II
111th CONGRESS
1st Session
S. 426
IN THE SENATE OF THE UNITED STATES
February 12, 2009
Mr. Bennett introduced the following bill; which was read twice and referred to the Committee on Finance
A BILL
To amend title II of the Social Security Act to provide for progressive indexing and longevity indexing of Social Security old-age insurance benefits for newly retired and aged surviving spouses to ensure the future solvency of the Social Security program, and for other purposes.
Short title
This Act may be cited as
the Social Security Solvency Act of
2009
.
Progressive indexing of benefits for old-age insurance benefits
In general
Section 215(a) of the Social Security Act (42 U.S.C. 415(a)) is amended—
by striking
The
in paragraph (1)(A) and inserting With respect to any
benefit other than an applicable benefit to which paragraph (2) applies,
the
, and
by redesignating paragraphs (2) through (7) as paragraphs (3) through (8), respectively, and by inserting after paragraph (1) the following new paragraph:
In the case of an applicable benefit with respect to any individual who initially becomes eligible for old-age insurance benefits or who dies (before becoming eligible for such benefits) in calendar year 2012 or later, the primary insurance amount of the individual shall be equal to the sum of—
90 percent of the individual's average indexed monthly earning (determined under subsection (b)) to the extent that such earnings do not exceed the amount established for purposes of paragraph (1)(A)(i) by paragraph (1)(B);
32 percent of the individual's average indexed monthly earnings to the extent that such earnings exceed the amount established for purposes of paragraph (1)(A)(i) by paragraph (1)(B) but do not exceed the amount established for purposes of this clause by subparagraph (B);
32 percent (reduced as provided in subparagraph (C)) of the individual's average indexed monthly earnings to the extent that such earnings exceed the amount established for purposes of clause (ii) but do not exceed the amount established for purposes of paragraph (1)(A)(ii) by paragraph (1)(B); and
15 percent (reduced as provided in subparagraph (C)) of the individual's average indexed monthly earnings to the extent that such earnings exceed the amount established for purposes of paragraph (1)(A)(ii) by paragraph (1)(B).
For purposes of subparagraph (A)(ii), the amount established under this subparagraph for calendar year 2012 shall be the level of average indexed monthly earnings determined by the Chief Actuary of the Social Security Administration under clause (ii) as being at the 30th percentile for the period of calendar years 2001 through 2003.
For purposes of clause (i), the average indexed monthly earnings for the period of calendar years 2001 through 2003 shall be determined by—
determining the average indexed monthly earnings for each individual who initially became eligible for old-age insurance benefits or who died (before becoming eligible for such benefits) during such period, except that in determining such average indexed monthly earnings under subsection (b), subsection (b)(3)(A)(ii)(I) shall be applied by substituting calendar year 2000 for the second calendar year described in such subsection; and
multiplying the amount determined for each individual under subclause (I) by the quotient obtained by dividing the national average wage index (as defined in section 209(k)(1)) for the calendar year 2010 by such index for the calendar year 2000.
For purposes of subparagraph (A)(ii), the amount established under this subparagraph for any calendar year after 2012 shall be equal to the product of the amount in effect under clause (i) with respect to calendar year 2012 and the quotient obtained by dividing—
the national average wage index (as defined in section 209(k)(1)) for the second calendar year preceding the calendar year for which the determination is being made, by
the national average wage index (as so defined) for 2010.
The amount established under this subparagraph for any calendar year shall be rounded to the nearest $1, except that any amount so established which is a multiple of $0.50 but not of $1 shall be rounded to the next higher $1.
Except as provided in clause (ii), in the case of any calendar year after 2011, each of the percentages to which this subparagraph applies by reason of clauses (iii) or (iv) of subparagraph (A) shall be a percentage equal to such percentage multiplied by the quotient obtained by dividing—
the difference of the maximum CPI-indexed benefit amount for such year over the amount determined under this paragraph for an individual whose average indexed monthly earnings are equal to the amount established for purposes of subparagraph (A)(ii) for such year, by
the difference of the maximum wage-indexed benefit amount for such year over the amount determined under this paragraph for an individual whose average indexed monthly earnings are equal to the amount established for purposes of subparagraph (A)(ii) for such year.
In the case of any calendar year which is a positive balance year, clause (i) shall not apply and each of the percentages to which this subparagraph applies by reason of clause (iii) or (iv) of subparagraph (B) shall be a percentage equal to the percentage determined under this subparagraph for the preceding year (determined after the application of this subparagraph).
In the case of any calendar year
after a positive balance year which is not a positive balance year, this
subparagraph shall be applied by substituting the second calendar year
preceding the most recent positive balance year
for 2009
each place it appears in clause (iv).
For purposes of clause (i), the maximum wage-indexed benefit amount for any calendar year shall be equal to the amount determined under this paragraph (determined without regard to any reduction under this subparagraph) for an individual with wages paid in and self-employment income credited to each computation base year in an amount equal to the contribution and benefit base for each calendar year.
For purposes of clause (i), the maximum CPI-indexed benefit amount for any calendar year shall be an amount equal to the amount determined under clause (iii) for such year multiplied by a fraction—
the numerator of which is the ratio (rounded to the nearest one-thousandth of 1 percent) of the Consumer Price Index for the second preceding year to such index for 2009; and
the denominator of which is the ratio (rounded to the nearest one-thousandth of 1 percent) of the national wage index (as defined in section 209(k)(1)) for the second year preceding such year to such index for 2009.
For purposes of clause (i), a positive balance year is a calendar year following any calendar year after 2050 for which the Chief Actuary of the Social Security Administration certifies to the Secretary of the Treasury and the Congress that the combined balance ratio of the Federal Old-Age and Survivors Trust Fund and the Federal Disability Insurance Trust Fund is not less than 100 percent for such year.
For purposes of subclause (I), the combined balance ratio of the Federal Old-Age and Survivors Trust Fund and the Federal Disability Insurance Trust Fund for any calendar year is the ratio of the combined balance of such Trust Funds as of the last day of such calendar year (reduced by any transfer made pursuant to section 201(o) in such calendar year) to the amount estimated by the Commissioner of Social Security under section 201(l)(3)(B)(iii)(II) to be paid from such Trust Funds during the calendar year following such calendar year for all purposes authorized by section 201 (determined as if such following calendar year were a positive balance year).
For purposes of this paragraph, rules similar to the rules of subparagraphs (C) and (D) of paragraph (1) shall apply.
For purposes of this paragraph, the term applicable benefit means any benefit under section 202 other than—
a child's insurance benefit under section 202(d) with respect to a child of an individual who has died;
a widow's insurance benefit under section 202(e) with respect to a widow who has not attained age 60 and is under a disability (as defined in section 223(d)) which began before the end of the period specified in section 202(e)(4);
a widower's insurance benefit under section 202(f) with respect to a widower who has not attained age 60 and is under a disability (as defined in section 223(d)) which began before the end of the period specified in section 202(f)(4); and
a mother's and father's insurance benefit under section 202(g).
.
Conforming amendments
Subsections
(e)(2)(B)(i)(I) and (f)(2)(B)(i)(I) of section 202 of the Social Security Act
are each amended by inserting or section 215(a)(2)(B)(iii)
after
section 215(a)(1)(B)(i) and (ii)
.
Section 203(a)(1) of such Act is amended—
in subparagraph
(A)(i), by striking 215(a)(2)(B)(i)
and inserting
215(a)(3)(B)(i)
;
in subparagraph
(A)(ii), by striking 215(a)(2)(C)
and inserting
215(a)(3)(C)
; and
in subparagraph
(B)(ii), by striking 215(a)(2)
and inserting
215(a)(3)
.
Section 209(k)(1) of such Act is amended by
inserting 215(a)(2)(B), 215(a)(2)(C),
after
215(a)(1)(D),
.
Section 215(a) of such Act is amended—
in paragraph
(4)(A), as redesignated by paragraph (2), by striking paragraph
(4)
and inserting paragraph (5)
;
in paragraph
(4)(B), as redesignated by paragraph (2), by striking paragraph
(2)(A)
and inserting paragraph (3)(A)
;
in paragraph (5),
as redesignated by paragraph (2), by striking paragraph (3)(A)
and inserting paragraph (4)(A)
;
in paragraph
(6)(A), as redesignated by paragraph (2), by striking paragraph
(4)(B)
and inserting paragraph (5)(B)
; and
in paragraph
(8)(B)(ii)(I), as redesignated by paragraph (2), by striking paragraph
(3)(B)
and inserting paragraph (4)(B)
.
Section 215(d)(3) of such Act is amended—
by striking
paragraph (4)(B)(ii)
and inserting paragraph
(5)(B)(ii)
; and
by striking
subsection (a)(7)(C)
and inserting subsection
(a)(8)(C)
.
Subsection 215(f) of such Act is amended—
in paragraph
(2)(B), by striking subsection (a)(4)(B)
and inserting
subsection (a)(5)(B)
;
in paragraph (7),
by striking subsection (a)(6)
and inserting subsection
(a)(7)
;
in paragraph (9)(A)—
by
striking subsection (a)(7)(A)
and inserting subsection
(a)(8)(A)
; and
by
striking subsection (a)(7)(C)
and inserting subsection
(a)(8)(C)
; and
in paragraph
(9)(B), by striking subsection (a)(7)
each place it appears and
inserting subsection (a)(8)
.
Modification of PIA factors to reflect changes in life expectancy
Modification
In general
Section 215(a)(2) of the Social Security Act (42 U.S.C. 415(a)(2)), as added by this Act, is amended by redesignating subparagraphs (D) and (E) as subparagraphs (E) and (F), respectively, and by inserting after subparagraph (C) the following new subparagraph:
For individuals who initially become eligible for old-age insurance benefits (or who die before becoming eligible for such benefits) in any calendar year after 2017, each of the percentages used for purposes of clauses (i), (ii), (iii), and (iv) of subparagraph (A) (after the application of subparagraph (C) in the case of subclauses (iii) and (iv) of subparagraph (A)) shall be multiplied by the life expectancy ratio for such calendar year.
The Commissioner of Social Security shall, through the Chief Actuary of the Social Security Administration, using generally accepted actuarial principles, determine and publish in the Federal Register on or before November 1 of each calendar year the life expectancy ratio for the following calendar year.
For purposes of this subparagraph, the life expectancy ratio for any calendar year is the ratio of—
the period life expectancy based on the computed death rates for 2013 of an individual at age 67, to
the period life expectancy of an individual at such age based on the computed death rates for the fourth calendar year preceding the calendar year for which the life expectancy ratio is determined under clause (ii).
.
Conforming amendment
Clauses (iii) and (iv) of section 215(a)(2)(A) of the
Social Security Act, as added by this Act, are each amended by striking
subparagraph (C)
and inserting subparagraphs (C) and
(F)
.
Study regarding life expectancy of disabled beneficiaries
In general
The Commissioner of Social Security shall conduct a study on the feasibility of creating a separate life expectancy ratio under section 215(a)(2)(D) of the Social Security Act for individuals attaining early retirement age who are receiving disability insurance benefits under title II of such Act on the date the individual attains such age.
Report
Not later than 1 year after the date of the enactment of this Act, the Commissioner shall submit to Congress a report on the results of the study under paragraph (1).
Treatment of disabled beneficiaries
Section 215(a) of the Social Security Act (42 U.S.C. 415(a)), as amended by sections 2 and 3, is amended by adding at the end the following new paragraph:
Notwithstanding the preceding provisions of this subsection, in the case of an individual who has or has had a period of disability and who initially becomes eligible for old-age insurance benefits or who dies (before becoming eligible for such benefits) in any calendar year in or after 2012, the primary insurance amount of such individual shall be the sum of—
the amount determined under subparagraph (B); and
the product derived by multiplying—
the excess of the amount determined under subparagraph (C) over the amount determined under subparagraph (B), by
the adjustment factor for such individual determined under subparagraph (D).
The amount determined under this subparagraph is the amount of such individual’s primary insurance amount as determined under this section without regard to this paragraph.
The amount determined under this subparagraph is the amount of such individual’s primary insurance amount as determined under this section as in effect with respect to individuals becoming eligible for old-age or disability insurance benefits under section 202(a) in 2008.
The adjustment factor determined under this subparagraph for any individual is the ratio (not greater than 1) of—
the total number of months during which such individual is under a disability (as defined in section 223(d)) during the period beginning on the date the individual attains age 22 and ending on the first day of such individual’s first month of eligibility for old-age insurance benefits under section 202(a) (or, if earlier, the month of such individual’s death), to
the number of months during the period beginning on the date the individual attains age 22 and ending on the first day of such individual’s first month of eligibility for old-age insurance benefits under section 202(a) (or, if earlier, the month of such individual’s death).
.
Acceleration of increase in retirement age
Increase in retirement age to 67
Section 216(l)(1) of the Social Security Act (42 U.S.C. 416(l)(1)) is amended—
in subparagraph
(C), by striking 2017
and inserting 2012
;
in subparagraph
(D), by striking after December 31, 2016 and before January 1,
2022
and inserting after December 31, 2011 and before January 1,
2017
; and
in subparagraph
(E), by striking 2021
and inserting 2016
.
Conforming amendment
Subparagraph (B) of section 216(l)(3) of the Social Security Act (42 U.S.C. 416(l)(3)(B)) is amended—
by striking
calendar years 2017 through 2021
and inserting calendar
years 2012 through 2016
; and
by striking
January 2017
and inserting January 2012
.
Maintenance of adequate balances in the Social Security trust funds
In General
Section 201 of the Social Security Act (42 U.S.C. 401) is amended by adding at the end the following new subsection:
In addition to amounts otherwise appropriated under the preceding provisions of this section to the Trust Funds established under this section, there is hereby appropriated for each fiscal year to each of such Trust Funds, from amounts in the general fund of the Treasury not otherwise appropriated, such sums as may be necessary from time to time to maintain the balance ratio (as defined in section 709(b)) of such Trust Fund, for the calendar year commencing during such fiscal year, at not less than 100 percent. The sums to be appropriated under the preceding sentence shall be determined by the Commissioner of Social Security and certified by the Commissioner to each House of the Congress not later than October 1 of such fiscal year. In making such determination and certification, the Commissioner shall use the intermediate actuarial assumptions used by the Board of Trustees of the Trust Funds in its most recent annual report to the Congress prepared pursuant to subsection (c)(2). The Commissioner shall also transmit a copy of any such certification to the Secretary of the Treasury, and upon receipt thereof, such Secretary shall promptly take appropriate actions in accordance with the certification.
.
Effective Date
The amendment made by subsection (a) shall apply with respect to fiscal years beginning after the date of the enactment of this Act.