A bill to amend title II of the Social Security Act to provide for progressive indexing and longevity indexing of Social Security old-age insurance benefits for newly retired and aged surviving spouses to ensure the future solvency of the Social Security program, and for other purposes.

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Social Security Solvency Act of 
2009''.

SEC. 2. PROGRESSIVE INDEXING OF BENEFITS FOR OLD-AGE INSURANCE 
              BENEFITS.

    (a) In General.--Section 215(a) of the Social Security Act (42 
U.S.C. 415(a)) is amended--
            (1) by striking ``The'' in paragraph (1)(A) and inserting 
        ``With respect to any benefit other than an applicable benefit 
        to which paragraph (2) applies, the'', and
            (2) by redesignating paragraphs (2) through (7) as 
        paragraphs (3) through (8), respectively, and by inserting 
        after paragraph (1) the following new paragraph:
    ``(2)(A) In the case of an applicable benefit with respect to any 
individual who initially becomes eligible for old-age insurance 
benefits or who dies (before becoming eligible for such benefits) in 
calendar year 2012 or later, the primary insurance amount of the 
individual shall be equal to the sum of--
            ``(i) 90 percent of the individual's average indexed 
        monthly earning (determined under subsection (b)) to the extent 
        that such earnings do not exceed the amount established for 
        purposes of paragraph (1)(A)(i) by paragraph (1)(B);
            ``(ii) 32 percent of the individual's average indexed 
        monthly earnings to the extent that such earnings exceed the 
        amount established for purposes of paragraph (1)(A)(i) by 
        paragraph (1)(B) but do not exceed the amount established for 
        purposes of this clause by subparagraph (B);
            ``(iii) 32 percent (reduced as provided in subparagraph 
        (C)) of the individual's average indexed monthly earnings to 
        the extent that such earnings exceed the amount established for 
        purposes of clause (ii) but do not exceed the amount 
        established for purposes of paragraph (1)(A)(ii) by paragraph 
        (1)(B); and
            ``(iv) 15 percent (reduced as provided in subparagraph (C)) 
        of the individual's average indexed monthly earnings to the 
        extent that such earnings exceed the amount established for 
        purposes of paragraph (1)(A)(ii) by paragraph (1)(B).
    ``(B)(i) For purposes of subparagraph (A)(ii), the amount 
established under this subparagraph for calendar year 2012 shall be the 
level of average indexed monthly earnings determined by the Chief 
Actuary of the Social Security Administration under clause (ii) as 
being at the 30th percentile for the period of calendar years 2001 
through 2003.
    ``(ii) For purposes of clause (i), the average indexed monthly 
earnings for the period of calendar years 2001 through 2003 shall be 
determined by--
            ``(I) determining the average indexed monthly earnings for 
        each individual who initially became eligible for old-age 
        insurance benefits or who died (before becoming eligible for 
        such benefits) during such period, except that in determining 
        such average indexed monthly earnings under subsection (b), 
        subsection (b)(3)(A)(ii)(I) shall be applied by substituting 
        calendar year 2000 for the second calendar year described in 
        such subsection; and
            ``(II) multiplying the amount determined for each 
        individual under subclause (I) by the quotient obtained by 
        dividing the national average wage index (as defined in section 
        209(k)(1)) for the calendar year 2010 by such index for the 
        calendar year 2000.
    ``(iii) For purposes of subparagraph (A)(ii), the amount 
established under this subparagraph for any calendar year after 2012 
shall be equal to the product of the amount in effect under clause (i) 
with respect to calendar year 2012 and the quotient obtained by 
dividing--
            ``(I) the national average wage index (as defined in 
        section 209(k)(1)) for the second calendar year preceding the 
        calendar year for which the determination is being made, by
            ``(II) the national average wage index (as so defined) for 
        2010.
    ``(iv) The amount established under this subparagraph for any 
calendar year shall be rounded to the nearest $1, except that any 
amount so established which is a multiple of $0.50 but not of $1 shall 
be rounded to the next higher $1.
    ``(C)(i) Except as provided in clause (ii), in the case of any 
calendar year after 2011, each of the percentages to which this 
subparagraph applies by reason of clauses (iii) or (iv) of subparagraph 
(A) shall be a percentage equal to such percentage multiplied by the 
quotient obtained by dividing--
            ``(I) the difference of the maximum CPI-indexed benefit 
        amount for such year over the amount determined under this 
        paragraph for an individual whose average indexed monthly 
        earnings are equal to the amount established for purposes of 
        subparagraph (A)(ii) for such year, by
            ``(II) the difference of the maximum wage-indexed benefit 
        amount for such year over the amount determined under this 
        paragraph for an individual whose average indexed monthly 
        earnings are equal to the amount established for purposes of 
        subparagraph (A)(ii) for such year.
    ``(ii)(I) In the case of any calendar year which is a positive 
balance year, clause (i) shall not apply and each of the percentages to 
which this subparagraph applies by reason of clause (iii) or (iv) of 
subparagraph (B) shall be a percentage equal to the percentage 
determined under this subparagraph for the preceding year (determined 
after the application of this subparagraph).
    ``(II) In the case of any calendar year after a positive balance 
year which is not a positive balance year, this subparagraph shall be 
applied by substituting `the second calendar year preceding the most 
recent positive balance year' for `2009' each place it appears in 
clause (iv).
    ``(iii) For purposes of clause (i), the maximum wage-indexed 
benefit amount for any calendar year shall be equal to the amount 
determined under this paragraph (determined without regard to any 
reduction under this subparagraph) for an individual with wages paid in 
and self-employment income credited to each computation base year in an 
amount equal to the contribution and benefit base for each calendar 
year.
    ``(iv) For purposes of clause (i), the maximum CPI-indexed benefit 
amount for any calendar year shall be an amount equal to the amount 
determined under clause (iii) for such year multiplied by a fraction--
            ``(I) the numerator of which is the ratio (rounded to the 
        nearest one-thousandth of 1 percent) of the Consumer Price 
        Index for the second preceding year to such index for 2009; and
            ``(II) the denominator of which is the ratio (rounded to 
        the nearest one-thousandth of 1 percent) of the national wage 
        index (as defined in section 209(k)(1)) for the second year 
        preceding such year to such index for 2009.
    ``(v)(I) For purposes of clause (i), a positive balance year is a 
calendar year following any calendar year after 2050 for which the 
Chief Actuary of the Social Security Administration certifies to the 
Secretary of the Treasury and the Congress that the combined balance 
ratio of the Federal Old-Age and Survivors Trust Fund and the Federal 
Disability Insurance Trust Fund is not less than 100 percent for such 
year.
    ``(II) For purposes of subclause (I), the combined balance ratio of 
the Federal Old-Age and Survivors Trust Fund and the Federal Disability 
Insurance Trust Fund for any calendar year is the ratio of the combined 
balance of such Trust Funds as of the last day of such calendar year 
(reduced by any transfer made pursuant to section 201(o) in such 
calendar year) to the amount estimated by the Commissioner of Social 
Security under section 201(l)(3)(B)(iii)(II) to be paid from such Trust 
Funds during the calendar year following such calendar year for all 
purposes authorized by section 201 (determined as if such following 
calendar year were a positive balance year).
    ``(D) For purposes of this paragraph, rules similar to the rules of 
subparagraphs (C) and (D) of paragraph (1) shall apply.
    ``(E) For purposes of this paragraph, the term `applicable benefit' 
means any benefit under section 202 other than--
            ``(i) a child's insurance benefit under section 202(d) with 
        respect to a child of an individual who has died;
            ``(ii) a widow's insurance benefit under section 202(e) 
        with respect to a widow who has not attained age 60 and is 
        under a disability (as defined in section 223(d)) which began 
        before the end of the period specified in section 202(e)(4);
            ``(iii) a widower's insurance benefit under section 202(f) 
        with respect to a widower who has not attained age 60 and is 
        under a disability (as defined in section 223(d)) which began 
        before the end of the period specified in section 202(f)(4); 
        and
            ``(iv) a mother's and father's insurance benefit under 
        section 202(g).''.
    (b) Conforming Amendments.--
            (1) Subsections (e)(2)(B)(i)(I) and (f)(2)(B)(i)(I) of 
        section 202 of the Social Security Act are each amended by 
        inserting ``or section 215(a)(2)(B)(iii)'' after ``section 
        215(a)(1)(B)(i) and (ii)''.
            (2) Section 203(a)(1) of such Act is amended--
                    (A) in subparagraph (A)(i), by striking 
                ``215(a)(2)(B)(i)'' and inserting ``215(a)(3)(B)(i)'';
                    (B) in subparagraph (A)(ii), by striking 
                ``215(a)(2)(C)'' and inserting ``215(a)(3)(C)''; and
                    (C) in subparagraph (B)(ii), by striking 
                ``215(a)(2)'' and inserting ``215(a)(3)''.
            (3) Section 209(k)(1) of such Act is amended by inserting 
        ``215(a)(2)(B), 215(a)(2)(C),'' after ``215(a)(1)(D),''.
            (4) Section 215(a) of such Act is amended--
                    (A) in paragraph (4)(A), as redesignated by 
                paragraph (2), by striking ``paragraph (4)'' and 
                inserting ``paragraph (5)'';
                    (B) in paragraph (4)(B), as redesignated by 
                paragraph (2), by striking ``paragraph (2)(A)'' and 
                inserting ``paragraph (3)(A)'';
                    (C) in paragraph (5), as redesignated by paragraph 
                (2), by striking ``paragraph (3)(A)'' and inserting 
                ``paragraph (4)(A)'';
                    (D) in paragraph (6)(A), as redesignated by 
                paragraph (2), by striking ``paragraph (4)(B)'' and 
                inserting ``paragraph (5)(B)''; and
                    (E) in paragraph (8)(B)(ii)(I), as redesignated by 
                paragraph (2), by striking ``paragraph (3)(B)'' and 
                inserting ``paragraph (4)(B)''.
            (5) Section 215(d)(3) of such Act is amended--
                    (A) by striking ``paragraph (4)(B)(ii)'' and 
                inserting ``paragraph (5)(B)(ii)''; and
                    (B) by striking ``subsection (a)(7)(C)'' and 
                inserting ``subsection (a)(8)(C)''.
            (6) Subsection 215(f) of such Act is amended--
                    (A) in paragraph (2)(B), by striking ``subsection 
                (a)(4)(B)'' and inserting ``subsection (a)(5)(B)'';
                    (B) in paragraph (7), by striking ``subsection 
                (a)(6)'' and inserting ``subsection (a)(7)'';
                    (C) in paragraph (9)(A)--
                            (i) by striking ``subsection (a)(7)(A)'' 
                        and inserting ``subsection (a)(8)(A)''; and
                            (ii) by striking ``subsection (a)(7)(C)'' 
                        and inserting ``subsection (a)(8)(C)''; and
                    (D) in paragraph (9)(B), by striking ``subsection 
                (a)(7)'' each place it appears and inserting 
                ``subsection (a)(8)''.

SEC. 3. MODIFICATION OF PIA FACTORS TO REFLECT CHANGES IN LIFE 
              EXPECTANCY.

    (a) Modification.--
            (1) In general.--Section 215(a)(2) of the Social Security 
        Act (42 U.S.C. 415(a)(2)), as added by this Act, is amended by 
        redesignating subparagraphs (D) and (E) as subparagraphs (E) 
        and (F), respectively, and by inserting after subparagraph (C) 
        the following new subparagraph:
    ``(D)(i) For individuals who initially become eligible for old-age 
insurance benefits (or who die before becoming eligible for such 
benefits) in any calendar year after 2017, each of the percentages used 
for purposes of clauses (i), (ii), (iii), and (iv) of subparagraph (A) 
(after the application of subparagraph (C) in the case of subclauses 
(iii) and (iv) of subparagraph (A)) shall be multiplied by the life 
expectancy ratio for such calendar year.
    ``(ii) The Commissioner of Social Security shall, through the Chief 
Actuary of the Social Security Administration, using generally accepted 
actuarial principles, determine and publish in the Federal Register on 
or before November 1 of each calendar year the life expectancy ratio 
for the following calendar year.
    ``(iii) For purposes of this subparagraph, the life expectancy 
ratio for any calendar year is the ratio of--
            ``(I) the period life expectancy based on the computed 
        death rates for 2013 of an individual at age 67, to
            ``(II) the period life expectancy of an individual at such 
        age based on the computed death rates for the fourth calendar 
        year preceding the calendar year for which the life expectancy 
        ratio is determined under clause (ii).''.
            (2) Conforming amendment.--Clauses (iii) and (iv) of 
        section 215(a)(2)(A) of the Social Security Act, as added by 
        this Act, are each amended by striking ``subparagraph (C)'' and 
        inserting ``subparagraphs (C) and (F)''.
    (b) Study Regarding Life Expectancy of Disabled Beneficiaries.--
            (1) In general.--The Commissioner of Social Security shall 
        conduct a study on the feasibility of creating a separate life 
        expectancy ratio under section 215(a)(2)(D) of the Social 
        Security Act for individuals attaining early retirement age who 
        are receiving disability insurance benefits under title II of 
        such Act on the date the individual attains such age.
            (2) Report.--Not later than 1 year after the date of the 
        enactment of this Act, the Commissioner shall submit to 
        Congress a report on the results of the study under paragraph 
        (1).

SEC. 4. TREATMENT OF DISABLED BENEFICIARIES.

    Section 215(a) of the Social Security Act (42 U.S.C. 415(a)), as 
amended by sections 2 and 3, is amended by adding at the end the 
following new paragraph:
    ``(9)(A) Notwithstanding the preceding provisions of this 
subsection, in the case of an individual who has or has had a period of 
disability and who initially becomes eligible for old-age insurance 
benefits or who dies (before becoming eligible for such benefits) in 
any calendar year in or after 2012, the primary insurance amount of 
such individual shall be the sum of--
            ``(i) the amount determined under subparagraph (B); and
            ``(ii) the product derived by multiplying--
                    ``(I) the excess of the amount determined under 
                subparagraph (C) over the amount determined under 
                subparagraph (B), by
                    ``(II) the adjustment factor for such individual 
                determined under subparagraph (D).
    ``(B) The amount determined under this subparagraph is the amount 
of such individual's primary insurance amount as determined under this 
section without regard to this paragraph.
    ``(C) The amount determined under this subparagraph is the amount 
of such individual's primary insurance amount as determined under this 
section as in effect with respect to individuals becoming eligible for 
old-age or disability insurance benefits under section 202(a) in 2008.
    ``(D) The adjustment factor determined under this subparagraph for 
any individual is the ratio (not greater than 1) of--
            ``(i) the total number of months during which such 
        individual is under a disability (as defined in section 223(d)) 
        during the period beginning on the date the individual attains 
        age 22 and ending on the first day of such individual's first 
        month of eligibility for old-age insurance benefits under 
        section 202(a) (or, if earlier, the month of such individual's 
        death), to
            ``(ii) the number of months during the period beginning on 
        the date the individual attains age 22 and ending on the first 
        day of such individual's first month of eligibility for old-age 
        insurance benefits under section 202(a) (or, if earlier, the 
        month of such individual's death).''.

SEC. 5. ACCELERATION OF INCREASE IN RETIREMENT AGE.

    (a) Increase in Retirement Age to 67.--Section 216(l)(1) of the 
Social Security Act (42 U.S.C. 416(l)(1)) is amended--
            (1) in subparagraph (C), by striking ``2017'' and inserting 
        ``2012'';
            (2) in subparagraph (D), by striking ``after December 31, 
        2016 and before January 1, 2022'' and inserting ``after 
        December 31, 2011 and before January 1, 2017''; and
            (3) in subparagraph (E), by striking ``2021'' and inserting 
        ``2016''.
    (b) Conforming Amendment.--Subparagraph (B) of section 216(l)(3) of 
the Social Security Act (42 U.S.C. 416(l)(3)(B)) is amended--
            (1) by striking ``calendar years 2017 through 2021'' and 
        inserting ``calendar years 2012 through 2016''; and
            (2) by striking ``January 2017'' and inserting ``January 
        2012''.

SEC. 6. MAINTENANCE OF ADEQUATE BALANCES IN THE SOCIAL SECURITY TRUST 
              FUNDS.

    (a) In General.--Section 201 of the Social Security Act (42 U.S.C. 
401) is amended by adding at the end the following new subsection:
    ``(o) In addition to amounts otherwise appropriated under the 
preceding provisions of this section to the Trust Funds established 
under this section, there is hereby appropriated for each fiscal year 
to each of such Trust Funds, from amounts in the general fund of the 
Treasury not otherwise appropriated, such sums as may be necessary from 
time to time to maintain the balance ratio (as defined in section 
709(b)) of such Trust Fund, for the calendar year commencing during 
such fiscal year, at not less than 100 percent. The sums to be 
appropriated under the preceding sentence shall be determined by the 
Commissioner of Social Security and certified by the Commissioner to 
each House of the Congress not later than October 1 of such fiscal 
year. In making such determination and certification, the Commissioner 
shall use the intermediate actuarial assumptions used by the Board of 
Trustees of the Trust Funds in its most recent annual report to the 
Congress prepared pursuant to subsection (c)(2). The Commissioner shall 
also transmit a copy of any such certification to the Secretary of the 
Treasury, and upon receipt thereof, such Secretary shall promptly take 
appropriate actions in accordance with the certification.''.
    (b) Effective Date.--The amendment made by subsection (a) shall 
apply with respect to fiscal years beginning after the date of the 
enactment of this Act.

Summary: Social Security Solvency Act of 2009 - Amends title II (Old Age, Survivors and Disability Insurance) (OASDI) of the Social Security Act to provide for progressive indexing of old age insurance benefits with respect to any individual who initially becomes eligible for them or who dies (before becoming eligible for them) in calendar year 2012 or later.

Provides for: (1) modification of primary insurance amount (PIA) factors to reflect changes in life expectancy; (2) computation of the PIA for an individual who has or has had a period of disability and who initially becomes eligible for such benefits in or after 2012; (3) acceleration of the increase in retirement age to 67; and (4) automatic appropriations to maintain the balance ratio of the Social Security Trust Funds at not less than 100% for the calendar year commencing during each fiscal year.