< Back to H.R. 4275 (103rd Congress, 1993–1994)

Text of Social Security Entitlement Reform Amendments of 1994

This bill was introduced on April 21, 1994, in a previous session of Congress, but was not enacted. The text of the bill below is as of Apr 21, 1994 (Introduced).

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HR 4275 IH

103d CONGRESS

2d Session

H. R. 4275

To amend title II of the Social Security Act to assure that the social security system remains viable for the baby boom generation and that the level of social security taxation remains affordable for their children.

IN THE HOUSE OF REPRESENTATIVES

April 21, 1994

Mr. PICKLE introduced the following bill; which was referred to the Committee on Ways and Means


A BILL

To amend title II of the Social Security Act to assure that the social security system remains viable for the baby boom generation and that the level of social security taxation remains affordable for their children.

    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.

    This Act may be cited as the ‘Social Security Entitlement Reform Amendments of 1994’.

TABLE OF CONTENTS

      Sec. 1. Short title and table of contents.

      Sec. 2. Gradual increase in retirement age to age 70 by the year 2029.

      Sec. 3. Reductions in benefits for early retirement.

      Sec. 4. Repeal of further increases in delayed retirement credit.

      Sec. 5. Permanently establishing age 65 as conversion age from entitlement to disability benefits to entitlement to old-age retirement benefits.

      Sec. 6. Phased reduction in spousal benefits other than survivor’s benefits to one-third of primary insurance amount.

      Sec. 7. Coverage of State and local employees hired after 1999.

      Sec. 8. Repeal of limitation on drop out years for disabled workers.

      Sec. 9. Cost-of-living adjustments first payable in July and effective on biennial basis unless annual adjustment would exceed 4 percent.

      Sec. 10. Repeal of limitation on widow’s and widower’s insurance benefits by reason of early retirement of the deceased spouse.

      Sec. 11. Adjustment in reduction of widow’s and widower’s insurance benefits upon attainment of age 85 after calendar year 2019.

      Sec. 12. General increase in benefits for individuals attaining age 85 or more years of age after calendar year 2019.

      Sec. 13. Increase in surviving child’s insurance benefits.

      Sec. 14. Gradual reduction in age necessary for eligibility for supplemental security income benefits on the basis of age.

SEC. 2. GRADUAL INCREASE IN RETIREMENT AGE TO AGE 70 BY THE YEAR 2029.

    (a) IN GENERAL- Section 216(l) of the Social Security Act (42 U.S.C. 416(l)) is amended--

      (1) by striking subparagraphs (B) through (E) of paragraph (1) and inserting the following:

      ‘(B) with respect to an individual who attains early retirement age after December 31, 1999, and before January 1, 2029, 65 years of age plus the number of months in the age increase factor (as determined under paragraph (3)) for the calendar year in which such individual attains early retirement age; and

      ‘(C) with respect to an individual who attains early retirement age after December 31, 2028, 70 years of age.’;

      and

      (2) by striking paragraph (3) and inserting the following:

    ‘(3) The age increase factor for any individual who attains early retirement age in the 30-year period consisting of calendar years 2000 through 2029 shall be equal to 2/12 of the number of months in the period beginning with January 2000 and ending with December of the year in which the individual attains early retirement age.’.

    (b) EFFECTIVE DATE- The amendments made by this section shall apply with respect to benefits of individuals attaining early retirement age (as defined in section 216(l)(2) of the Social Security Act) after 1999.

SEC. 3. REDUCTIONS IN BENEFITS FOR EARLY RETIREMENT.

    (a) IN GENERAL- Section 202(q)(1) of the Social Security Act (42 U.S.C. 402(q)(1)) is amended to read as follows:

    ‘(q)(1) If the first month for which an individual is entitled to an old-age, wife’s, husband’s, widow’s, or widower’s insurance benefit is a month before the month in which such individual attains retirement age, the amount of such benefit for such month and for any subsequent month shall, subject to the succeeding paragraphs of this subsection, be reduced by a percentage of such amount, consisting of the sum of the primary reduction percentage for such benefit and (if any) the second, third, and fourth reduction percentages for such benefit, determined as follows:

      ‘(A) The primary reduction percentage for a benefit is the product derived by multiplying--

        ‘(i) the monthly reduction percentage for such benefit for the primary reduction phase for such benefit, by

        ‘(ii) the number of months in such primary reduction phase.

      ‘(B) The second reduction percentage for such benefit is the product derived by multiplying--

        ‘(i) the monthly reduction percentage for such benefit for the second reduction phase for such benefit, by

        ‘(ii) the number of months in such second reduction phase.

      ‘(C) The third reduction percentage for such benefit is the product derived by multiplying--

        ‘(i) the monthly reduction percentage for such benefit for the third reduction phase for such benefit, by

        ‘(ii) the number of months in such third reduction phase.

      ‘(D) The fourth reduction percentage for such benefit is the product derived by multiplying--

        ‘(i) the monthly reduction percentage for such benefit for the fourth reduction phase for such benefit, by

        ‘(ii) the number of months in such fourth reduction phase.’.

    (b) REDUCTION PHASES AND REDUCTION PERCENTAGES FOR SUCH PHASES- Section 202(q) of such Act (42 U.S.C. 402(q)) is further amended--

      (1) by striking paragraph (9);

      (2) by redesignating paragraphs (6), (7), and (8) as paragraphs (7), (8), and (9), respectively; and

      (3) by inserting after paragraph (5) the following new paragraph:

    ‘(6)(A) For purposes of this subsection--

      ‘(i) in the case of an old-age insurance benefit--

        ‘(I) the primary reduction phase consists of the last 36 months of the reduction period (determined under paragraph (7)), and the monthly reduction percentage for such phase is 5/9 of 1 percent,

        ‘(II) the second reduction phase consists of the months in such reduction period, not exceeding 12 in number, which precede the primary reduction phase, and the monthly reduction percentage for such phase is 5/12 of 1 percent,

        ‘(III) the third reduction phase consists of the months in such reduction period, not exceeding 24 in number, which precede the second reduction phase, and the monthly reduction percentage for such phase is 1/3 of 1 percent, and

        ‘(IV) the fourth reduction phase consists of the months in such reduction period which precede the third reduction phase, and the monthly reduction percentage for such phase is 7/24 of 1 percent,

      ‘(ii) in the case of a wife’s or husband’s insurance benefit--

        ‘(I) the primary reduction phase consists of the last 36 months in the reduction period (determined under paragraph (7)), and the monthly reduction percentage for such phase is 25/36 of 1 percent,

        ‘(II) the second reduction phase consists of the months in such reduction period, not exceeding 12 in number, which precede the primary reduction phase, and the monthly reduction percentage for such phase is 5/12 of 1 percent,

        ‘(III) the third reduction phase consists of the months in such reduction period, not exceeding 24 in number, which precede the second reduction phase, and the monthly reduction percentage for such phase is 1/3 of 1 percent, and

        ‘(IV) the fourth reduction phase consists of the months in such reduction period which precede the third reduction phase, and the monthly reduction percentage for such phase is 7/24 of 1 percent, and

      ‘(iii) in the case of a widow’s or widower’s insurance benefit--

        ‘(I) the primary reduction phase consists of the last 60 months in such reduction period (determined under paragraph (7)), and the monthly reduction percentage for such phase is 19/40 of 1 percent,

        ‘(II) the second reduction phase consists of the months in such reduction period, not exceeding 12 in number, which precede the primary reduction phase, and the monthly reduction percentage for such phase is 1/4 of 1 percent,

        ‘(III) the third reduction phase consists of the months in such reduction period, not exceeding 12 in number, which precede the second reduction phase, and the monthly reduction percentage for such phase is 5/24 of 1 percent, and

        ‘(IV) the fourth reduction phase consists of the months in such reduction period which precede the third reduction phase, and the monthly reduction percentage for such phase is 1/6 of 1 percent.

    ‘(B) Effective with any individual’s benefit (i) for the month in which such individual attains age 62, and (ii) for the month in which such individual attains retirement age (as defined in section 216(l)) and for each month (if earlier) in which such individual attains age 65, 66, 67, 68, or 69, if the number of months in the adjusted reduction period for such benefit (determined under paragraph (8) as of the end of such month) is less than the number of months in the reduction period (determined under paragraph (7)), then each reference to the reduction period in subparagraph (A) shall be deemed a reference to such adjusted reduction period (as so determined).’.

    (c) TREATMENT OF WIDOW’S AND WIDOWER’S INSURANCE BENEFITS BASED ON DISABILITY- Section 202(q)(3) of such Act (42 U.S.C. 402(q)(3)) is amended by adding at the end the following new subparagraph:

    ‘(F) In the case of any individual who is entitled to a widow’s or widower’s insurance benefit for the month in which such individual attains age 60 and such individual was entitled to a widow’s or widower’s insurance benefit for a month within the 1-year period preceding the month in which such individual attains age 60, the amount of the reduction for early retirement applicable under this subsection to such widow’s or widower’s insurance benefit for a month ending after such individual attains age 60 shall not exceed the amount of the reduction which would be determined under this subsection if such individual had attained age 60 in such individual’s first month of entitlement to a widow’s or widower’s insurance benefit (based on the same wages and self-employment income).’.

    (d) TREATMENT OF OLD-AGE INSURANCE BENEFITS AFTER CONVERSION FROM DISABILITY INSURANCE BENEFITS- Section 202(q)(3) of such Act (as amended by subsection (c)) is further amended by adding at the end the following new subparagraph:

    ‘(G) In the case of any individual whose first month of entitlement to an old-age insurance benefit is the month in which such individual attains age 65 and who was entitled to a disability insurance benefit for the preceding month, the amount of the reduction for early retirement applicable under this subsection to such old-age insurance benefit shall not exceed the amount of the reduction which would be determined under this subsection if such individual had attained age 65 in such individual’s first month of entitlement to such disability insurance benefit.’.

    (e) ADJUSTMENT TO MOTHER’S AND FATHER’S INSURANCE BENEFITS-

      (1) IN GENERAL- Section 202(g)(2) of such Act (42 U.S.C. 402(g)(2)) is amended to read as follows:

    ‘(2) Except as provided in paragraph (4) of this subsection, such mother’s or father’s insurance benefit for each month shall be equal to the amount which would be the amount of such individual’s widow’s or widower’s insurance benefit for such month, if such individual had become entitled to such widow’s or widower’s insurance benefit in such individual’s first month of entitlement to such mother’s or father’s insurance benefit and had attained age 60 in that month.’.

      (2) CONFORMING AMENDMENT- Section 202(g)(1)(C) of such Act (42 U.S.C 402(g)(1)(C)) is amended by striking ‘three-fourths of the primary insurance amount of such individual’ and inserting ‘the amount which would be determined under paragraph (2) for such month upon entitlement under this subsection for such month’.

    (f) CONFORMING AMENDMENTS-

      (1) Section 202(q)(4) of such Act (42 U.S.C. 402(q)(4)) is amended by striking ‘paragraph (7)’ and inserting ‘paragraph (8)’.

      (2) Section 202(q)(8) of such Act (as redesignated by subsection (b)(2)) is amended by striking ‘paragraph (6)’ and inserting ‘paragraph (7)’.

      (3) Section 202(q)(10) of such Act (42 U.S.C. 402(q)(10)) is amended by striking ‘paragraph (8)’ and inserting ‘paragraph (9)’.

      (4) Section 202(s)(1) of such Act (42 U.S.C. 402(s)(1)) is amended by striking ‘(q)(7)’ and inserting ‘(q)(8)’.

    (g) EFFECTIVE DATES-

      (1) The amendments made by subsections (a), (b), (c), (d), and (f) shall apply with respect to benefits of individuals attaining early retirement age (as defined in section 216(l)(2) of the Social Security Act) after 1999.

      (2) The amendments made by subsection (e) shall apply with respect to benefits for which individuals first become eligible after December 1999. For purposes of this paragraph, an individual shall be treated as ‘eligible’ for a mother’s or father’s insurance benefit under section 202(g) of the Social Security Act if such individual meets all requirements for entitlement to such benefit under such section (as amended by subsection (c)) except the filing of an application for such benefit.

SEC. 4. REPEAL OF FURTHER INCREASES IN DELAYED RETIREMENT CREDIT.

    Section 202(w)(6) of the Social Security Act (42 U.S.C. 402(w)(6)) is amended--

      (1) in subparagraph (C), by striking ‘2005’ and inserting ‘1993’; and

      (2) in subparagraph (D), by striking ‘ 2/3 of 1 percent’ and inserting ‘ 3/8 of 1 percent’, and by striking ‘2004’ and inserting ‘1992’.

SEC. 5. PERMANENTLY ESTABLISHING AGE 65 AS CONVERSION AGE FROM ENTITLEMENT TO DISABILITY BENEFITS TO ENTITLEMENT TO OLD-AGE RETIREMENT BENEFITS.

    (a) SUBSTITUTION OF AGE 65 FOR RETIREMENT AGE WITH RESPECT TO TERMINATION OF DISABILITY INSURANCE BENEFITS- Section 223(a)(1) of the Social Security Act (42 U.S.C. 423(a)(1)) is amended, in subparagraph (B) and in the matter following subparagraph (D), by striking ‘retirement age (as defined in section 216(l))’ each place it appears and inserting ‘age 65’.

    (b) TRANSITION FROM ENTITLEMENT TO DISABILITY INSURANCE BENEFITS TO ENTITLEMENT TO OLD-AGE INSURANCE BENEFITS AT AGE 65- Section 202(a)(3) of such Act (42 U.S.C. 402(a)(3)) is amended by striking ‘retirement age (as defined in section 216(l))’ and inserting ‘age 65’.

    (c) DISABILITY INSURANCE BENEFIT LIMITED TO OLD-AGE INSURANCE BENEFIT AMOUNT COMPUTED AS IF MONTH OF ONSET OF DISABILITY WERE MONTH OF ATTAINMENT OF AGE 65- Section 223(a)(2) of such Act (42 U.S.C. 423(a)(2)) is amended--

      (1) by redesignating subparagraphs (A) and (B) as clauses (i) and (ii), respectively;

      (2) by striking ‘(2) Except’ and inserting ‘(2)(A) Except’;

      (3) by inserting ‘and subparagraph (B) of this paragraph’ after ‘section 215(b)(2)(A)(ii)’;

      (4) in the last sentence, by striking ‘subparagraph (A) or (B)’ and inserting ‘clause (i) or (ii)’; and

      (5) by adding at the end the following new subparagraph:

    ‘(B) The amount determined under subparagraph (A) shall not exceed the amount which would be such individual’s old-age insurance benefit if--

      ‘(i) such individual were entitled to an old-age insurance benefit equal (without the application of section 202(q) to such old-age insurance benefit) to such individual’s disability insurance benefit as determined under subparagraph (A), and

      ‘(ii) section 202(q) were applied to such old-age insurance benefit as if such individual had attained age 65 in the first month, described in clause (i) or (ii) of subparagraph (A), which is applicable under subparagraph (A) in determining such individual’s benefit.’.

    (d) EFFECTIVE DATE- The amendments made by this section shall apply to any disability insurance benefit if the first month applicable under clause (i) or (ii) of section 223(a)(2)(A) of the Social Security Act (as amended by this section) in the case of such benefit occurs after July 2003.

SEC. 6. PHASED REDUCTION IN SPOUSAL BENEFITS OTHER THAN SURVIVOR’S BENEFITS TO 33 PERCENT OF PRIMARY INSURANCE AMOUNT.

    (a) WIFE’S INSURANCE BENEFITS- Section 202(b)(2) of the Social Security Act (42 U.S.C. 402(b)(2)) is amended to read as follows:

    ‘(2)(A) Except as provided in subsection (q) and paragraph (4) of this subsection, such wife’s insurance benefit for each month shall be equal to the applicable percentage of the primary insurance amount of her husband (or, in the case of a divorced wife, her former husband) in connection with the calendar year in which such individual becomes eligible for such benefit, as specified in the following table:

‘If the calendar year in which the individual becomes eligible is:

The applicable percentage shall be:

Before calendar year 2000


50 percent

Calendar year 2000


49 percent

Calendar year 2001


48 percent

Calendar year 2002


47 percent

Calendar year 2003


46 percent

Calendar year 2004


45 percent

Calendar year 2005


44 percent

Calendar year 2006


43 percent

Calendar year 2007


42 percent

Calendar year 2008


41 percent

Calendar year 2009


40 percent

Calendar year 2010


39 percent

Calendar year 2011


38 percent

Calendar year 2012


37 percent

Calendar year 2013


36 percent

Calendar year 2014


35 percent

Calendar year 2015


34 percent

After calendar year 2015


33 percent.’.

    ‘(B) For purposes of subparagraph (A)--

      ‘(i) an individual shall be treated as eligible for a wife’s insurance benefit if such individual meets the requirements of subparagraphs (B), (C), and (D) of paragraph (1), and

      ‘(ii) in determining when an individual becomes eligible for a wife’s insurance benefit, any break in eligibility of less than 12 consecutive months shall not be taken into account.’.

    (b) HUSBAND’S INSURANCE BENEFITS- Section 202(c)(3) of such Act (42 U.S.C. 402(c)(3)) is amended to read as follows:

    ‘(3)(A) Except as provided in subsection (q) and paragraph (2) of this subsection, such husband’s insurance benefit for each month shall be equal to the applicable percentage of the primary insurance amount of his wife (or, in the case of a divorced husband, his former wife) in connection with the calendar year in which such individual becomes eligible for such benefit, as specified in the following table:

‘If the calendar year inwhich the individual becomes eligible is:

The applicable percentage shall be:

Before calendar year 2000


50 percent

Calendar year 2000


49 percent

Calendar year 2001


48 percent

Calendar year 2002


47 percent

Calendar year 2003


46 percent

Calendar year 2004


45 percent

Calendar year 2005


44 percent

Calendar year 2006


43 percent

Calendar year 2007


42 percent

Calendar year 2008


41 percent

Calendar year 2009


40 percent

Calendar year 2010


39 percent

Calendar year 2011


38 percent

Calendar year 2012


37 percent

Calendar year 2013


36 percent

Calendar year 2014


35 percent

Calendar year 2015


34 percent

After calendar year 2015


33 percent.’.

    ‘(B) For purposes of subparagraph (A)--

      ‘(i) an individual shall be treated as eligible for a husband’s insurance benefit if such individual meets the requirements of subparagraphs (B), (C), and (D) of paragraph (1), and

      ‘(ii) in determining when an individual becomes eligible for a husband’s insurance benefit, any break in eligibility of less than 12 consecutive months shall not be taken into account.’.

SEC. 7. COVERAGE OF STATE AND LOCAL EMPLOYEES HIRED AFTER 1999.

    (a) AMENDMENTS TO THE SOCIAL SECURITY ACT-

      (1) IN GENERAL- Paragraph (7) of section 210(a) of the Social Security Act (42 U.S.C. 410(a)(7)) is amended to read as follows:

      ‘(7) Service described in subsection (r) (relating to excluded State or local government employment);’.

      (2) EXCLUDED STATE OR LOCAL GOVERNMENT EMPLOYMENT-

        (A) IN GENERAL- Section 210 of such Act (42 U.S.C. 410) is amended by adding at the end the following new subsection:

    ‘(r) EXCLUDED STATE OR LOCAL GOVERNMENT EMPLOYMENT- (1) IN GENERAL- Service is described in this subsection if such service is performed in the employ of a State, of any political subdivision thereof, or of any instrumentality of any one or more of the foregoing which is wholly owned thereby, and--

      ‘(A)(i) such service would be excluded from the term ‘employment’ for purposes of this title if subsections (a)(7) and (h) as in effect in March 1994 had remained in effect, and (ii) the requirements of paragraph (2) are met with respect to such service, or

      ‘(B) the requirements of paragraph (3) are met with respect to such service.

    ‘(2) EXCEPTION FOR CURRENT EMPLOYMENT WHICH CONTINUES-

      ‘(A) IN GENERAL- The requirements of this paragraph are met with respect to service for any employer if such service is performed by an individual who continuously performs service described in paragraph (1)(A)(i) since December 31, 1999.

      ‘(B) ALLOWABLE BREAKS IN SERVICE- For purposes of this clause--

        ‘(i) if an individual performing service described in paragraph (1)(A)(i) returns to the performance of such service after being separated therefrom for a period of less than 366 consecutive days, regardless of whether the period begins before, on, or after December 31, 1999, then such service shall be considered continuous, and

        ‘(ii) if an individual performing service described in paragraph (1)(A)(i) returns to the performance of such service after performing service as a member of a uniformed service (including, for purposes of this clause, service in the National Guard and temporary service in the Coast Guard Reserve) and after exercising restoration or reemployment rights as provided under chapter 43 of title 38, United States Code, then the service so performed as a member of a uniformed service shall be considered service described in paragraph (1)(A)(i).

      ‘(C) TREATMENT OF MULTIPLE JURISDICTIONS- For purposes of subparagraph (A), under regulations (consistent with regulations established under section 3121(t)(2)(C) of the Internal Revenue Code of 1986)--

        ‘(i) MULTIPLE AGENCIES AND INSTRUMENTALITIES- All agencies and instrumentalities of a State (as defined in section 218(b)) and of the political subdivisions thereof shall be treated as a single employer, and all agencies and instrumentalities of the District of Columbia shall be treated as a single employer.

        ‘(ii) MULTIPLE STATES- If an individual, after separation from service described in paragraph (1)(A)(I) for any State, commences service described in paragraph (1)(A)(I) for any other State and such service for such other State does not consist of service covered under an agreement entered into under section 218, such commencement of such service for such other State shall be treated as a return to the performance of the service from which such separation occurred. For purposes of this clause, the term ‘service’ for a State means service--

          ‘(I) for such State (as defined in section 218(b)),

          ‘(II) for any political subdivision (as so defined) of such State, or

          ‘(III) for any agency or instrumentality of such State or political subdivision.

        For purposes of subclauses (I) and (III), the term ‘State’ includes the District of Columbia.

    ‘(3) EXCEPTION FOR CERTAIN SERVICES-

      ‘(A) IN GENERAL- The requirements of this paragraph are met with respect to service if such service is performed--

        ‘(i) by an individual who is employed by a State or political subdivision thereof to relieve such individual from unemployment,

        ‘(ii) in a hospital, home, or other institution by a patient or inmate thereof as an employee of a State or political subdivision thereof or of the District of Columbia,

        ‘(iii) by an individual, as an employee of a State or political subdivision thereof or of the District of Columbia, serving on a temporary basis in case of fire, storm, snow, earthquake, flood, or other similar emergency,

        ‘(iv) by any individual as an employee included under section 5351(2) of title 5, United States Code (relating to certain interns, student nurses, and other student employees of hospitals of the District of Columbia Government), other than as a medical or dental intern or a medical or dental resident in training,

        ‘(v) by an election official or election worker if the remuneration paid in a calendar year for such service is less than $100, except to the extent that service by such election official or election worker is included in employment under an agreement under section 218, or

        ‘(vi) by an employee in a position compensated solely on a fee basis which is treated pursuant to section 211(c)(2)(E) as a trade or business for purposes of inclusion of such fees in net earnings from self-employment.

      ‘(B) DEFINITIONS- As used in this paragraph, the terms ‘State’ and ‘political subdivision’ have the meanings given those terms in section 218(b).’.

      (3) CONFORMING AMENDMENTS-

        (A) Subsection (k) of section 210 of such Act (42 U.S.C. 410(k)) (relating to covered transportation service) is repealed.

        (B) Section 210(p) of such Act (42 U.S.C. 410(p)) is amended--

          (i) in paragraph (2), by striking ‘service is performed’ and all that follows and inserting ‘service is service described in subsection (r)(3)(A).’; and

          (ii) in paragraph (3)(A), by inserting ‘under subsection (a)(7) as in effect in March 1994 and applicable with respect to service performed before January 1, 2000,’ after ‘section’.

        (C) Section 218(c)(6) of such Act (42 U.S.C. 418(c)(6)) is amended--

          (i) by striking subparagraph (C);

          (ii) by redesignating subparagraphs (D) and (E) as subparagraphs (C) and (D), respectively; and

          (iii) by striking subparagraph (F) and inserting the following:

      ‘(E) service which is included as employment under section 210(a).’

    (b) AMENDMENTS TO THE INTERNAL REVENUE CODE OF 1986-

      (1) IN GENERAL- Paragraph (7) of section 3121(b) of the Internal Revenue Code of 1986 (relating to employment) is amended to read as follows:

      ‘(7) service described in subsection (t) (relating to excluded State or local government employment);’.

      (2) EXCLUDED STATE OR LOCAL GOVERNMENT EMPLOYMENT- Section 3121 of such Code is amended by inserting after subsection (s) the following new subsection:

    ‘(t) EXCLUDED STATE OR LOCAL GOVERNMENT EMPLOYMENT-

      ‘(1) IN GENERAL- Service is described in this subsection if such service is performed in the employ of a State, of any political subdivision thereof, or of any instrumentality of any one or more of the foregoing which is wholly owned thereby, and--

        ‘(A)(i) such service would be excluded from the term ‘employment’ for purposes of this chapter if the provisions of subsections (b)(7) and (j) as in effect in March 1994 had remained in effect, and (ii) the requirements of paragraph (2) are met with respect to such service, or

        ‘(B) the requirements of paragraph (3) are met with respect to such service.

      ‘(2) EXCEPTION FOR CURRENT EMPLOYMENT WHICH CONTINUES-

        ‘(A) IN GENERAL- The requirements of this paragraph are met with respect to service for any employer if such service is performed by an individual who continuously performs service described in paragraph (1)(A)(i) since December 31, 1999.

        ‘(B) ALLOWABLE BREAKS IN SERVICE- For purposes of this clause--

          ‘(i) if an individual performing service described in paragraph (1)(A)(i) returns to the performance of such service after being separated therefrom for a period of less than 366 consecutive days, regardless of whether the period begins before, on, or after December 31, 1999, then such service shall be considered continuous, and

          ‘(ii) if an individual performing service described in paragraph (1)(A)(i) returns to the performance of such service after performing service as a member of a uniformed service (including, for purposes of this clause, service in the National Guard and temporary service in the Coast Guard Reserve) and after exercising restoration or reemployment rights as provided under chapter 43 of title 38, United States Code, then the service so performed as a member of a uniformed service shall be considered service described in paragraph (1)(A)(i).

        ‘(C) TREATMENT OF MULTIPLE AGENCIES AND INSTRUMENTALITIES- For purposes of subparagraph (A), under regulations:

          ‘(i) MULTIPLE AGENCIES AND INSTRUMENTALITIES WITHIN STATES- All agencies and instrumentalities of a State (as defined in section 218(b) of the Social Security Act) and of the political subdivisions thereof shall be treated as a single employer, and all agencies and instrumentalities of the District of Columbia shall be treated as a single employer.

          ‘(ii) MULTIPLE STATES- If an individual, after separation from service described in paragraph (1)(A)(I) for any State, commences service described in paragraph (1)(A)(I) for any other State and such service for such other State does not consist of service covered under an agreement entered into under section 218 of the Social Security Act, such commencement of such service for such other State shall be treated as a return to the performance of the service from which such separation occurred. For purposes of this clause, the term ‘service’ for a State means service--

            ‘(I) for such State (as defined in section 218(b) of the Social Security Act),

            ‘(II) for any political subdivision (as so defined) of such State, or

            ‘(III) for any agency or instrumentality of such State or political subdivision.

          For purposes of subclauses (I) and (III), the term ‘State’ includes the District of Columbia.

      ‘(3) EXCEPTION FOR CERTAIN SERVICES-

        ‘(A) IN GENERAL- The requirements of this paragraph are met with respect to service if such service is performed--

          ‘(i) by an individual who is employed by a State or political subdivision thereof to relieve such individual from unemployment,

          ‘(ii) in a hospital, home, or other institution by a patient or inmate thereof as an employee of a State or political subdivision thereof or of the District of Columbia,

          ‘(iii) by an individual, as an employee of a State or political subdivision thereof or of the District of Columbia, serving on a temporary basis in case of fire, storm, snow, earthquake, flood, or other similar emergency,

          ‘(iv) by any individual as an employee included under section 5351(2) of title 5, United States Code (relating to certain interns, student nurses, and other student employees of hospitals of the District of Columbia Government), other than as a medical or dental intern or a medical or dental resident in training,

          ‘(v) by an election official or election worker if the remuneration paid in a calendar year for such service is less than $100, except to the extent that service by such election official or election worker is included in employment under an agreement under section 218 of the Social Security Act, or

          ‘(vi) by an employee in a position compensated solely on a fee basis which is treated pursuant to section 1402(c)(2)(E) as a trade or business for purposes of inclusion of such fees in net earnings from self-employment.

        ‘(B) DEFINITIONS- As used in this paragraph, the terms ‘State’ and ‘political subdivision’ have the meanings given those terms in section 218(b) of the Social Security Act.’.

      (3) CONFORMING AMENDMENTS-

        (A) Subsection (j) of such section 3121 (relating to covered transportation service) is repealed.

        (B) Paragraph (2) of section 3121(u) of such Code (relating to application of hospital insurance tax to Federal, State, and local employment) is amended--

          (i) in subparagraph (B), by striking ‘service is performed’ in clause (ii) and all that follows through the end of such subparagraph and inserting ‘service is service described in subsection (t)(3)(A).’; and

          (ii) in subparagraph (C)(i), by inserting ‘under subsection (b)(7) as in effect in March 1994 and applicable with respect to service performed before January 1, 2000,’ after ‘chapter’.

    (c) EFFECTIVE DATE- The amendments made by this section shall apply with respect to service performed after December 31, 1999.

SEC. 8. REPEAL OF LIMITATION ON DROP OUT YEARS FOR DISABLED WORKERS.

    (a) IN GENERAL- Section 215(b)(2)(A) of the Social Security Act (42 U.S.C. 415(b)(2)(A)) is amended to read as follows:

    ‘(2)(A) The number of an individual’s benefit computation years equals the number of elapsed years reduced by 5 years, except that the number of an individual’s benefit computation years shall in no case be less than two.’.

    (b) EFFECTIVE DATE- The amendments made by this section shall apply to any disability insurance benefit if the first month applicable under clause (i) or (ii) of section 223(a)(2)(A) of the Social Security Act (as amended by section 5) in the case of such benefit occurs after July 2003.

SEC. 9. COST-OF-LIVING ADJUSTMENTS FIRST PAYABLE IN JULY AND EFFECTIVE ON BIENNIAL BASIS UNLESS ANNUAL ADJUSTMENT WOULD EXCEED 4 PERCENT.

    (a) ADJUSTMENTS PAYABLE IN JULY RATHER THAN JANUARY-

      (1) IN GENERAL- Section 215(i)(2) of the Social Security Act (42 U.S.C. 415(i)(2)) is amended--

        (A) in subparagraph (A)(ii), by striking ‘December’ and inserting ‘June’;

        (B) in subparagraph (A)(iii), by striking ‘November’ and inserting ‘May’; and

        (C) in subparagraph (B), by striking ‘November’ each place it appears and inserting ‘May’.

      (2) BASE QUARTER- Section 215(i)(1)(A) of such Act (42 U.S.C. 415(i)(1)(A)) is amended by striking ‘September 30’ and inserting ‘March 31’, and by striking ‘1982’ and inserting ‘1998’.

      (3) CONFORMING AMENDMENTS-

        (A) Section 215(i)(5)(A) of such Act (42 U.S.C. 415(i)(5)(A)) is amended, in the matter following clause (ii), by striking ‘December’ and inserting ‘June’.

        (B) Section 203(f)(8)(A) of such Act (42 U.S.C. 403(f)(8)(A)) is amended by striking ‘December’ and inserting ‘June’.

        (C) Section 230(a) of such Act (42 U.S.C. 430(a)) is amended by striking ‘December’ and inserting ‘June’.

      (4) PRIOR APPLICABLE LAW-

        (A) IN GENERAL-

          (i) Section 215(i) of such Act as in effect in December 1978, and as applied in certain cases under the provisions of such Act as in effect after December 1978, is amended by striking ‘December’ in subparagraph (A)(ii) and inserting ‘June’, and by striking ‘November’ each place it appears and inserting ‘May’.

          (ii) Section 215(i)(1)(A) of such Act as in effect in December 1978, and as applied in certain cases after December 1978, is amended by striking ‘September 30’ and inserting ‘March 31’, and by striking ‘1982’ and inserting ‘1998’.

          (iii) Section 215(i)(4) of such Act (42 U.S.C. 415(i)(4)) is amended--

            (I) by striking ‘and by section 9001’ and inserting ‘, by section 9001’; and

            (II) by inserting ‘and by section 7 of the Social Security Entitlement Reform Amendments of 1994,’ after ‘1986,’.

        (B) MINIMUM BENEFITS- Section 202(m) of such Act (as it applies in certain cases by reason of section 2 of Public Law 97-123) is amended by striking ‘November’ and inserting ‘May’.

      (5) EFFECTIVE DATE-

        (A) IN GENERAL- The amendments made by this subsection shall apply with respect to increases under section 215(i) of the Social Security Act which take effect with months after December 1998.

        (B) TRANSITION RULE- For purposes of section 215(i) of the Social Security Act (or section 215(i) of such Act as in effect in December 1978, and as applied in certain cases under the provisions of such Act as in effect after December 1978), notwithstanding any provision to the contrary in such section, the ‘base quarter’ (as defined in paragraph (1)(A)(i) of such section as amended by paragraph (2) or (4)) in the calendar year 1999 shall not be a ‘cost-of-living computation quarter’ within the meaning of such section.

    (b) ADJUSTMENTS EFFECTIVE ON BIENNIAL BASIS UNLESS ANNUAL ADJUSTMENT WOULD EXCEED 4 PERCENT-

      (1) IN GENERAL- Section 215(i)(1)(B) of such Act (42 U.S.C. 415(i)(1)(B)) is amended to read as follows:

      ‘(B) the term ‘cost-of-living computation quarter’ means a base quarter, as defined in subparagraph (A)(i); except that there shall be no cost-of-living computation quarter in any calendar year--

        ‘(i) if the base quarter, as defined in subparagraph (A)(i), in the prior calendar year was a cost-of-living computation quarter, and the applicable increase percentage (as determined under subclause (I) or (II), as applicable, of subparagraph (C)(i)) does not exceed 4 percent, or

        ‘(ii) if in the year prior to such year a law has been enacted providing a general benefit increase under this title or if in such prior year such a general benefit increase becomes effective;’.

      (2) RULES APPLICABLE IN CASES OF INITIAL ELIGIBILITY-

        (A) INITIAL APPLICABILITY OF INCREASES- Section 215(i)(2)(A)(iii) of such Act (42 U.S.C. 415(i)(2)(A)(iii)) is amended to read as follows:

    ‘(iii)(I) Except as otherwise provided in this clause, in the case of an individual who becomes eligible for an old-age or disability insurance benefit (or who dies prior to becoming so eligible) in any year, the individual’s primary insurance amount (without regard to the time of entitlement to that benefit) shall be increased only by applicable increases provided under clause (ii) in years subsequent to such year, and only with respect to benefits payable for months after June of the year following such year.

    ‘(II) Subclause (I) shall not apply with respect to increases other than those provided under this subsection.

    ‘(III) With respect to a primary insurance amount determined under subsection (a)(1)(C)(i)(I) in the case of an individual to whom that subsection (as in effect in December 1981) applied, subclause (I) shall apply subject to the provisions of subsection (a)(1)(C)(i) and clauses (iv) and (v) of this subparagraph (as then in effect).’.

        (B) SPECIAL RULE FOR DETERMINING CERTAIN INITIAL INCREASES- Section 215(i)(1)(C) of such Act (42 U.S.C. 415(i)(1)(C)) is amended--

          (i) by redesignating clauses (i) and (ii) as subclauses (I) and (II), respectively;

          (ii) by inserting ‘(i) except as provided in clause (ii), ’ after ‘(C)’;

          (iii) by inserting ‘and’ after ‘lower;’ at the end of subclause (II) (as redesignated); and

          (iv) by adding at the end the following new clause:

      ‘(ii) in the case of the first year in which there occurs (in accordance with paragraph (2)(A)(iii)) an increase under this subsection in the amounts referred to in subclauses (II) and (III) of paragraph (2)(A)(ii) with respect to any primary insurance amount, if such first year is preceded by a year in which no cost-of-living computation quarter occurs under this subsection, for purposes of deriving under this subsection the increase in such first year in such amounts, the term ‘applicable increase percentage’ means the lesser of--

        ‘(I) the applicable increase percentage as defined in clause (i), or

        ‘(II) the percentage (rounded to the nearest one-tenth of percent) by which the Consumer Price Index for the first calendar quarter of such first year (as prepared by the Department of Labor) exceeds such index for the first calendar quarter for the preceding calendar year;’.

        (C) CONFORMING AMENDMENTS-

          (i) Section 215(i)(2)(D) of such Act (42 U.S.C. 415(i)(2)(D)) is amended by striking ‘a benefit increase is resultantly required and the percentage thereof’ and inserting ‘benefit increases are resultantly required and the percentages thereof’.

          (ii) Section 215(i)(5)(A) of such Act (42 U.S.C. 415(i)(5)(A)) is amended--

            (I) in clause (i), by striking ‘under clause (ii) of paragraph (1)(C) rather than under clause (i) of such paragraph’ and inserting ‘under paragraph (1)(C) by applying subclause (II) of paragraph (1)(C)(i) rather than subclause (I) thereof’; and

            (II) in the matter following clause (ii), by inserting ‘with respect to which the ‘applicable increase percentage’ was determined as described in clause (i)’ after ‘paragraph (2)(A)(ii)’.

      (3) Continued annual adjustment of earnings test exempt amounts and contribution and benefit base-

        (A) EXEMPT AMOUNT UNDER EARNINGS TEST- Section 203(f)(8)(A) of such Act (42 U.S.C. 403(f)(8)(A)) is amended--

          (i) by striking ‘Whenever’ and all that follows through ‘in which such quarter occurs’ and inserting ‘The Secretary shall determine and publish in the Federal Register on or before November 1 of each calendar year’;

          (ii) by striking ‘the calendar year after the calendar year in which such benefit increase is effective’ and inserting ‘the subsequent calendar year’; and

          (iii) by striking ‘the calendar year after the calendar year in which the benefit increase is effective’ and inserting ‘such subsequent calendar year’.

        (B) CONTRIBUTION AND BENEFIT BASE-

          (i) IN GENERAL- Section 230(a) of such Act (42 U.S.C. 430(a)) is amended--

            (I) by striking ‘Whenever’ and all that follows through ‘in which such quarter occurs’ and inserting ‘The Secretary shall determine and publish in the Federal Register on or before November 1 of each calendar year’; and

            (II) by striking ‘the calendar year in which such quarter occurs’ and inserting ‘such calendar year’.

          (ii) PRIOR APPLICABLE LAW- Section 230(d) of such Act (42 U.S.C. 430(d)) is amended by inserting after ‘except that,’ the following: ‘for purposes of subsection (a) of such section 230 as so in effect, the Secretary shall make the determination and publication required thereunder on or before November 1 of each calendar year, and that,’.

      (4) AMENDMENT RELATING TO PRIOR APPLICABLE LAW GOVERNING COST-OF-LIVING INCREASES- Section 215(i)(4) of such Act (42 U.S.C. 415(i)(4)) is amended by adding at the end the following new sentence: ‘The Secretary shall provide by regulation for the continued application of this subsection as in effect in December 1978 as provided by the preceding provisions of this paragraph and the amendments referred to therein. Such regulations shall provide for the application of the amendments to the provisions of this subsection made by section 7 of the Social Security Entitlement Reform Amendments of 1994 so as to have the same effect on the corresponding provisions of this subsection as in effect in December 1978 and applicable in accordance with this paragraph.’.

      (5) EFFECTIVE DATE- The amendments made by this subsection shall apply with respect to increases under section 215(i) of the Social Security Act which take effect with the month of June of years after 2000.

SEC. 10. REPEAL OF LIMITATION ON WIDOW’S AND WIDOWER’S INSURANCE BENEFITS BY REASON OF EARLY RETIREMENT OF THE DECEASED SPOUSE.

    (a) WIDOW’S INSURANCE BENEFITS-

      (1) IN GENERAL- Section 202(e)(2)(D) of the Social Security Act (42 U.S.C. 402(e)(2)(D)) is repealed.

      (2) CONFORMING AMENDMENTS- Section 202(e) of such Act is further amended--

        (A) in paragraph (2)(A), by striking ‘subsection (q), paragraph (7) of this subsection, and subparagraph (D) of this paragraph,’ and inserting ‘subsection (q) and paragraph (7) of this subsection,’; and

        (B) in paragraph (7)(A), by striking ‘subsections (q) and (k), paragraph (2)(D), and paragraph (3)’ and inserting ‘subsections (q) and (k) and paragraph (3)’.

    (b) WIDOWER’S INSURANCE BENEFITS-

      (1) IN GENERAL- Section 202(f)(3)(D) of such Act (42 U.S.C. 402(f)(3)(D)) is repealed.

      (2) CONFORMING AMENDMENTS- Section 202(f) of such Act is further amended--

        (A) in paragraph (2)(A), by striking ‘subsections (q) and (k), paragraph (3)(D), and paragraph (4)’ and inserting ‘subsections (q) and (k) and paragraph (4)’; and

        (B) in paragraph (3)(A), by striking ‘subsection (q), paragraph (2) of this subsection, and subparagraph (D) of this paragraph,’ and inserting ‘subsection (q) and paragraph (2) of this subsection,’.

    (c) EFFECTIVE DATE- The amendments made by this section shall apply with respect to benefits of individuals attaining early retirement age (as defined in section 216(l)(2) of the Social Security Act) after 1999.

SEC. 11. ADJUSTMENT IN REDUCTION OF WIDOW’S AND WIDOWER’S INSURANCE BENEFITS UPON ATTAINMENT OF AGE 85 AFTER CALENDAR YEAR 2019.

    Section 202(q) of the Social Security Act (42 U.S.C. 402(q)) is amended by adding at the end the following new paragraph:

    ‘(12) In the case of any individual’s widow’s or widower’s insurance benefit for any month in or after a year specified in the following table, if such individual has attained 85 years of age as of the end of such month, the percentage specified in such table in connection with such year shall be applied in paragraph (1) in lieu of the sum of reduction percentages specified in paragraph (1):

‘If the year is:

The specified percentage shall be:

After 2019 and before 2022


5/12 of 1 percent

After 2021 and before 2024


1/3 of 1 percent

After 2023 and before 2026


1/4 of 1 percent

After 2025 and before 2028


1/6 of 1 percent

After 2027


1/12 of 1 percent.’.

SEC. 12. GENERAL INCREASE IN BENEFITS FOR INDIVIDUALS ATTAINING AGE 85 OR MORE YEARS OF AGE AFTER CALENDAR YEAR 2019.

    (a) IN GENERAL- Section 202 of the Social Security Act (42 U.S.C. 402) is amended by adding at the end the following new subsection:

    (y) ‘GENERAL BENEFIT INCREASE FOR BENEFICIARIES OVER 85 YEARS OF AGE- (1) The amount of a monthly insurance benefit under this section or section 223 payable to an individual for any month ending after such individual attains 85 or more years of age after 2019 shall be the amount of such benefit as determined without regard to this subsection, increased by the applicable percentage increase specified in the following table:

‘If the individual attains 85 or more years of age in:

The applicable percentage increase under this subsection in such benefit for each month in such year shall be:

2020


1 percent

2021


2 percent

2022


3 percent

2023


4 percent

2024 or a later year


5 percent.’.

    ‘(2) This subsection shall be applied after any reduction under section 203(a) and any increase under subsection (w).’.

    (b) ROUNDING- Section 215(g) of such Act (42 U.S.C. 415(g)) is amended--

      (1) by striking ‘and after’ and inserting ‘after’; and

      (2) by inserting ‘, and after any increase under section 202(y)’ after ‘section 1840(a)(1)’.

    (c) EFFECTIVE DATE- The amendments made by this section shall apply with respect to benefits for months after December 2019.

SEC. 13. INCREASE IN SURVIVING CHILD’S INSURANCE BENEFITS.

    Section 202(d)(2) of the Social Security Act (42 U.S.C. 402(d)(2)) is amended--

      (1) by inserting ‘(A)’ after ‘(2)’; and

      (2) by striking the last sentence and inserting at the end the following new subparagraph:

    ‘(B) Such child’s insurance benefit for each month shall, if the individual on the basis of whose wages and self-employment income the child is entitled to such benefit has died in or prior to such month, be equal to the applicable percentage of the primary insurance amount of such individual in connection with such child’s first month of entitlement, as set forth in the following table:

‘If the first month of entitlement occurs:

The applicable percentage of the primary insurance amount is:

Before 2000


75 percent

After 1999 and before 2010


80 percent

After 2009 and before 2025


85 percent

After 2024


90 percent.’.

SEC. 14. GRADUAL REDUCTION IN AGE NECESSARY FOR ELIGIBILITY FOR SUPPLEMENTAL SECURITY INCOME BENEFITS ON THE BASIS OF AGE.

    (a) IN GENERAL- Section 1614(a)(1)(A) of the Social Security Act (42 U.S.C. 1382c(a)(1)(A)) is amended to read as follows:

      ‘(A)(i) as of the end of a year specified in the following table, attains the age specified in such table in connection with such year:

‘If the year is:

The specified age is:

Before 2000


65 years

2000


64 years, 9 months

2001


64 years, 6 months

2002


64 years, 3 months

2003


64 years

2004


63 years, 9 months

2005


63 years, 6 months

2006


63 years, 3 months

2007


63 years

2008


62 years, 9 months

2009


62 years, 6 months

2010


62 years, 3 months

After 2010


62 years

      ‘(ii) is blind (as determined under paragraph (2)), or

      ‘(iii) is disabled (as determined under paragraph (3)), and’.

    (b) CONFORMING AMENDMENTS-

      (1) Section 1601 of such Act, as in effect pursuant to the amendment made by section 301 of the Social Security Amendments of 1972, (42 U.S.C. 1381) is amended by striking ‘have attained age 65 or are blind’ and inserting ‘are aged, blind,’.

      (2) Section 1612(b)(4) of such Act (42 U.S.C. 1382a(b)(4)) is amended--

        (A) in each of subparagraphs (A) and (B)--

          (i) by striking ‘not attained age 65’ and inserting ‘not, as of the end of a year specified in the table set forth in section 1614(a)(1)(A)(i), attained the age specified in such table in connection with such year’; and

          (ii) by striking ‘he attained age 65’ and inserting ‘such individual attained such age’; and

        (B) in subparagraph (C), by striking ‘attained age 65’ and inserting ‘, as of the end of a year specified in the table set forth in section 1614(a)(1)(A)(i), attained the age specified in such table in connection with such year’.

      (3) Section 1615(a)(1) of such Act (42 U.S.C. 1382d(a)(1)) is amended by striking ‘not attained age 65’ and inserting ‘not, as of the end of a year specified in the table set forth in section 1614(a)(1)(A)(i), attained the age specified in such table in connection with such year’.

      (4) Section 1620(a)(2) of such Act (42 U.S.C. 1382i(a)(2)) is amended by striking ‘under age 65’ and inserting ‘, as of the end of a year specified in the table set forth in section 1614(a)(1)(A)(i), have not attained the age specified in such table in connection with such year’.