II
113th CONGRESS
1st Session
S. 567
IN THE SENATE OF THE UNITED STATES
March 14, 2013
Mr. Harkin introduced the following bill; which was read twice and referred to the Committee on Finance
A BILL
To improve the retirement security of American families by strengthening Social Security.
Short title
This Act may be cited as the
Strengthening Social Security Act of
2013
.
Determination of taxable wages and self-employment income above contribution and benefit base after 2013
Determination of taxable wages above contribution and benefit base after 2013
Amendments to the Internal Revenue Code of 1986
Section 3121 of the Internal Revenue Code of 1986 is amended—
in subsection
(a)(1), by inserting the applicable percentage (determined under
subsection (c)(1)) of
before that part of the
remuneration
; and
in subsection (c), by striking (c)
Included and excluded
service.—For purposes of this chapter, if
and
inserting the following:
Special rules for wages and employment
Applicable percentage of remuneration in determining taxable wages
For purposes of subsection (a)(1), the applicable percentage for a calendar year shall be equal to—
for 2014, 80 percent;
for 2015 through 2017, the applicable percentage under this paragraph for the previous year, decreased by 20 percentage points; and
for 2018 and each year thereafter, 0 percent.
Included and excluded service
For purposes of this chapter, if
.
Amendments to the Social Security Act
Section 209 of the Social Security Act (42 U.S.C. 409) is amended—
in subsection (a)(1)(I)—
by
inserting and before 2014
after 1974
; and
by
inserting and
after the semicolon;
in subsection (a)(1), by adding at the end the following new subparagraph:
The applicable percentage (determined under subsection (l)) of that part of remuneration which, after remuneration (other than remuneration referred to in the succeeding subsections of this section) equal to the contribution and benefit base (determined under section 230) with respect to employment has been paid to an individual during any calendar year after 2013 with respect to which such contribution and benefit base is effective, is paid to such individual during such calendar year;
; and
by adding at the end the following new subsection:
For purposes of subsection (a)(1)(J), the applicable percentage for a calendar year shall be equal to—
for 2014, 80 percent;
for 2015 through 2017, the applicable percentage under this subsection for the previous year, decreased by 20 percentage points; and
for 2018 and each year thereafter, 0 percent.
.
Effective date
The amendments made by this subsection shall apply with respect to remuneration paid in calendar years after 2013.
Determination of taxable self-Employment income above contribution and benefit base after 2013
Amendments to the Internal Revenue Code of 1986
Section 1402 of the Internal Revenue Code of 1986 is amended—
in subsection
(b)(1), by striking that part of the net earnings
and all that
follows through minus
and inserting the following: an
amount equal to the applicable percentage (as determined under subsection
(d)(2)) of that part of the net earnings from self-employment which is in
excess of the difference (not to be less than zero) between (i) an amount equal
to the contribution and benefit base (as determined under section 230 of the
Social Security Act) which is effective for the calendar year in which such
taxable year begins, and
; and
in subsection (d)—
by
striking (d) Employee and
wages.—The term
and inserting the following:
Rules and definitions
Employee and wages
The term
; and
by adding at the end the following:
Applicable percentage of net earnings from self-employment in determining taxable self-employment income
For purposes of subsection (b)(1), the applicable percentage for a taxable year beginning in any calendar year referred to in such paragraph shall be equal to—
for 2014, 80 percent;
for 2015 through 2017, the applicable percentage under this paragraph for the previous year, decreased by 20 percentage points; and
for 2018 and each year thereafter, 0 percent.
.
Amendments to the Social Security Act
Section 211 of the Social Security Act (42 U.S.C. 411) is amended—
in subsection (b)—
in paragraph (1)(I)—
by striking
or
after the semicolon; and
by inserting
and before 2014
after 1974
;
by redesignating paragraph (2) as paragraph (3); and
by inserting after paragraph (1) the following:
For any taxable year beginning in any calendar year after 2013, an amount equal to the applicable percentage (as determined under subsection (l)) of that part of net earnings from self-employment which is in excess of the difference (not to be less than zero) between—
an amount equal to the contribution and benefit base (as determined under section 230) that is effective for such calendar year, and
the amount of the wages paid to such individual during such taxable year; or
; and
by adding at the end the following:
For purposes of subsection (b)(2), the applicable percentage for a taxable year beginning in any calendar year referred to in such paragraph shall be equal to—
for 2014, 80 percent;
for 2015 through 2017, the applicable percentage under this subsection for the previous year, decreased by 20 percentage points; and
for 2018 and each year thereafter, 0 percent.
.
Effective date
The amendments made by this subsection shall apply with respect to taxable years beginning during or after calendar year 2014.
Adjustments to bend points in determining primary insurance amount and inclusion of surplus earnings for benefit determinations
Inclusion of surplus average indexed monthly earnings in determination of primary insurance amounts
In general
Section 215(a)(1)(A) of the Social Security Act (42 U.S.C. 415(a)(1)(A)) is amended—
in clauses (i),
(ii), and (iii), by inserting basic
before average
indexed monthly earnings
each place it appears;
in clause (ii), by
striking and
at the end;
in clause (iii),
by adding and
at the end; and
by inserting after clause (iii) the following new clause:
5 percent of the individual’s surplus average indexed monthly earnings,
.
Bend point adjustment
Section 215(a)(1)(B) of such Act (42 U.S.C. 415(a)(1)(B)) is amended—
by redesignating clause (iii) as clause (iv); and
by inserting after clause (ii) the following new clause:
For individuals who initially become eligible for old-age or disability insurance benefits, or who die (before becoming eligible for such benefits) in any calendar year after 2018, the amount determined under clause (i) of this subparagraph for purposes of subparagraph (A)(i) for such calendar year shall be increased by—
for calendar year 2019, 1 percent;
for each of calendar years 2020 through 2032, the percent determined under this clause for the preceding year increased by 1 percentage point; and
for calendar year 2033 and each year thereafter, 15 percent.
.
Basic AIME and surplus AIME
Basic AIME
Section 215(b)(1) of such Act ( 42 U.S.C. 415(b)(1) ) is amended—
by inserting basic
before
average
; and
in subparagraph
(A), by striking paragraph (3)
and inserting
paragraph
(3)(A)
and by inserting before the comma the following: to the
extent such total does not exceed the contribution and benefit base for the
applicable year
.
Surplus AIME
In general
Section 215(b)(1) of such Act (as amended by paragraph (1)) is amended—
by redesignating subparagraphs (A) and (B) as clauses (i) and (ii), respectively;
by
inserting (A)
after (b)(1)
; and
by adding at the end the following new subparagraph:
An individual’s surplus average indexed monthly earnings shall be equal to the quotient obtained by dividing—
the total (after adjustment under paragraph (3)(B)) of such individual’s surplus earnings (determined under clause (ii)) for such individual’s benefit computation years (determined under paragraph (2)), by
the number of months in those years.
For purposes of clause (i) and paragraph (3)(B), an individual’s surplus earnings for a benefit computation year are the total of such individual’s wages paid in and self-employment income credited to such benefit computation year, to the extent such total (before adjustment under paragraph (3)(B)) exceeds the contribution and benefit base for such year.
.
Conforming amendment
The heading for section 215(b) of such Act is amended
by striking Average Indexed Monthly Earnings
and inserting
Basic Average Indexed Monthly Earnings; Surplus Average Indexed Monthly
Earnings
.
Adjustment of surplus earnings for purposes of determining surplus AIME
Section 215(b)(3) of such Act ( 42 U.S.C. 415(b)(3) ) is amended—
in subparagraph
(A), by striking subparagraph (B)
and inserting
subparagraph (C)
and by inserting and determination of
basic average indexed monthly income
after paragraph
(2)
;
by redesignating subparagraph (B) as subparagraph (C); and
by inserting after subparagraph (A) the following new subparagraph:
For purposes of determining under paragraph (1)(B) an individual’s surplus average indexed monthly earnings, the individual’s surplus earnings (described in paragraph (2)(B)(ii)) for a benefit computation year shall be deemed to be equal to the product of—
the individual’s surplus earnings for such year (as determined without regard to this subparagraph), and
the quotient described in subparagraph (A)(ii).
.
Effective date
The amendments made by this section shall apply with respect to individuals who initially become eligible (within the meaning of section 215(a)(3)(B) of the Social Security Act) for old-age or disability insurance benefits under title II of the Social Security Act, or who die (before becoming eligible for such benefits), in any calendar year after 2018.
Consumer Price Index for Elderly Consumers
In general
The Bureau of Labor Statistics of the Department of Labor shall prepare and publish an index for each calendar month to be known as the Consumer Price Index for Elderly Consumers that indicates changes over time in expenditures for consumption which are typical for individuals in the United States who have attained early retirement age (as defined under section 216(l)(2) of the Social Security Act ( 42 U.S.C. 416(l)(2) ) for purposes of an old-age, wife's, or husband's insurance benefit).
Effective date
Subsection (a) shall apply with respect to calendar months ending on or after June 30 of the calendar year in which this Act is enacted.
Authorization of appropriations
There are authorized to be appropriated such sums as are necessary to carry out the provisions of this section .
Computation of cost-of-living increases for Social Security benefits
In general
Section 215(i) of the Social Security Act (42 U.S.C. 415(i)) is amended—
in paragraph (1)(G), by inserting before
the period the following: , and, with respect to any monthly insurance
benefit payable under this title, effective for adjustments under this
subsection to the primary insurance amount on which such benefit is based (or
to any such benefit under section 227 or 228), the applicable Consumer Price
Index shall be deemed to be the Consumer Price Index for Elderly Consumers and
such primary insurance amount shall be deemed adjusted under this subsection
using such Index
; and
in paragraph (4), by striking and by
section 9001
and inserting , by section 9001
, and by
inserting after 1986,
the following: and by section 5(a)
of the Strengthening Social Security Act of
2013
,
.
Conforming amendments in applicable former law
Section 215(i)(1)(C) of the
Social Security Act
, as in effect in
December 1978 and applied in certain cases under the provisions of such Act in
effect after December 1978, is amended by inserting before the period the
following: , and, with respect to any monthly insurance benefit payable
under this title, effective for adjustments under this subsection to the
primary insurance amount on which such benefit is based (or to any such benefit
under section 227 or 228), the applicable Consumer Price Index shall be deemed
to be the Consumer Price Index for Elderly Consumers and such primary insurance
amount shall be deemed adjusted under this subsection using such
Index
.
Effective date
The amendments made by this section shall apply to determinations made by the Commissioner of Social Security under section 215(i)(2) of the Social Security Act (42 U.S.C. 415(i)(2)) with respect to cost-of-living computation quarters ending on or after September 30, 2014.
