201(c).
‘‘(3) It shall be the duty’’.
(c) EFFECTIVE DATE AND TRANSITIONAL RULES.—
The amendments made by this section shall take effect
on the date of the enactment of this Act, except that the
Secretary of the Treasury shall continue to serve as Man-
aging Trustee of the Social Security Trust Funds and the
members of the Board of Trustees under sections 201(c),
1817(b), and 1841(b) of the Social Security Act (as in
effect immediately before such date) shall continue to
serve as the members of such Boards, until the date on
which all individuals initially appointed under section
201(c) of such Act (as amended by this section) take of-
fice.
SEC. 3. INVESTMENT OF THE SOCIAL SECURITY TRUST
FUNDS PURSUANT TO ANNUAL INVESTMENT
PLAN.
(a) FEDERAL OLD-AGE AND SURVIVORS INSURANCE
TRUST FUND
AND FEDERAL DISABILITY INSURANCE
TRUST FUND.—Section 201(d) of the Social Security Act
is amended by striking ‘‘(d) It shall be the duty’’ and all
that follows through ‘‘Such investments’’ and inserting the
following:
‘‘(d)(1)(A) It shall be the duty of the Managing
Trustee to invest amounts in the Trust Funds in such
manner and to such extent as is determined by the Manag-
ing Trustee to be in accordance with the annual invest-
ment plan submitted by the Board of Trustees pursuant
to this paragraph.
‘‘(B) The Board of Trustees shall conduct a continu-
ing study and actuarial analysis of the status of the invest-
ments made by the Managing Trustee pursuant to this
subsection, and, on the basis of such study and analysis
shall, on or before August 1 of each calendar year, formu-
late and submit to the President and each House of the
Congress an investment plan to govern the investments
of the Trust Funds during the fiscal year beginning with
October 1 of such calendar year. The Board of Trustees
may, from time to time thereafter, submit amendments
to the annual investment plan in the manner in which
original annual investment plans are submitted, except
that each such amendment shall not be effective before
60 days after its submission.
‘‘(C) Each annual investment plan shall set forth
standards governing the investment and disinvestment of
the Trust Funds which are appropriate to ensure that the
insurance program under this title will to the maximum
extent possible fulfill its intended purposes and meet the
needs for which it is designed in a fiscally and actuarially
sound manner, without being influenced or characterized
by budgetary or fiscal considerations irrelevant to the
Trust Funds or by partisan or political considerations.
Such plan shall be accompanied by any recommendations
of the Board of Trustees regarding the investment of the
Trust Funds, including appropriate technical legislative
language for any necessary modifications in the provisions
of this title relating to matters covered by such rec-
ommendations.
‘‘(D) The annual investment plan submitted to each
House of the Congress (and any amendment thereto), to-
gether with accompanying recommendations of the Board
of Trustees, shall be incorporated in a special message to
each House. Such message shall be delivered to the Clerk
of the House of Representatives if the House of Rep-
resentatives is not in session and to the Secretary of the
Senate if the Senate is not in session. Each such message
shall be printed as a document for each House.
‘‘(E) For purposes of making investments under this
paragraph, obligations may be acquired (i) at original
issue at the issue price, or (ii) by purchase of outstanding
obligations at the market price.
‘‘(2) The purposes for which’’.
(b) 
FEDERAL
HOSPITAL
INSURANCE
TRUST
FUND.—Section 1817(c) of such Act is amended by strik-
ing ‘‘(c) It shall be the duty’’ and all that follows through
‘‘The purposes for which’’ and inserting the following:
‘‘(c)(1)(A) It shall be the duty of the Managing
Trustee to invest amounts in the Trust Fund in such man-
ner and to such extent as is determined by the Managing
Trustee to be in accordance with the annual investment
plan submitted by the Board of Trustees pursuant to this
paragraph.
‘‘(B) The Board of Trustees shall conduct a continu-
ing study and actuarial analysis of the status of the invest-
ments made by the Managing Trustee pursuant to this
subsection, and, on the basis of such study and analysis
shall, on or before August 1 of each calendar year, formu-
late and submit to the President and each House of the
Congress an investment plan to govern the investments
of the Trust Fund during the fiscal year beginning with
October 1 of such calendar year. The Board of Trustees
may, from time to time thereafter, submit amendments
to the annual investment plan in the manner in which
original annual investment plans are submitted, except
that each such amendment shall not be effective before
60 days after its submission.
‘‘(C) Each annual investment plan shall set forth
standards governing the investment and disinvestment of
the Trust Fund which are appropriate to ensure that the
insurance program under this title will to the maximum
extent possible fulfill its intended purposes and meet the
needs for which it is designed in a fiscally and actuarially
sound manner, without being influenced or characterized
by budgetary or fiscal considerations irrelevant to the
Trust Fund or by partisan or political considerations.
Such plan shall be accompanied by any recommendations
of the Board of Trustees regarding the investment of the
Trust Fund, including appropriate technical legislative
language for any necessary modifications in the provisions
of this title relating to matters covered by such rec-
ommendations.
‘‘(D) The annual investment plan submitted to each
House of the Congress (and any amendment thereto), to-
gether with accompanying recommendations of the Board
of Trustees, shall be incorporated in a special message to
each House. Such message shall be delivered to the Clerk
of the House of Representatives if the House of Rep-
resentatives is not in session and to the Secretary of the
Senate if the Senate is not in session. Each such message
shall be printed as a document for each House.
‘‘(E) For purposes of making investments under this
paragraph, obligations may be acquired (i) at original
issue at the issue price, or (ii) by purchase of outstanding
obligations at the market price.
‘‘(2) The purposes for which’’.
(c) FEDERAL SUPPLEMENTARY MEDICAL INSUR-
ANCE TRUST FUND.—Section 1841(c) of such Act is
amended by striking ‘‘(c) It shall be the duty’’ and all
that follows through ‘‘The purposes for which’’ and insert-
ing the following:
‘‘(c)(1)(A) It shall be the duty of the Managing
Trustee to invest amounts in the Trust Fund in such man-
ner and to such extent as is determined by the Managing
Trustee to be in accordance with the annual investment
plan submitted by the Board of Trustees pursuant to this
paragraph.
‘‘(B) The Board of Trustees shall conduct a continu-
ing study and actuarial analysis of the status of the invest-
ments made by the Managing Trustee pursuant to this
subsection, and, on the basis of such study and analysis
shall, on or before August 1 of each calendar year, formu-
late and submit to the President and each House of the
Congress an investment plan to govern the investments
of the Trust Fund during the fiscal year beginning with
October 1 of such calendar year. The Board of Trustees
may, from time to time thereafter, submit amendments
to the annual investment plan in the manner in which
original annual investment plans are submitted, except
that each such amendment shall not be effective before
60 days after its submission.
‘‘(C) Each annual investment plan shall set forth
standards governing the investment and disinvestment of
the Trust Fund which are appropriate to ensure that the
insurance program under this title will to the maximum
extent possible fulfill its intended purposes and meet the
needs for which it is designed in a fiscally and actuarially
sound manner, without being influenced or characterized
by budgetary or fiscal considerations irrelevant to the
Trust Fund or by partisan or political considerations.
Such plan shall be accompanied by any recommendations
of the Board of Trustees regarding the investment of the
Trust Fund, including appropriate technical legislative
language for any necessary modifications in the provisions
of this title relating to matters covered by such rec-
ommendations.
‘‘(D) The annual investment plan submitted to each
House of the Congress (and any amendment thereto), to-
gether with accompanying recommendations of the Board
of Trustees, shall be incorporated in a special message to
each House. Such message shall be delivered to the Clerk
of the House of Representatives if the House of Rep-
resentatives is not in session and to the Secretary of the
Senate if the Senate is not in session. Each such message
shall be printed as a document for each House.
‘‘(E) For purposes of making investments under this
paragraph, obligations may be acquired (i) at original
issue at the issue price, or (ii) by purchase of outstanding
obligations at the market price.
‘‘(2) The purposes for which’’.
SEC. 4. GREATER DISCRETION IN INVESTMENT OF THE SO-
CIAL SECURITY TRUST FUNDS.
(a) FEDERAL OLD-AGE AND SURVIVORS INSURANCE
TRUST FUND
AND FEDERAL DISABILITY INSURANCE
TRUST FUND.—Section 201(d) of the Social Security Act
(as amended by section 3 of this Act) is further amended
by striking the last sentence and inserting the following:
‘‘The Managing Trustee may purchase such obligations
and other interest-bearing obligations, on original issue or
at the market price, and sell such obligations, if the Man-
aging Trustee determines that such purchase or sale is
in the public interest and in accordance with the annual
investment plan of the Board of Trustees.’’.
(b) 
FEDERAL
HOSPITAL
INSURANCE
TRUST
FUND.—Section 1817(c) of such Act (as amended by sec-
tion 3 of this Act) is further amended by striking the last
sentence and inserting the following: ‘‘The Managing
Trustee may purchase such obligations and other interest-
bearing obligations, on original issue or at the market
price, and sell such obligations, if the Managing Trustee
determines that such purchase or sale is in the public in-
terest and in accordance with the annual investment plan
of the Board of Trustees.’’.
(c) FEDERAL SUPPLEMENTARY MEDICAL INSUR-
ANCE TRUST FUND.—Section 1841(c) of such Act (as
amended by section 3 of this Act) is further amended by
striking the last sentence and inserting in lieu thereof the
following: ‘‘The Managing Trustee may purchase such ob-
ligations and other interest-bearing obligations, on original
issue or at the market price, and sell such obligations, if
the Managing Trustee determines that such purchase or
sale is in the public interest and in accordance with the
annual investment plan of the Board of Trustees.’’.
(d) EFFECTIVE DATE.—The amendments made by
this section shall take effect October 1, 1995.
Æ