Social Security Reform: Bills in the 106th Congress

Order Code RL30138

CRS Report for Congress

Received through the CRS Web

Social Security Reform:

Bills in the 106th Congress

Updated January 5, 2001

David Koitz

Geoffrey Kollmann

Domestic Social Policy Division

Congressional Research Service ˜ The Library of Congress

Social Security Reform: Bills in the 106th Congress

Summary

The Social Security system is projected to have long-range funding problems.

Although its income currently exceeds its expenditures, the Social Security Board of

Trustees estimates that over the next 75 years the system’s expenditures would

exceed its income by 14% on average and by 2037 its trust funds would be depleted.

This adverse outlook is mirrored by public opinion polls where fewer than 50% of

respondents express confidence that Social Security can meet its future commitments.

Accompanying this skepticism is a growing perception that the system’s benefits will

not be as good a value in the future as they are today. These concerns and a belief

that the remedy lies partly in economic growth that could be bolstered by changes to

the system have led to a large number of reform plans. They range from restoring the

system’s long-range solvency with as few changes as possible to revamping it totally

toward private-sector pension models.

In his January 2000 State of the Union message, President Clinton renewed his

call for crediting the Social Security trust funds with general revenues equal to the

interest savings achieved by using Social Security surpluses to buy up publicly-held

debt. In his 1999 message, he had proposed a similar debt reduction course and

general fund infusions to Social Security equal to a little more than half of the next 15

years’ overall budget surpluses. Under both proposals part of the trust funds were to

be invested in stocks.

While no major reform action was taken in the 106th Congress, Social Security

remained an issue in the 2000 Presidential campaign. President-elect George W. Bush

favored allowing workers to put some of their Social Security taxes in personal

accounts where they could invest in stocks if they so desired. As with President

Clinton, Vice President Al Gore supported using budget surpluses in some fashion to

shore up system. He also endorsed the creation of personal retirement accounts with

government matching contributions, but not by using social security taxes.

Congressional leaders put particular emphasis in the 106th Congress on setting

aside the Social Security portion of the looming budget surpluses pending

consideration of reform legislation. While agreement could not be reached on a socalled “lock box” measure to protect the set asides, budget actions taken during the

two-year period avoided dipping into the Social Security portion of the surpluses.

Legislation was brought up dealing with a number of other Social Security concerns

as well. Following a public statement by President Clinton that he would support

repeal of the Social Security earnings test, Congress passed H.R. 5, a bill to allow

recipients ages 65 to 69 to work without losing benefits, effective in 2000. The

President signed the bill into law on April 7, 2000 as P.L. 106-182. Also considered

was a measure to repeal a provision enacted in 1993 that subjected up to 85% of

Social Security benefits to income taxes. While passed by the House, the Senate did

not take up the repeal before adjourning sine die.

This report gives an overview of the reform issues and summarizes the bills

introduced in the 106th Congress to address them. Bills directed at other Social

Security concerns also are listed by subject in a summary table.

Contents

Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

Background . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

Projected Financing Problem . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

Past Financing Problems . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

Emerging Calls for Reform . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

The 1994/1996 Advisory Council on Social Security . . . . . . . . . . . . . 8

Reform Bills and Other Proposals . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8

Social Security Bills Introduced In 106th Congress . . . . . . . . . . . . . . . . . . 15

Social Security Bills In 106th Congress On Which Action Has Been Taken 20

Appendix . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22

Additional Relevant CRS Products . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22

List of Figures

Figure 1. Social Security Trust Fund Balances, 1983 and 2000 Projections . . . . 6

List of Tables

Table 1. Measures Enacted in 1977 and 1983 to Shore Up Financial

Condition of Social Security System . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

Table 2. Major Assumptions Underlying Long-Range Social Security

Projections Made in 1983 and 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

Table 3. Social Security’s Long-Range Financing Shortfall Addressed in

1977 and 1983 Compared to That Shown in 2000 Trustees’ Report . . . . . . 7

Table 4. Social Security Bills in 106th Congress . . . . . . . . . . . . . . . . . . . . . . . . 16

Social Security Reform:

Bills in the 106th Congress

Introduction

The Social Security system is projected to have long-range funding problems.

Although the system’s income currently exceeds its outgo, its board of trustees

projects that over the next 75 years the system’s expenditures will exceed its income

by 14% on average and by 2037 its trust funds will be depleted. 1 This adverse

outlook is mirrored by opinion polls where fewer than 50% of respondents express

confidence that Social Security will pay its promised benefits. Accompanying this

skepticism is a growing perception that Social Security will not be as good a value in

the future as it is today. Until recent years, a typical retiree could expect to receive

far more in benefits than he or she paid in Social Security taxes. However, because

Social Security tax rates have increased to cover the costs of a maturing system, it has

become increasingly apparent that the system will be less of a good deal for future

recipients.2 These concerns and a belief that the remedy lies partly in economic

growth that could be bolstered by Social Security reforms have led to a number of

major proposals, including ones to totally revamp the system toward private-sector

pension models.

Others suggest that the issues are not as serious as sometimes portrayed. They

point out that there is no imminent crisis, that the system is now running surpluses and

is projected to do so for two decades or more, that the public still likes the program,

and that there is considerable risk in some of the new reform ideas. They contend that

modest changes would resolve the long-range funding problem.

1

The Social Security Board of Trustees, comprised of three Cabinet Members, the

Commissioner of Social Security, and two members representing the public at large, annually

projects the long-range financial condition of the Social Security system. Traditionally, the

Board uses a valuation period extending 75 years into the future. Although the measure of

solvency was refined in 1991 to encompass shorter and more recent periods of valuation,

generally long-range solvency — or what is technically referred to as “close actuarial balance”

— is assumed to exist if the system’s average income over the 75-year period as a whole is

projected to be within 95% of its average costs.

2

To a large extent, the very favorable returns on taxes experienced by the first few decades

of Social Security recipients were artificial, stemming from policy decisions to pay relatively

large benefits early on while keeping tax rates low. As the system matured, with more people

becoming eligible with longer periods of paying taxes, and higher taxes becoming necessary

to cover the benefit costs of an expanding eligible population, the ratio of benefits-to-taxes

declined. The continued decline in the ratio of workers to retirees is projected to further erode

benefit-to-tax ratios for future recipients.

CRS-2

Following a year of public forums on the issue sponsored by the White House,

President Clinton proposed in his State of the Union address in January 1999 using

$2.8 trillion of some $4.9 trillion in projected federal budget surpluses over the

following 15 years to shore up the system — 21% of this infusion (or nearly $.6

trillion) would be invested in the stock market, the rest would be invested in federal

government securities. The proposal was estimated to keep Social Security solvent

until 2059. He further proposed that recipients be allowed to work without losing

benefits — through elimination of the Social Security earnings test — and unspecified

measures to reduce poverty among elderly women. He also proposed that $.5 trillion

of the budget surpluses be used to create new Universal Savings Accounts (USAs)

— 401(k)-like savings accounts that individuals would own. These would be

intended to supplement Social Security benefits.

In June 1999, he raised his 15-year surplus projection to $5.9 trillion and revised

his Social Security proposal. It called for creation of a budget “lock box” to protect

the Social Security portion of the surplus, similar to approaches being considered by

Congress, and general fund infusions to the Social Security trust funds of $543 billion

in the FY2011-2014 period, followed by an indefinite $189 billion per year thereafter.

These were equal to the estimated interest savings to the Treasury from using the

“lock box” surpluses to reduce outstanding publicly-held federal debt. The infusions

were to be invested in stocks until the stock portion of trust fund holdings reached

15%. The plan was projected to keep the system solvent until 2053.

In October 1999, President Clinton sent draft legislation to Congress reflecting

yet another plan. It resembled the June plan, but omitted the part calling for

investment of the new infusions in stock. It called, instead, for crediting the trust

funds with $735.2 billion in federal securities in the FY2011-2015 period, followed

by $215.5 billion per year through 2044. The plan was projected to extend the life

of the system until 2050. It also called for reserving a of future budget surpluses for

Medicare reform. The draft legislation was introduced by Senators Moynihan (S.

1828) and Daschle (S. 1831) and Representative Gephardt (H.R. 3165).

In his State of the Union address on January 27, 2000 and his FY2001 budget

request, President Clinton again renewed his call to protect the projected Social

Security surpluses and that interest savings from eliminating publicly-held federal debt

be credited to the trust funds. Unlike his October 1999 proposal, this last one again

called for investment of part of the new infusions in stock. Some 50% of the infusions

would be invested in stocks until the stock portion of the trust funds’ holdings

reached 15%. In effect, this last plan was close to his June 1999 plan. The new trust

fund infusions were to begin in FY2011. The Social Security Administration’s

actuaries estimated that they would range from $98.7 billion in FY2011 to $204.9

billion in 2016 and thereafter (with all such infusions ending in 2050), and that the

plan would extend the life of the system until 2054.

Although no major reforms were enacted in the 106th Congress, steps were taken

to set aside the portion of the looming budget surpluses attributable to Social Security

pending consideration of reform legislation. This was done through both budget

resolutions enacted during the two-year period. Attempts, however, to bolster the

set-asides through procedural measures to discourage tax cuts or spending increases

CRS-3

that would dip into the set asides — so-called budget “lock box” measures – failed

to garner Senate approval.

Following a public statement by President Clinton early in the year that he would

support repeal of the Social Security earnings test, Congress did pass H.R. 5, a bill

to allow recipients ages 65 to 69 to work without losing benefits effective in 2000.

Under the old law, recipients ages 65 to 69 who earned more than $17,000 in 2000

would have lost one dollar in benefits for each three dollars they earned above the

limit; there was no loss of benefits once a person reached age 70. Under the new law,

recipients ages 65 to 69 received full benefits beginning with the month they reached

age 65, or beginning with January 2000 if they had reached age 65 earlier. President

Clinton signed the measure into law on April 7, 2000 as P.L. 106-182 (see CRS

Report 98-789).

Congress also considered legislation to repeal part of the income taxation of

Social Security benefits that is now credited to the Medicare HI program. Legislation

enacted in 1993 had made up to 85% of benefits taxable for some recipients. H.R.

4865 as passed the House would have limited the taxable portion to 50%. However,

no action on the bill was taken in the Senate before it adjourned sine die (see CRS

Report RL30581).

This report summarizes the various reform bills and other legislation introduced

in the 106th Congress. For additional reading on the issues, see the Appendix to this

report. Many of the CRS products listed there and links to information from other

organizations can be accessed through an on-line Social Security “electronic briefing

book” located at the CRS website [http://www.congress.gov/brbk/html/ebssc1.html].

Background

Projected Financing Problem. Currently the Social Security system’s income

exceeds its outgo. However, the Social Security Board of Trustees projects that on

average over the next 75 years the system’s expenditures will exceed its income by

14%. The primary reason is demographic: an aging post-World War II “baby boom”

generation will begin retiring in 2008 and increasing life expectancy is creating an

older society. By 2025, the number of people 65 and older is projected to rise by

75%. In contrast, the number of workers whose taxes will finance future Social

Security benefits is projected to grow by only 13%. As a result, the ratio of workers

to Social Security recipients is projected to fall from 3.4 to 1 today to 2.1 to 1 in 2030

and ultimately to 1.9 to 1 in 2075 (the end of trustees’ projection period).3

Social Security revenues are paid into the U.S. Treasury and invested in federal

securities recorded to the Old Age, Survivors and Disability Insurance (OASDI) trust

funds maintained by the Treasury Department (OASDI being the formal title for

Social Security). Social Security benefits and administrative costs are paid out of the

Treasury and a corresponding amount of securities are written off the trust funds.

3

See the 2000 Report of the Board of Trustees of the Federal Old-Age, Survivors and

Disability Insurance Trust Funds, Intermediate projections.

CRS-4

The tax surpluses the system is currently generating and the interest the

government “pays” to the trust funds on the securities they hold appear as growing

trust fund balances. On March 30, 2000, the trustees projected that the balances

would grow to a peak of $6 trillion in 2024. After 2024, the trust funds’ income

would be less than their outgo and the balances would fall. By 2037, the balances

would be totally depleted and the system would be technically insolvent.4

Although aggregate trust fund surpluses are projected through 2024, the point

at which Social Security taxes alone (ignoring interest credited to the funds) would

fall below the system’s outgo is 2015. Since interest “paid” to the trust funds is

simply an exchange of credits among governmental accounts, it does not represent a

source of receipts for the government. Only the portion of the trust funds’ income

represented by taxes provides receipts for the government. Hence, it is in 2015 that

surplus Social Security taxes would no longer be available to the government and

other resources of the government would be needed to help meet the costs of the

system. At that point, in the absence of surplus receipts from the rest of the

government’s operations, policymakers would have three basic choices: raise taxes,

cut spending, or borrow money from the public.5

Today, the cost of the system — approximately $410 billion in 2000 — is equal

to 10.34% of the total amount of national earnings subject to Social Security taxation

(referred to as taxable payroll). It is projected to rise slowly over the next decade,

reaching 11.55% of payroll by 2010. It would then begin a more precipitous rise to

16.24% in 2025 and 17.86% in 2035. This would be near the end of the baby

boomers’ retirement as those born in 1965 (the approximate end of the baby boom)

would be 70 years old in 2035. After that, the system’s cost would rise slowly to

19.53% of payroll in 2075. The system’s average cost over the entire 75-year period

would be 15.4% of payroll or 14% higher than its average income. However, the gap

between income and outgo would grow throughout the period and by 2075, income

would equal 13.34% of payroll, outgo would equal 19.53% of payroll, and the gap

would equal 6.18% of payroll. Simply put, by the end of the projection period, outgo

would exceed income by 46%.

Past Financing Problems. The current problem is not unprecedented. In 1983

and in legislation in 1977, Congress enacted a variety of measures to address financing

shortfalls similar to those now being forecast. Among them were benefit computation

changes, a gradual increase from 65 to 67 in Social Security’s “full” benefit age,

increases in payroll taxes, partial taxation of the Social Security benefits of higherincome recipients, and extension of coverage to federal and nonprofit employees.

(See Table 1.) Since then, new long-term deficits have been forecast, resulting from

4

The reader should recognize that at that point the system is projected to still be receiving

taxes sufficient to cover about 72% of its ongoing costs.

5

Since the trust funds would still be credited with interest for the securities they hold, from

an accounting standpoint their “total” income (tax receipts and interest combined) would

exceed their outgo and the use of general governmental resources during the 2015-2024 period

would be “making good” on part of the interest due to the funds. Even more general

governmental resources would be needed in the 2025-2037 period as the balances of the trust

funds are drawn down.

CRS-5

changes in actuarial methods and assumptions, as well as extensions of the 75-year

valuation period to later years (which added years of deficits at the back end of the

period, while subtracting recent years of surpluses). (See Figure 1 and Table 2.)

Table 1. Measures Enacted in 1977 and 1983 to Shore Up Financial

Condition of Social Security System

Measures enacted in 1983

Percent of projected 75-year

funding gap closed by measure

Raise full benefit age from 65 to 67

34%

Subject up to ½ benefits to income taxes

29%

Cover federal & non-profit employees

18%

Move COLAs from July to January

14%

Other

5%

Funding gap remaining after changes

-0-

Measures enacted in 1977

Changes in benefit computation rules

58%

Increase in Social Security tax rates

15%

Increase in taxable earnings base

7%

Other

2%

Subtotal of changes

82%

Funding gap remaining after changes*

18%

* The 1977 amendments did not fully resolve the long-range financing problem projected at that time.

CRS-6

Figure 1. Social Security Trust Fund Balances, 1983 and

2000 Projections

600

Trust Fund Balance as % of Annual Outgo

1983 Projections

500

400

300

200

100

2000 Projections

0

1985 1995 2005 2015 2025 2037 2045 2055

Table 2. Major Assumptions Underlying Long-Range Social Security

Projections Made in 1983 and 2000

Long-range assumptions

Annual increase in:

—wages in covered employment

—consumer price index

Unemployment rate

Annual interest rate

Fertility rate (births per woman)

Life expectancy in 2060:

At birth (in years):

—women

—men

At age 65 (in years):

—women

—men

Annual net immigration

1983 projections

2000 projections

5.5%

4.0%

5.5%

6.1%

2.0

4.3%

3.3%

5.5%

6.3%

1.95

84.4

76.3

84.1

79.9

23.6

17.9

400,000

22.0

19.1

900,000

Source: 1983 and 2000 OASDI Trustees’ Report, Intermediate projections.

CRS-7

Expressed as a percent of taxable payroll, the currently projected financing

problem of 1.89% of payroll (averaged over the next 75 years) is slightly less than the

size as the problem that Congress tackled in 1983 and only about one-fourth the size

of the problem addressed in 1977 (see Table 3). The more important difference

between the financing problems projected then and now is that the problems in 1977

and 1983 were immediate. The imminent “insolvency” of the trust funds gave

political impetus to act on the issue. Today, there is no near-term problem, only a

long-term one. In one sense, it makes dealing with the problem harder, because the

length of time before the problem emerges gives people a basis to doubt what the

projections show (the argument being that long-term projections will inevitably be

wrong). On the other hand, the longer time frame until the problem emerges allows

for gradual changes to be made to solve it, in lieu of precipitous benefit cuts or tax

increases that might be required if insolvency were imminent.

Table 3. Social Security’s Long-Range Financing Shortfall Addressed

in 1977 and 1983 Compared to That Shown in 2000 Trustees’ Report

Year of

Projection

Income

Outgo

Deficit

Deficit as Percent

of Income

(75-year average in % of payroll)

1977

10.99

19.19

-8.20

75%

1983

12.29

14.38

-2.09

17%

2000

13.51

15.40

-1.89

14%

Source: 1977 and 2000 OASDI Trustees’ Report, Intermediate projections, and projections provided

to House Committee on Ways and Means and Senate Committee on Finance, February 1983.

Emerging Calls for Reform

As far back as 1990, Social Security trustees of previous administrations

concluded that steps eventually would need to be taken to fix the system. Impetus to

move soon was triggered by the 1994/1995 Bipartisan Commission on Entitlement

and Tax Reform (better known as the Kerrey-Danforth Commission), which, while

failing to get agreement on a specific plan, did conclude that the earlier action was

taken the better. This perspective was echoed two years later by the 1994-1996

Social Security Advisory Council, a legislatively-mandated panel convened to study

Social Security’s long-term problem. It too was unable to agree on a specific plan,

but its members also concluded that action needed to be taken soon. Since then,

numerous other private and governmental entities, including a new permanent Social

Security Advisory Board, the General Accounting Office, the National Association

of Manufacturers, the Committee on Economic Development, and the American

Academy of Actuaries have come forward urging Congress to take action. Moreover,

opinion polls suggest that the public generally sees the need and is in favor of reform

soon. However, while a consensus has emerged that action is necessary, there is a

wide range of opinion over what should be done.

CRS-8

The 1994/1996 Advisory Council on Social Security. The 1997 report of the

1994-96 Social Security Advisory Council contained three possible alternatives to

restore the system’s solvency.6 The first (the “maintain benefits” plan) would have

kept the system’s benefit structure essentially in tact by addressing most of the longrange problem with revenue increases (including an eventual rise in the payroll tax)

and minor benefit cuts. To close the remaining gap, its proponents suggested that

Congress consider authorizing investment of up to 40% of the Social Security trust

funds in the stock market. The second (the “individual account” plan) addressed the

problem mostly with gradually growing benefit reductions. It also would have

required workers to make an extra 1.6% of pay contribution to new personal savings

accounts. The third (the “personal security account” plan) proposed a complete

redesign of the system that would have gradually replaced the current earnings-related

retirement benefits with flat-rate benefits based on length of service and personal

savings accounts funded with a 5% of pay contribution (carved out of the current

payroll tax). It would have covered the costs of transitioning to the new system with

an increase in payroll taxes of 1.52% of pay and government borrowing.

While Congress did not act on any of the Advisory Council’s plans, the Council’s

report and varied plans have served to stimulate public debate. The conceptual

approaches they reflect can be found in the many reform bills introduced in the 105th

and 106th Congresses as well as in other proposals suggested by private panels and

experts.

Reform Bills and Other Proposals. This section briefly summarizes some of

the more fundamental reform bills introduced in recent Congresses and proposals

suggested by others. A more general list of Social Security-related bills introduced

in the 106th Congress is provided in the succeeding section.

During the 103rd Congress, bills were introduced proposing to raise the system’s

full benefit age to 70, modify cost-of-living adjustments (COLAs), and make other

benefit reductions — H.R. 4275 (Pickle), H.R. 4372/H.R. 4373 (Penny), H.R. 5308

(Nick Smith). H.R. 4245 (Rostenkowski) of the 103rd Congress sought a mix of

benefit reductions and tax increases. In the 104th Congress, more far-reaching

proposals were introduced encompassing not only some of these changes, but also

seeking to privatize a portion of the program — S. 818 (Kerrey), S. 825 (Kerrey and

Simpson), and H.R. 3758 (Nick Smith). In the 105th Congress more than 30 reform

bills reflecting an even wider array of options were introduced.

As measured by the number of bills introduced, the most popular form of Social

Security change proposed in the 106th Congress were those designed to alter the

program’s treatment in the federal budget — more than 40 would have done so either

by changing how Social Security is viewed and treated in the congressional budgetmaking process or through constitutional amendments to balance the federal budget

without counting Social Security. Included among them were the FY2000 and FY

2001 concurrent budget resolutions, H.Con.Res. 68 and H.Con.Res. 290, both of

which set aside the portion of projected budget surpluses attributable to Social

Security pending action to reform the system. Many others consisted of so-called

6

Report on the 1994-1996 Advisory Council on Social Security. Washington, GPO, 1997.

CRS-9

“lock box” measures, including amendments to S. 557 (Thompson), which would

have set a statutory limit on publicly-held debt that would decline annually by the

amount of Social Security surpluses, and H.R. 1259 (Herger), H.R. 3859 (Herger),

H.R. 5173 (Fletcher), H.R. 5203 (Shaw), all of which were aimed at creating points

of order against bills that would use the Social Security or Medicare portions of

budget surpluses for spending increases or tax cuts. The latter four passed the House

but were not taken up in the Senate (See CRS Report RS20165 for further discussion

of Social Security “lock boxes.”)

Also prominent were measures to allow aged recipients to earn more without

losing benefits. As previously mentioned, following President Clinton’s statement that

he would sign a “clean” bill eliminating the earnings limit for recipients ages 65 to 69,

both Houses of Congress passed H.R. 5 (Representative Sam Johnson) unanimously

with no other amendments or alterations of the program. The President signed the

bill into law as P.L. 106-182, on April 7, 2000. Under the new law, the earnings limit

for this age group was eliminated beginning in the year 2000.

Congress also considered legislation to repeal part of the income taxation of

Social Security benefits that is now credited to the Medicare HI program. Legislation

enacted in 1993 made up to 85% of benefits taxable for some recipients. H.R. 4865,

passed by the House on July 27, 2000, would have repealed that measure, and thereby

limited the taxable portion of benefits to 50%. It too was not taken up in the Senate

(see CRS Report RL30581).

Most of the fundamental reform bills introduced in the 106th Congress and those

aimed at addressing the system’s long-range financing problems proposed alterations

of the system with some combination of benefit restraints and income-producing

measures. Most would have made some use of the nation’s financial markets, either

by permitting the creation of new personal savings accounts to supplement or take the

place of future Social Security benefits or by requiring or permitting the “collective”

investment of the Social Security trust funds in stocks and bonds. Some involving the

creation of personal accounts would have phased-in rapidly, giving workers so-called

recognition bonds for their past Social Security taxes, while others called for a long

transition.

H.R. 249 (Sanford) and H.R. 874 (Porter) of the 106th Congress would have

allowed workers to divert 8 and 10 percentage points, respectively, of the current

Social Security tax rate paid by employees and employers into new personal accounts.

Under H.R. 249, workers who did so would have received Social Security benefits

equivalent to those payable had they turned age 62 and retired in the year 2000 and

a minimum annual annuity from their new personal accounts (with any remaining

balance being available as a personal asset). For those who stayed in the existing

system, the bill would have gradually raised the full benefit age to 70, altered the basic

benefit formula to produce lower benefits (i.e., than current law), and reduced annual

COLAs and spousal benefits. It also would have extended Social Security coverage

to newly hired state and local government workers. Under H.R. 874, workers opting

for the new system would have received Social Security benefits (through recognition

bonds) based on their employment record before they joined and a minimum annuity

from their new personal accounts. For those remaining in the existing system, the bill

CRS-10

would have gradually raised the full benefit age to 70 and altered the basic benefit

formula to produce lower benefits.

S. 1103 of the 106th Congress (Rod Grams) and H.R. 3683 (Sessions) of the

105 Congress would similarly have allowed workers to opt for a new system of

personal accounts. S. 1103, like H.R. 874, would have allowed workers to divert 10

percentage points of the current tax rate into the new accounts. Workers age 30 and

older were to receive recognition bonds for past Social Security taxes. Those

choosing the new system would have been permitted to opt back into the old one

within 10 years upon repayment of the taxes and any recognition bonds received.

Under H.R. 3683, once a worker opted out, his or her portion of the Social Security

tax — 6.2% of pay — were to be deposited into a new personal account. Employers

would have continued to pay their share of the tax to the existing system for 15 years,

after which they were to contribute to the worker’s personal account. There was to

be a 90-day period of dual coverage, after which the worker’s Social Security

coverage was to decline by 20% per year until all protections were forfeited in the 5th

year.

th

S. 21 (Moynihan/Kerrey) of the 106th Congress would have put the current

system on a pay-as-you-go basis by immediately reducing the tax rate by one

percentage point each on workers and their employers, and then raising it later in

tandem with the system’s future cost. Workers were to be given the option of using

the tax cut to create new personal accounts. If they did, their employers would have

had to match their contributions. The bill also reduced COLAs, increased and

extended the taxation of benefits to all recipients, repealed the currently scheduled

increase in the full Social Security benefit age while constraining the future growth in

benefits to reflect increasing life expectancy, lengthened the earnings “averaging

period” for computing benefits, eliminated the Social Security earnings test (allowing

recipients age 62 and older to receive benefits regardless of their earnings), raised the

maximum amount of earnings subject to taxation, extended Social Security coverage

to all newly hired state and local government workers, and created a new system of

personal savings accounts for children under the age of 6, referred to as kidsave

accounts, funded with contributions by the government.

Senator Phil Gramm suggested a plan under which workers would be allowed

to divert three percentage points of their tax rate into new personal accounts with the

government guaranteeing a higher retirement income than would be payable from

Social Security alone. The guarantee would apply when a retiree’s Social Security

benefits plus an annuity from the new personal accounts are less than 120% of current

law Social Security benefits. An amount equal to an additional two percent of

workers’ pay also would be contributed to personal accounts by the Federal

government, and the annuities from these contributions would be used entirely to

offset the cost of a worker’s eventual Social Security benefits. Federal budget

surpluses, a partial draw-down of the Social Security trust funds, and higher corporate

tax receipts resulting from the potential economic stimulus created by the plan were

suggested as ways of covering transition costs. The Senator suggested that the plan

would resolve Social Security’s funding problems since the personal account annuities

would fully or partially offset Social Security benefits. The plan was not introduced

in bill form.

CRS-11

H.R. 5659 (Kasich) would have created a new system of voluntary personal

accounts coupled with constraints on the growth of the existing Social Security

benefit formula such that benefits would rise only at the rate of inflation. Under

current rules, future retirees’ Social Security benefits are scheduled to rise at the rate

of average wages in the economy. Under the bill, their benefits were to rise at the rate

of inflation, which historically has risen at a slower pace than wages. This change

alone would be expected to bring the system into long-range balance. Under the new

personal accounts system, workers under age 55 in the year 2000 could have made

an irrevocable choice to divert a portion of their Social Security tax into the accounts,

and in return accepted a partial reduction in their eventual Social Security benefits.

The amount of the diversion was to vary with the level of a worker’s annual earnings;

the smaller the earnings, the larger the diversion rate (with a minimum of 1% of

earnings and a maximum approaching 3.5%). The bill also called for borrowing from

the general fund by the Social Security trust funds to help cover transition costs.

H.R. 3206 (Nick Smith) of the 106th Congress would have allowed workers to

put 2.5 percentage points of their Social Security taxes into new personal accounts

for the next 25 years, 2.75 percentage points from 2026 to 2038, and an amount

thereafter based on the yearly excess of aggregate Social Security revenue over

expenditures. At retirement, each participant’s Social Security benefits were to be

reduced by the amount of a hypothetical annuity derived from their new personal

accounts. The bill would have altered the existing system by accelerating the

scheduled increase in the full benefit age to 67 for those born in 1949, thereafter

increasing it by 1 month every 2 years, and made changes to the basic benefit formula

to produce lower initial benefits such that ultimately there would be nearly a singlerate benefit formula. It also would have raised benefits for surviving spouses by 10%

beginning in 2001, increased the “delayed retirement credit” to 8% per year beginning

in 2000 (instead of in 2008 as scheduled under current law), extended Social Security

coverage to newly hired state and local government workers, eliminated the Social

Security earnings test for recipients age 62 and older, and made general fund infusions

to the trust funds equal to non-Social Security budget surpluses for FY2001-FY2009

and for a portion of the costs of Disability Insurance.

S. 588 (Bunning) of the 106th Congress would have allowed workers to initially

divert 2.5% of their taxes into new accounts with the diversion amount rising to up

to half of their taxes over 20 years. Workers opting to do so would have had to take

a 50% reduction in their eventual Social Security benefits. Retirees would have been

required to draw down at least 75% of their personal account accumulations in the

form of an annuity or other monthly payment based on their life expectancy.

Patterned after recommendations made by the National Commission on

Retirement Policy, an independent panel comprising Members of Congress, business

leaders, economists, and other experts in the pension field, S. 2313 (Gregg/Breaux)

and H.R. 4256/H.R. 4824 (Kolbe/Stenholm) of the 105th Congress would have

mandatorily diverted two percentage points of the workers’ tax rate into new

accounts (for those under age 55 upon enactment). They would have raised the

existing system’s income by extending Social Security coverage to newly hired state

and local government workers and crediting proceeds from the current income tax on

benefits that now go to the Medicare Hospital Insurance trust fund to the Social

Security trust funds. They would have reduced its outgo by raising the early and full

CRS-12

benefit ages gradually to 67 and 70, thereafter increasing them by 2 months every 3

years, altering the basic benefit formula to produce lower benefits, reducing the

dependent spouse’s benefit, lengthening the earnings averaging period for computing

benefits, and reducing Social Security COLAs. The bills also called for a new system

of minimum Social Security benefits, ending the Social Security earnings test for

recipients at or above the full benefit age, and creating new voluntary incentives for

personal savings.

Representatives Kolbe and Stenholm introduced a revised proposal in the 106th

Congress, H.R. 1793. While retaining many of the same provisions of H.R. 4256 and

H.R. 4824 (including the mandatory two percentage point tax “carve out” for new

personal accounts and a new but revised minimum benefit), the new bill did not

contain measures extending Social Security coverage to state and local government

workers and reducing the dependent spouse’s benefit. It also revised the provisions

of the previous bills affecting the early and full benefit age, such that after the full

benefit age rose to 67 in 2011, both it and the early benefit age would have risen more

slowly than under the previous bills (i.e., by one month every two years). It added

two new benefit formula constraints to the package: (1) limiting the future growth in

benefits to reflect increases in life expectancy (similar to approach taken in S.21) and

(2) constraining the growth of the middle and upper brackets of the formula (these

two constraints would be additive, not separate). It also revised voluntary savings

provisions in the previous bills by adding government matching contributions for lowincome workers. In addition, to assist with program financing, it called for general

fund infusions to the Social Security trust funds rising from amounts equal to 0.4%

of pay in 2000 to 0.8% in 2060 and thereafter.

Senators Gregg and Breaux (along with 5 other cosponsors) also introduced a

revised plan, S. 1383. It only raised the full benefit age to 67 (albeit somewhat faster

than current law and with greater reductions and increases for early and delayed

retirement) and did not increase the earliest eligibility age. In lieu of such changes

proposed in their previous bill, it contained a provision similar to that of S. 21,

constraining the growth of the system’s benefit formula to reflect increasing life

expectancy. It retained the mandatory two percentage point tax “carve out” for new

personal accounts, however, in contrast to their previous bill, some or all of the

annuities from these accounts was to cause a reduction in future Social Security

benefits. In addition, it did not create a new minimum benefit but instead revised the

basic benefit formula to tilt it more heavily toward low-wage workers. The new

package also called for creation of “kidsave” accounts similar to those of S. 21 (with

half of the eventual “kidsave” annuities causing a reduction in Social Security

benefits), and it revised voluntary savings provisions in the previous bill by adding a

government contribution and matching rate for low-income workers. To assist with

program financing, it would have raised the maximum amount of earnings subject to

Social Security taxation and authorized general fund infusions to the Social Security

trust funds rising from amounts equal to 0.6% of pay in 2000 to 1.2% in 2060 and

thereafter. As with H.R. 1793 (Kolbe/Stenholm), this new package excluded

provisions extending Social Security coverage to state and local government workers

and reducing the dependent spouse’s benefit. (Also see S. 2774, introduced by same

sponsors in the 106th Congress – similar bill with some modifications).

CRS-13

H.R. 250 and H.R. 251 (Sanford) of the 106th Congress would have mandatorily

diverted one percentage point of the workers’ share of the tax rate on into new

personal accounts (for those under age 55 upon enactment) managed by the Treasury

in the same manner as the federal workers’ Thrift Savings Plan (with the same

investment options) or by banking institutions. Future Social Security benefits were

to be scaled down to reflect the annuity value of the account accumulations. They

also gradually raised Social Security’s early and full retirement ages to 67 and 70,

respectively, for those born in 1967, thereafter increasing them by about 1 month

every 2 years, and reduced COLAs.

H.R. 4839 (Sanford) of the 106th Congress would have mandatorily diverted an

amount derived from annual Social Security surpluses into new personal savings

accounts (for those under age 55) with between 5 and 15 investment options to

choose from. Future Social Security benefits were to be scaled down to take account

of the growth of the accounts. It further provided for general fund infusions to the

DI trust fund if the fund balance falls below 20% of annual costs.

Economists Martin Feldstein and Andrew Samwick have suggested a personal

accounts system funded with federal budget surpluses allocated to workers at a rate

equal to 2% of their pay. Under their plan, withdrawals from the accounts would

cause a partial reduction in Social Security benefits; i.e., for every $1 withdrawn, $.75

in Social Security benefits should be forfeited. In this way, the build up of the

accounts would lead to an eventual reduction in the existing system’s cost while

enhancing future retirees’ income. They claimed the proposal would make the

existing system solvent in the long run.

A related approach suggested by Representatives Archer and Shaw would have

established a personal accounts system (referred to as Social Security “guarantee

accounts”) funded with indefinite government contributions equal to 2% of pay. The

government would have established the accounts for all workers who pay Social

Security taxes. However, workers’ Social Security taxes were to be unaffected, since

the funding of the accounts would be through refundable tax credits (the accounts

would be effectively funded with general revenues). The accounts were to be

managed by selected investment companies with portfolios containing a 60/40% split

of equities and corporate bonds. Upon entitlement to Social Security, an amount

equal to a “life annuity” was to be transferred monthly from each worker’s account

to the Social Security system, and the higher of current law Social Security benefits

or the life annuity would have been paid to the recipient (in effect, the annuity

payment was to fund a portion or all of the Social Security benefit depending on its

size). The account balances of deceased recipients were to be used to finance Social

Security benefits of any eligible survivors or would have otherwise reverted to the

Social Security trust funds. The account balances of workers who die before

entitlement with no eligible survivors were to become part of the worker’s estate. The

proposal also would have eliminated the Social Security earnings test for recipients

age 62 and older and liberalized Social Security survivor benefits for two-earner

couples (the Social Security benefits of the surviving spouse were to be equal to

2/3rds of the combined benefits they formerly received as a couple). The plan was not

introduced in bill form.

CRS-14

Following the theme of the “maintain benefits” plan of 1994-1996 Social

Security Advisory Council, three other approaches attempted to close the system’s

funding gap without altering Social Security benefits or creating new personal

accounts. Reflecting in part the original “framework” for reform proposed by the

President in January 1999, H.R. 1043 (Nadler) in the 106th Congress would have

credited the trust funds with $2.8 trillion of the then projected $4.9 trillion in federal

budget surpluses over the next 15 years as a general fund “infusion,” using 40% of

such amounts to buy stocks (about $1.1 trillion worth). It also would have raised the

maximum amount of earnings subject to Social Security taxation. H.R. 2039 (Stark)

would have credited the Social Security trust funds with annual general fund infusions

equal to 2.07% of taxable payroll (about $75 billion per year in 1999 dollars), an

amount equivalent to the average long-range funding gap projected in the 1999

trustees’ report. S. 1376 (Hollings) called for the creation of a new source of federal

revenue — a 5% value added tax — that was to be used to retire the federal debt and

help shore up the Social Security trust funds.

Other more limited approaches embody the concept of expanding the investment

policies of the program; more specifically, by creating a board empowered to invest

Social Security funds in stocks as well as federal bonds. The idea is that a managed

fund that took advantage of investment yields from stocks would raise the income of

the trust funds. This was incorporated in both President Clinton’s various proposals,

which as previously mentioned would have credited the trust funds with general fund

infusions, part of which was to be used to buy stocks. It also is similar to approaches

suggested in H.R. 633 and H.R. 990 (Bartlett), H.R. 871 (Markey), H.R. 1043

(Nadler), and H.R. 2717 (DeFazio) in the 106th Congress and H.R. 336 (Solomon)

of the 105th Congress, and to proposals of former Social Security commissioner,

Robert Ball, and Brookings economists, Henry Aaron and Robert Reischauer.

Not all proposals attempted to close the system’s funding gap. S. 263 (Roth)

of the 106th Congress and H.R. 3456 (Kasich) and S. 2369 (Roth) of the 105th

Congress would have created personal savings accounts funded with federal budget

surpluses that were to be considered supplements to Social Security. These proposals

assumed no changes to the existing system. The expressed view was that the Social

Security system will have to be changed at some point, and the creation of these

accounts could help fill the gap in benefits caused by those eventual changes. A

similar measure to create universal savings accounts (USAs) using a portion of the

budget surpluses was incorporated in President Clinton’s 1999 reform framework.

In a detailed plan announced on April 14, 1999, he proposed a progressive system of

automatic government contributions, with a further progressive government match

when a worker makes a voluntary contribution (progressive in the sense that the

lower a worker’s income, the larger the automatic contribution and matching rate).

Also embedded in President Clinton’s various plans and, to a more limited extent

in H.R. 147 (Ralph Hall) and H.R. 160 (Royce) in the 106th Congress and H.R. 2191

(Neumann) in the 105th Congress, was a proposal to buy up federal securities in the

financial markets (i.e., outstanding publicly-held federal debt) and credit an equivalent

amount of federal securities to the Social Security trust funds. The various bills

introduced simply called for replacement of the trust funds’ non-marketable securities

with marketable federal ones. The President’s January 1999 plan called for crediting

$2.2 trillion of such to the trust funds over the next 15 years as a general fund

CRS-15

infusion. His revised June 1999 plan would have credited the trust funds only with

interest savings from buying up federal securities, first in the form of stocks, and then

in the form of federal securities (i.e., once the trust funds’ holdings in stocks reached

15% of the total). In his October 1999 plan, all of the trust fund infusions (again

representing interest savings from retiring federal debt) would have been in the form

of federal securities. His January 2000 plan resembled the June 1999 plan calling for

50% of the “interest-derived” infusions to be invested in stock until the trust funds’

holdings in stocks reached 15% of the total.

Social Security Bills Introduced In 106th Congress

Table 4 lists many of the bills introduced in the 106th Congress affecting Social

Security. It is relatively comprehensive but not all-inclusive. The bills shown are

confined to those that would have reformed the system or otherwise addressed its

financing problems, changed its budget status, or had notable cost or revenue effects.

The table groups them into categories reflecting their general nature. Footnotes to

the table indicate CRS or GAO reports that discuss the bills or the subject matter.

CRS-16

Table 4. Social Security Bills in 106th Congress

General Nature of Bill

Attempts to restore solvency

of current systema

Creates new voluntary or

mandatory system of

personal accounts in place of

part of current system

Creates personal accounts,

but does not alter current

system

S. 263

H.R. 1

(reserved for

President’s

bill)

Hastert

H.R. 249

Sanford

H.R. 249

Sanford

H.R. 250

Sanford

H.R. 250

Sanford

H.R. 251

Sanford

H.R. 251

Sanford

H.R. 874

Porter

H.R. 1043

Nadler

H.R. 1793

Kolbe

H.R. 1793

Kolbe

H.R. 1897

Petri

H.R. 2039

Stark

H.R. 3206

Nick Smith

H.R. 2717

DeFazio

H.R. 4839

Sanford

H.R. 3206

Nick Smith

H.R. 5659

Kasich

H.R. 3165

Gephardt

S. 21

Moynihan

H.R. 5659

Kasich

S. 588

Bunning

S. 21

Moynihan

S. 1103

Grams

S. 588

Bunning

S. 1383

Gregg

S. 1103

Grams

S. 2740

Landrieu

S. 1376

Hollings

S. 2774

Gregg

S. 1383

Gregg

S. 3200

Kerrey

S. 1828

Moynihan

S. 1831

Daschle

S. 2774

Gregg

Roth

Alters system’s investment

policiesb

Alters Social Security’s

budget treatment (including

“lock box” bills)c

Liberalizes or ends Social

Security earnings testd

H.R. 147

Hall

H.R. 37

Livingston

H.R. 5

S. Johnson

H.R. 160

Royce

H.R. 74

Bilbray

H.R. 47

Stump

H.R. 219

Paul

H.R. 167

Klink

H.R. 107

Knollenberg

H.R. 633

Bartlett

H.R. 196

Minge

H.R. 288

Sweeney

H.R. 871

Markey

H.R. 343

Andrews

H.R. 519

Gilman

H.R. 990

Bartlett

H.R. 420

Nick Smith

H.R. 1084

Dunn

H.R. 1043

Nadler

H.R. 563

Adam Smith

H.R. 1793

Kolbe

H.R. 1268

Gary Miller

H.R. 656

Stearns

H.R. 2020

N. Johnson

H.R. 2717

DeFazio

H.R. 685

Moore

H.R. 2698

Dreier

S. 633

Ashcroft

H.R. 853

Nussle

H.R. 3206

Nick Smith

CRS-17

General Nature of Bill

Alters Social Security’s

disability provisions

Alters Social Security’s

budget treatment (including

“lock box” bills) — cont’d:

Liberalizes or ends Social

Security earnings test —

cont’d

H.R. 401

Mink

H.R. 863

Herger

H.R. 3599

Nick Smith

H.R. 545

N. Johnson

H.R. 1157

Herger

S. 21

Moynihan

H.R. 631

N. Johnson

H.R. 1259

Herger

S. 279

McCain

H.R. 1091

Hulshof

H.R. 1803

Kasich

S. 1160

Grassley

H.R. 1107

Watkins

H.R. 1927

Holt

S. 1168

McCain

H.R. 1180

Lazio

H.R. 3012

Barton

S. 1383

Gregg

H.R. 1601

Ehrlich

H.R. 3165

Gephardt

S. 1440

Gramm

H.R. 3280

Mink

H.R. 3175

Minge

S. 2074

Ashcroft

H.R. 5412

Deal

H.R. 3206

Nick Smith

S. 2085

Lugar

H.R. 5553

English

H.R. 3695

Toomey

S. 2086

Lugar

H.R. 5577

Lowey

H.R. 3859

Herger

H.R. 5578

Lowey

H.R. 4195

Schaffer

S. 86

Bunning

H.R. 4397

Nussle

S. 285

McCain

H.R. 4505

Bass

S. 331

Jeffords

H.R. 5173

Fletcher

H.R. 5203

Shaw

H.R. 5670

Kasich

H.Res. 18

Pascell

H.Res. 98

Ryan

H.Res. 302

Herger

H.Res. 306

Herger

H.J.Res. 40

Traficant

H.J.Res. 53

Istook

S. 8

Daschle

S. 27

Feingold

S. 359

Grams

S. 502

Ashcroft

Amendments

to S. 557

Thompson

S. 588

Bunning

S. 605

Hollings

S. 862

Lautenberg

S. 1097

Enzi

S. 1168

McCain

S. 1693

Grams

S. 1768

Abraham

S. 1828

Moynihan

CRS-18

General Nature of Bill

Repeals some/all of taxation

of Social Security benefitse

Alters Social Security’s

budget treatment (including

“lock box” bills) — cont’d:

Addresses Social Security

“notch” issue f

H.R. 48

Stump

S. 1889

Grams

H.R. 120

Emerson

H.R. 107

Knollenberg

S. 1962

Ashcroft

H.R. 122

Emerson

H.R. 291

Sweeney

S. 2001

Grams

H.R. 148

Hall

H.R. 688

Salmon

S. 2126

Grams

H.R. 538

Clement

H.R. 761

Forbes

S. 2220

Allard

H.R. 568

Wexler

H.R. 3437

Nadler

S.J.Res. 5

Gramm

H.R. 1771

Emerson

H.R. 3438

Nadler

S.J.Res. 13

Abraham

S. 390

Reid

H.R. 3857

Franks, Bob

S.J.Res. 38

Voinovich

H.R. 4865

Archer

S. 137

Kyl

S. 286

McCain

S. 482

Abraham

S. 488

Grams

S. 2180

Abraham

S. 2304

Shelby

Deals with treatment of

Social Security numbers and

privacy concerns

Expresses sense of Congress

about Social Security issue

Alters Social Security taxes

for purposes other than to

restore solvency

H.R. 220

Paul

H.R. 245

Sanford

H.R. 1099

Owens

H.R. 4611

Markey

H.Res. 34

DeLauro

H.R. 1316

Dreier

H.R. 4857

Shaw

H.Res. 48

Ryan

H.R. 4212

Minge

H.R. 4910

Ehlers

H.Res. 93

Nadler

H.R. 4260

Nussle

S. 2554

Gregg

H.J.Res. 32

Ryan

H.R. 4265

Paul

S. 2606

Hollings

H.C.Res. 101

Mark Green

H.R. 4325

Pitts

S. 2699

Feinstein

H.C.Res. 155

Schaffer

S. 2871

Shelby

S. 2876

Bunning

S. 3219

Feinstein

Liberalizes “windfall”

benefits provisiong

Liberalizes “government

pension offset” provisionh

Authorizes benefits for the

month of deathi

H.R. 742

Sandlin

H.R. 1217

Jefferson

H.R. 163

Holden

H.R. 860

Frank

H.R. 1590

Gejdenson

H.R. 287

Sweeney

S. 8

Daschle

H.R. 3890

Mink

S. 717

Mikulski

H.R. 4310

Hoekstra

S. 786

Mikulski

CRS-19

General Nature of Bill

Provides an income tax

deduction for payment of

Social Security taxes

Alters COLAs or Revises

Consumer Price Index (CPI)

for COLA purposesj

Budget resolutions

H.R. 105

Knollenberg

H.R. 1422

Sanders

H.Con.Res. 68

Kasich

H.R. 1458

Nethercutt

H.R. 2180

Weiner

S.Con.Res. 20

Domenici

S. 807

Ashcroft

H.R. 4551

Bass

S.Con.Res.

290

Kasich

H.R. 5373

Tancredo

S. 1247

Grams

Mandates coverage of state

and local government

workersk

Expands eligibility for lump

sum death benefit

Restores benefits for college

students

H.R. 249

Sanford

H.R. 3281

H.R. 4873

Andrews

H.R. 3206

Nick Smith

H.R. 5329

Wu

S. 21

Moynihan

Mink

Requires that Social Security

benefits be made a “legal

guarantee”

Establishes bi-partisan Social

Security commission

Liberalizes benefits for

divorced or surviving spouses

S. 1102

H.R. 5593

H.R. 5575

Lowey

H.R. 5576

Lowey

Grams

Portman

Source: Derived from on-line Legislative Information System; bills introduced in 106th Congress

as of December 31, 2000.

a

For discussion, see CRS Issue Brief IB98048, Social Security Reform.

For discussion, see CRS Report RS20607, Social Security: Trust Fund Investment Practices,

and CRS Report 91-129, Social Security: Investing the Surplus.

c

For discussion, see CRS Report RS20165, Social Security, Medicare, and Public Debt

Reduction “Lock Boxes,” and CRS Report 98-422, Social Security and the Federal Budget:

What Does Social Security Being “Off Budget” Mean?

d

For discussion, see CRS Report 98-789, Social Security: Proposed Changes to the Earnings

Test.

e

For discussion, see CRS Report RL30581, Social Security: Taxation of Benefits.

f

For discussion, see CRS Report 95-188, The Social Security Notch Issue.

g

For discussion, see CRS Report 98-35, The Windfall Benefit Provision.

h

For discussion, see CRS Report RS20148, Social Security: The Government Pension Offset.

i

For discussion, see CRS Report 93-792, Social Security Benefits Are Not Paid For the Month

of Death.

j

For discussion, see CRS Report RS20060, A Separate Consumer Price Index for the Elderly?

and CRS Report 97-33, The CPI and the “True”Cost of Living.

k

For discussion, see GAO Report 98-196, Implications of Extending Mandatory Coverage to

State and Local Employees

b

CRS-20

Social Security Bills In 106th Congress On Which Action Has Been Taken

H.J.Res. 32 (Ryan, et al.) — A joint resolution expressing the sense of the Congress

that the President and the Congress should join in undertaking the Social Security

Guarantee Initiative to strengthen and protect the retirement income security of all

Americans through the creation of a fair and modern Social Security Program for the 21st

century. Passed by House, March 2, 1999, by vote of 416-1.

H.Res. 306 (Herger) — A resolution expressing the desire of the House of

Representatives to not spend any of the budget surplus created by Social Security receipts

and to continue to retire the debt held by the public. Passed House 417-2, September 28,

1999.

H.Con.Res. 68 (Kasich, et al.); S.Con.Res. 20 (Domenici, et al.) — A concurrent

resolution establishing the congressional budget for the United States Government for

FY2000 and setting forth appropriate budgetary levels for each of FY2001 through 2009.

Conference agreement on resolution (H.Con.Res. 68) passed House 220-208, April 14,

1999; passed Senate 54 to 44, April 15, 1999. (In addition to setting forth congressional

budget totals setting aside Social Security surpluses, includes provisions and sense of

House and Senate statements pertaining to treatment of Social Security surpluses in the

federal budget and other aspects of the program).

H.Con.Res. 290 (Kasich, et al.); S.Con.Res. 101 (Domenici, et al.) — A concurrent

resolution establishing the congressional budget for the United States Government for

FY2001 and setting forth appropriate budgetary levels for each of FY2002 through 2005.

Conference agreement on resolution (H.Con.Res. 290) passed House 220-208, April 13,

2000; passed Senate 50 to 48. (In addition to setting forth congressional budget totals

setting aside Social Security surpluses, includes provisions and sense of House and Senate

statements pertaining to treatment of Social Security surpluses in the federal budget and

other aspects of the program).

H.R. 1259 (Herger, et al.) A bill amending Budget Act of 1974 to protect Social

Security surpluses through strengthened budgetary enforcement mechanisms. Passed

House, May 26, 1999, by vote of 416-12.

H.R. 3859 (Herger, et al.) – A bill amending Budget Act of 1974 to protect Social

Security and Medicare surpluses through strengthened budgetary enforcement

mechanisms. Passed House, June 20, 2000, by a vote of 420-2.

H.R. 4865 (Archer, et al.) – A bill repealing legislation enacted in 1993 making up

to 85% of Social Security benefits taxable for some recipients. Passed House, 265-159,

July 27, 2000.

S. 331 (Jeffords, et al.) — A bill to amend the Social Security Act to expand the

availability of health care coverage for working individuals with disabilities, to establish

a Ticket to Work and Self-Sufficiency Program in the Social Security Administration to

provide such individuals with meaningful opportunities to work and for other purposes.

Approved and ordered to be reported by Senate Finance Committee on March 4, 1999;

passed by Senate, June 16, 1999, by vote of 99-0. Also see H.R. 1180 (Lazio, et al.) —

similar legislation jointly referred to House Ways and Means and Commerce Committees

on March 18, 1999; approved and reported from Subcommittee on Health and the

CRS-21

Environment of Commerce Committee on April 20, 1999; approved and ordered reported

from Commerce Committee on May 19, 1999. Passed by House, October 19, 1999 by

vote of 412-9 (including additional provisions of H.R. 3070 (Hulshof, et al.), reported

from Committee on Ways and Means, October 18, 1999). Conference report passed by

House, November 18, 1999 by a vote of 418-2; passed by Senate, November 19, 1999 by

vote of 95-1. Signed into law by President Clinton, December 17, 1999 as P.L. 106-170.

H.R. 5 (Sam Johnson, et al.) – A bill to repeal the Social Security earning test at ages

65-69, effective in 2000. Approved by Social Security Subcommittee of House Ways and

Means Committee, February 16, 2000. Approved by full Committee, February 29, 2000.

Passed House, March 1, 2000, by a vote of 422-0. Passed Senate, March 22, 2000, by a

vote of 100-0. Bill with Senate technical amendment passed House, March 29, 2000, by

a vote of 419-0. President Clinton signed the bill into law as P.L. 106-182, April 7, 2000.

H.R. 5173 (Fletcher) – A bill to provide for reconciliation pursuant to sections

103(b)(2) and 213(b)(2)(C) of the concurrent resolution on the budget for fiscal year 2001

to reduce the public debt and to decrease the statutory limit on the public debt. Approved

by House Ways and Means Committee, September 14, 2000. Passed House, September

18, 2000, by a vote of 381-3.

H.R. 5203 (Shaw) – A bill to provide for reconciliation pursuant to sections

103(a)(2), 103(b)(2) and 213(b)(2)(C) of the concurrent resolution on the budget for fiscal

year 2001 to reduce the public debt and to decrease the statutory limit on the public debt,

and to amend the Internal Revenue Code of 1986 to provide for retirement security.

Passed House, September 19, 2000, by a vote of 401-20.

CRS-22

Appendix

Additional Relevant CRS Products

CRS Report 95-543, The Financial Outlook for Social Security and Medicare.

CRS Report 94-622, Social Security: Raising the Retirement Age - Background and

Issues.

CRS Report RL30558, Social Security: A Discussion of Some Issues Affecting the Early

Retirement Age.

CRS Report 98-195, Social Security Reform — How Much of a Role Could Private

Accounts Play?

CRS Report RL30397, Social Security Reform — Individual Account Proposals.

CRS Report RL30571, Social Security Reform: The Issue of Individual Versus Collective

Investment for Retirement.

CRS Report RL30380, Social Security Reform: Assessing Changes to Future Retirement

Benefits.

CRS Report 98-961, Social Security Reform: Projected Contributions and Benefits Under

Three Proposals (S. 1792 and S. 2313/H.R. 4256 in the 105th Congress, and a Plan

by Robert M. Ball).

CRS Memorandum, President Clinton’s Social Security Reform Proposal. March 10,

1999.

CRS Report 97-990, Social Security in the United Kingdom: A Model for Reform?

CRS Report 95-839, Social Security - the Chilean Example.

CRS Report 97-116, Social Security – Eliminating the Taxable Earnings Base.

CRS Report 97-81, Social Security: Recommendations of the 1994-1996 Advisory

Council on Social Security.

CRS Report 97-77, The Long Range Social Security Projections.

CRS Report 94-791, Means-Testing Social Security Benefits: An Issues Summary.

CRS Report 97-741, Social Security Financing Reform: Lessons From the 1983

Amendments.

CRS Report 94-593, Social Security Taxes: Where Do Surplus Taxes Go and How are

They Used?

CRS Report 95-149, Social Security: The Relationship of Taxes and Benefits for Past,

Present, and Future Retirees.

CRS Report 94-803, Social Security: The Cost of Living Adjustment in January 2000.

CRS Report 95-206, Social Security’s Treatment Under the Federal Budget: A Summary.

CRS Report 94-27, Social Security: Brief Facts and Statistics.