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 84.4 76.3 23.6 17.9 400,000 Source: 1983 and 2000 OASDI Trustees’ Report, Intermediate projections. 4.3% 3.3% 5.5% 6.3% 1.95 84.1 79.9 22.0 19.1 900,000 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.