H.R.1793 - 21st Century Retirement Act106th Congress (1999-2000)
Summary: H.R.1793 — 106th Congress (1999-2000)
21st Century Retirement Act - Amends title II (Old Age, Survivors and Disability Insurance) (OASDI) of the Social Security Act (SSA) to: (1) add a new part B (Individual Security Accounts); and (2) redesignate the current OASDI program under such title as a new part A (Insurance Benefits). Requires the Commissioner of Social Security (Commissioner) to establish an individual security account (ISA) for each individual who is either employed or self-employed and who was born after December 31, 1944 (eligible individual). Identifies the eligible individual's ISA via the individual's social security number. Requires each eligible individual (or, if need be, the Commissioner) to designate the investment type of ISA to which the Commissioner shall credit the contributions transferred by the Secretary of the Treasury from the Federal Old-Age and Survivors Insurance Trust Fund (Trust Fund) that result from the reduced Federal Insurance Contributions Act (FICA) tax rates (as provided for in this Act), as well as other specified contributions involving certain tax overpayments treated as contributions and certain rollovers (as provided in this Act). Requires investment of an ISA in a manner similar to that under the Thrift Savings Plan for Federal employees. Prescribes rules for the distribution of an eligible individual's ISA's funds, as well as rules for the off-budget treatment of ISAs.
Introduced in House (05/13/1999)
(Sec. 2) Establishes in the Treasury an Individual Security Fund composed of all established ISAs, and managed by an Individual Security Fund Board. Directs the Board to study and report to the President and Congress on ways to increase an eligible individual's ISA's investment options, especially with respect to ISA rollovers or distributions.
Amends the Internal Revenue Code (IRC) to reduce FICA tax rates on the income of every eligible individual, as well as to impose an ISA contribution on such income, computed according to a specified formula, for crediting to the eligible individual's ISA. Maintains the current FICA tax rates for every individual who is not an eligible individual covered under new SSA title II part B.
Entitles each eligible individual to a specified limited ISA tax credit for the taxable year involved, treated as a tax overpayment, to be transferred by the Secretary for crediting by the Commissioner, as a contribution equal to the tax overpayment, to such eligible individual's ISA for its sole use.
Outlines further similar IRC contribution measures involving contributions based on the earned income tax credit, as well as measures involving the tax treatment of eligible individual ISAs, generally exempting them from income taxation; but including any ISA distribution in gross income for annuity-related purposes, while excluding rollovers.
(Sec. 3) Amends SSA title II new part A to establish a new minimum monthly social security benefit, as adjusted according to the new reduced Consumer Price Index (CPI) increase percentage established by this Act, for certain low-income part A beneficiaries who initially become eligible for OASDI benefits, or who die before becoming eligible for such benefits, after December 31, 2005, and who have at least 80 quarters of coverage. Eliminates the limitation on the amount of outside income (earnings test) which part A beneficiaries who have attained the appropriate retirement age as established by this Act may earn without incurring a reduction in benefits.
(Sec. 5) Amends the Social Security Amendments of 1983, as amended by the Omnibus Budget Reconciliation Act of 1993, to provide for a phased-in reduction to zero, beginning after 2009, of the subtrahend in the formula for certain transfers to the Federal Hospital Insurance Trust Fund under part A (Hospital Insurance) of the Medicare program (SSA title XVIII).
(Sec. 6) Amends SSA title II to provide for the following with regard to the computation of the primary insurance amount: (1) a new formula for determining an individual's average indexed monthly earnings; and (2) a change in the formula for computing the number of an individual's benefit computation years in the case of an individual who is entitled to old-age insurance benefits (with certain current law exceptions still applicable) or in the case of an individual who has died. Provides for a graduated increase in the early and delayed retirement credits under old-age, wife's, husband's, widow's, or widower's insurance benefits provisions.
(Sec. 8) Directs the Commissioner of the Bureau of Labor Statistics (BLS) to publish annually in the Federal Register an estimate of: (1) the number of percentage points by which the annual rate of change in the CPI (achieved substitution bias) is reduced below the rate it would otherwise have attained because of adjustments in the CPI's determination instituted by BLS after December 31, 1998; and (2) the upper level substitution bias retained in the CPI.
Makes appropriations to BLS for: (1) research, evaluation, and implementation of a superlative index to estimate such upper level substitution bias in the CPI; (2) expansion of the Consumer Expenditure Survey and the Point of Purchase Survey; and (3) implementation of revisions to the CPI with respect to SSA title II programs.
Directs BLS to establish an administrative advisory committee to advise it periodically on CPI revisions, and to conduct research and experimentation with alternative data collection and estimating approaches.
Amends SSA title II to revise requirements for determining the cost-of-living increases in primary insurance amounts, redefining CPI increase percentage to provide for an outlined limitation on such increases based on the CPI.
Ties such revision for determining the CPI increase percentage to the relevant indexes used for determining similar annual increases for other specified Federal benefits (including civil service retirement benefits, armed forces retired and retainer pay, and workers' compensation benefits) generally, incorporating BLS's achieved substitution bias correction for instance, and applies a reduced CPI for use under IRC.
Directs the Secretary to transfer, from the Treasury's general fund to the Trust Fund, for each calendar year after 1999, a specified graduated applicable percentage for the year involved of the total wages paid in, and self-employment income credited to, such year.
(Sec. 9) Prescribes an adjustment to the upper two benefit formula factors.
(Sec. 10) Amends SSA title II to phase-in an increase in social security normal and early retirement ages, requiring specified incremental increases in both retirement ages after 2011.
(Sec. 11) Directs the Commissioner to: (1) submit to Congress a study plan on the effects of increased life expectancy on the expected level of retirement income from social security, pensions, and other sources; and (2) provide to Congress an evaluation of such study plan, along with any appropriate recommendations, on whether increased life expectancy requires modification of the disability insurance program under SSA title II and other income support programs.
(Sec. 12) Amends SSA title VII (Administration) to outline a new mechanism for ensuring solvency in the Federal Old-Age and Survivors Insurance Trust Fund and the Federal Disability Insurance Trust Fund (social security trust funds) through Trust Funds Board of Trustees (Board) oversight of the balance ratio of either social security trust fund. Requires the Board to report recommendations to Congress and the President on any statutory adjustments necessary to maintain a balance ratio of either trust fund at not less than 20 percent if the Board determines that the balance ratio of either fund for any calendar year during the succeeding 75 years will be zero, with due regard to the economic conditions that created such inadequacy in the balance ratio, and the amount of time necessary to alleviate it in a prudent manner. Requires such report also to specify the extent to which benefits would have to be reduced, taxes would have to be increased, or a combination thereof, to obtain the desired objectives. Requires the Board also to recommend statutory adjustments to the disability insurance program under SSA title II to modify the changes in disability benefits under the Strengthening Social Security Act of 1998 without reducing the balance ratio of the Federal Disability Insurance Trust Fund. Prescribes procedures for presidential review, disapproval, and approval of reported Board recommendations as well as procedures for congressional consideration of presidential recommendations based on recommendations of the Board.