TASK DEFINITION: In this task, you are given text for US Congressional and California state bills, your task is to generate a summary for this bill.
PROBLEM: SECTION 1. SHORT TITLE.

This Act may be cited as the ''Social Security and Medicare
Protection Act''.

SEC. 2. FINDINGS AND PURPOSE.

(a) Findings.--The Congress finds that--
(1) fiscal pressures will mount as an aging population
increases the Government's obligations to provide retirement
income and health services;
(2) Social Security and Medicare surpluses should be
reserved for strengthening and preserving the Social Security
trust funds; and
(3) preserving Social Security and Medicare surpluses would
restore confidence in the long-term financial integrity of
Social Security and Medicare.
(b) Purpose.--It is the purpose of this Act to prevent the Social
Security and Medicare hospital insurance trust funds from being used
for any purpose other than providing retirement and health security.

SEC. 3. PROTECTION OF SOCIAL SECURITY AND MEDICARE SURPLUSES.

(a) Protection of Social Security and Medicare Surpluses.--Title
III of the Congressional Budget Act of 1974 is amended by adding at the
end the following new section:

''protection for social security and hospital insurance surpluses

''Sec. 316. (a) Protection for Social Security and Hospital
Insurance Surpluses.--
''(1) Concurrent resolutions on the budget.--
''(A) In general.--It shall not be in order in the
House of Representatives or the Senate to consider any
concurrent resolution on the budget, or an amendment
thereto or conference report thereon, that would set
forth a surplus for any fiscal year that is less than
the surplus of the Federal Hospital Insurance Trust
Fund for that fiscal year.
''(B) Exception.--(i) Subparagraph (A) shall not
apply to the extent that a violation of such
subparagraph would result from an assumption in the
resolution, amendment, or conference report, as
applicable, of an increase in outlays or a decrease in
revenue relative to the baseline underlying that
resolution for social security reform legislation or
medicare reform legislation for any such fiscal year.
''(ii) If a concurrent resolution on the budget, or
an amendment thereto or conference report thereon,
would be in violation of subparagraph (A) because of an
assumption of an increase in outlays or a decrease in
revenue relative to the baseline underlying that
resolution for social security reform legislation or
medicare reform legislation for any such fiscal year,
then that resolution shall include a statement
identifying any such increase in outlays or decrease in
revenue.
''(2) Spending and tax legislation.--
''(A) In general.--It shall not be in order in the
House of Representatives or the Senate to consider any
bill, joint resolution, amendment, motion, or
conference report if--
''(i) the enactment of that bill or
resolution, as reported;
''(ii) the adoption and enactment of that
amendment; or
''(iii) the enactment of that bill or
resolution in the form recommended in that
conference report,
would cause the surplus for any fiscal year covered by
the most recently agreed to concurrent resolution on
the budget to be less than the surplus of the Federal
Hospital Insurance Trust Fund for that fiscal year.
''(B) Exception.--Subparagraph (A) shall not apply
to social security reform legislation or medicare
reform legislation.
''(b) Enforcement.--
''(1) Budgetary levels with respect to concurrent
resolutions on the budget.--For purposes of enforcing any point
of order under subsection (a)(1), the surplus for any fiscal
year shall be--
''(A) the levels set forth in the later of the
concurrent resolution on the budget, as reported, or in
the conference report on the concurrent resolution on
the budget; and
''(B) adjusted to the maximum extent allowable
under all procedures that allow budgetary aggregates to
be adjusted for legislation that would cause a decrease
in the surplus for any fiscal year covered by the
concurrent resolution on the budget (other than
procedures described in paragraph (2)(A)(ii)).
''(2) Current levels with respect to spending and tax
legislation.--
''(A) In general.--For purposes of enforcing
subsection (a)(2), the current levels of the surplus
for any fiscal year shall be--
''(i) calculated using the following
assumptions--
''(I) direct spending and revenue
levels at the baseline levels
underlying the most recently agreed to
concurrent resolution on the budget;
and
''(II) for the budget year,
discretionary spending levels at
current law levels and, for outyears,
discretionary spending levels at the
baseline levels underlying the most
recently agreed to concurrent
resolution on the budget; and
''(ii) adjusted for changes in the surplus
levels set forth in the most recently agreed to
concurrent resolution on the budget pursuant to
procedures in such resolution that authorize
adjustments in budgetary aggregates for updated
economic and technical assumptions in the mid-
session report of the Director of the
Congressional Budget Office.
Such revisions shall be included in the first current
level report on the congressional budget submitted for
publication in the Congressional Record after the
release of such mid-session report.
''(B) Budgetary treatment.--Outlays (or receipts)
for any fiscal year resulting from social security or
medicare reform legislation in excess of the amount of
outlays (or less than the amount of receipts) for that
fiscal year set forth in the most recently agreed to
concurrent resolution on the budget or the section
302(a) allocation for such legislation, as applicable,
shall not be taken into account for purposes of
enforcing any point of order under subsection (a)(2).
''(3) Disclosure of hi surplus.--For purposes of enforcing
any point of order under subsection (a), the surplus of the
Federal Hospital Insurance Trust Fund for a fiscal year shall
be the levels set forth in the later of the report accompanying
the concurrent resolution on the budget (or, in the absence of
such a report, placed in the Congressional Record prior to the
consideration of such resolution) or in the joint explanatory
statement of managers accompanying such resolution.
''(c) Additional Content of Reports Accompanying Budget Resolutions
and of Joint Explanatory Statements.--The report accompanying any
concurrent resolution on the budget and the joint explanatory statement
accompanying the conference report on each such resolution shall
include the levels of the surplus in the budget for each fiscal year
set forth in such resolution and of the surplus or deficit in the
Federal Hospital Insurance Trust Fund, calculated using the assumptions
set forth in subsection (b)(2)(A).
''(d) Definitions.--As used in this section:
''(1) The term 'medicare reform legislation' means a bill
or a joint resolution to save Medicare that includes a
provision stating the following: 'For purposes of section
316(a) of the Congressional Budget Act of 1974, this Act
constitutes medicare reform legislation.'.
''(2) The term 'social security reform legislation' means a
bill or a joint resolution to save social security that
includes a provision stating the following: 'For purposes of
section 316(a) of the Congressional Budget Act of 1974, this
Act constitutes social security reform legislation.'.
''(e) Waiver and Appeal.--Subsection (a) may be waived or suspended
in the Senate only by an affirmative vote of three-fifths of the
Members, duly chosen and sworn. An affirmative vote of three-fifths of
the Members of the Senate, duly chosen and sworn, shall be required in
the Senate to sustain an appeal of the ruling of the Chair on a point
of order raised under this section.
''(f) Effective Date.--This section shall cease to have any force
or effect upon the enactment of social security reform legislation and
medicare reform legislation.''.
(b) Conforming Amendment.--The item relating to section 316 in the
table of contents set forth in section 1(b) of the Congressional Budget
and Impoundment Control Act of 1974 is amended to read as follows:

''Sec. 316. Protection for Social Security and hospital insurance
surpluses.''.

SEC. 4. PRESIDENT'S BUDGET.

(a) Protection of Social Security and Medicare Surpluses.--If the
budget of the Government submitted by the President under section
1105(a) of title 31, United States Code, recommends a surplus for any
fiscal year that is less than the surplus of the Federal Hospital
Insurance Trust Fund for that fiscal year, then it shall include a
detailed proposal for social security reform legislation or medicare
reform legislation.
(b) Effective Date.--Subsection (a) shall cease to have any force
or effect upon the enactment of social security reform legislation and
medicare reform legislation as defined by section 316(d) of the
Congressional Budget Act of 1974.

SOLUTION: Social Security and Medicare Protection Act - Amends the Congressional Budget Act of 1974 to make it out of order in the House of Representatives or the Senate to consider any concurrent resolution on the budget (or related measure) that would set forth a surplus for any fiscal year less than the surplus of the Federal Hospital Insurance Trust Fund for that fiscal year.

Creates an exception to such point of order if a violation of it would result from an assumption in the measure of an increase in outlays or a decrease in revenue relative to the baseline underlying the measure for Social Security or Medicare reform legislation for any such year.

Makes it out of order in the House of Representatives or the Senate to consider any (spending or tax) measure if its enactment would cause the surplus for any fiscal year covered by the most recently agreed to budget resolution to be less than the surplus of the Federal Hospital Insurance Trust Fund for that fiscal year. Creates an exception to such point of order similar to the other one.

Declares that, if the President's budget recommends an on-budget surplus for any fiscal year less than the surplus of the Federal Hospital Insurance Trust Fund for that fiscal year, then it shall include a detailed proposal for Social Security or Medicare reform legislation.

PROBLEM: SECTION 1. SHORT TITLE; AMENDMENT OF 1986 CODE.

(a) Short Title.--This Act may be cited as the ''Individual
Retirement Account Equity and Enhancement Act of 1994''.
(b) Amendment of 1986 Code.--Except as otherwise expressly
provided, whenever in this Act an amendment or repeal is expressed in
terms of an amendment to, or repeal of, a section or other provision,
the reference shall be considered to be made to a section or other
provision of the Internal Revenue Code of 1986.

SEC. 2. HOMEMAKERS ELIGIBLE FOR FULL IRA DEDUCTION.

(a) Spousal IRA Computed on Basis of Compensation of Both
Spouses.--Subsection (c) of section 219 (relating to special rules for
certain married individuals) is amended to read as follows:
''(c) Special Rules for Certain Married Individuals.--
''(1) In general.--In the case of an individual to whom
this paragraph applies for the taxable year, the limitation of
paragraph (1) of subsection (b) shall be equal to the lesser
of--
''(A) $2,000, or
''(B) the sum of--
''(i) the compensation includible in such
individual's gross income for the taxable year,
plus
''(ii) the compensation includible in the
gross income of such individual's spouse for
the taxable year reduced by the amount
allowable as a deduction under subsection (a)
to such spouse for such taxable year.
''(2) Individuals to whom paragraph (1) applies.--Paragraph
(1) shall apply to any individual if--
''(A) such individual files a joint return for the
taxable year, and
''(B) the amount of compensation (if any)
includible in such individual's gross income for the
taxable year is less than the compensation includible
in the gross income of such individual's spouse for the
taxable year.''
(b) Conforming Amendments.--
(1) Paragraph (2) of section 219(f) (relating to other
definitions and special rules) is amended by striking
''subsections (b) and (c)'' and inserting ''subsection (b)''.
(2) Section 408(d)(5) is amended by striking ''$2,250'' and
inserting ''$2,000''.
(c) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after December 31, 1994.

SEC. 3. DISTRIBUTIONS FROM CERTAIN PLANS MAY BE USED WITHOUT PENALTY TO
PURCHASE FIRST HOMES, TO PAY HIGHER EDUCATION OR
QUALIFIED LONG-TERM CARE EXPENSES, OR BY THE LONG-TERM
UNEMPLOYED.

(a) In General.--Paragraph (2) of section 72(t) (relating to
exceptions to 10-percent additional tax on early distributions from
qualified retirement plans) is amended by adding at the end the
following new subparagraph:
''(D) Distributions from certain plans for first home
purchases or educational or long-term care expenses.--
Distributions to an individual from an individual retirement
plan, or from amounts attributable to employer contributions
made pursuant to elective deferrals described in subparagraph
(A) or (C) of section 402(g)(3) or section 501(c)(18)(D)(iii)--
''(i) which are qualified first-time homebuyer
distributions (as defined in paragraph (6)), or
''(ii) to the extent such distributions do not
exceed the sum of the qualified higher education
expenses (as defined in paragraph (7)) and the
qualified long-term care expenses (as defined in
paragraph (8)) of the taxpayer for the taxable year.''
(b) Definitions.--Section 72(t) is amended by adding at the end the
following new paragraphs:
''(6) Qualified first-time homebuyer distributions.--For
purposes of paragraph (2)(D)(i)--
''(A) In general.--The term 'qualified first-time
homebuyer distribution' means any payment or
distribution received by an individual to the extent
such payment or distribution is used by the individual
before the close of the 60th day after the day on which
such payment or distribution is received to pay
qualified acquisition costs with respect to a principal
residence of a first-time homebuyer who is such
individual, the spouse of such individual, or the child
or grandchild of such individual or the individual's
spouse.
''(B) Qualified acquisition costs.--For purposes of
this paragraph, the term 'qualified acquisition costs'
means the costs of acquiring, constructing, or
reconstructing a residence. Such term includes any
usual or reasonable settlement, financing, or other
closing costs.
''(C) First-time homebuyer; other definitions.--For
purposes of this paragraph--
''(i) First-time homebuyer.--The term
'first-time homebuyer' means any individual
if--
''(I) such individual (and if
married, such individual's spouse) had
no present ownership interest in a
principal residence during the 3-year
period ending on the date of
acquisition of the principal residence
to which this paragraph applies, and
''(II) subsection (a)(6), (h), or
(k) of section 1034 did not suspend the
running of any period of time specified
in section 1034 with respect to such
individual on the day before the date
the distribution is applied pursuant to
subparagraph (A)(ii).
''(ii) Principal residence.--The term
'principal residence' has the same meaning as
when used in section 1034.
''(iii) Date of acquisition.--The term
'date of acquisition' means the date--
''(I) on which a binding contract
to acquire the principal residence to
which subparagraph (A) applies is
entered into, or
''(II) on which construction or
reconstruction of such a principal
residence is commenced.
''(D) Special rule where delay in acquisition.--If
any distribution from any individual retirement plan
fails to meet the requirements of subparagraph (A)
solely by reason of a delay or cancellation of the
purchase or construction of the residence, the amount
of the distribution may be contributed to an individual
retirement plan as provided in section 408(d)(3)(A)(i)
(determined by substituting '120 days' for '60 days' in
such section), except that--
''(i) section 408(d)(3)(B) shall not be
applied to such contribution, and
''(ii) such amount shall not be taken into
account in determining whether section
408(d)(3)(A)(i) applies to any other amount.
''(7) Qualified higher education expenses.--For purposes of
paragraph (2)(D)(ii)--
''(A) In general.--The term 'qualified higher
education expenses' means tuition, fees, books,
supplies, and equipment required for the enrollment or
attendance of--
''(i) the taxpayer,
''(ii) the taxpayer's spouse, or
''(iii) the child (as defined in section
151(c)(3)) or grandchild of the taxpayer or the
taxpayer's spouse,
at an eligible educational institution (as defined in
section 135(c)(3)).
''(B) Coordination with savings bond provisions.--
The amount of qualified higher education expenses for
any taxable year shall be reduced by any amount
excludable from gross income under section 135.
''(8) Qualified long-term care expenses.--For purposes of
paragraph (2)(D)(ii)--
''(A) In general.--The term 'qualified long-term
care expenses' means amounts paid or incurred for
qualified long-term care services, including amounts
for insurance covering such services.
''(B) Qualified long-term care services.--For
purposes of subparagraph (A)--
''(i) In general.--The term 'qualified
long-term care services' means necessary
diagnostic, preventive, therapeutic,
rehabilitative, and maintenance (including
personal care) services--
''(I) which are required by an
individual during any period during
which such individual is a functionally
impaired individual,
''(II) which have as their primary
purpose the provision of needed
assistance with 1 or more activities of
daily living which a functionally
impaired individual is certified as
being unable to perform under clause
(ii)(I), and
''(III) which are provided pursuant
to a continuing plan of care prescribed
by a licensed health care practitioner
(other than a relative of such
individual).
''(ii) Functionally impaired individual.--
''(I) In general.--The term
'functionally impaired individual'
means any individual who is certified
by a licensed health care practitioner
(other than a relative of such
individual) as being unable to perform,
without substantial assistance from
another individual (including
assistance involving verbal reminding,
physical cueing, or substantial
supervision), at least 3 activities of
daily living described in clause (iii).
''(II) Special rule for home health
care services.--In the case of services
which are provided during any period
during which an individual is residing
within the individual's home (whether
or not the services are provided within
the home), subclause (I) shall be
applied by substituting '2' for '3'.
For purposes of this subclause, a
nursing home or similar facility shall
not be treated as a home.
''(iii) Activities of daily living.--Each
of the following is an activity of daily
living:
''(I) Eating.
''(II) Transferring.
''(III) Toileting.
''(IV) Dressing.
''(V) Bathing.
''(C) Licensed health care practitioner.--For
purposes of subparagraph (B)--
''(i) In general.--The term 'licensed
health care practitioner' means--
''(I) a physician or registered
professional nurse,
''(II) a qualified community care
case manager (as defined in clause
(ii)), or
''(III) any other individual who
meets such requirements as may be
prescribed by the Secretary after
consultation with the Secretary of
Health and Human Services.
''(ii) Qualified community care case
manager.--The term 'qualified community care
case manager' means an individual or entity
which--
''(I) has experience or has been
trained in providing case management
services and in preparing individual
care plans;
''(II) has experience in assessing
individuals to determine their
functional and cognitive impairment;
''(III) is not a relative of the
individual receiving case management
services; and
''(IV) meets such requirements as
may be prescribed by the Secretary
after consultation with the Secretary
of Health and Human Services.
''(D) Relative.--For purposes of this paragraph,
the term 'relative' means an individual bearing a
relationship to another individual which is described
in paragraphs (1) through (8) of section 152(a).''
(c) Penalty-Free Distributions for Certain Unemployed
Individuals.--Paragraph (2) of section 72(t) is amended by adding at
the end the following new subparagraph:
''(E) Distributions to unemployed individuals.--A
distribution from an individual retirement plan to an
individual after separation from employment, if--
''(i) such individual has received
unemployment compensation for 12 consecutive
weeks under any Federal or State unemployment
compensation law by reason of such separation,
and
''(ii) such distributions are made during
any taxable year during which such unemployment
compensation is paid or the succeeding taxable
year.''
(d) Conforming Amendments.--
(1) Section 401(k)(2)(B)(i) is amended by striking ''or''
at the end of subclause (III), by striking ''and'' at the end
of subclause (IV) and inserting ''or'', and by inserting after
subclause (IV) the following new subclause:
''(V) the date on which qualified
first-time homebuyer distributions (as
defined in section 72(t)(6)), or
distributions for qualified higher
education expenses (as defined in
section 72(t)(7)), or for qualified
long-term care expenses (as defined in
section 72(t)(18)), are made, and''.
(2) Section 403(b)(11) is amended by striking ''or'' at the
end of subparagraph (A), by striking the period at the end of
subparagraph (B) and inserting '', or'', and by inserting after
subparagraph (B) the following new subparagraph:
''(C) for qualified first-time homebuyer
distributions (as defined in section 72(t)(6)) or for
the payment of qualified higher education expenses (as
defined in section 72(t)(7)) or qualified long-term
care expenses (as defined in section 72(t)(8)).''
(e) Effective Date.--The amendments made by this section shall
apply to payments and distributions after the date of the enactment of
this Act.

SOLUTION: Individual Retirement Account Equity and Enhancement Act of 1994 - Amends the Internal Revenue Code to allow certain spouses a deduction for contributions to an individual retirement account.
Allows distribution from certain retirement plans without penalty to purchase first homes, pay higher education expenses and qualified long-term care expenses, and assist certain unemployed individuals.

PROBLEM: SECTION 1. SHORT TITLE.

This Act may be cited as the ''Middle Class Flexible Savings Act of
1993''.

SEC. 2. HIGHER MAXIMUM IRA DEDUCTION AND INCOME PHASEOUT LIMITS;
INFLATION ADJUSTMENT OF MAXIMUM IRA DEDUCTION AND
PHASEOUT LIMITS.

(a) Higher Maximum IRA Deduction.--
(1) In general.--The following provisions of the Internal
Revenue Code of 1986 are each amended by striking ''$2,000''
and inserting ''$3,000'':
(A) Subsections (b)(1)(A) and (c)(2) of section
219.
(B) Subsections (a)(1), (b), and (j) of section
408.
(2) Conforming amendment.--Sections 219(c)(2) and 408(d)(5)
are each amended by striking ''$2,250'' and inserting
''$3,500''.
(b) Higher Income Phaseout Limits.--
(1) Subparagraph (B) of section 219(g)(3) of such Code is
amended--
(A) by striking ''$40,000'' and inserting
''$50,000'', and
(B) by striking ''$25,000'' and inserting
''$30,000''.
(2) Clause (ii) of section 219(g)(2)(A) of such Code is
amended to read as follows:
''(ii) $12,000.''
(c) Inflation Adjustment of Maximum IRA Deduction and Income
Phaseout Limits.--Section 219 of such Code is amended by inserting
after subsection (f) the following new subsection:
''(g) Inflation Adjustment of Maximum Deduction and Income Phaseout
Limits.--
''(1) In general.--In the case of any taxable year
beginning in a calendar year after 1993, each applicable dollar
amount shall be increased by an amount equal to--
''(A) such dollar amount, multiplied by
''(B) the cost-of-living adjustment under section
1(f)(3) for the calendar year in which the taxable year
begins, determined by substituting 'calendar year 1992'
for 'calendar year 1989' in subparagraph (B) thereof.
''(2) Applicable dollar amount.--For purposes of paragraph
(1), the term 'applicable dollar amount' means--
''(A) the $3,000 amount in subsections (b)(1)(A),
(c)(2), and (c)(3) of this section and in subsections
(a)(1), (b), and (j) of section 408,
''(B) the $3,500 amount in subsection (c)(2) of
this section and in section 408(d)(5),
''(C) the $50,000 and $30,000 amounts in subsection
(g)(3)(B), and
''(D) the $12,000 amount in subsection
(g)(2)(A)(ii).
''(3) Rounding.--If any amount as adjusted under paragraph
(1) is not a multiple of $50, such amount shall be rounded to
the nearest multiple of $50 (or, if such amount is a multiple
of $25 and not of $50, such amount shall be rounded to the next
highest multiple of $50).''
(d) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after December 31, 1992.

SEC. 3. IRA FOR NONWORKING SPOUSE WITH YOUNG CHILDREN COMPUTED ON BASIS
OF COMPENSATION OF BOTH SPOUSES.

(a) In General.--Subsection (c) of section 219 of the Internal
Revenue Code of 1986 (relating to special rules for certain married
individuals) is amended by adding at the end thereof the following new
paragraph:
''(3) Higher limit for spouse with young children.--
''(A) In general.--In the case of a qualifying
spouse, the amount allowable as a deduction under
paragraph (1) shall not exceed the lesser of--
''(i) $3,000, or
''(ii) the sum of--
''(I) the compensation includible
in such individual's gross income for
the taxable year, plus
''(II) the compensation includible
in the gross income of such
individual's spouse for the taxable
year reduced by the amount allowable as
a deduction under subsection (a) to
such spouse for such taxable year.
''(B) Qualifying spouse.--For purposes of
subparagraph (A), the term 'qualifying spouse' means
any spouse of an individual if--
''(i) such individual and spouse file a
joint return for the taxable year,
''(ii) such spouse has less than $1,000 of
compensation (determined without regard to
section 911) for the taxable year, and
''(iii) such spouse has a child (as defined
in section 151(c)(3)) who has not attained age
6 as of the close of such taxable year and who
is a dependent (as defined in section 152) of
the taxpayer for such year.''
(b) Effective Date.--The amendment made by this section shall apply
to taxable years beginning after December 31, 1992.

SEC. 4. PENALTY-FREE WITHDRAWALS FROM CERTAIN PLANS TO PAY EDUCATIONAL
EXPENSES, MEDICAL EXPENSES, AND BUSINESS START-UP
EXPENSES.

(a) Educational Expenses and Business Start-up Expenses.--
(1) In general.--Paragraph (2) of section 72(t) of the
Internal Revenue Code of 1986 (relating to exceptions to 10-
percent additional tax on early distributions from qualified
retirement plans) is amended by adding at the end thereof the
following new subparagraph:
''(D) Distributions from certain plans for
educational expenses and business start-up expenses.--
''(i) In general.--Distributions to an
individual from an individual retirement plan,
or from amounts attributable to employer
contributions made pursuant to elective
deferrals described in subparagraph (A) or (C)
of section 402(g)(3) or section
501(c)(18)(D)(iii) to the extent such
distributions do not exceed the sum of--
''(I) the qualified higher
education expenses (as defined in
paragraph (6)) of the taxpayer for the
taxable year, and
''(II) the start-up expenditures
(as defined in section 195(c)) of the
taxpayer for the taxable year.
''(ii) Adjusted gross income limit.--Clause
(i) shall apply to distributions from an
individual retirement plan only if the adjusted
gross income of the distributee for the taxable
year in which the distribution occurs does not
exceed--
''(I) $60,000 in the case of an
unmarried individual,
''(II) $70,000 in the case of a
joint return, and
''(III) $35,000 in the case of a
married individual filing a separate
return.''
(2) Qualified higher education expenses defined.--Section
72(t) of such Code is amended by adding at the end thereof the
following new paragraph:
''(6) Qualified higher education expenses.--For purposes of
paragraph (2)(D)--
''(A) In general.--The term 'qualified higher
education expenses' means tuition, fees, books,
supplies, and equipment required for the enrollment or
attendance of--
''(i) the taxpayer,
''(ii) the taxpayer's spouse, or
''(iii) a child (as defined in section
151(c)(3)) of the taxpayer,
at an eligible educational institution (as defined in
section 135(c)(3)).
''(B) Coordination with savings bond provisions.--
The amount of qualified higher education expenses for
any taxable year shall be reduced by any amount
excludable from gross income under section 135.''
(b) Catastrophic Illness Expenses.--Subparagraph (A) of section
72(t)(3) of such Code is amended to read as follows:
''(A) Certain exceptions not to apply to individual
retirement plans.--
''(i) In general.--Except as provided in
clause (ii), subparagraphs (A)(v), (B), and (C)
of paragraph (2) shall not apply to
distributions from an individual retirement
plan.
''(ii) Distributions for medical expenses
from certain individual retirement plans.--
Subparagraph (B) of paragraph (2) shall apply
to distributions from an individual retirement
plan if the adjusted gross income of the
distributee for the taxable year in which the
distribution occurs does not exceed the
applicable limitation under paragraph (2)(D).''
(c) Conforming Amendments.--
(1) Section 401(k)(2)(B)(i) of such Code is amended by
striking ''or'' at the end of subclause (III), by striking
''and'' at the end of subclause (IV) and inserting ''or'', and
by inserting after subclause (IV) the following new subclause:
''(V) the date on which
distributions for qualified higher
education expenses (as defined in
section 72(t)(6)) or start-up expenses
(as defined in section 195(c)) are
made, and''.
(2) Section 403(b)(11) of such Code is amended by striking
''or'' at the end of subparagraph (A), by striking the period
at the end of subparagraph (B) and inserting '', or'', and by
inserting after subparagraph (B) the following new
subparagraph:
''(C) for the payment of qualified higher education
expenses (as defined in section 72(t)(6)) or start-up
expenses (as defined in section 195(c)).''
(d) Effective Date.--The amendments made by this section shall
apply to payments and distributions after the date of the enactment of
this Act.

SOLUTION:
Middle Class Flexible Savings Act of 1993 - Amends the Internal Revenue Code to increase the retirement savings deduction and the maximum individual retirement account contribution from $2,000 to $3,000. Raises income phase-out limits. Provides an inflation adjustment for such amounts.
Allows higher retirement savings deductions for nonworking spouses in households with one or more children under the age of six.
Allows penalty-free distributions from certain retirement plans for: (1) qualified higher education expenses of the taxpayer, spouse, or child; (2) business start-up expenditures; and (3) medical expenses. Limits such distributions to individuals whose adjusted gross income does not exceed: $60,000 in the case of an unmarried individual, $70,000 in the case of a joint return, and $35,000 in the case of married individuals filing separately.