Text: H.R.539 — 112th Congress (2011-2012)

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[Congressional Bills 112th Congress]
[From the U.S. Government Printing Office]
[H.R. 539 Introduced in House (IH)]

112th CONGRESS
  1st Session
                                H. R. 539

 To amend title II of the Social Security Act and the Internal Revenue 
   Code of 1986 to make improvements in the old-age, survivors, and 
disability insurance program, to provide for cash relief for years for 
   which annual COLAs do not take effect under certain cash benefit 
    programs, and to provide for Social Security benefit protection.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                            February 8, 2011

 Mr. Deutch (for himself, Mr. Frank of Massachusetts, Mr. Hastings of 
Florida, Mr. Carnahan, Ms. Pingree of Maine, and Mr. Critz) introduced 
  the following bill; which was referred to the Committee on Ways and 
     Means, and in addition to the Committees on Education and the 
  Workforce, Rules, Transportation and Infrastructure, and Veterans' 
Affairs, for a period to be subsequently determined by the Speaker, in 
   each case for consideration of such provisions as fall within the 
                jurisdiction of the committee concerned

_______________________________________________________________________

                                 A BILL


 
 To amend title II of the Social Security Act and the Internal Revenue 
   Code of 1986 to make improvements in the old-age, survivors, and 
disability insurance program, to provide for cash relief for years for 
   which annual COLAs do not take effect under certain cash benefit 
    programs, and to provide for Social Security benefit protection.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE AND TABLE OF CONTENTS.

    (a) Short Title.--This Act may cited as the ``Preserving Our 
Promise to Seniors Act''.
    (b) Table of Contents.--The table of contents of this Act is as 
follows:

Sec. 1. Short title and table of contents.
                   TITLE I--COST-OF-LIVING INCREASES

Sec. 101. Consumer price index for elderly consumers.
Sec. 102. Computation of cost-of-living increases.
               TITLE II--GUARANTEED SUPPLEMENTAL PAYMENT

Sec. 201. Relief payments to recipients of social security, 
                            supplemental security income, railroad 
                            retirement benefits, and veterans 
                            disability compensation or pension 
                            benefits.
              TITLE III--CONTRIBUTION AND BENEFIT FAIRNESS

Sec. 301. Determination of wages and self-employment income above 
                            contribution and benefit base after 2011.
Sec. 302. Inclusion of surplus earnings in social security benefit 
                            formula.
              TITLE IV--SOCIAL SECURITY BENEFIT PROTECTION

Sec. 401. Point of order against privatization of Social Security or 
                            reductions in Social Security benefits.

                   TITLE I--COST-OF-LIVING INCREASES

SEC. 101. CONSUMER PRICE INDEX FOR ELDERLY CONSUMERS.

    (a) In General.--The Bureau of Labor Statistics of the Department 
of Labor shall prepare and publish an index for each calendar month to 
be known as the ``Consumer Price Index for Elderly Consumers'' that 
indicates changes over time in expenditures for consumption which are 
typical for individuals in the United States who are 62 years of age or 
older.
    (b) Effective Date.--Subsection (a) shall apply with respect to 
calendar months ending on or after July 31 of the calendar year 
following the calendar year in which this Act is enacted.
    (c) Authorization of Appropriations.--There are authorized to be 
appropriated such sums as are necessary to carry out the provisions of 
this section.

SEC. 102. COMPUTATION OF COST-OF-LIVING INCREASES.

    (a) In General.--Section 215(i) of the Social Security Act (42 
U.S.C. 415(i)) is amended--
            (1) in paragraph (1)(G), by inserting before the period the 
        following: ``, and, solely with respect to any monthly 
        insurance benefit payable under this title to an individual who 
        has attained age 62, effective for adjustments under this 
        subsection to the primary insurance amount on which such 
        benefit is based (or to any such benefit under section 227 or 
        228) occurring after such individual attains such age, the 
        applicable Consumer Price Index shall be deemed to be the 
        Consumer Price Index for Elderly Consumers and such primary 
        insurance amount shall be deemed adjusted under this subsection 
        using such Index''; and
            (2) in paragraph (4), by striking ``and by section 9001'' 
        and inserting ``, by section 9001'', and by inserting after 
        ``1986,'' the following: ``and by section 102 of the Preserving 
        Our Promise to Seniors Act,''.
    (b) Conforming Amendments in Applicable Former Law.--Section 
215(i)(1)(C) of such Act, as in effect in December 1978 and applied in 
certain cases under the provisions of such Act in effect after December 
1978, is amended by inserting before the period the following: ``, and, 
solely with respect to any monthly insurance benefit payable under this 
title to an individual who has attained age 62, effective for 
adjustments under this subsection to the primary insurance amount on 
which such benefit is based (or to any such benefit under section 227 
or 228) occurring after such individual attains such age, the 
applicable Consumer Price Index shall be deemed to be the Consumer 
Price Index for Elderly Consumers and such primary insurance amount 
shall be deemed adjusted under this subsection using such Index''.
    (c) Effective Date.--The amendments made by subsection (a) shall 
apply to determinations made with respect to cost-of-living computation 
quarters (as defined in section 215(i)(1)(B) of the Social Security Act 
(42 U.S.C. 415(i)(1)(B))) ending on or after September 30 of the second 
calendar year following the calendar year in which this Act is enacted.

               TITLE II--GUARANTEED SUPPLEMENTAL PAYMENT

SEC. 201. RELIEF PAYMENTS TO RECIPIENTS OF SOCIAL SECURITY, 
              SUPPLEMENTAL SECURITY INCOME, RAILROAD RETIREMENT 
              BENEFITS, AND VETERANS DISABILITY COMPENSATION OR PENSION 
              BENEFITS.

    (a) Authority To Make Payments.--
            (1) Eligibility.--
                    (A) In general.--The Secretary of the Treasury 
                shall disburse a cash payment equal to $250 (or such 
                greater amount as may take effect under paragraph (2)), 
                for each non-COLA year of a program providing benefit 
                payments described in clause (i), (ii), or (iii) of 
                subparagraph (C) or in subparagraph (D), to each 
                individual who, for any month during such year, is 
                entitled to such a benefit payment under such program.
                    (B) Non-cola year.--For purposes of this section, 
                the term ``non-COLA year'' means, in connection with a 
                program referred to in subparagraph (A), a 12-month 
                period, ending with or during any calendar year after 
                2009, for which--
                            (i) a cost-of-living adjustment is 
                        generally provided under such program in 
                        relation to an index; and
                            (ii) such an adjustment does not take 
                        effect by reason of the performance of such 
                        index.
                    (C) Benefit payment described.--For purposes of 
                subparagraph (A):
                            (i) Title ii benefit.--A benefit payment 
                        described in this clause is a monthly insurance 
                        benefit payable (without regard to sections 
                        202(j)(1) and 223(b) of the Social Security Act 
                        (42 U.S.C. 402(j)(1), 423(b)) under--
                                    (I) section 202(a) of such Act (42 
                                U.S.C. 402(a));
                                    (II) section 202(b) of such Act (42 
                                U.S.C. 402(b));
                                    (III) section 202(c) of such Act 
                                (42 U.S.C. 402(c));
                                    (IV) section 202(d)(1)(B)(ii) of 
                                such Act (42 U.S.C. 402(d)(1)(B)(ii));
                                    (V) section 202(e) of such Act (42 
                                U.S.C. 402(e));
                                    (VI) section 202(f) of such Act (42 
                                U.S.C. 402(f));
                                    (VII) section 202(g) of such Act 
                                (42 U.S.C. 402(g));
                                    (VIII) section 202(h) of such Act 
                                (42 U.S.C. 402(h));
                                    (IX) section 223(a) of such Act (42 
                                U.S.C. 423(a));
                                    (X) section 227 of such Act (42 
                                U.S.C. 427); or
                                    (XI) section 228 of such Act (42 
                                U.S.C. 428).
                            (ii) Railroad retirement benefit.--A 
                        benefit payment described in this clause is a 
                        monthly annuity or pension payment payable 
                        (without regard to section 5(a)(ii) of the 
                        Railroad Retirement Act of 1974 (45 U.S.C. 
                        231d(a)(ii))) under--
                                    (I) section 2(a)(1) of such Act (45 
                                U.S.C. 231a(a)(1));
                                    (II) section 2(c) of such Act (45 
                                U.S.C. 231a(c));
                                    (III) section 2(d)(1)(i) of such 
                                Act (45 U.S.C. 231a(d)(1)(i));
                                    (IV) section 2(d)(1)(ii) of such 
                                Act (45 U.S.C. 231a(d)(1)(ii));
                                    (V) section 2(d)(1)(iii)(C) of such 
                                Act to an adult disabled child (45 
                                U.S.C. 231a(d)(1)(iii)(C));
                                    (VI) section 2(d)(1)(iv) of such 
                                Act (45 U.S.C. 231a(d)(1)(iv));
                                    (VII) section 2(d)(1)(v) of such 
                                Act (45 U.S.C. 231a(d)(1)(v)); or
                                    (VIII) section 7(b)(2) of such Act 
                                (45 U.S.C. 231f(b)(2)) with respect to 
                                any of the benefit payments described 
                                in clause (i) of this subparagraph.
                            (iii) Veterans benefit.--A benefit payment 
                        described in this clause is a compensation or 
                        pension payment payable under--
                                    (I) section 1110, 1117, 1121, 1131, 
                                1141, or 1151 of title 38, United 
                                States Code;
                                    (II) section 1310, 1312, 1313, 
                                1315, 1316, or 1318 of title 38, United 
                                States Code;
                                    (III) section 1513, 1521, 1533, 
                                1536, 1537, 1541, 1542, or 1562 of 
                                title 38, United States Code; or
                                    (IV) section 1805, 1815, or 1821 of 
                                title 38, United States Code,
                        to a veteran, surviving spouse, child, or 
                        parent as described in paragraph (2), (3), 
                        (4)(A)(ii), or (5) of section 101, title 38, 
                        United States Code, who received that benefit 
                        during any month within the 3 month period 
                        ending with the month which ends prior to the 
                        month that includes the date of the enactment 
                        of this Act.
                    (D) SSI cash benefit described.--A SSI cash benefit 
                described in this subparagraph is a cash benefit 
                payable under section 1611 (other than under subsection 
                (e)(1)(B) of such section) or 1619(a) of the Social 
                Security Act (42 U.S.C. 1382, 1382h).
            (2) Cost-of-living adjustment to payment.--
                    (A) In general.--Effective for each 12-month period 
                referred to in paragraph (1)(B)(i) in connection with a 
                program referred to in paragraph (1)(A) (irrespective 
                of whether such period is a non-COLA year) ending with 
                or during a calendar year after 2011, the dollar amount 
                determined under this paragraph shall be substituted 
                for the dollar amount specified in paragraph (1)(A). 
                The dollar amount shall be determined by multiplying 
                the dollar amount specified in paragraph (1)(A) by the 
                quotient obtained by dividing--
                            (i) the Consumer Price Index for Elderly 
                        Consumers (published by the Bureau of Labor 
                        Statistics of the Department of Labor) for the 
                        calendar quarter ending with September 
                        preceding the 12-month period for which the 
                        determination is made, by
                            (ii) such Index for the calendar quarter 
                        ending with September 2010.
                    (B) Determination of quarterly index.--For purposes 
                of subparagraph (A), the Consumer Price Index for 
                Elderly Consumers for a calendar quarter shall be the 
                arithmetical mean of such index for the 3 months in 
                such quarter.
            (3) Requirement.--A payment shall be made under paragraph 
        (1) only to individuals who reside in 1 of the 50 States, the 
        District of Columbia, Puerto Rico, Guam, the United States 
        Virgin Islands, American Samoa, or the Northern Mariana 
        Islands. For purposes of the preceding sentence, the 
        determination of the individual's residence shall be based on 
        the current address of record under a program specified in 
        paragraph (1).
            (4) No double payments.--An individual shall be paid only 1 
        payment under this section, regardless of whether the 
        individual is entitled to, or eligible for, more than 1 benefit 
        or cash payment described in paragraph (1).
            (5) Limitation.--A payment under this section shall not be 
        made--
                    (A) in the case of an individual entitled to a 
                benefit specified in paragraph (1)(C)(i) or paragraph 
                (1)(C)(ii)(VIII) if, for the most recent month of such 
                individual's entitlement in the 3-month period 
                described in paragraph (1), such individual's benefit 
                under such paragraph was not payable by reason of 
                subsection (x) or (y) of section 202 of the Social 
                Security Act (42 U.S.C. 402) or section 1129A of such 
                Act (42 U.S.C. 1320a-8a);
                    (B) in the case of an individual entitled to a 
                benefit specified in paragraph (1)(C)(iii) if, for the 
                most recent month of such individual's entitlement in 
                the 3 month period described in paragraph (1), such 
                individual's benefit under such paragraph was not 
                payable, or was reduced, by reason of section 1505, 
                5313, or 5313B of title 38, United States Code;
                    (C) in the case of an individual entitled to a 
                benefit specified in paragraph (1)(D) if, for such most 
                recent month, such individual's benefit under such 
                paragraph was not payable by reason of subsection 
                (e)(1)(A) or (e)(4) of section 1611 (42 U.S.C. 1382) or 
                section 1129A of such Act (42 U.S.C. 1320a-8a); or
                    (D) in the case of any individual whose date of 
                death occurs before the date on which the individual is 
                certified under subsection (b) to receive a payment 
                under this section.
            (6) Timing and manner of payments.--The Secretary of the 
        Treasury shall commence disbursing payments under this section 
        with respect to a non-COLA year at the earliest practicable 
        date but in no event later than 120 days after the later of the 
        date of the enactment of this Act or the end of such non-COLA 
        year. The Secretary of the Treasury may disburse any payment 
        electronically to an individual in such manner as if such 
        payment was a benefit payment or cash benefit to such 
        individual under the applicable program described in 
        subparagraph (C) or (D) of paragraph (1).
    (b) Identification of Recipients.--The Commissioner of Social 
Security, the Railroad Retirement Board, and the Secretary of Veterans 
Affairs shall certify the individuals entitled to receive payments 
under this section and provide the Secretary of the Treasury with the 
information needed to disburse such payments. A certification of an 
individual shall be unaffected by any subsequent determination or 
redetermination of the individual's entitlement to, or eligibility for, 
a benefit specified in subparagraph (C) or (D) of subsection (a)(1).
    (c) Treatment of Payments.--
            (1) Payment to be disregarded for purposes of all federal 
        and federally assisted programs.--A payment under subsection 
        (a) shall not be regarded as income and shall not be regarded 
        as a resource for the month of receipt and the following 9 
        months, for purposes of determining the eligibility of the 
        recipient (or the recipient's spouse or family) for benefits or 
        assistance, or the amount or extent of benefits or assistance, 
        under any Federal program or under any State or local program 
        financed in whole or in part with Federal funds.
            (2) Payment not considered income for purposes of 
        taxation.--A payment under subsection (a) shall not be 
        considered as gross income for purposes of the Internal Revenue 
        Code of 1986.
            (3) Payments protected from assignment.--The provisions of 
        sections 207 and 1631(d)(1) of the Social Security Act (42 
        U.S.C. 407, 1383(d)(1)), section 14(a) of the Railroad 
        Retirement Act of 1974 (45 U.S.C. 231m(a)), and section 5301 of 
        title 38, United States Code, shall apply to any payment made 
        under subsection (a) as if such payment was a benefit payment 
        or cash benefit to such individual under the applicable program 
        described in subparagraph (C) or (D) of subsection (a)(1).
            (4) Payments subject to offset.--Notwithstanding paragraph 
        (3), for purposes of section 3716 of title 31, United States 
        Code, any payment made under this section shall not be 
        considered a benefit payment or cash benefit made under the 
        applicable program described in subparagraph (C) or (D) of 
        subsection (a)(1) and all amounts paid shall be subject to 
        offset to collect delinquent debts.
    (d) Payment to Representative Payees and Fiduciaries.--
            (1) In general.--In any case in which an individual who is 
        entitled to a payment under subsection (a) and whose benefit 
        payment or cash benefit described in paragraph (1) of that 
        subsection is paid to a representative payee or fiduciary, the 
        payment under subsection (a) shall be made to the individual's 
        representative payee or fiduciary and the entire payment shall 
        be used only for the benefit of the individual who is entitled 
        to the payment.
            (2) Applicability.--
                    (A) Payment on the basis of a title ii or ssi 
                benefit.--Section 1129(a)(3) of the Social Security Act 
                (42 U.S.C. 1320a-8(a)(3)) shall apply to any payment 
                made on the basis of an entitlement to a benefit 
                specified in paragraph (1)(C)(i) or (1)(D) of 
                subsection (a) in the same manner as such section 
                applies to a payment under title II or XVI of such Act.
                    (B) Payment on the basis of a railroad retirement 
                benefit.--Section 13 of the Railroad Retirement Act (45 
                U.S.C. 231l) shall apply to any payment made on the 
                basis of an entitlement to a benefit specified in 
                paragraph (1)(C)(ii) of subsection (a) in the same 
                manner as such section applies to a payment under such 
                Act.
                    (C) Payment on the basis of a veterans benefit.--
                Sections 5502, 6106, and 6108 of title 38, United 
                States Code, shall apply to any payment made on the 
                basis of an entitlement to a benefit specified in 
                paragraph (1)(C)(iii) of subsection (a) in the same 
                manner as those sections apply to a payment under that 
                title.
    (e) Appropriation.--Out of any sums in the Treasury of the United 
States not otherwise appropriated, the following sums are appropriated 
for each fiscal year beginning on or after October 1, 2011, to remain 
available until expended, to carry out this section:
            (1) For the Secretary of the Treasury, such sums as may be 
        necessary for administrative costs incurred in carrying out 
        this section.
            (2) For the Commissioner of Social Security--
                    (A) such sums as may be necessary for payments to 
                individuals certified by the Commissioner of Social 
                Security as entitled to receive a payment under this 
                section; and
                    (B) such sums as may be certified by the 
                Commissioner to the Secretary of the Treasury for the 
                Social Security Administration's Limitation on 
                Administrative Expenses as necessary for administrative 
                costs incurred in carrying out this section.
            (3) For the Railroad Retirement Board--
                    (A) such sums as may be necessary for payments to 
                individuals certified by the Railroad Retirement Board 
                as entitled to receive a payment under this section; 
                and
                    (B) such sums as may be certified by the Board to 
                the Secretary of the Treasury for the Railroad 
                Retirement Board's Limitation on Administration as 
                necessary for administrative costs incurred in carrying 
                out this section.
            (4)(A) For the Secretary of Veterans Affairs--
                            (i) such sums as may be necessary for the 
                        Compensation and Pensions account, for payments 
                        to individuals certified by the Secretary of 
                        Veterans Affairs as entitled to receive a 
                        payment under this section; and
                            (ii) such sums as may be certified by the 
                        Secretary of Veterans Affairs to the Secretary 
                        of the Treasury for the Information Systems 
                        Technology account and for the General 
                        Operating Expenses account as necessary for 
                        administrative costs incurred in carrying out 
                        this section.
            (B) The Department of Veterans Affairs Compensation and 
        Pensions account shall hereinafter be available for payments 
        authorized under subsection (a)(1)(A) to individuals entitled 
        to a benefit payment described in subsection (a)(1)(C)(iii).

              TITLE III--CONTRIBUTION AND BENEFIT FAIRNESS

SEC. 301. DETERMINATION OF WAGES AND SELF-EMPLOYMENT INCOME ABOVE 
              CONTRIBUTION AND BENEFIT BASE AFTER 2011.

    (a) Determination of Wages Above Contribution and Benefit Base 
After 2011.--
            (1) Amendments to the internal revenue code of 1986.--
        Section 3121 of the Internal Revenue Code of 1986 is amended--
                    (A) in subsection (a)(1), by inserting ``the 
                applicable percentage (determined under subsection 
                (c)(1)) of'' before ``that part of the remuneration''; 
                and
                    (B) in subsection (c), by striking ``(c) Included 
                and Excluded Service.--For purposes of this chapter, 
                if'' and inserting the following:
    ``(c) Special Rules for Wages and Employment.--
            ``(1) Applicable percentage of remuneration in determining 
        wages.--For purposes of paragraph (1) of subsection (a), the 
        applicable percentage for a calendar year, in connection with 
        any calendar year referred to in such subparagraph, shall be 
        the percentage determined in accordance with the following 
        table:


------------------------------------------------------------------------
                                                                  The
                                                              applicable
                      ``In the case of:                       percentage
                                                                  is:
------------------------------------------------------------------------
Calendar year 2012..........................................         86%
Calendar year 2013..........................................         71%
Calendar year 2014..........................................         57%
Calendar year 2015..........................................         43%
Calendar year 2016..........................................         29%
Calendar year 2017..........................................         14%
Calendar years after 2017...................................         0%.
------------------------------------------------------------------------

            ``(2) Included and excluded service.--For purposes of this 
        chapter, if''.
            (2) Amendments to the social security act.--Section 209 of 
        the Social Security Act (42 U.S.C. 409) is amended--
                    (A) in subsection (a)(1)(I)--
                            (i) by inserting ``and before 2012'' after 
                        ``1974''; and
                            (ii) by inserting ``and'' after the 
                        semicolon;
                    (B) in subsection (a)(1), by adding at the end the 
                following new subparagraph:
                    ``(J) The applicable percentage (determined under 
                subsection (l)) of that part of remuneration which, 
                after remuneration (other than remuneration referred to 
                in the succeeding subsections of this section) equal to 
                the contribution and benefit base (determined under 
                section 230) with respect to employment has been paid 
                to an individual during any calendar year after 2011 
                with respect to which such contribution and benefit 
                base is effective, is paid to such individual during 
                such calendar year;''; and
                    (C) by adding at the end the following new 
                subsection:
    ``(l) For purposes of subparagraph (J) of subsection (a)(1), the 
applicable percentage for a calendar year, in connection with any 
calendar year referred to in such subparagraph, shall be the percentage 
determined in accordance with the following table:


------------------------------------------------------------------------
                                                                  The
                                                              applicable
                      ``In the case of:                       percentage
                                                                  is:
------------------------------------------------------------------------
Calendar year 2012..........................................         86%
Calendar year 2013..........................................         71%
Calendar year 2014..........................................         57%
Calendar year 2015..........................................         43%
Calendar year 2016..........................................         29%
Calendar year 2017..........................................         14%
Calendar years after 2017...................................       0%''.
------------------------------------------------------------------------

            (3) Effective date.--The amendments made by this subsection 
        shall apply with respect to remuneration paid in calendar years 
        after 2011.
    (b) Determination of Self-Employment Income Above Contribution and 
Benefit Base After 2011.--
            (1) Amendments to the internal revenue code of 1986.--
        Section 1402 of the Internal Revenue Code of 1986 is amended--
                    (A) in subsection (b)(1), by inserting ``an amount 
                equal to the applicable percentage (as determined under 
                subsection (d)(2)) of'' before ``that part of the net 
                earnings from self-employment''; and
                    (B) in subsection (d)--
                            (i) by striking ``(d) Employee and Wages.--
                        The term'' and inserting the following:
    ``(d) Rules and Definitions.--
            ``(1) Employee and wages.--The term''; and
                            (ii) by adding at the end the following:
            ``(2) Applicable percentage of net earnings from self-
        employment in determining self-employment income.--For purposes 
        of paragraph (1) of subsection (b), the applicable percentage 
        for a taxable year beginning in any calendar year referred to 
        in such paragraph shall be the percentage determined in 
        accordance with the following table:


------------------------------------------------------------------------
                                                                  The
                                                              applicable
                      ``In the case of:                       percentage
                                                                  is:
------------------------------------------------------------------------
Calendar year 2012..........................................         86%
Calendar year 2013..........................................         71%
Calendar year 2014..........................................         57%
Calendar year 2015..........................................         43%
Calendar year 2016..........................................         29%
Calendar year 2017..........................................         14%
Calendar years after 2017...................................       0%''.
------------------------------------------------------------------------

            (2) Amendments to the social security act.--Section 211 of 
        the Social Security Act (42 U.S.C. 411) is amended--
                    (A) in subsection (b)(1)(I)--
                            (i) by striking ``or'' after the semicolon; 
                        and
                            (ii) by inserting ``and before 2012'' after 
                        ``1974'';
                    (B) in subsection (b)--
                            (i) by redesignating paragraph (2) as 
                        paragraph (3); and
                            (ii) by inserting after paragraph (1) the 
                        following:
            ``(2) For any taxable year beginning in any calendar year 
        after 2011, an amount equal to the applicable percentage (as 
        determined under subsection (l)) of that part of net earnings 
        from self-employment which is in excess of (A) an amount equal 
        to the contribution and benefit base (determined under section 
        230) that is effective for such calendar year, minus (B) the 
        amount of the wages paid to such individual during such taxable 
        year; or''; and
                    (C) by adding at the end the following:
    ``(l) For purposes of paragraph (2) of subsection (b), the 
applicable percentage for a taxable year beginning in any calendar year 
referred to in such paragraph, shall be the percentage determined in 
accordance with the following table:


------------------------------------------------------------------------
                                                                  The
                                                              applicable
                      ``In the case of:                       percentage
                                                                  is:
------------------------------------------------------------------------
Calendar year 2012..........................................         86%
Calendar year 2013..........................................         71%
Calendar year 2014..........................................         57%
Calendar year 2015..........................................         43%
Calendar year 2016..........................................         29%
Calendar year 2017..........................................         14%
Calendar years after 2017...................................       0%''.
------------------------------------------------------------------------

            (3) Effective date.--The amendments made by this subsection 
        shall apply with respect to taxable years beginning during or 
        after calendar year 2012.

SEC. 302. INCLUSION OF SURPLUS EARNINGS IN SOCIAL SECURITY BENEFIT 
              FORMULA.

    (a) Inclusion of Surplus Average Indexed Monthly Earnings in 
Determination of Primary Insurance Amounts.--
            (1) In general.--Section 215(a)(1)(A) of the Social 
        Security Act (42 U.S.C. 415(a)(1)(A)) is amended--
                    (A) in clauses (i), (ii), and (iii), by inserting 
                ``basic'' before ``average indexed monthly earnings'' 
                each place it appears;
                    (B) in clause (ii), by striking ``and'' at the end; 
                and
                    (C) by inserting after clause (iii) the following 
                new clauses:
            ``(iv) 3 percent of the individual's surplus average 
        indexed monthly earnings to the extent such surplus average 
        indexed monthly earnings do not exceed the excess of the amount 
        established for purposes of this clause by subparagraph (B) 
        over \1/12\ of the contribution and benefit base for the last 
        of such individual's computation base years, and
            ``(v) 0.25 percent of the sum of the individual's surplus 
        average indexed monthly earnings plus \1/12\ of the 
        contribution and benefit base for the last of such individual's 
        computation base years, to the extent such sum exceeds the 
        amount established for purposes of clause (iv) by subparagraph 
        (B).''.
            (2) Bend point for surplus earnings.--Section 215(a)(1)(B) 
        of such Act (42 U.S.C. 415(a)(1)(B)) is amended--
                    (A) in clause (ii), by striking ``the amounts so 
                established'' and inserting ``the amounts established 
                for purposes of clauses (i) and (ii) of subparagraph 
                (A)'';
                    (B) by redesignating clause (iii) as clause (v);
                    (C) in clause (v) (as redesignated), by inserting 
                ``or (iv)'' after ``clause (ii)''; and
                    (D) by inserting after clause (ii) the following 
                new clauses:
    ``(iii) For individuals who initially become eligible for old-age 
or disability insurance benefits, or who die (before becoming eligible 
for such benefits), in the calendar year 2012, the amount established 
for purposes of clause (iv) of subparagraph (A) shall be $11,933.
    ``(iv) For individuals who initially become eligible for old-age or 
disability insurance benefits, or who die (before becoming eligible for 
such benefits), in any calendar year after 2012, the amount established 
for purposes of clause (iv) of subparagraph (A) shall equal the product 
of the amount established with respect to the calendar year 2012 under 
clause (iii) of this subparagraph and the quotient obtained by 
dividing--
            ``(I) the national average wage index (as defined in 
        section 209(k)(1)) for the second calendar year preceding the 
        calendar year for which the determination is made, by
            ``(II) the national average wage index (as so defined) for 
        2010.''.
    (b) Basic AIME and Surplus AIME.--
            (1) Basic aime.--Section 215(b)(1) of such Act (42 U.S.C. 
        415(b)(1)) is amended--
                    (A) by inserting ``basic'' before ``average''; and
                    (B) in subparagraph (A), by striking ``paragraph 
                (3)'' and inserting ``paragraph (3)(A)'' and by 
                inserting before the comma the following: ``to the 
                extent such total does not exceed the contribution and 
                benefit base for the applicable year''.
            (2) Surplus aime.--
                    (A) In general.--Section 215(b)(1) of such Act (as 
                amended by paragraph (1)) is amended--
                            (i) by redesignating subparagraphs (A) and 
                        (B) as clauses (i) and (ii), respectively;
                            (ii) by inserting ``(A)'' after ``(b)(1)''; 
                        and
                            (iii) by adding at the end the following 
                        new subparagraph:
    ``(B)(i) An individual's surplus average indexed monthly earnings 
shall be equal to the quotient obtained by dividing--
            ``(I) the total (after adjustment under paragraph (3)(B)) 
        of such individual's surplus earnings (determined under clause 
        (ii)) for such individual's benefit computation years 
        (determined under paragraph (2)), by
            ``(II) the number of months in those years.
    ``(ii) For purposes of clause (i) and paragraph (3)(B), an 
individual's surplus earnings for a benefit computation year are the 
total of such individual's wages paid in and self-employment income 
credited to such benefit computation year, to the extent such total 
(before adjustment under paragraph (3)(B)) exceeds the contribution and 
benefit base for such year.''.
                    (B) Conforming amendment.--The heading for section 
                215(b) of such Act is amended by striking ``Average 
                Indexed Monthly Earnings'' and inserting ``Basic 
                Average Indexed Monthly Earnings; Surplus Average 
                Indexed Monthly Earnings''.
            (3) Adjustment of surplus earnings for purposes of 
        determining surplus aime.--Section 215(b)(3) of such Act (42 
        U.S.C. 415(b)(3)) is amended--
                    (A) in subparagraph (A), by striking ``subparagraph 
                (B)'' and inserting ``subparagraph (C)'' and by 
                inserting ``and determination of basic average indexed 
                monthly income'' after ``paragraph (2)'';
                    (B) by redesignating subparagraph (B) as 
                subparagraph (C); and
                    (C) by inserting after subparagraph (A) the 
                following new subparagraph:
    ``(B) For purposes of determining under paragraph (1)(B) an 
individual's surplus average indexed monthly earnings, the individual's 
surplus earnings (described in paragraph (2)(B)(ii)) for a benefit 
computation year shall be deemed to be equal to the product of--
            ``(i) the individual's surplus earnings for such year (as 
        determined without regard to this subparagraph), and
            ``(ii) the quotient described in subparagraph (A)(ii).''.
    (c) Effective Date.--The amendments made by this section shall 
apply with respect to individuals who initially become eligible (within 
the meaning of section 215(a)(3)(B) of the Social Security Act) for 
old-age or disability insurance benefits under title II of the Social 
Security Act, or who die (before becoming eligible for such benefits), 
in any calendar year after 2011.

              TITLE IV--SOCIAL SECURITY BENEFIT PROTECTION

SEC. 401. POINT OF ORDER AGAINST PRIVATIZATION OF SOCIAL SECURITY OR 
              REDUCTIONS IN SOCIAL SECURITY BENEFITS.

    (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 the enactment of that bill 
or resolution, as reported, the adoption and enactment of that 
amendment, or the enactment of that bill or resolution in the form 
recommended in that conference report would have the effect of--
            (1) establishing or maintaining a program--
                    (A) under which benefits under title II of the 
                Social Security Act are reduced, in whole or in part, 
                in connection with contributions made to individual 
                accounts of beneficiaries under such title established 
                or maintained in the private sector or in connection 
                with returns on investment of amounts credited to such 
                accounts, or
                    (B) which provides for administration of the old-
                age, survivors, and disability insurance program under 
                such title, in whole or in part, by any entity in the 
                private sector,
            (2) otherwise reducing benefits under title II of the 
        Social Security Act in the case of any present or future 
        beneficiary below the level of such benefits that would be in 
        effect without the enactment of such bill, resolution, or 
        amendment, or
            (3) providing for investment of amounts held in the Federal 
        Old-Age and Survivors Insurance Trust Fund and the Federal 
        Disability Insurance Trust Fund in any investment vehicle other 
        than interest-bearing obligations of the United States or 
        obligations guaranteed as to both principal and interest by the 
        United States.
    (b) 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.
    (c) Exercise of Rulemaking Powers.--The Congress adopts the 
provisions of this section--
            (1) as an exercise of the rulemaking power of the House of 
        Representatives and the Senate and as such they shall be 
        considered as part of the rules of each House or of that House 
        to which they specifically apply, and these rules shall 
        supersede other rules only to the extent that they are 
        inconsistent with other such rules; and
            (2) with full recognition of the constitutional right of 
        either the House of Representatives or the Senate to change 
        those rules at any time, in the same manner, and to the same 
        extent as in the case of any other rule of the House of 
        Representatives or the Senate.
                                 <all>