< Back to S. 5 (107th Congress, 2001–2002)

Text of the Social Security Preservation Act

This bill was introduced on November 19, 2002, in a previous session of Congress, but was not enacted. The text of the bill below is as of Nov 19, 2002 (Introduced).

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S 5 IS

107th CONGRESS

2d Session

S. 5

To strengthen and permanently preserve social security through the power of investment and compound interest without benefit reductions or tax increases, and for other purposes.

IN THE SENATE OF THE UNITED STATES

November 19, 2002

Mr. GRAMM (for himself and Mr. HAGEL) introduced the following bill; which was read twice and referred to the Committee on Finance


A BILL

To strengthen and permanently preserve social security through the power of investment and compound interest without benefit reductions or tax increases, and for other purposes.

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

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

    (a) SHORT TITLE- This Act may be cited as the ‘Social Security Preservation Act’.

    (b) TABLE OF CONTENTS- The table of contents for this Act is as follows:

      Sec. 1. Short title; table of contents.

      Sec. 2. Findings.

TITLE I--AMENDMENTS TO THE SOCIAL SECURITY ACT

      Sec. 101. Establishment of an investment-based option for social security benefits.

‘Part B--Investment-Based Social Security

‘Sec. 250. Guarantee of promised benefits.

‘Sec. 251. Definitions.

‘Sec. 252. Social security savings accounts for employees (SAFE Accounts).

‘Sec. 253. SAFE Investment Funds.

‘Sec. 254. Social Security Investment Board.

‘Sec. 255. SAFE Account contributions.

‘Sec. 256. Social security savings annuity for eligible retirees (SAFER Annuities) and other distributions.

‘Sec. 257. Money-back guarantee.

‘Sec. 258. Guarantee of promised benefits.

‘Sec. 259. Increased SAFE Account investment rate.

‘Sec. 260. Tax treatment of accounts.

TITLE II--AMENDMENTS TO THE INTERNAL REVENUE CODE OF 1986

      Sec. 201. Reduction of FICA rates resulting from investment-based social security system.

TITLE III--AMENDMENTS TO GRAMM-LEACH-BLILEY ACT

      Sec. 301. Social Security Investment Board.

TITLE IV--FINANCING OF INVESTMENT-BASED SOCIAL SECURITY

Subtitle A--Dedication of Savings

      Sec. 401. Dedication of part B savings to social security trust funds.

Subtitle B--Exemption of Worker Investments From Federal Corporate Income Taxes

      Sec. 411. SAFE Account and SAFER Annuity investments exempt from Federal corporate income taxes.

Subtitle C--Amendments to Balanced Budget and Emergency Deficit Control Act of 1985

      Sec. 421. Dedication of budget surpluses to saving social security.

Subtitle D--Allocation of Transfers

      Sec. 431. Allocation of transfers.

SEC. 2. FINDINGS.

    Congress makes the following findings:

      (1) The exploding cost of social security threatens to become the greatest financial crisis in American history.

      (2) The unfunded liability of the social security system is twice as large as the national debt of the Federal Government and exceeds the combined cost of all the wars fought in our Nation’s history.

      (3) More than a financial crisis, the current social security system is fast becoming a human tragedy that will force Americans to choose between economic opportunity for their children and retirement security for their parents.

      (4) The cause of the crisis is a debt-based system of finance. Taxes taken from today’s workers are not invested in real assets to fund the retirement of those workers. Instead, that money is used to pay for the social security benefits of current retirees.

      (5) Under current law the retirement benefits for the 77,000,000 members of the ‘baby boom’ generation born between 1946 and 1964 and beginning to retire in 10 years will have to be financed with the payroll taxes paid by a dwindling number of workers.

      (6) By the year 2042, Congress will have to choose between increasing the payroll tax by 38 percent or reducing each social security check by 28 percent.

      (7) Such an unacceptable choice can be avoided if immediate action is taken to transition to an investment-based social security system in which workers will be allowed to place a portion of their payroll tax dollars in private investment accounts owned by such workers.

      (8) By making such real investments and creating real wealth, the system will benefit from what Albert Einstein called the most powerful force in the universe--the power of compound interest.

      (9) Investment-based social security would be voluntary, guaranteed by the Federal Government, owned by the individual, and protected against both inflation and cuts imposed by Congress.

      (10) Investing today means investing in the retirement security of parents and grandparents; saving today means saving tomorrow’s economic opportunity for America’s children.

TITLE I--AMENDMENTS TO THE SOCIAL SECURITY ACT

SEC. 101. ESTABLISHMENT OF AN INVESTMENT-BASED OPTION FOR SOCIAL SECURITY BENEFITS.

    (a) IN GENERAL- Title II of the Social Security Act (42 U.S.C. 401 et seq.) is amended--

      (1) by inserting before section 201 the following:

‘Part A--Debt-Based Social Security’;

      and

      (2) by adding at the end the following:

‘Part B--Investment-Based Social Security

‘GUARANTEE OF PROMISED BENEFITS

    ‘SEC. 250. Any individual electing to receive benefits of investment-based social security under this part shall be guaranteed a total monthly benefit not less than the monthly benefit promised under debt-based social security under part A, as provided in sections 257 and 258.

‘DEFINITIONS

    ‘SEC. 251. For purposes of this part--

      ‘(1) INVESTING WORKER-

        ‘(A) IN GENERAL- Except as provided in subparagraph (B), the term ‘investing worker’ means any individual--

          ‘(i) who, before, on, or after the date of enactment of this part--

            ‘(I) is employed by a covered employer, or

            ‘(II) is self-employed, and

          ‘(ii) who elects the option of investment-based social security under this part at the time of the designation described in section 252(a)(1).

        ‘(B) ELIGIBILITY WAIVER REQUIRED FOR CERTAIN INDIVIDUALS- Such term does not include any individual born before January 1, 1953, unless such individual requests in writing and is granted an eligibility waiver from the Social Security Investment Board.

      ‘(2) COVERED EMPLOYER- The term ‘covered employer’ means, for any calendar year, any person on whom an excise tax is imposed under section 3111 of the Internal Revenue Code of 1986 with respect to having an individual in the person’s employ to whom wages are paid by such person during such calendar year.

      ‘(3) SOCIAL SECURITY SAVINGS ACCOUNTS FOR EMPLOYEES (SAFE ACCOUNT)- The term ‘social security savings accounts for employees’ or ‘SAFE Account’ means any individual retirement plan (as defined in section 7701(a)(37) of the Internal Revenue Code of 1986), other than a Roth IRA (as defined in section 408A(b) of such Code), which is designated by an investing worker as a SAFE Account (in such manner as the Social Security Investment Board may prescribe) and which is administered by a SAFE Investment Fund.

      ‘(4) SOCIAL SECURITY SAVINGS ANNUITY FOR ELIGIBLE RETIREES (SAFER ANNUITY)- The term ‘social security savings annuity for eligible retirees’ or ‘SAFER Annuity’ has the meaning given such term by section 256(b)(1)(C).

      ‘(5) SAFE INVESTMENT FUND- The term ‘SAFE Investment Fund’ means a fund certified by the Social Security Investment Board under section 801(f)(1) of the Gramm-Leach-Bliley Act.

      ‘(6) SOCIAL SECURITY INVESTMENT BOARD- The term ‘Social Security Investment Board’ or ‘Board’ means the board established under section 801 of the Gramm-Leach-Bliley Act.

      ‘(7) SAFER ANNUITY INVESTMENT FUND- The term ‘SAFER Annuity Investment Fund’ means a fund certified by the Social Security Investment Board under section 801(f)(2) of the Gramm-Leach-Bliley Act.

      ‘(8) COMMISSIONER- The term ‘Commissioner’ means the Commissioner of Social Security.

‘SOCIAL SECURITY SAVINGS ACCOUNTS FOR EMPLOYEES (SAFE ACCOUNTS)

    ‘SEC. 252. (a) INITIAL DESIGNATION OF SAFE ACCOUNTS BY INVESTING WORKERS- An individual who is an investing worker shall receive or be provided with the most recent listing of SAFE Investment Funds certified for safety and soundness by the Social Security Investment Board as compiled under section 801(f)(3) of the Gramm-Leach-Bliley Act, and shall designate a SAFE Account not later than 10 business days after the individual becomes an investing worker.

    ‘(b) TIME DESIGNATION TAKES EFFECT- A designation under subsection (a) shall take effect with respect to the first pay period beginning more than 14 days after the date of the designation.

    ‘(c) INVESTING WORKER’S CONTROL OF AND PROPERTY RIGHT IN DESIGNATED SAFE ACCOUNT-

      ‘(1) IN GENERAL- An investing worker shall, at the time a designation is made under subsection (a), designate the SAFE Account to which SAFE Account contributions on behalf of the investing worker are to be deposited.

      ‘(2) CHANGES- The Social Security Investment Board shall by regulation provide the time and manner by which an investing worker may--

        ‘(A) not more than once every 12 months, designate a different SAFE Account to which contributions are to be deposited, and

        ‘(B) transfer the entire balance from one such Account to another.

      ‘(3) ACCOUNT IS PROPERTY OF WORKER- Each SAFE Account designated by an investing worker is the sole property of the worker.

    ‘(d) FORM OF DESIGNATIONS- Designations under this section shall be made--

      ‘(1) on W-4 forms (or any successor forms), or

      ‘(2) in such other manner as the Social Security Investment Board may prescribe in order to ensure ease of administration and reductions in burdens on covered employers.

‘SAFE INVESTMENT FUNDS

    ‘SEC. 253. (a) IN GENERAL- Each SAFE Account shall be administered by a SAFE Investment Fund, which shall be certified and regulated by the Social Security Investment Board established under section 801 of the Gramm-Leach-Bliley Act, and shall invest the assets of each SAFE Account according to the rules established by the Board.

    ‘(b) INVESTMENT EARNINGS REPORT-

      ‘(1) IN GENERAL- At least annually, each SAFE Investment Fund shall provide to each investing worker with a SAFE Account managed by the Fund a SAFE Investment Status Report. Such report may be transmitted electronically upon the agreement of the investing worker under the terms and conditions established by the Social Security Investment Board.

      ‘(2) CONTENTS OF REPORT- The SAFE Investment Status Report, with respect to a SAFE Account, shall provide the following information:

        ‘(A) The total SAFE Account contributions made in the last quarter, the last year, and since the Account was established.

        ‘(B) The amount and rate of return earned for each period described in subparagraph (A).

        ‘(C) A projection of how much the investing worker will have available on the date the worker attains normal retirement age if such contributions and earnings continue at the same rate during the remaining period ending with such date.

    ‘(c) GUARANTEED ACCEPTANCE POLICY- Each SAFE Investment Fund shall accept all investing workers requesting to open SAFE Accounts in the Fund.

    ‘(d) MAXIMUM ADMINISTRATIVE FEE- Each SAFE Investment Fund shall charge each investing worker in the Fund a single, uniform annual administrative fee not to exceed 0.3 percent of the value of the assets invested in the worker’s SAFE Account.

‘SOCIAL SECURITY INVESTMENT BOARD

    ‘SEC. 254. For the establishment of the Social Security Investment Board, see section 801 of the Gramm-Leach-Bliley Act.

‘SAFE ACCOUNT CONTRIBUTIONS

    ‘SEC. 255. (a) IN GENERAL- The Secretary of the Treasury shall transfer at least quarterly for payment by the Commissioner to a SAFE Investment Fund for deposit in a SAFE Account of an investing worker, an amount equal to the base SAFE Account investment rate, plus, if applicable, the supplemental SAFE Account investment rate of the taxable wages and self-employment income of the investing worker for the taxable year as determined under chapters 2 and 21 of the Internal Revenue Code of 1986. Transfers referred to under the preceding sentence shall be made from that portion of the annual unified Federal budget surplus derived from the annual surplus income of the Federal Old-Age and Survivors Insurance Trust Fund. The Social Security Investment Board may require that such transfers be made on a more frequent basis, if the Board determines such frequency is feasible. No transfer may be made to a SAFE Account unless provided for under this part.

    ‘(b) BASE SAFE ACCOUNT INVESTMENT RATE- For purposes of this part, with respect to any taxable year, the base SAFE Account investment rate is equal to the greater of--

      ‘(1) 3.1 percent, or

      ‘(2) the investment rate established under section 259(a)(2).

    All assets and earnings resulting from the base SAFE Account investment rate shall be identified as base SAFE Account assets.

    ‘(c) SUPPLEMENTAL SAFE ACCOUNT INVESTMENT RATE- For purposes of this part, with respect to any taxable year, in the case of any investing worker who has attained the age of 37 but not the age of 58 on January 1, 2003, the supplemental SAFE Account investment rate is equal to 2 percent. All assets and earnings resulting from the supplemental SAFE Account investment rate shall be identified as supplemental SAFE Account assets.

    ‘(d) NOTICE OF CONTRIBUTIONS- The full amount of an investing worker’s SAFE Account contributions shall be shown on such worker’s W-2 tax statement, as provided in section 6051(a)(12) of the Internal Revenue Code of 1986.

‘SOCIAL SECURITY SAVINGS ANNUITY FOR ELIGIBLE RETIREES (SAFER ANNUITIES) AND OTHER DISTRIBUTIONS

    ‘SEC. 256. (a) DATE OF INITIAL DISTRIBUTION- Except as provided in subsection (b)(4), distributions may only be made from a SAFE Account of an investing worker on and after the earliest of--

      ‘(1) the date the worker attains normal retirement age, as determined under section 216 (or early retirement age (as so determined) if elected by such worker), or

      ‘(2) the date on which the worker’s base SAFE Account assets are sufficient--

        ‘(A) to purchase a SAFER Annuity (as defined in subsection (b)(1)(B)) with a monthly benefit calculated as if the worker had reached early retirement age on such date, and

        ‘(B) to fund family or survivor benefits for related individuals as calculated under subsection (b)(2).

    ‘(b) FORMS OF DISTRIBUTION-

      ‘(1) SAFER ANNUITY-

        ‘(A) IN GENERAL- Except as provided in paragraph (4) and section 257, on the date determined under subsection (a), the investing worker shall, in a manner to be determined by the Social Security Investment Board, directly transfer sufficient assets in an amount equal to--

          ‘(i) the aggregate supplemental SAFE Account assets in the worker’s SAFE Account (if any), plus

          ‘(ii) sufficient base SAFE Account assets in the worker’s SAFE Account,

        to purchase a SAFER Annuity from a SAFER Annuity Investment Fund.

        ‘(B) SAFER ANNUITY INVESTMENT FUNDS-

          ‘(i) NOTICE OF FUNDS- An investing worker shall receive or be provided with before the date of initial distribution the most recent listing of SAFER Annuity Investment Funds certified for safety and soundness by the Social Security Investment Board as compiled under section 801(f)(3) of the Gramm-Leach-Bliley Act.

          ‘(ii) GUARANTEED ACCEPTANCE POLICY- Each SAFER Annuity Investment Fund shall accept all investing workers requesting to purchase SAFER Annuities from the Fund.

          ‘(iii) MAXIMUM ADMINISTRATIVE FEE- Each SAFER Annuity Investment Fund shall charge each investing worker in the Fund a single, uniform annual administrative fee not to exceed 0.3 percent of the total value of the assets in the worker’s SAFER Annuity.

          ‘(iv) UNIFORM TREATMENT- Each SAFER Annuity Investment Fund shall provide each investing worker of the same age the same monthly benefit relative to the amount of SAFE Account assets transferred, regardless of sex, race, health status, or other characteristics.

        ‘(C) SOCIAL SECURITY SAVINGS ANNUITY FOR ELIGIBLE RETIREES (SAFER ANNUITY)- For purposes of this part, the term ‘social security savings annuity for eligible retirees’ or ‘SAFER Annuity’ means an annuity--

          ‘(i) the annuity starting date (as defined in section 72(c)(4) of the Internal Revenue Code of 1986) of which commences on the first day of the month beginning after the date of the purchase of the annuity,

          ‘(ii) that, except as provided in subparagraph (E), provides for a monthly payment to the worker during the life of the worker equal to the SAFER Annuity payment determined under subparagraph (D), and

          ‘(iii) that includes such terms and conditions as the Social Security Investment Board requires for the protection of the annuitant.

        ‘(D) SAFER ANNUITY PAYMENT- For purposes of this part, the SAFER Annuity payment is equal to a monthly payment equal to the sum of--

          ‘(i) 100 percent of the investing worker’s initial primary insurance amount (determined under section 215 as if the worker applied for old-age insurance benefits on the date determined under subsection (a)), adjusted annually for benefit changes reflecting the rate of return on the annuities investment by the SAFER Annuity Investment Fund, plus

          ‘(ii) a bonus amount equal to 20 percent of that portion of the benefits described in clause (i) which are funded by that portion of the SAFER Annuity derived from the Base SAFE Account assets in the worker’s SAFE Account.

        ‘(E) GUARANTY PAYMENT TO ENSURE FULL PROMISED BENEFITS- If an investing worker purchasing a SAFER Annuity under subparagraph (A) on the date determined under subsection (a)(1) has insufficient assets in the worker’s SAFE Account for such an annuity to provide a SAFER Annuity payment, the worker shall purchase the largest SAFER Annuity the worker’s SAFE Account can fund, and the worker shall be eligible for a guaranty payment pursuant to section 258.

      ‘(2) FAMILY OR SURVIVOR BENEFITS FOR RELATED INDIVIDUALS-

        ‘(A) IN GENERAL- In the case of an investing worker whose SAFE Account has more than sufficient base SAFE account assets to purchase a SAFER Annuity providing a SAFER Annuity payment on the date determined under subsection (a), the worker shall set aside excess base SAFE Account assets in an amount determined by the Social Security Investment Board under subparagraph (B) to fund family or survivor benefits for related individuals entitled to such benefits under section 202 based on the wages or self-employment income of the worker.

        ‘(B) DETERMINATION OF SET ASIDE AMOUNT- The Social Security Investment Board shall determine and the Commissioner shall implement rules to determine the amount of excess assets to be set aside under subparagraph (A) taking into account--

          ‘(i) the base SAFE Account assets, if any, of each related individual described in subparagraph (A),

          ‘(ii) the projected buildup in the base SAFE Account assets of such individual, if any, assuming distribution at normal retirement age,

          ‘(iii) the SAFER Annuity, if any, such related individual is or is projected to receive, compared to the maximum benefit such related individual receives or is projected to receive under part A, and

          ‘(iv) the projected interest rate for the applicable period as the Board determines on the set aside date.

        ‘(C) USE OF SET ASIDE AMOUNT- The assets set aside under subparagraph (A) shall be deposited in a related individual’s SAFE Account, if applicable, or shall be used to fund or supplement a SAFER Annuity the starting date of which is the date the related individual is eligible to receive the benefits described in subparagraph (A).

        ‘(D) PROTECTION AGAINST ADDITIONAL ASSESSMENTS- Once a determination and set aside is made under this paragraph with respect to any related individual, the investing worker shall be held harmless for any additional amounts necessary to fund any additional benefits such related individual may become entitled to under section 202.

      ‘(3) RIGHT TO USE EXCESS SAFE ACCOUNT ASSETS- To the extent assets remain in an investing worker’s SAFE Account after the purchase of an annuity under paragraph (1) and a set aside of assets under paragraph (2), such excess assets shall be payable to the worker in such manner and in such amounts as determined by the worker.

      ‘(4) DISTRIBUTION IN THE EVENT OF DEATH BEFORE THE PURCHASE OF AN ANNUITY- If the investing worker dies before the date determined under subsection (a), the balance in the worker’s SAFE Account shall be distributed in the following manner:

        ‘(A) An amount equal to the present discount value of the family or survivor benefits related individuals are entitled to under section 202 based on the wages or self-employment income of the worker, for deposit or use as described in paragraph (2)(C).

        ‘(B) The remainder in a lump sum, under rules established by the Social Security Investment Board, to the worker’s estate, subject to applicable State laws.

‘MONEY-BACK GUARANTEE

    ‘SEC. 257. On the date determined under section 256(a), an investing worker may irrevocably elect to reject

investment-based social security under this part for the full benefits such worker is eligible for under part A. Upon such election, an investing worker’s eligibility under this part shall terminate and the balance in the worker’s SAFE Account shall be distributed to the Federal Old-Age and Survivors Insurance Trust Fund and the Federal Disability Insurance Trust Fund in a manner to be determined by the Social Security Investment Board.

‘GUARANTEE OF PROMISED BENEFITS

    ‘SEC. 258. (a) GUARANTEE OF PROMISED BENEFITS-

      ‘(1) IN GENERAL- If an investing worker receives a monthly payment from the worker’s SAFER Annuity that is less than the SAFER Annuity payment determined under section 256(b)(1)(D), the Commissioner shall use such sums as are necessary from the Federal Old-Age and Survivor’s Insurance Trust Fund to provide a guaranty payment to supplement the SAFER Annuity and to guarantee full payment of such worker’s monthly promised benefits.

      ‘(2) GUARANTY PAYMENT- For purposes of paragraph (1), an investing worker’s guaranty payment is equal to the excess of--

        ‘(A) the amount which would have been the investing worker’s monthly benefit under section 202, as of the date determined under section 256(a)(1) and adjusted for benefit increases reflecting the actual cost-of-living increases provided under section 215, over

        ‘(B) the sum of--

          ‘(i) the annuity payment funded by that portion of the base SAFE Account assets in the investing worker’s SAFE Account, divided by 120 percent, plus

          ‘(ii) the annuity payment, if any, funded by the supplemental SAFE Account assets in the investing worker’s SAFE Account.

    ‘(b) PROTECTION AGAINST INFLATION- If the assets in an investing worker’s SAFE Account are sufficient to provide a monthly payment equal to the SAFER Annuity payment determined under section 256(b)(1)(D), but in any particular year, the SAFER Annuity payment does not equal or exceed 120 percent of the cost-of-living adjusted primary insurance amount such worker would have received under part A for months in such year, the Commissioner shall use such sums as are necessary from the Federal Old-Age and Survivor’s Insurance Trust Fund to supplement the SAFER Annuity, as provided in subsection (a).

‘INCREASED SAFE ACCOUNT INVESTMENT RATE

    ‘SEC. 259. (a) DETERMINATION OF RATE-

      ‘(1) NOTIFICATION OF SURPLUS RECEIPTS TO SOCIAL SECURITY TRUST FUNDS- For years beginning after 2005, upon the determination by the Commissioner that the annual projected non-interest receipts of the Federal Old-Age and Survivors Insurance Trust Fund and the Federal Disability Insurance Trust Fund exceed the annual projected costs of providing benefits under part A, the Commissioner shall notify the Social Security Investment Board, the President, and the Congress of such surplus receipts.

      ‘(2) RECALCULATION OF SAFE ACCOUNT INVESTMENT RATE- Beginning after 2005, upon receiving notification under paragraph (1), the Social Security Investment Board shall direct the Secretary of the Treasury to increase the transfers from the Federal Old-Age and Survivors Insurance Trust Fund and the Federal Disability Insurance Trust Fund under section 255 by increasing, in increments of tenths of a percentage point, the maximum investment rate supported by such surplus receipts. Such increase shall be determined to ensure that--

        ‘(A) a base SAFE Account investment rate shall never be less than 3.1 percent nor more than 8 percent, and

        ‘(B) a suitable reserve shall be maintained in such Trust Funds so that benefits payable under part A and this part can be fully funded.

      ‘(3) CONTINUING RECALCULATIONS- Additional determinations, notifications, and recalculations under this subsection shall be made to ensure that the SAFE Account investment rate remains at its maximum level.

      ‘(4) USE OF TRUST FUNDS ASSETS- In any year with respect to which the annual projected surplus as determined under paragraph (1) is insufficient to maintain a base SAFE Account investment rate of 3.1 percent, the Secretary of the Treasury shall redeem sufficient assets of the Trust Funds to ensure that benefits under part A are fully paid and such rate is so maintained.

‘TAX TREATMENT OF ACCOUNTS

    ‘SEC. 260. (a) IN GENERAL- Except as provided in subsection (b), any SAFE Account shall be treated in the same manner as an individual retirement plan (as defined in section 7701(a)(37) of the Internal Revenue Code of 1986), other than a Roth IRA (as defined in section 408A(b) of such Code).

    ‘(b) EXCEPTIONS-

      ‘(1) CONTRIBUTION LIMIT- The aggregate amount of contributions for any taxable year to the SAFE Account of an investing worker shall not exceed the aggregate amount of contributions transferred pursuant to section 255 on behalf of such worker.

      ‘(2) NO DEDUCTION ALLOWED- No deduction shall be allowed under section 219 of the Internal Revenue Code of 1986 for a contribution to a SAFE Account.

      ‘(3) ROLLOVER CONTRIBUTIONS- No rollover contribution may be made to a SAFE Account unless it is from another SAFE Account. A rollover described in the preceding sentence shall not be taken into account for purposes of paragraph (1).

      ‘(4) TAXATION OF DISTRIBUTIONS-

        ‘(A) SAFER ANNUITY PAYMENT- Any payment from a SAFER Annuity purchased under section 256(b)(1) shall be treated as a social security benefit for purposes of section 86 of the Internal Revenue Code of 1986.

        ‘(B) DISTRIBUTION OF EXCESS ASSETS- Any distribution from a SAFE Account under section 256(b)(3) shall be includible in gross income under rules under section 72 of such Code.

        ‘(C) OTHER DISTRIBUTIONS- Any amount paid to purchase a SAFER Annuity and any other distribution under section 256 shall be exempt from any taxation under such Code.

    ‘(c) NONAPPLICATION OF STATE TAX-

      ‘(1) IN GENERAL- No tax, fee, or other monetary payment may be imposed or collected by any State, the District of Columbia, or the Commonwealth of Puerto Rico, or by any political subdivision or other governmental authority thereof, on, or with respect to--

        ‘(A) any amount paid to purchase a SAFER Annuity under section 256, or

        ‘(B) any distribution under section 256 (other than a distribution under subsection (b)(3) thereof).

      ‘(2) RULE OF CONSTRUCTION- Paragraph (1)(A) shall not be construed to exempt any company or other entity issuing an annuity contract under this section from the imposition, payment, or collection of a tax, fee, or other monetary payment on the net income or profit accruing to or realized by that entity from the sale of a SAFER Annuity under this part if that tax, fee, or payment is applicable to a broad range of business activity.’.

    (b) SAFE Account Contributions Shown onW-2’s-

      (1) IN GENERAL- Section 6051(a) of the Internal Revenue Code of 1986 (relating to receipts for employees) is amended by striking ‘and’ at the end of paragraph (10), by striking the period at the end of paragraph (11) and inserting ‘, and’, and inserting after paragraph (11) the following:

      ‘(12) in the case of an investing worker (as defined in section 251(1) of the Social Security Act), of the amount shown pursuant to paragraph (6), the total amount transferred to such worker’s SAFE Account under section 255 of such Act.’.

      (2) CONFORMING AMENDMENTS-

        (A) Section 6051(a)(6) of such Code is amended by inserting ‘and paid as tax under section 3111’ after ‘section 3101’.

        (B) Section 6051(c) of such Code is amended by inserting ‘and paid as tax under section 3111’ after ‘section 3101’.

    (c) EFFECTIVE DATE AND NOTICE REQUIREMENTS-

      (1) EFFECTIVE DATE- The amendments made by this section shall apply to designations of accounts made with respect to payroll periods beginning on or after January 1, 2003.

      (2) NOTICE REQUIREMENTS-

        (A) IN GENERAL- Not later than January 1, 2003, the Commissioner of Social Security shall--

          (i) send to the last known address of each eligible individual a description of the program established by the amendments made by this section, that shall be written in the form of a pamphlet in language that may be readily understood by the average worker,

          (ii) provide for toll-free access by telephone from all localities in the United States and access by the Internet to the Social Security Administration through which individuals may obtain information and answers to questions regarding such program, and

          (iii) provide information to the media in all localities of the United States about such program and such toll-free access by telephone and access by Internet.

        (B) ELIGIBLE INDIVIDUAL- For purposes of this paragraph, the term ‘eligible individual’ means an individual who, as of the date of the pamphlet sent pursuant to subparagraph (A), is indicated within the records of the Social Security Administration as being credited with 1 or more quarters of coverage under section 213 of the Social Security Act (42 U.S.C. 413).

        (C) MATTERS TO BE INCLUDED- The Commissioner of Social Security shall include with the pamphlet sent to each eligible individual pursuant to subparagraph (A)--

          (i) a statement of the number of quarters of coverage indicated in the records of the Social Security Administration as of the date of the description as credited to such individual under section 213 of such Act and the date as of which such records may be considered accurate, and

          (ii) the number for toll-free access by telephone established by the Commissioner pursuant to subparagraph (A)(ii).

TITLE II--AMENDMENTS TO THE INTERNAL REVENUE CODE OF 1986

SEC. 201. REDUCTION OF FICA RATES RESULTING FROM INVESTMENT-BASED SOCIAL SECURITY SYSTEM.

    (a) EMPLOYEE CONTRIBUTION- Section 3101 of the Internal Revenue Code of 1986 (relating to tax on employees) is amended--

      (1) in the table in subsection (a)--

        (A) by striking ‘1990 or thereafter’ and inserting ‘1990 and until the reduction year’,

        (B) by striking the period at the end, and

        (C) by adding at the end the following:

‘The reduction year or thereafter


The reduction year percentage.’,

      and

      (2) by adding at the end the following:

    ‘(c) REDUCTION YEAR- For purposes of this section, the term ‘reduction year’ means the year beginning after the date on which the SAFE Account investment rate established under section 259(a)(2) of the Social Security Act is 8 percent of wages (as so defined).

    ‘(d) REDUCTION YEAR PERCENTAGE- For purposes of this section, the term ‘reduction year percentage’ is equal to the sum of--

      ‘(1) 4 percent, plus

      ‘(2) the Federal Disability Insurance Trust Fund rate of 0.9 percent under section 201(b) of the Social Security Act.’.

    (b) EMPLOYER CONTRIBUTION- Section 3111 of the Internal Revenue Code of 1986 (relating to tax on employees) is amended--

      (1) in the table in subsection (a)--

        (A) by striking ‘1990 or thereafter’ and inserting ‘1990 and until the reduction year’,

        (B) by striking the period at the end, and

        (C) by adding at the end the following:

‘The reduction year or thereafter


The reduction year percentage.’,

      and

      (2) by adding at the end the following:

    ‘(c) REDUCTION YEAR- For purposes of this section, the term ‘reduction year’ means the year beginning after the date on which the SAFE Account investment rate established under section 259(a)(2) of the Social Security Act is 8 percent of wages (as so defined).

    ‘(d) REDUCTION YEAR PERCENTAGE- For purposes of this section, the term ‘reduction year percentage’ is equal to the sum of--

      ‘(1) 4 percent, plus

      ‘(2) the Federal Disability Insurance Trust Fund rate of 0.9 percent under section 201(b) of the Social Security Act.’.

    (c) SELF-EMPLOYED CONTRIBUTION- Section 1401 of the Internal Revenue Code of 1986 (relating to tax on self-employment income) is amended--

      (1) by striking the table in subsection (a) and inserting the following:

-----------------------------------------------------------------------------------------------
 ‘In the case of a taxable year                                                                
 Beginning:                          And:                      The applicable percentage is:   
-----------------------------------------------------------------------------------------------
 After December 31, 1989             Before the reduction year 12.4                            
 In the reduction year or thereafter                           The reduction year percentage’, 
-----------------------------------------------------------------------------------------------

      and

      (2) by adding at the end the following:

    ‘(c) REDUCTION YEAR- For purposes of this section, the term ‘reduction year’ means the taxable year beginning after the date on which the SAFE Account investment rate established under section 259(a)(2) of the Social Security Act is 8 percent of self-employment income (as so defined).

    ‘(d) REDUCTION YEAR PERCENTAGE- For purposes of this section, the term ‘reduction year percentage’ is equal to the sum of--

      ‘(1) 8 percent, plus

      ‘(2) the Federal Disability Insurance Trust Fund rate of 1.8 percent under section 201(b) of the Social Security Act.’.

TITLE III--AMENDMENTS TO THE GRAMM-LEACH-BLILEY ACT

SEC. 301. SOCIAL SECURITY INVESTMENT BOARD

    (a) IN GENERAL- The Gramm-Leach-Bliley Act is amended by adding at the end the following new title:

‘TITLE VIII--SOCIAL SECURITY INVESTMENT BOARD

‘SEC. 801. SOCIAL SECURITY INVESTMENT BOARD.

    ‘(a) ESTABLISHMENT- There is established in the Executive Branch of the Government a Social Security Investment Board (in this section, referred to as the ‘Board’).

    ‘(b) COMPOSITION- The Board shall be composed of--

      ‘(1) 2 members from the private sector appointed by the President, of whom 1 shall be designated by the President as Chairman and of whom--

        ‘(A) 1 shall be appointed by the President after taking into consideration the recommendation made by the Speaker of the House of Representatives in consultation with the Minority Leader of the House of Representatives, and

        ‘(B) 1 shall be appointed by the President after taking into consideration the recommendation made by the Majority Leader of the Senate in consultation with the Minority Leader of the Senate,

      ‘(2) the Secretary of the Treasury,

      ‘(3) the Chairman of the Federal Reserve Board, and

      ‘(4) the Chairman of the Securities and Exchange Commission.

    ‘(c) ADVICE AND CONSENT- Appointments under subsection (b)(1) shall be made by and with the advice and consent of the Senate.

    ‘(d) MEMBERSHIP REQUIREMENTS- Members of the Board appointed under subsection (b)(1) shall have substantial experience, training, and expertise in finance, investments, or insurance.

    ‘(e) LENGTH OF APPOINTMENTS-

      ‘(1) TERMS- A member of the Board appointed under subsection (b)(1) shall be appointed

for a term of 6 years, except that of the members first appointed under subsection (b)(1)--

        ‘(A) the Chairman shall be appointed for a term of 6 years, and

        ‘(B) the remaining member shall be appointed for a term of 3 years.

      ‘(2) VACANCIES-

        ‘(A) IN GENERAL- A vacancy on the Board shall be filled in the manner in which the original appointment was made and shall be subject to any conditions that applied with respect to the original appointment.

        ‘(B) COMPLETION OF TERM- An individual chosen to fill a vacancy shall be appointed for the unexpired term of the member replaced.

      ‘(3) EXPIRATION- The term of any member shall not expire before the earlier of--

        ‘(A) the date on which the member’s successor takes office, or

        ‘(B) 1 year after the member’s term is scheduled to expire.

    ‘(f) DUTIES- The Board shall--

      ‘(1) certify as a SAFE Investment Fund any fund that demonstrates to the satisfaction of the Board that the manner in which such Fund will administer SAFE Accounts will be consistent with the requirements of part B of title II of the Social Security Act and any other applicable Federal law,

      ‘(2) certify as a SAFER Annuity Investment Fund any fund that demonstrates to the satisfaction of the Board that the manner in which such Fund will administer SAFER Annuities will be consistent with the requirements of such part and any other applicable Federal law,

      ‘(3) provide, under a staggered schedule, an annual listing to all workers of the SAFE Investment Funds and the SAFER Annuity Investment Funds certified under paragraphs (1) and (2), the performance of such Funds, and any other information concerning such Funds as the Board determines is necessary for workers to make an informed choice,

      ‘(4) establish the safety and soundness standards under which all SAFE Investment Funds and SAFER Annuity Investment Funds are regulated by the Federal and State agencies authorized to oversee such Funds,

      ‘(5) establish policies for the investment and management of SAFE Accounts and SAFER Annuities, including policies applicable to each SAFE Investment Fund with responsibility for managing the investment options designated by investing workers, that shall provide for--

        ‘(A) prudent investment instruments suitable for accumulating funds for payment of retirement income,

        ‘(B) sound diversification of investments by each SAFE Investment Fund and SAFER Annuity Investment Fund, including--

          ‘(i) for the first 2 years beginning after the date of enactment of part B of title II of the Social Security Act, an overall portfolio for all SAFE Accounts or SAFER Annuities of a Fund of 60 percent stocks and 40 percent bonds, and

          ‘(ii) beginning on the date which is 2 years after such date of enactment, a permitted range of allocating SAFE Account or SAFER Annuity investments in stocks, bonds, and other instruments, taking into account an appropriate balance of risk and return for the age of the investing worker, and

        ‘(C) administrative, management, and brokerage fees at a rate--

          ‘(i) uniform among all SAFE Accounts managed by a SAFE Investment Fund or all SAFER Annuities managed by a SAFER Annuity Investment Fund, and

          ‘(ii) not to exceed a total of 30 basis points,

      ‘(6) assess penalties, including decertification, against any SAFE Investment Fund or SAFER Annuity Investment Fund determined by the applicable Federal or State agency to be in violation of the requirements of part B of title II of the Social Security Act and the standards described in paragraph (4),

      ‘(7) review and approve the budget of the Board,

      ‘(8) apply such statutory requirements of the applicable laws regulating SAFE Investment Funds and SAFER Annuity Funds as the Board deems necessary to ensure the safety and soundness of the funds and the protection of and full disclosure to participants,

      ‘(9) exempt from such statutory requirements of the applicable laws regulating SAFE Investment Funds and SAFER Annuity Funds as the Board deems necessary to limit the regulatory, administrative, legal and litigation-related costs imposed on such funds, consistent with the limit on administrative expenses in section 253(d) of the Social Security Act,

      ‘(10) make recommendations to Congress for legislation necessary--

        ‘(A) to ensure the safety and soundness of the funds,

        ‘(B) to protect and ensure full disclosure to participants, and

        ‘(C) to limit the regulatory, administrative, legal and litigation-related costs imposed on such funds, and

      ‘(11) carry out any other duties specified under part B of title II of the Social Security Act.

    In carrying out its duties under paragraph (5), the Board shall require that each SAFE Investment Fund and SAFER Annuity Investment Fund have not more than 3 percent of its overall portfolio in any 1 stock. However, the Board is specifically prohibited from requiring or denying the purchase of a specific stock or bond.

    ‘(g) ADMINISTRATIVE PROVISIONS-

      ‘(1) IN GENERAL- The Board may--

        ‘(A) adopt, alter, and use a seal,

        ‘(B) direct the Executive Director to take such action as the Board considers appropriate to carry out the provisions of part B of title II of the Social Security Act and the policies of the Board,

        ‘(C) upon the concurring votes of 4 members, remove the Executive Director from office for good cause shown, and

        ‘(D) take such other actions as may be necessary to carry out the functions of the Board.

      ‘(2) MEETINGS- The Board shall meet--

        ‘(A) not less than once during each 2-month period, and

        ‘(B) at additional times at the call of the Chairman.

      ‘(3) EXERCISE OF POWERS-

        ‘(A) IN GENERAL- Except as provided in paragraph (1)(C), the Board shall perform the functions and exercise the powers of the Board on a majority vote of a quorum of the Board. Three members of the Board shall constitute a quorum for the transaction of business.

        ‘(B) VACANCIES- A vacancy on the Board shall not impair the authority of a quorum of the Board to perform the functions and exercise the powers of the Board.

    ‘(h) COMPENSATION-

      ‘(1) IN GENERAL- Each member of the Board who is not an officer or employee of the Federal Government shall be compensated at the daily rate of basic pay for level IV of the Executive Schedule for each day during which such member is engaged in performing a function of the Board.

      ‘(2) EXPENSES- A member of the Board shall be paid travel, per diem, and other necessary expenses under subchapter I of chapter 57 of title 5, United States Code, while traveling away from such member’s home or regular place of business in the performance of the duties of the Board.

    ‘(i) APPOINTMENT OF EXECUTIVE DIRECTOR-

      ‘(1) IN GENERAL- The Board shall appoint, without regard to the provisions of law governing appointments in the competitive service, an Executive Director by action agreed to by a majority of the members of the Board.

      ‘(2) REQUIREMENTS- The Executive Director shall have substantial experience, training, and expertise in finance, investments, and insurance.

      ‘(3) DUTIES- The Executive Director shall--

        ‘(A) carry out the policies established by the Board,

        ‘(B) administer the provisions of part B of title II of the Social Security Act, and

        ‘(C) prescribe such regulations (other than regulations relating to fiduciary responsibilities) as may be necessary for the administration of such part.

      ‘(4) ADMINISTRATIVE AUTHORITY- The Executive Director may--

        ‘(A) appoint such personnel as may be necessary to carry out the provisions of part B of title II of the Social Security Act,

        ‘(B) subject to approval by the Board, procure the services of experts and consultants under section 3109 of title 5, United States Code,

        ‘(C) secure directly from an Executive agency, the United States Postal Service, or the Postal Rate Commission any information necessary to carry out the provisions of such part and the policies of the Board,

        ‘(D) make such payments out of sums described in subsection (l) as the Executive Director determines are necessary to carry out the provisions of such part and the policies of the Board,

        ‘(E) accept and use the services of individuals employed intermittently in the Government service and reimburse such individuals for travel expenses, as authorized by section 5703 of title 5, United States Code, including per diem as authorized by section 5702 of such title,

        ‘(F) except as otherwise expressly prohibited by law or the policies of the Board, delegate any of the Executive Director’s functions to such employees under the Board as the Executive Director may designate and authorize such successive redelegations of such functions to such employees under the Board as the Executive Director may consider to be necessary or appropriate, and

      ‘(G) take such other actions as are appropriate to carry out the functions of the Executive Director.

    ‘(j) DISCHARGE OF RESPONSIBILITIES- The members of the Board shall discharge their responsibilities solely in the interest of SAFE Account holders and beneficiaries under part B of title II of the Social Security Act.

    ‘(k) ANNUAL INDEPENDENT AUDIT- The Board shall annually engage an independent qualified public accountant to audit the activities of the Board.

    ‘(l) SOURCE OF FUNDS- Payments authorized under this section shall be paid from the Federal Old-Age and Survivors Insurance Trust Fund.

    ‘(m) SUBMISSION OF BUDGET TO CONGRESS- The Board shall prepare and submit to the President, and, at the same time, to the appropriate committees of Congress, an annual budget of the expenses and other items relating to the Board which shall be included as a separate item in the budget required to be transmitted to Congress under section 1105 of title 31, United States Code.

    ‘(n) SUBMISSION OF LEGISLATIVE RECOMMENDATIONS- The Board may submit to the President, and, at the same time, shall submit to each House of Congress, any legislative recommendations of the Board relating to any of its functions under part B of title II of the Social Security Act or any other provision of law.

    ‘(o) DEFINITIONS- For purposes of this section--

      ‘(1) INVESTING WORKER- The term ‘investing worker’ has the meaning given such term by section 251(1) of the Social Security Act.

      ‘(2) SAFE ACCOUNT- The term ‘SAFE Account’ means any individual retirement plan (as defined in section 7701(a)(37) of the Internal Revenue Code of 1986), other than a Roth IRA (as defined in section 408A(b) of such Code), which is designated by an investing worker as a SAFE Account (in such manner as the Secretary of the Treasury may prescribe) and which is administered by a SAFE Investment Fund.

      ‘(3) SAFER ANNUITY- The term ‘SAFER Annuity’ has the meaning given such term by section 256(b)(1)(C) of the Social Security Act.

      ‘(4) SAFE INVESTMENT FUND- The term ‘SAFE Investment Fund’ means a fund certified by the Board under subsection (f)(1).

      ‘(5) SAFER ANNUITY INVESTMENT FUND- The term ‘SAFER Annuity Investment Fund’ means a fund certified by the Board under subsection (f)(2).’.

    (b) CONFORMING AMENDMENT- The table of contents in section 1(b) of the Gramm-Leach-Bliley Act is amended by adding at the end the following:

‘TITLE VIII--SOCIAL SECURITY INVESTMENT BOARD

      ‘Sec. 801. Social Security Investment Board.’.

TITLE IV--FINANCING OF INVESTMENT-BASED SOCIAL SECURITY

Subtitle A--Dedication of Savings

SEC. 401. DEDICATION OF PART B SAVINGS TO SOCIAL SECURITY TRUST FUNDS.

    In the case of fiscal years beginning after September 30, 2002, the Secretary of the Treasury, in consultation with the Social Security Investment Board, shall estimate and transfer to the Federal Old-Age and Survivors Insurance Trust Fund and the Federal Disability Insurance Trust Fund established under section 201 of the Social Security Act (42 U.S.C. 401) within 3 months after the end of each fiscal year an amount equal to the annual savings of the Federal Government resulting from investment-based social security under part B of such Act, including any additional Federal income tax receipts resulting from SAFER Annuity bonuses and excess SAFE Account distributions under such part B.

Subtitle B--Exemption of Worker Investments From Federal Corporate Income Taxes

SEC. 411. SAFE ACCOUNT AND SAFER ANNUITY INVESTMENTS EXEMPT FROM FEDERAL CORPORATE INCOME TAXES.

    (a) IN GENERAL- In the case of fiscal years beginning after September 30, 2002, the Secretary of the Treasury, in consultation with the Social Security Investment Board, shall estimate and transfer to the Federal Old-Age and Survivors Insurance Trust Fund and the Federal Disability Insurance Trust Fund established under section 201 of the Social Security Act (42 U.S.C. 401) within 3 months after the end of each fiscal year an amount equal to the recapture percentage for such fiscal year. For purposes of the preceding sentence, the recapture percentage for any fiscal year shall be equal to the percentage of corporate income tax receipts under the Internal Revenue Code of 1986 deposited in the Treasury for that fiscal year which are attributable to SAFE Account and SAFER Annuity investments under part B of the Social Security Act.

    (b) DETERMINATION OF RECAPTURE PERCENTAGE- In determining the recapture percentage under subsection (a) for fiscal years 2001 and 2002, the Secretary of the Treasury shall make the following assumptions concerning the total amount of taxable capital in the United States represented by the total assets held by SAFE Accounts and SAFER Annuities established under part B of the Social Security Act:

      (1) 80 percent of such total assets are a net addition to national investments.

      (2) Of the amount described in paragraph (1), 90 percent will be invested domestically and subject to Federal taxation.

      (3) Of the amount described in paragraph (2), 95 percent will be subject to Federal corporate income tax.

      (4) The amount described in paragraph (3) is subject to the statutory tax rate of 35 percent, creating an effective corporate income tax rate of 23.9 percent on the earnings of such assets.

Subtitle C--Amendments to Balanced Budget and Emergency Deficit Control Act of 1985

SEC. 421. DEDICATION OF BUDGET SURPLUSES TO SAVING SOCIAL SECURITY.

    (a) IN GENERAL- In the case of fiscal years beginning after September 30, 2002, from the surplus in the total budget of the United States Government or from

that portion of Federal revenues directly attributable to the surplus income of the Federal Old-Age and Survivors Insurance Trust Fund and the Federal Disability Insurance Trust Fund established under section 201 of the Social Security Act (42 U.S.C. 401), the Secretary of the Treasury shall reimburse each quarter the Federal Old-Age and Survivors Insurance Trust Fund in an amount equal to the amounts transferred to SAFE Accounts under part B of such Act for that quarter.

    (b) ADDITIONAL FISCAL RESTRAINT TO SAVE SOCIAL SECURITY-

      (1) AMENDMENT TO DISCRETIONARY SPENDING LIMITS TO PROVIDE AN OVERALL CAP FOR FISCAL YEARS 2003 THROUGH 2009- Section 251(c) of the Balanced Budget and Emergency Deficit Control Act of 1985 is amended (2 U.S.C. 901(c))--

        (A) in paragraph (6), by striking ‘and’ after the semicolon;

        (B) in paragraph (7)--

          (i) by redesignating subparagraphs (A) and (B) as subparagraphs (B) and (C), respectively,

          (ii) by striking the period at the end of subparagraph (C) (as so redesignated) and inserting ‘; and’, and

          (iii) by inserting before subparagraph (B) (as so redesignated) the following:

        ‘(A) for the discretionary category: $XXXXXXXXXX in new budget authority and $XXXXXXXXXX in outlays, reduced by the total amount of the outlays in the categories described in subparagraphs (B) and (C); ’; and

        (C) by adding at the end the following:

      ‘(8) with respect to each fiscal year beginning with fiscal year 2004 and ending with fiscal year 2009, for the discretionary category: $XXXXXXXXXX in new budget authority and $XXXXXXXXXX in outlays;’.

      (2) EXTENSION OF BUDGET ENFORCEMENT ACT OF 1997 enforcement provisions through fiscal year 2009-

        (A) AMENDMENTS TO THE BALANCED BUDGET AND EMERGENCY DEFICIT CONTROL ACT OF 1985- The Balanced Budget and Emergency Deficit Control Act of 1985 is amended--

          (i) in section 250(c) (2 U.S.C. 900(c)), add at the end the following:

      ‘(20) The term ‘maximum deficit amount’ means zero for fiscal year 2003 and thereafter.’;

          (ii) in section 251(b)(2) (2 U.S.C. 901(b)(2)), in the matter before subparagraph (A), by striking ‘2002’ and inserting ‘2009’;

          (iii) in section 254(c)(2) (2 U.S.C. 904(c)(2)), by striking ‘2002’ and inserting ‘2009’;

          (iv) in section 254(f)(2)(A) (2 U.S.C. 904(f)(2)(A)), by striking ‘2002’ and inserting ‘2009’; and

          (v) in section 275(b), by striking ‘2002’ and inserting ‘2009’.

        (B) CONGRESSIONAL BUDGET ACT OF 1974- Section 904(e) of the Congressional Budget Act of 1974 (2 U.S.C. 621 note) is amended by striking ‘2002’ and inserting ‘2009’.

Subtitle D--Allocation of Transfers

SEC. 431. ALLOCATION OF TRANSFERS.

    The Secretary of the Treasury, in his or her capacity as the Managing Trustee of the Federal Old-Age and Survivors Insurance Trust Fund and the Federal Disability Insurance Trust Fund established under section 201 of the Social Security Act (42 U.S.C. 401), shall determine the allocation of the transfers described in sections 401, 411(a), and 421(a) between such Trust Funds.