I 
108TH CONGRESS 
2D SESSION 
H. R. 5179
To amend title II of the Social Security Act and the Internal Revenue 
Code of 1986 to provide for modest adjustments necessary to restore 
the old-age, survivors, and disability insurance program to long-term 
actuarial balance. 
IN THE HOUSE OF REPRESENTATIVES 
SEPTEMBER 29, 2004
Mr. OBEY introduced the following bill; which was referred to the Committee 
on Ways and Means 
A BILL 
To amend title II of the Social Security Act and the Internal 
Revenue Code of 1986 to provide for modest adjustments 
necessary to restore the old-age, survivors, and disability 
insurance program to long-term actuarial balance.
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 Sol-
vency Act of 2004’’.
SEC. 2. ADJUSTMENT TO RATE OF INCREASE IN CONTRIBU-
TION AND BENEFIT BASE. 
Section 230(b)(2) of the Social Security Act (42 
U.S.C. 430(b)(2)) is amended to read as follows: 
‘‘(2) the sum of—
‘‘(A) the ratio (expressed as a percentage) 
of (i) the national average wage index (as de-
fined in section 209(k)(1)) for the calendar year 
before the calendar year in which the deter-
mination under subsection (a) is made to (ii) 
the national average wage index (as so defined) 
for 1992, plus 
‘‘(B) for purposes of determining the con-
tribution and benefit base effective with respect 
to remuneration paid during calendar years 
after 2005 and before 2037 and self-employ-
ment income derived in taxable years beginning 
with or during such calendar years, 2 percent-
age points,’’. 
SEC. 3. APPLICATION OF THE CHAINED CONSUMER PRICE 
INDEX FOR ALL URBAN CONSUMERS IN DE-
TERMINING COST-OF-LIVING INCREASES IN 
BENEFITS. 
(a) IN GENERAL.—Section 215(i)(1) of the Social Se-
curity Act (42 U.S.C. 425(i)(1)) is amended—
(1) in subparagraph (G), by striking the period 
and inserting ‘‘; and’’; and 
(2) by adding at the end the following new sub-
paragraph: 
‘‘(H) the term ‘Consumer Price Index’ means 
the chained consumer price index for all urban con-
sumers, published by the Bureau of Labor Statis-
tics.’’. 
(b) EFFECTIVE DATE.—The amendments made by 
this section shall apply with respect to increases described 
in section 215(i)(2)(A) of the Social Security Act effective 
with the month of December of calendar years after 2005. 
SEC. 4. RETENTION OF ESTATE TAX; TRANSFERS TO SO-
CIAL SECURITY TRUST FUND. 
(a) EXCLUSION EQUIVALENT MADE PERMANENT AT 
2009 AMOUNT.—The item relating to 2009 in the table 
in section 2010(c) of the Internal Revenue Code of 1986 
(relating to applicable credit amount) is amended by strik-
ing all that follows ‘‘the applicable exclusion amount’’ and 
inserting ‘‘. For purposes of the preceding sentence, the 
applicable exclusion amount is $3,500,000.’’. 
(b) CONFORMING AMENDMENTS.—
(1) Subtitles A and E of title V of the Eco-
nomic Growth and Tax Relief Reconciliation Act of 
2001, and the amendments made by such subtitles,
are hereby repealed; and the Internal Revenue Code 
of 1986 shall be applied as if such subtitles, and 
amendments, had never been enacted. 
(2)(A) Subsection (a) of section 901 of the Eco-
nomic Growth and Tax Relief Reconciliation Act of 
2001 is amended by striking ‘‘this Act’’ and all that 
follows and inserting ‘‘this Act (other than title V) 
shall not apply to taxable, plan, or limitation years 
beginning after December 31, 2010.’’. 
(B) Subsection (b) of such section 901 is 
amended by striking ‘‘, estates, gifts, and transfers’’. 
(3) Subsections (d) and (e) of section 511 of 
the Economic Growth and Tax Relief Reconciliation 
Act of 2001, and the amendments made by such 
subsections, are hereby repealed; and the Internal 
Revenue Code of 1986 shall be applied as if such 
subsections, and amendments, had never been en-
acted. 
(c) TRANSFERS TO TRUST FUND.—
(1) IN
GENERAL.—There are hereby appro-
priated to the Federal Old-Age and Survivors Insur-
ance Trust Fund amounts equivalent to the taxes re-
ceived in the Treasury under chapters 11 and 13 of 
the Internal Revenue Code of 1986 (relating to es-
tate tax and tax on generation-skipping transfers, 
respectively). 
(2) TRANSFERS.—The amounts appropriated 
by paragraph (1) shall be transferred from time to 
time (but not less frequently than quarterly) from 
the general fund of the Treasury on the basis of es-
timates made by the Secretary of the Treasury of 
the amounts referred to in such paragraph. Any 
such quarterly payment shall be made on the first 
day of such quarter. Proper adjustments shall be 
made in the amounts subsequently transferred to the 
extent prior estimates were in excess of or less than 
the amounts required to be transferred. 
(3) REPORTS.—The Secretary of the Treasury 
shall submit annual reports to the Congress and to 
the Commissioner of Social Security regarding—
(A) the transfers made under this sub-
section during the year, and the methodology 
used in determining the amount of such trans-
fers, and 
(B) the anticipated operation of this sub-
section during the next 5 years.
SEC. 5. FUTURE ADJUSTMENT OF EMPLOYMENT TAX 
RATES TO KEEP SOCIAL SECURITY TRUST 
FUNDS IN BALANCE. 
(a) STATEMENT OF PROJECTED INSOLVENCY IN AN-
NUAL REPORT OF BOARD OF TRUSTEES.—Section 201(c) 
of the Social Security Act (42 U.S.C. 401(c)) is amended, 
in the second sentence following clause (5), by striking 
‘‘Trustees).’’ and inserting ‘‘Trustees), the Board’s best 
estimate of the date as of which, using intermediate as-
sumptions, the Trust Funds will, with no change in rates 
of tax under chapters 2 and 21 of the Internal Revenue 
Code of 1986, first have assets insufficient to pay sched-
uled benefits in full on a timely basis, and, if such date 
is within 2 years after the date of the filing of the report, 
the minimum increase necessary in such rates of tax 
(using such assumptions and assuming pro rata adjust-
ments in the taxes applicable under sections 1401(a), 
3101(a), and 3111(a) of such Code) necessary to take ef-
fect (effective for the calendar year and applicable taxable 
years in which such date occurs) to preclude such an insuf-
ficiency (rounded, if not a multiple of 0.01 percent, to the 
next higher multiple of 0.01 percent).’’. 
(b) EMPLOYEE CONTRIBUTION.—Subsection (a) of 
section 3101 of the Internal Revenue Code of 1986 (relat-
ing to rate of tax for old-age, survivors, and disability in-
surance) is amended by adding at the end the following
flush sentence: ‘‘In the case of the year in which occurs 
the date determined under section 201(c) of the Social Se-
curity Act to be the date as of which the Trust Funds 
will first have assets insufficient to pay scheduled benefits 
in full on a timely basis, the rate in effect under the pre-
ceding sentence for such year and each year thereafter 
(without regard for this sentence) shall be increased to 
the extent determined under section 201(c) of such Act 
to be necessary to preclude such an insufficiency. Such 
increase shall be prescribed by the Secretary.’’. 
(c) EMPLOYER CONTRIBUTION.—Subsection (a) of 
section 3111 of such Code (relating to rate of tax for old-
age, survivors, and disability insurance) is amended by 
adding at the end the following flush sentence: ‘‘In the 
case of the year in which occurs the date determined under 
section 201(c) of the Social Security Act to be the date 
as of which the Trust Funds will first have assets insuffi-
cient to pay scheduled benefits in full on a timely basis, 
the rate in effect under the preceding sentence for such 
year and each year thereafter (without regard for this sen-
tence) shall be increased to the extent determined under 
section 201(c) of such Act to be necessary to preclude such 
an insufficiency. Such increase shall be prescribed by the 
Secretary.’’.
(d) 
SELF-EMPLOYMENT
CONTRIBUTION.—Sub-
section (a) of section 1401 of such Code (relating to rate 
of tax for old-age, survivors, and disability insurance) is 
amended by adding at the end the following flush sen-
tence: ‘‘In the case of the year in which occurs the date 
determined under section 201(c) of the Social Security Act 
to be the date as of which the Trust Funds will first have 
assets insufficient to pay scheduled benefits in full on a 
timely basis, the rate in effect under the preceding sen-
tence for such year and each year thereafter (without re-
gard for this sentence) shall be increased to the extent 
determined under section 201(c) of such Act to be nec-
essary to preclude such an insufficiency. Such increase 
shall be prescribed by the Secretary.’’.
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