EXPLANATION OF CONFERENCE REPORT ON H. R. 1900 SOCIAL SECURITY ACT AMENDMENTS OF 1983

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• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP85-00003R000200110005-9
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• Document Page Count: 65
• Document Creation Date: December 21, 2016
• Document Release Date: October 29, 2008
• Sequence Number: 5
• Publication Date: March 24, 1982
• Content Type: OPEN SOURCE

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H 1724
CONGRESSIONAL RECORD - HOUSE March 24, 1983
an undocumented status. Could the
gentleman tell us what disposition the
conference made?
Mr. CONABLE. Yes; that was con-
sidered, of course, in the conference
committee, and there was considerable
resistance on the part of the adminis-
tration to that proposal only because
of fear that it would be extremely dif-
ficult to administer.
We are going to have to deal with
the problem of illegal aliens, and per-
haps in connection with that we can
do something further, but that provi-
sion was dropped out of the bill pri-
marily for administrative reasons, con-
cern that the Social Security Adminis-
tration would not be able to handle
the administrative problems that such
a proposal would bring up.
^ 1100
Mr. FISH. If the gentleman would
yield further, I think the Senate
amendment is absolutely appalling
and I am delighted with the confer-
ence result. But I do think it under-
scores the necessity for this House to
act in this session of Congress on the
Simpson-Marsoli Immigration Reform
and Control Act.
I thank the gentleman very much.
Mr. CONABLE. I thank my friend
for his comments.
Mr. Speaker, although the House
bill provided some needed improve-
ments in the treatment of women
under the system, and those were the
improvements that were included in
the original House bill, they were not
changed.
Mr. Speaker, rather than take any
further time of the House, I under-
stand the papers are now present and
I would like to yield back the remain-
der of my 1 minute, whatever is
unused.
The SPEAKER pro tempore. The
gentleman has consumed 50 seconds.
VCONFERENCE REPORT ON H.R.
1900, SOCIAL SECURITY ACT
AMENDMENTS OF 1983
Mr. ROSTENKOWSKI submitted
the following conference report and
statement on the bill (H.R. 1900) to
assure the solvency of the social secu-
rity trust funds, to reform the medi-
care reimbursement of hospitals, to
extend the Federal supplemental com-
pensation program, and for other pur-
poses:
CONFERENCE REPORT (H. REPT. No. 98-47)
The committee of conference on the disa-
greeing votes of the two Houses on the
amendment of the Senate to the bill (H.R.
1900) to assure the solvency of the Social
Security Trust Funds, to reform the medi-
care reimbursement of hospitals, to extend
the Federal supplemental compensation
program, and for other purposes, having
met, after full and free conference, have
agreed to recommend and do recommend to
their respective Houses as follows:
That the House recede from its disagree-
ment to the amendment of the Senate and
agree to the same with an amendment as
follows:
In lieu of the matter proposed to be in- TITLE III-MISCELLANEOUS AND
serted by the Senate amendment insert the TECHNICAL PROVISIONS
SHORT TITTS
SECTION 1. This Act, with the following
table of contents may be cited as the "Social
Security Amendments of 1983':
TABLE OF CONTENTS
Sec. 1. Short title.
TITLE I-PROVISIONS AFFECTING THE
FINANCING OF THE SOCIAL SECU-
RITY SYSTEM
PART A-COVERAGE
Sea 101. Coverage of newly hired Federal
employees
Sec. 102. Coverage of employees of nonprofit
organizations.
Sea 103. Duration of agreements for cover-
age of State and local employ-
ees.
PART B-COMPUTATION or BENEFIT AMOUNTS
Sec. 111. Shift of cost-of-living adjustments
to calendar year basis.
Sea 112. Cost-0-living increases to be based
on either wages or prices
(whichever is lower) when bal-
ance in OASDI trust funds falls
below specified level.
Sea 113. Elimination of windfall benefits
for individuals receiving pen-
sions from noncovered employ-
ment.
Sec. 114. Increase in old-age insurance bene-
fit amounts on account of de-
layed retirement.
PART C-REVENUE PROVISIONS
Sea 121. Taxation of social security and
[tier 1] railroad retirement
benefits
Sea 122. Credit for the elderly and the per-
manently and totally disabled.
Sea 123. Acceleration of increases in FICA
taxes; 1984 employee tax credit.
Sec. 124. Taxes on self-employment income;
credit against such taxes.
Sec. 125. Allocations to disability insurance
trust fund.
PART D-BENEFITS FOR CERTAIN SURVIVING,
DlvoRcsz, AND DISABLED SPOUSES
Sea 131. Benefits for surviving divorced
spouses and disabled widows
and widowers who remarry.
Sea 132. Entitlement to divorced spouse's
benefits before entitlement of
insured individual to benefits.
Sec. 133. Indexing of deferred surviving
spouse's benefits
Sec. 134. Limitation on benefit reduction
for early retirement in case of
disabled widows and widowers.
Part E-Mechanisms To Assure Continued
Benefit Payments in Unexpectedly Adverse
Conditions.
Sec. 141. Normalized crediting of social se-
curity taxes to trust funds.
Sec. 142. Interfund borrowing extension.
Sec. 143. Recommendations by Board of
Trustees to remedy inadequate
balances in the Social Security
Trust Funds.
PART F-OTHER FINANCING AMENDMENTS
Sea 151. Financing of noncontributory mil-
itary wage credits.
Sec. 152. Accounting for certain unnegotiat-
ed checks for benefits under the
social security program.
Sec. 153. Float periods.
TITLE II-ADDITIONAL PROVISIONS RE-
LATING TO LONG-TERM FINANCING
OF THE SOCIAL SECURITY SYSTEM
Sec. 201. Increase in retirement age.
DISTINCTIONS
Sec. 301. Divorced husbands.
Sec. 302. Remarriage of surviving spouse
before age of eligibility.
Sec. 303. Illegitimate children.
Sec. 304. Transitional insured status.
Sec. 305. Equalization of benefits under sec-
tion 228.
Sec. 306. Father's insurance benefits.
Sec. 307. Effect of marriage on childhood
disability benefits and on other
dependents' or survivors' bene-
fits.
Sea 308. Credit for certain military service.
Sea 309. Conforming amendments.
Sec. 310. Effective date of part A.
PART B-COVERAGE
Sec. 321. Coverage of employees of foreign
affiliates of American employ-
ers.
Sec. 322. Extension of coverage by interna-
tional social security agree-
ment.
Sec. 323. Treatment of certain service per-
formed outside the United
States.
Sec. 324. Amount received under certain de-
ferred compensation and
salary reduction arrangements
treated as wages for FICA
taxes.
Sec. 325. Treatment of contributions under
simplified employee pensions.
Sec. 326. Effect of changes in names of State
and local employee groups in
Utah.
Sec. 327. Effective dates of international
social security agreements.
Sec. 328. Codification of Rowan decision
with respect to meals and lodg-
ing.
PART C-OTHER AMENDMENTS
Sec. 331. Technical and conforming amend-
ments to maximum farhily a
benefit provisions.
Sec. 332. Relaxation of insured status re-
quirements for certain workers
previously entitled to a period
of disability.
Sec. 333. Protection of benefits of illegit-
imate children of disabled
beneficiaries.
Sec. 334. One-month retroactivity of
widow's and widower's insur-
ance benefits.
Sec. 335. Nonassignability of benefits.
Sec. 336. Use of death certificates to prevent
erroneous benefit payments to
deceased individuals.
Sec. 337. Public pension offset.
Sec. 338. Study concerning the establish-
ment of the Social Security Ad-
ministration as an independ-
ent agency.
Sec. 339. Limitation on payments to prison-
ers.
Sec. 340. Limitations on payments to non-
resident aliens
Sec. 341. Addition of public members to
Trust Fund Board of Trustees.
Sec. 342. Payments schedule by State and
local governments.
Sec. 343. Professors of clinical medicine.
Sec. 344. Earnings sharing implementation
report.
Sec. 345. Veterans' Administration reorga-
nization report.
Sec. 346. Social security cards.
Sec. 347. Budgetary treatment of Trust
Fund operations.
Sea 348. Liberalization of earnings text.
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CONGRESSIONAL RECORD - HOUSE March 24, 1983
"(1) IN azNE AL -For purposes of the taxes
imposed by sections 3101(b) and 3111(b),
subsection (b) shall be applied without
regard to paragraph (5) thereof.".
(c)(1) Section 209 of the Social Security
Act is amended by adding at the end thereof
the following new paragraph:
`For purposes of this title, in the case of
an individual performing service under the
provisions of section 294 of title 28, United
States Code (relating to assignment of re-
tired Justices and fudges to active duty), the
term `wages' shall, subject to the provisions
of subsection (a) of this section, include any
payment under section 371(b) of such title
28 which is received during the period of
such service. ':
(2) Section 3121(1) of the Internal Revenue
Code of 1954 (relating to computation of
wages in certain cases) is amended by
adding at the end thereof the following new
paragraph.
"(5) SERVICE PERFORMED BY CERTAIN RE-
TIRED JUSTICES AND JUDGES -For purposes of
this chapter, in the case of an individual
performing service under the provisions of
section 294 of title 28, United States Code
(relating to assignment of retired justices
and Judges to active duty), the term 'wages'
shah subject to the provisions of subsection
(a)(1) of this section. include any payment
under section 371(b) of such title 28 which is
received during the period of such service".
(d) The amendments made by this section
shall be effective with respect to remunera-
tion paid after December 31, 1983.
(e) Nothing in this Act shall reduce the ac-
crued entitlements to future benefits under
the Federal Retirement System of current
and retired Federal employees and their
families.
COVERAGE OF EMPLOYEES OF NONPROFIT
ORGAN/ZATIONS
SEC, 102. (a) Section 210(a)(8) of the Social
Security Act is amended
(1) by striking out "(A)" immediately after
"(8)".
(2) by striking out "subparagraph" where
it first appears and inserting in lieu thereof
"paragraph", and
(3) by striking out subparagraph (B).
(b)(1) Section 3121(b)(8) of the Internal
Revenue Code of 1954 is amended
(A) by striking out "(A)" immediately after
(B) by striking out "subparagraph" where
it first appears and inserting in lieu thereof
`paragraph"7 and
(C) by striking out subparagraph (B).
(2) Section 3121(k) of such Code is re-
pealed.
(3) Section 3121(r) of such Code is amend-
ed-
(A) by striking out "subsection (b)(8)(A)"
and "section 210(a)(8)(A)" in paragraph (3)
and inserting in lieu thereof "subsection
(b)(8)" and "section 210(a)(8)" respectively;
and
(B) by striking out paragraph (4).
(c) The amendments made by the preced-
ing provisions of this section shall be effec-
tive with respect to service performed after
December 31, 1983 (but the provisions of sec-
tions 2 and 3 of Public Law 94-563 and sec-
tion 312(c) of Public Law 95-216 shall con-
tinue in effect, to the extent applicable, as
though' such amendments had not been
made).
(dl The period for which a certificate is in
effect under section 3121(k) of the Internal
Revenue Code of 1954 may not be terminat-
ed under paragraph (1)(D) or (2) thereof on
or after March 31, 1983; but no such certiK-
cate shall be effective with respect to any
service to which the amendments made by
this section apply.
(e)(1) If any individual-
(A) on January 1, 1984, is age 55 or over,
and is an employee of an organization de-
scribed in section 210(a)(8)(B) of the Social
Security Act (A) which does not have in
effect (on that date) a waiver certificate
under section 3121(k) of the Internal Reve-
nue Code of 1954 and (B) to the employees of
which social security coverage is extended
on January 1, 1984, solely by reason of the
enactment of this section, and
(B) after January 1, 1984, acquires the
number of quarters of coverage (within the
meaning of section 213 of the Social Secu-
rity Act) which is required for purposes of
this subparagraph under paragraph (2),
then such individual shall be deemed to be a
fully insured individual (as defined in sec-
tion 214 of the Social Security Act) for all of
the purposes of title II of such Act.
(2) The number of quarters of coverage
which is required for purposes of subpara-
graph (B) of paragraph (1) shall be deter-
mined as follows:
In the case of an in- The number of quar-
dividual who on ters of coverage
January 1, 1984, so required
is- shall be-
age 60 or over ...................................... 6
age 59 or over but less than age 60.. 8
age 58 or over but less than age 59.. 12
age 57 or over but less than age 58.. 16
age 55 or over but less than age 57.. 20.
DURATION OF AGREEMENTS FOR COVERAGE OF
STATE AND LOCAL EMPLOYEES
SEc. 103. (a) Section 218(g) of the Social
Security Act is amended to read as follows:
`Duration ofAgreement
"(g) No agreement under this section may
be terminated, either in its entirety or with
respect to any coverage group. on or after
the date of the enactment of the Social Secu-
rity Amendments of 1983.".
(b) The amendment made by subsection
(a) shall apply to any agreement in effect
under section 218 of the Social Security Act
on the date of the enactment of this Act,
without regard to whether a notice of termi-
nation is in effect on such date, and to any
agreement or modification thereof which
may become effective under such section 218
after that date.
PART B-COMPUTATION OF BENEFIT AMOUNTS
SWIFT OF COST-OF-LIVMG AWUS2MENTS TO
CALENDAR YEAR BASIS
SEc. 111. (a)(1) Section 215(i)(2)(A)(ii) of
the Social Security Act is amended by strik-
ing out "June" and inserting in lieu thereof
`December':
(2) Section 215(i)(2)(A)(ili) of such Act is
amended by striking out `May". and insert
in lieu thereof "November":
(3) Section 215(i)(2)(B) of such Act is
amended by striking out "May" each place
it appears and inserting in lieu thereof in
each instance 'November':
(4) Section 203(f)(8)(A) of such Act is
amended by striking out "June" and insert-
ing in lieu thereof `December':
(5) Section 230(a) of such Act is amended
by striking out "June" and inserting in lieu
thereof "December".
(6) Section 215(i)(2) 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 out "June" in subpara-
graph (A)(it) and inserting in lieu thereof
'December'; and by striking out "May" each
place it appears in subparagraph (B) and
inserting in leiu thereof in each instance
November':
(7) Section 202(m) of such Act (as it ap-
plies in certain cases by reason of section 2
of Public Law 97-123) is amended by strik-
ing out "May" and inserting in lieu thereof
'November':
(8) The amendments made by this subsec-
tion shall apply with respect to coat-of
living increases determined under section
215(1) of the Social Security Act for years
after 1982.
(b)(1) Section 215(i)(1)(A) of the Social Se-
curity Act is amended by striking out
"March 31" and inserting in lieu thereof
"September 30'; and by striking out "1974"
and inserting in lieu thereof "1982":
(2) Section 215(i)(1)(A) 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 out "March 31 " and in-
serting in lieu thereof "September 30" and
by striking out "1974" and inserting in lieu
thereof "1982":
(31 The amendments made by this subsec-
tion shall apply with respect to cost-of-
living increases determined under section
215(1) of the Social Security Act for years
after 1983.
(c) Section 215(i)(4) of such Act is amend-
ed by inserting, , and as amended by,sec-
tion 111(A)(6) and (b)(2) of the Social Secu-
rity Amendments of 1983," after "as in effect
in December 1978" the first place it appears.
(d) Notwithstanding any provision to the
contrary in section 215(i) of the Social Secu-
rity Act, the "base quarter" (as defined in
paragraph (1)(A)(i) of such section) in, the
calendar year 1983 shall be a `coat-of-living
computation quarter" within the meaning
of paragraph (1)(B) of such section (and
shall be deemed to have been determined by
the Secretary of Health and Human Services
to be a "cost-of-living computation quarter"
under paragraph (2)(A) of such section) for
all of the purposes of such Act as amended
by this section and by other provisions of
this Act, without regard to the extend by
which the Consumer Price index has in-
creased since the last prior cost-of-living
computation quarter which was established
under such paragraph (1) (B).
(e) Section 403(b) of the Omnibus Recon-
ciliation Act of 1982 (Public Law 97-253) is
amended to read as follows:
"(b)(1) Except as provided in paragraph
(2), the amendment made by subsection
(a)(1) shall apply with respect to amounts
payable for periods beginning after May 31,
1983.
"(2) In the cases of individuals to whom
pension is payable under sections 521, 541,
and 542 of title 38, United States Code, the
amendment made by subsection (a)(1) shall
take effect on the first day after May 31,
1983, that an increase is made in maximum
annual rates of pension pursuant to section
:
3112 of title 38, United States Code."
COST-OF-LIVING INCREASES 70 BE BASED ON
EITHER WAGES OR PRICES (WHICHEVER IS
LOWER) WHEN BALANCE IN OASDI TRUST FUNDS
FALLS BELOW SPECIFIED LEVEL
Sea 11& (a) Section 215(i)(1) of the Social
Security Act is amended
(1) by striking out "In which" in subpara-
graph (B) and all that follows down through
the first semicolon in such subparagraph
and inserting in lieu thereof "with respect to
which the applicable increase percentage is
3 percent or more;11.
(2) by striking out "and" at the end of sub-
paragraph (B);
(3) by redesignating subparagraph (C) as
subparagraph (H); and
(4) by inserting after subparagraph (B) the
following new subparagraphs:
"(C) the term 'applicable increase percent-
age' means-
110) with respect to a base quarter or cost-
of-living computation quarter in any calen-
dar year before 1985, or in any calendar
year after 1984 and before 1989 for which the
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(12) as paragraph (13), and by inserting
after paragraph (11) the following new para-
graph:
"(12) in lieu of the deduction provided by
section 164(f) (relating to deduction for one-
half of self-employment taxes), there shall be
allowed a deduction equal to the product
of-
"(A) the taxpayer's net earnings from self-
employment for the taxable year (deter-
mined without regard to this paragraph),
and
"(B) one-half of the sum of the rates im-
posed by subsections (a) and (b) of section
1401 for such year,, and":
(3) Conforming amendment to Social Se-
curity Act.-Subsection (a) of section 211 of
the Social Security Act is amended by strik-
ing out "and" at the end of paragraph (10),
by redesignating paragraph (11) as para-
graph (12), and by inserting after paragraph
(10) the following new paragraph:
"(11) In lieu of the deduction provided by
section 164(f) of the Internal Revenue Code
of 1954 (relating to deduction for one-half of
self-employment taxes), there shall be al-
lowed a deduction equal to the product of-
"(A) the taxpayer's net earnings from self-
employment for the taxable year (deter-
mined without regard to this paragraph),
and
"(B) one-half of the sum of the rates im-
posed by subsections (a) and (b) of section
1401 of such Code for such year,, and".
(4) Section 164(f) deduction taken into ac-
count in computing earned income.-
(A) Subparagraph (A) of section 401(c)(2)
of such Code (defining earned income) is
amended by striking out "and" at the end of
clause (iv), by striking out the period at the
end of clause (v) and inserting in lieu there-
of , and'; and by inserting after clause (v)
the following new clause:
"(vi) with regard to the deduction allowed
to the taxpayer by section 164(f)."
(B) Clause (ii) of section 43(c)(2)(A) of
such Code is amended by inserting before
the period , but such net earnings shall be
determined with regard to the deduction al-
lowed to the taxpayer by section 164(f)':
(5) CONFORMING AMENDMENT:-Subsection
(a) of section 275 of such Code (relating to
denial of deduction for certain taxes) is
amended by adding at the end thereof the
following new sentence:
"Paragraph (1) shall not apply to any taxes
to the extent such taxes are allowable as a
deduction under section 164(f)."
(d) EFFECTTVE DATES.-
(1) IN GENERAL.-Except as provided in
paragraph (2), the amendments made by
this section shall apply to taxable years be-
ginning after December 31, 1983.
(2) SUBSECTION (c).-The _ amendments
made by subsection (c) shall apply to tax-
able years beginning after December 31,
1989.
SEC. 125. TREATMENT OF CERTAIN FACULTY PRAC-
TICE PLANS
(a) GENERAL RULE.-For purpose of subsec-
tion (s) of section 3121 of the Internal Reve-
nue Code of 1954 (relating to concurrent em-
ployment by 2 or more employers)-
(1) the following entities shall be deemed
to be related corporations:
(A) a State university which employs
health professionals as faculty members at a
medical school, and
(B) a faculty practice plan described in
section 501(c)(3) of such Code and exempt
from tax under section 501(a) 6/ such Code-
(d) which employs faculty members of such
medical school, and
(ii) 30 percent or more of the employees of
which are concurrently employed by such
medical school; and
(2) remuneration which is disbursed by
such faculty practice plan to a health profes-
CONGRESSIONAL RECORD - HOUSE March 24, 1983
sional employed by both such entities shall
be deemed to have been actually disbursed
by such university as a common paymaster
and not to have been actually disbursed by
such faculty practice plan.
(b) EFFECTIVE DATS.-The provisions of
subsection (a) shall apply to remuneration
paid after December 31, 1983.
ALLOCATIONS TO DISABILITY INSURANCE TRUST
FUND
SEC 125. (a) Section 201(b)(1) of the Social
Security Act is amended by striking out
clauses (K) through (M) and inserting in
lieu thereof the following: "(K) 1.65 per
centum of the wages (as so defined) paid
after December 31, 1981, and before January
1, 1983, and so reported, (L) 1.25 per centum
of the wages (as so defined) paid after De-
cember 31, 1982, and before January 1, 1984,
and so reported, (M) 1.00 per centum of the
wages (as so defined) paid after December
31, 1983, and before January 1, 1988, and so
reported, (N) 1.06 per centum of the wages
(as so defined) paid after December 31, 1987,
and before January 1, 1990, and so reported,
(0) 1.20 per centum of the wages (as so de-
fined) paid after December 31, 1989, and
before January 1, 2000, and so reported, and
(P) 1.42 per centum of the wages (as so de-
fined) paid after December 31, 1999, and so
reported,":
(b) Section 201(b)(2) of such Act is amend-
ed by striking out clauses (K) through (M)
and inserting in lieu thereof the following.,
"(K) 1.2375 per centum of the amount of
self-employment income (as so defined) so
reported for any taxable year beginning
after December 31, 1981, and before January
1, 1983, (L) 0.9375 per eentum of the amount
of self-employment income (as so defined) so
reported for any taxable year beginning
after December 31, 1982, and before, January
1, 1984, (M) 1.00 per centum of the amount
of self-employment income (as so defined) so
reported for any taxable year beginning
after December 31, 1983, and before January
1, 1988, (N) 1.08 per centum of the self-em-
ployment income (as so defined) so reported
for any taxable year beginning after Decem-
ber 31, 1987, and before January 1, 1990, (0)
1.20 per centum of the amount of self-em-
ployment income (as so defined) so reported
for any taxable year beginning after Decem,
ber 31, 1989, and-before January 1, 2000, and
(P) 1.42 per eentum of the self-employment
income (as so defined) so reported for any
taxable year begining after December 31,
1999,":
PART D-BENEFITS FOR CERTAIN SURVIVING,
DIVORCED, AND DISABLED SPOUSES
BENEFITS FOR SURVIVING DIVORCED SPOUSES
AND DISABLED WIDOWS AND WIDOWERS WHO
REMARRY
SEC. 131. (a)(1) Section 202(e)(3) of the
Social Security Act is repealed.
(2) Section 202(e)(4) of such Act is amend-
ed to read as follows:
"(4) For purposes of paragraph (1), if-
"(A) a widow or surviving divorced wife
marries after attaining age 60 (or after at-
taining age 50 if she was entitled before'such
marriage occurred to benefits based on dis-
ability under this subsection), or
`'(B) a disabled widow or disabled surviv-
ing divorced wife described in paragraph
(1)(B)(ii) marries after attaining age 50,
such marriage shall be deemed not to have
occurred.":
(3)(A) Section 202(e) of such Act is further
amended by redesignating paragraph (4) (as
amended by paragraph (2) of this subsec-
tion), and paragraphs (5) through (8), as
paragraphs (3) through (7), respectively.
(B) Section 202(e)(1)(B)(ii) of such Act is
amended by striking out "(5)" and inserting
in lieu thereof "(4)":
(C) Section 202(e)(1)(F) of such Act is
amended by striking out "(6)" in clause (i)
and "W" in clause (ii) and inserting in lieu
thereof "(5)" and "(4)"; respectively.
(D) Section 202(e)(2)(A) of such Act is
amended by striking out "(8)" and inserting
in lieu thereof "(7)":
(E) The paragraph of section 202(e) of
such Act redesignated as paragraph (5) by
subparagraph (A) of this paragraph is
amended by striking out "(S)" and inserting
in lieu thereof "(4)":
(F) The paragraph of such section 202(e)
redesignated as paragraph (7) by subpara-
graph (A) of this paragraph is amended by
striking out "Y4)" and inserting in lieu
thereof "(3)":
(G) Section 202(k) of such Act is amended
by striking out "(e)(4)" each place it appears
in paragraphs (2)(B) and (3)(B) and insert-
ing in lieu thereof "(e)(3)":
(H) Section 226(e)(1)(A) of such Act is
amended by striking out "202(e)(5)" and in-
serting in lieu thereof "202(e)(4)":
(b)(1) Section 202(f)(4) of such Act is re-
pealed.
(2ASection 202(f)(5) of such Act is amend-
ed to read as follows:
"(5) For purposes of paragraph (1), if-
"(A) a widower marries after attaining
age 60 (or after attaining age 50 if he was
entitled before such marriage occurred to
benefits based on disability under this sub-
section), or
"(B) a disabled widower described in
paragraph (1)(B)(ii) marries after attaining
age 50,
such marriage shall be deemed not to have
occurred.":
(3)(A) Section 202(f) of such Act is further
amended by redesignating paragraph (5) (as
amended by paragraph (2) of this subsec-
tion), and paragraphs (6) through (8), as
paragraphs (4) through (7), respectively.
(B) Section 202(f)(1)(B)(ii) of such Act is
amended by striking out "(6)" and inserting
in lieu thereof "(5)":
(C) Section 202(f)(1)(F) of such Act is
amended by striking out "(7)" in clause (i)
and "(6)" in clause (ii) and inserting in lieu
thereof "(6)" and "(5)"; respectively.
(D) Section 202(f)(2)(A) of such Act is
amended by striking out "(5)" and inserting
in lieu thereof "(4)".
(E) The paragraph of section 202(f) of such
Act redesignated as paragraph (6) by sub-
paragraph (A) of this paragraph is amended
by striking out "(6)" and inserting in lieu
thereof "(5)":
(F) Section 202(k) of such Act is amended
by striking out "(f)(5)" each place it appears
in paragraphs (2)(B) and (3)(B) and insert-
ing in lieu thereof "(f)(4)" :
(G) Section 226(e)(1)(A) of such Act is
amended by striking out "202(f)(6)" and in-
serting in lieu thereof "202(f)(5)":
(c)(1) Section 202(s)(2) of such Act is
amended by striking out "Subsection (f)(4),
and so much of subsections (b)(3), (d)(5),
(e)(3), (g)(3), and (h)(4)" and inserting in
lieu thereof "So much of subsections (b)(3),
(d)(5), (g)(3), and (h)(4)':
(2) Section 202(s)(3) of such Act is amend-
ed by striking out "(e)(3),":
(d)(1) The amendments made by this sec-
tion shall be effective with respect to month-
ly benefits payable under title II of the
Social Security Act for months after Decem-
ber 1983.
(2) In the case of an individual who was
not entitled to a monthly benefit of the type
involved under title II of such Act for De-
cember 1983, no benefit shall be paid under
such title by reason of such amendments
unless proper application for such benefit is
made.
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(2) Section 202(f) of such Act (as amended
by paragraph (11 of this subsection) is fur-
ther amended-
(A) in paragraph (1)(D) and in the matter
in paragraph (1) following subparagraph
(F)(ii), by inserting "(as determined after
application of subparagraphs (B) and (C) of
paragraph (3))" after 'primary insurance
amount'; and
(B) in paragraph (3)(D)(ii), by inserting
'Yas determined without regard to subpara-
graph (C))" after "primary insurance
amount".
(c) The amendments made by this section
shall apply with respect to monthly insur-
ance benefits for months after December
1984 for individuals who first meet all crite-
ria for entitlement to benefits under section
202 (e) or (f) of the Social Security Act
(other than making application for such
benefits) after December 1984.
LIMITATION ON BENEFIT REDUCTION FOR EARLY
RETIREMENT IN CASE OF DISABLED WIDOWS AND
WIDOWERS
Sec. 134. (a)(1) Section 202(q)(1) of the
Social Security Act is amended by striking
out the semicolon at the end of subpara-
graph (B)(ii) and all that follows and insert-
ing in lieu thereof a period.
(2)(A) Section 202(q)(6) of such Act is
amended to read as follows:
"(6) For purposes of this subsection, the
'reduction period' for an individual's old-
age, wife's, husband's, widow's, or widower's
insurance benefit is the period-
"(A) beginning-
"(I) in the case of an old-age or husband's
insurance benefit, with the first day of the
first month for which such individual is en-
titled to such benefit,
"(ii) in the case of a wife's insurance bene-
fit, with the first day of the first month for
which a certificate described in paragraph
(5)(A)(i) is effective, or
"(iii) in the case of a widow's or widower's
insurance benefit, with the first day of the
first month for which such individual is en-
titled to such benefit or the first day of the
month in which such individual attains age
60, whichever is the later, and
"(B) ending with the last day of the month
before the month in which such individual
attains retirement age.":
(B) Section 202(q)(3)(G) of such Act is
amended by striking out 'paragraph (6)(A)
(or, if such paragraph does not apply, the
period specified in paragraph (6)(B))" and
inserting in lieu thereof 'paragraph (6)'.
(C) Section 202(q) of such Act is further
amended, in paragraphs (1)(B)(i), (3)(E)(ii),
and (3)(F)(iil(I), by striking out "paragraph
(6)(A)" and inserting in lieu thereof "para-
graph (6)';
(3) Section 202(q)(7) of such Act is amend-
ed by striking out the matter preceding sub-
paragraph (A) and inserting in lieu thereof
the following.,
"(7) For purposes of this subsection, the
'adjusted reduction period' for an individ-
ual's old-age, wife's, husbands, widow's, or
widower's insurance benefit is the reduction
period prescribed in paragraph (6) for such
benefit, excluding-".
(4) Section 202(q)(10) of such Act is
amended-
(A) in that part of. the second sentence pre-
ceding clause (A), by striking out "or an ad-
ditional adjusted reduction period';,
(B) in clauses (B)(i) and (C)(i), by striking
out "? plus the number of months in the ad-
justea additional reduction period multi-
plied by 4%0 of 1 percent''
(C) in clause (Bllii), by striking out 'plus
the number of months in the additional re-
duction period multiplied by %,, of 1 per-
cent,and
(D) in clause (C)(ii), by striking out 'plus
the number of months in the adjusted addi-
CONGRESSIONAL RECORD - HOUSE March 2.4, 1983
tional reduction period multiplied by '%.v Qf
1 percent.':
(b) Section 202(m)(2)(B) of such Act (as
applicable after the enactment of section 2
of Public Law 97-123) is amended by strik-
ing out "subsection (q)(6)(A)(ii)" and insert-
ing in lieu thereof "subsection (q)(6)(B)':
(c) The amendments made by this section
shall apply with respect to benefits for
months after December 1983.
PART E-MEcNANISMs To ASSURE CONTINUED
BENEFIT PAYMENTS IN UNEXPECTEDLY AD-
VERSE CoNDmoNs
NORMALIZED CREDITING OF SOCIAL SECURITY
TAXES TO TRUST FUNDS
SEC 141. (a)(1) The last sentence of section
201(a) of the Social Security Act' is amend-
ed-
(A) by striking out 'from time to time"
each place it appears and inserting in lieu
thereof 'monthly on the first day of each
calendar month';' and
(B) by striking out "paid to or deposited
into the Treasury" and inserting in lieu
thereof "to be paid to or deposited into the
Treasury during such month":
(2) Section 201(a) of such Act is further
amended by adding at the end thereof the
following new sentence: 'All amounts trans-
ferred to either Trust Fund under the preced-
ing sentence shall be invested by the Manag-
ing Trustee in the same manner and to the
same extent as the other assets of such Trust
Fund; and such Trust Fund shall pay inter-
est to the general fund on the amount so
transferred on the first day of any month at
a rate (calculated on a daily basis, and ap-
plied against the difference between the
amount so transferred on. such first day and
the amount which would have been trans-
ferred to the Trust Fund up to that day
under the procedures in effect on January 1,
1983) equal to the rate earned by the invest-
ments of such Fund in the same month
under subsection (d).':
(b)(1) The last sentence of section 1817(a)
of such Act is amended-
(A) by striking out ".from time to time"
and inserting in lieu thereof 'monthly on
the first day of each calendar month'; and
(B) by striking out "paid to or deposited
into the Treasury" and inserting in lieu
thereof "to be paid to or deposited into the
Treasury during such month":
(2) Section 1817(a) of such Act is further
amended by adding at the end thereof the
following new sentence: "All amounts trans-
ferred to the Trust Fund under the preceding
sentence shall be invested by the Managing
Trustee in the same manner and to the same
extent as the other assets of the Trust Fund;
and the Trust Fund shall pay interest to the
general fund on the amount so transferred
on the first day of any month at a rate (cal-
culated on a daily basis, and applied
against the difference between the amount
so transferred on such first day and the
amount which would have been transferred
to the Trust Fund up to that day under the
procedures in effect on January 1, 1983)
equal to the rate earned by the investments
of the Trust Fund in the same month under
subsection (c).":
(c) The amendments made by this section
shall become effective on the first day of the
month following the month in which this
Act is enacted.
INTERFUND BORROWING EXTENSION
SEC. 142. (a)(1) Section 201(l)(1) of the
Social Security Act is amended-
(A) by striking out "January 1983" and in-
serting in lieu thereof "January 1988" and
(B) by inserting after "or" the second
place it appears '; subject to paragraph
(5),':
(2)(A) Section 201(l)(2) of such Act is
amended-
(I) by striking out from time to time" and
inserting in lieu thereof "on the last day of
each month after such loan is made';,
(ii) by striking out 'Interest" and insert-
ing in lieu thereof "the total interest ac-
crued to such day"; and
(iii) by striking out "the loan were an in-
vestment under subsection (d)" and insert-
ing in lieu thereof `such amount had re-
mained in the Depositary Account estab-
lished with respect, to such lending Trust,
Fund under subsection (d) or section
1817(c)':
(B) The amendment made by this para-
graph shall apply with respect to months be-
ginning more than thirty days after the date
of enactment of this Act.
(3) Section 201(l)(3) of such Act is amend-
ed-
(A) by inserting "(A)" after the paragraph
designation; and
(B) by adding at the end thereof the fol-
lowing new subparagraphs:
"(B)(i) If on the last day of any year after
a loan has been made ' under paragraph (1)
by the Federal Hospital Insurance Trust
Fund to the Federal Old-Age and Survivors
Trust Fund or the Federal Disability Insur-
ance Trust Fund, the Managing Trustee de-
termines that the OASDI trust fund ratio ex-
ceeds 15 percent, he shall transfer from the
borrowing Trust Fund to the Federal Hospi-
tal Insurance Trust Fund on amount that-
"(I) together with any amounts trans-
ferred from another borrowing Trust Fund
under this paragraph for such year, will
reduce the OASDI trust fund ratio of 15 per-
cent; and
"(II) does not exceed the outstanding bal-
ance of such loan.
"(ii) Amounts required to be transferred
under clause (i) shall be transferred on the
last day of the first month of the year suc-
ceeding the year in which the determination
described in clause (I) is made.
'Viii) For purposes of this subparagraph,
the term 'OASDI trust fund ratio' means,
with respect to any calendar year, the ratio
of-
"(I) the combined balance in the Federal
Old-Age and Survivors Insurance Trust
Fund and the Federal Disability Insurance
Trust Fund, reduced by the outstanding
amount of any loan (including interest
thereon) theretofore made to either such
Fund from the Federal Hospital Insurance
Trust Fund, as of the last day of such calen-
dar year, to
"(II) the amount estimated by the Secre-
tary to be the total amount to be paid from
the Federal Old Age and Survivors Insur-
ance Trust Fund and the Federal Disability
Insurance Trust Fund during the calendar
year following such calendar year for all
purposes authorized by section 201 (other
than payments of interest on, and repay-
ments of, loans from the Federal Hospital
Insurance Trust Fund under paragraph (1),
but excluding any transfer payments be-
tween such trust funds and reducing the
amount of any transfer to the Railroad Re-
tirement Account by the amount of any
transfers into either such trust fund from
that Account).
"(C)(i) The full amount of all loans made
under paragraph (1) (whether made before
or after January 1, 1983) shall be repaid at
the earliest feasible date and in, any event
no later than December 31, 1989. -
"(ii) For the period after December 31,
1987, and before January 1, 1990, the Man-
aging Trustee shall transfer each month to
the Federal Hospital Insurance Trust Fund
from any Trust Fund with any amount out-
standing on a loan made from the Federal
Hospital Insurance Trust Fund under para-
graph (1) an amount not less than an
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March 24, 1983 CONGRESSIONAL RECORD - HOUSE
amount equal to (I) the amount owed to the
Federal Hospital Insurance Trust Fund by
such Trust Fund at the beginning of such
month (plus the interest accrued on the out-
standing balance of such loan during such
month), divided by (II) the number of
months elapsing Alter the preceding month
and before January 1990. The Managing
Trustee may, during this period transfer
larger amounts than prescribed by the pre-
ceding sentence."
(4) Section 201(l) of such Act is further
amended by adding at the end thereof the
following new paragraph:
"(5)(A) No amounts may be borrowed from
the Federal Hospital Insurance Trust Fund
under paragraph (1) during. any month if
the Hospital Insurance Trust Fund ratio for
such month is less than 10 percent.
"(B) For purposes of this paragraph, the
term 'Hospital Insurance trust fund ratio'
means, with respect to any_month, the ratio
of-
"(I) the balance in the Federal Hospital
Insurance Trust Fund, reduced by the out-
standing amount of any loan (including in-
terest thereon) theretofore made to such
Trust Fund under this subsection, as of the
last day of the second month preceding such
month, to
"(ti) the amount obtained by multiplying
by twelve the total amount which (as esti-
mated by the Secretary) will be paid from
the Federal Hospital Insurance Trust Fund
during the month for which such ratio is to
be determined (other than payments of in-
terest on, or repayments of loans from an-
other Trust Fund under this subsection),
and reducing the amount of any transfers to
the Railroad Retirement Account by the
amount of any transfer into the Hospital In-
surance Trust Fund from that Account.":
(b)(1) Section 1817(51(1) of such Act is
amended
(A) by striking out "January 1983" and in-
serting in lieu thereof "January 19U",* and
,(B) by inserting , subject to paragraph
(5),"after "may":
(2)(A) Section 1817(j)(2) of such.Act is
amended-
(i) by striking out ';from time to time" and
inserting in lieu thereof "on the last day of
each month after such loan is made':
(ii) by striking out "interest" and insert-
ing in lieu thereof "the 'total interest ac-
crued to such day', and
(iii) bsrstriking out "the loan were an in-
vestment under subsection (c)" and insert-
ing in lieu thereof "such amount had re-
mained in the Depositary Account estab-
lished with respect to such lending Trust
Fund under section 201(d)':
(B) The amendment made by this para-
graph shall apply with respect to months be-
ginning more than 30 days after the date of
enactment of this Act
(3) Section 1817(5)(3) of such Act is amend-
ed-
(A) by inserting "(A)" After the paragraph
designation; and
(B) by adding at the end thereof the fol-
lowing new subparagraphs:
"(B)(I) If on the last day of any year After
a loan has been made under paragraph (1)
by the Federal Old-Age and Survivors Insur-
ance Trust Fund or the Federal Disability
Insurance Trust Fund to the Federal Hospi-
tal Insurance Trust Fund, the Managing
Trustee determines that the hospital Insur-
ance Trust Fund ratio exceeds 15 percent he
shall transfer from such Trust Fund to the
lending trust fund an amount that-
"(I) together with any amounts trans-
ferred to another lending trust fund under
this paragraph for such year, will reduce
Hospital Insurance Trust Fund ratio to 15
percent; and
"(II) does not exceed the outstanding bat-
ance of such loan.
"(ii) Amounts required to be transferred
under clause Ii) shall be.transrermd on the
last day of the first month of the year sus
Deeding the year to idsich the determination
described in clause (V is made,
"(iii) For Purposes Of this -subparagraph,
the term 'Hospital Insurance Trust Fund
ratio' means, with respect to any calendar
year, the ratio o/
"(I) the balance in the Federal Hospital
Insurance Trust Fund, reduced by the
amount of any outstanding loan (including
interest thereon) from the Federal Old-Age
and Survivors Insurance Trust Fund and
the Federal Disability Insurance Trust
Fund, as of the last day of such calendar
year; to
"(II) the amount estimated by the ,$ecre-
tary to be the total amount to be paid from
the Federal Hospital Insurance Trust Fund
during the calendar year foloowing such cal-
endar year (other than payments of interest
on, and repayments of, loans from the Feder-
al Old-Age and Survivors Insurance Trust
Fund and the Federal Disability Insurance
Trust Fund under paragraph (1)), and re-
ducing the amount of any transfer to the
Railroad Retirement Account by the amount
of any transfers into such Trust Fund from
the Railroad Retirement Account.
"MI(I) 27&e full amount of all loans made
under paragraph (1) (whether made before
or after January 1; 1983) shall be repaid at
the earliest feasible dads and in any event
no later than December 31, 1989.:
"(ii) For the period after December 31,
1987 and before January 1,1990, the Manag-
ing Trustee shall transfer each month from
the Federal Hospital Insurance Trust Fund
to any Trust Fund that is owed any amount
by the Federal Hospital Insurance Trust
Fund on a loan made under paragraph (1),
an amount not less than an amount equal to
(1) of the amount owed to such Trust fund
by the Federal Hospital Insurance Trust
Fund at the beginning of such month (plus
the interest accrued on the outstanding bal-
ance of such loan during such month), di-
vided by (11) the number of months elapsing
after the preceding month and before Janu-
ary 1990. The Managing Trd1tee may,
during this period traniler larger amounts
than prescribed by the preceding sentence.':
(4) Section 18170) of such Act is further
amended by adding at the end thereof the
following new paragraph:
"(5)(A) No amounts may be loaned by the
Federal Old-Age and Survivors Insurance
Trust Fund or the Federal Disability Insur-
ance Trust Fund under paragraph (1)
during any month if the OASDI trust fund
ratio for such month is less than 10 percent
"(B) For purposes of this paragraph, the
term `OASDI trust fund ratio' means, with
respect to any month. the ratio of-
"(i) the combined balance in the Federal
Old-Age and Survivors Insurance Trust
Fund and the Federal Disability Insurance
Trust Fund, reduced by the outstanding
amount of any loan' (including interest
thereon) theretofore made to either such
Trust Fund from the Federal Hospital Insur-
ance Trust Fund under section 201(11, as of
the last day of the second month preceding
such month, to
"(ii) the amount obtained by multiplying
by twelve the total amount which (as esti-
mated by the Secretary) will be paid from
the Federal Old-Age and Survivors Insur-
ance Trust Fund and the Federal Disability
Insurance Trust Fund during the month for
which such ratio is to be determined for all
purposes authorised by section 201 (other
than payments of interest on. or repayments
of loans from the Federal Hospital Insur-
ance Trust Fund under section 201(), but
excluding any transfer payments between
such trust funds and reducing the amount of
H 1735
any transfers to the Railroad Retirement Ac-
count by the amount of any transfers into
either such trust fund from that Account.
RSCOMYzNAsT1018 BY BOARD W TRUdTEU TO
REMEDY IItIDEQUSIT DILANCuS m !W-E SOCIAL
SECURITY T UET FWWS
SEc 143. Title VII of the Social Security
Act is amended by adding at the end thereof
the following new section: -
'Usco MElVAAlYONS By 105RD Or TRUSTEES TO
REMEDY DVADSQUATT BALANCES IN THE SOCIAL
SECURITY TRUST FVNDS
Sic. 709. (a) If the Board of Trustees of the
Federal Old-Age and Survivors insurance
Trust Fund, the Federal Disability Insur-
ance Trust Fund determines at any time
that the balance ratio of such Trust Fund
,for any calendar year may become less than
20 percent, the Board shall promptly submit
to each House of the Comae a report set-
ting forth its recommensdatione for statutory
adjustments affecting 'the receipts and dis-
bursements of 'such Trust Fund necessary to
maintain the balance-ratio of such Trust
Fund at not less than 20 percent, with due
regard to the economic conditions which
created such inadequacy and the amount of
time necessary to alleviate such inadequacy
in a prudent manner. The report shall set
forth specifically the extent to which bene-
fits would have to be reduced, taxes under
sections 1401, 3101. or 5111 of the Internal
Revenue;Code of 1954 would have to be in-
creased, or a combination thereof, in order
to obtain the objectives referred to in the
preceding sentence,
"(b) For purposes of this section, the term
'balance ratio' means, with respect to any
calendar year in connection with any Trust
Fund referred to in subsection (a), the ratio
of-
"(1) the -balance in such Trust Fund, re-
duced by the outstanding amount of any
loan (including interest thereon) theretofore
made to such Trust Fund under section
201(1), as of the beginning of each year, to
"(2) the total amount which (as estimated
by the Secretary) will be paid from such
Trust Fund during such calendar year for
all purposes authorised by section 201, 1817,
or 1841 (as applicable), other than payments
of interest on, or payments of, loans under
section 201(1), but excluding any transfer
payments between such Trust Fund and any
other Trust Fund referred to in subsection
(a) and reducing the amount of any trans-
fers to the Railroad Retirement Account by
the amount of any transfers into such Trust
Fund from that Account
PART F-Ormm Fmtx 3 AMENDMSNla
FINANCING OF NONCOmR1BV RY MILITARY
WAGE CREDVle
See. 151. (a) Section .217(0) of the Social
Security Act is amended to read as follows:
`Appropriation to Trust Funds
"(g)(1) Within thirty days after the date of
the enactment of the Social Security Amend-
ments of 1984 the Secretary shall determine
the amount equal to the es7oess of-
"(A) the actuarial present value as of such
date of enactment of the past and future
benefit payments from the Federal Old-Age
and Survivors Insurance Trust Fund, the
Federal Disability Insurance Trust Fund,
and the Federal Hospital Insurance Trust
Fund under this title and title 'VIII, togeth-
er with associated administrative costs, re-
sulting from the operation of this section
(other than this subsection) and section 210
of this Act as in effect before the enactment
of the Social Security Act Amendments of
1950, over
"(B) any amounts previously transferred
from the. general fund of the Treasury to
such Trust Funds pursuant to the provisions
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of this subsection as in effect immediately
before the date of the enactment of the
Social Security Act Amendments of 1983.
Such actuarial present value shall be based
on the relevant actuarial assumptions set
forth in the report of the Board of Trustees
of each such Trust Fund for 1983 under sec-
tions 201(c) and 1817(b). Within thirty days
after the date of the enactment of the Social
Security Act Amendments of 1983. the Secre-
tary of the Treasury shall transfer the
amount determined under this paragraph
with respect to each such Trust Fund to such
Trust Fund from amounts in the general
fund of the Treasury not otherwise appropri-
ated.
"(2) The Secretary shall revise the amount
determined under paragraph (1) with re-
spect to each such Trust Fund in 1985 and
each fifth year thereafter, as determined ap-
propriate by the Secretary from data which
becomes available to him after the date of
the determination under paragraph (1) on
the basis of the amount of benefits and ad-
ministrative expenses actually paid from
such Trust Fund under this title or title
XVIII and the relevant actuarial assump-
tions set forth in the report of the Board of
Trustees of such Trust Fund for such year
under section 201(e) or 1817(b). Within 30
days after any Such revision, the Secretary
of the Treasury, to the extent provided in ad-
vance in appropriation Acts, shalt transfer
to such Treat Fund, from amounts in the
general fund of the Treasury not otherwise
appropriated, or from such Trust Fund to
the general fund of the Treasury, such
amounts as the Secretary of the Treasury de-
termines necessary to compensate for such
revision..
(b)(1) Section 229(b) of such Act is amend-
ed to read as follows:
"(b) There are authorized to be appropri-
ated to each of the Trust Funds, consisting
of the Federal OW-Age and Survivors Insur-
ance Trust Fund, the Federal Disability In-
surance Trust Fund, and the Federal Hospi-
tal Insurance Trust Fund, for transfer on
July 1 of each calendar year to such Trust
Fund from amounts in the general fund in
the Treasury not otherwise appropriated, an
amount equal to the total of the additional
amounts which would be appropriated to
such Trust Fund for the fiscal year ending
September 30 of such calendar year under
section 201 or 1217 of this Act if the
amounts of the additional wages deemed to
have been paid for such calendar year by
reason of subsection (a) constituted remu-
neration for employment (as defined in sec-
tion 3121(b) of the lufrnal Revenue Code of
1954) for purposes of the taxes imposed by
sections 3101 and 3111 of the Internal Reve-
nue Code of 1954. Amounts authorized to be
appropriated under this subsection for
transfer on July 1 of each calendar year
shall be determined on the basis of estimates
of the Secretary of the wages' deemed to be
paid for such calendar year under subsec-
tion (a); and proper adjustments shall be
made in amounts audwriaed to be appropri-
ated for subsequent transfer to the extent
prior estimates were in excess of or were less
than such wages so deemed to be paid.':
(2) The amendment made by paragraph
(1) shall be effective with respect to wages
deemed to have been paid for calendar years
after 1981
(3)(A) Within thirty days after the date of
the enactment of this Act, the Secretary of
Health and Human Services shall determine
the additional amounts which would have
been appropriated to the Federal Old-Age
and Survivors Insurance Trust Fund, the
Federal Disability Insurance Trust Fund,
and the Federal Hospital Insurance Trust
Fund under sections 201 and 1817 of the
Social Security Act if the additional wages
deemed to have been paid under section
229(a) of the Social Security Act prior to
1984 had constituted remuneration for em-
ployment (as defined in section 3121(b) of
the Internal Revenue Code of 1954) for pur-
poses of the taxes imposed by sections 3101
and 3111 of the Internal Revenue Code of
1954, and the amount of interest which
would have been earned on such amounts if
they had been so appropriated
(B)(i) Within thirty days after the date of
the enactment of this Act, the Secretary of
the Treasury shall transfer to each such
Trust Fund, from amounts in the general
fund of the Treasury not otherwise appropri-
ated, an amount equal to the amount deter-
minerj with respect to such Trust Fund
under subparagraph (A), less any amount
appropriated to such Trust Fund pursuant
to the provisions of section 229(b) of the
Social Security Act prior to the date of the
determination made under subparagraph
(A) with respect to wages deemed to have
been paid for calendar years prior to 1984.
(ii) The Secretary of Health and Human
Services shall revise the amount determined
under clause (V with respect to each such
Trust Fund within one year after the date of
the transfer made to such Trust Fund under
clause (i), as determined appropriate by
such Secretary from data which becomes
available to him after the date of the trans-
fer under clause (iA Within 30 days after
any such revision, the Secretary of the
Treasury shall transfer to such Trust Fund,
from amounts in the general fund of the
Treasury not otherwise appropriated, or
from such Trust Fund to the general fund of
the Treasury, such amounts as the Secretary
of Health and Human Services certifies as
necessary to take into account such revi-
sion.
CREDITING AMOUNTS OF UNNEOOTGTED CHECKS
TO TRUST FUNDS
SEC. 153. (a) The Secretary of the Treasury
shall take such actions as may be necessary
to ensure that amounts of checks for benefits
under title II of the Social Security Act
which have not been presented for payment
within a reasonable length of time (not to
exceed twelve months) after issuance are
credited to the Federal Old-Age and Survi-
vors Insurance Trust Fund or the Federal
Disability Insurance Trust Fund, whichever
may be the fund from which the check was
issued, to the extent provided in advance in
appropriation jets. Amounts of any such
check shall be recharged to the fund from
which they were issued if payment is subse-
quently made on such check.
(b)(1) The Secretary of the Treasury shall
transfer from the general fund of the Treas-
ury to the Federal Old-A/e and Survivors In-
surance Trust Fund and to the Federal Dis-
ability Insurance Trust Fund, as appropri-
ate, as soon as possible after the date of the
enactment of this Act, such sums as may be
necessary to reimburse such Trust Funds in
the total amounts of all currently unnego-
tiated benefit checks (including interest
thereon), to the extent provided in advance
in appropriation Acts. After the amounts ap-
propriated by this subsection have been
transferred to the Trust Funds, the provi-
sions of subsection (a) shall be applicable.
(2) As used in paragraph (1), the term
"currently unnegotiated benefit checks"
means the checks issued under title II of the
Social Security Act prior to the date of the
enactment of this Act, which remain unne-
gotiated after the twelfth month following
the date on which they were issued
PLOIT PERIODS
SEC. 154. (a) The Secretary of Health and
Human Services and the Secretary of the
Treasury shall jointly undertake, as soon as
possible after the date of the enactment of
March 24, 1989
this Act, a thorough study with respect to
the period of time (hereafter in this section
referred to as the `float period") between the
issuance of checks from the general fund of
the Treasury in payment of monthly insur-
ance benefits under title 11 of the Social Se-
curity Act and the transfer to the general
fund from the Federal Old-Age and Survi-
vors Insurance Trust Fund or the Federal
Disability Insurance Trust Fund, as appli-
cable, of the amounts necessary to compen-
sate the general fund for the issuance of
such checks. Each such Secretary shall con-
sult the other regularly during the course of
the study and shall, as appropriate, provide
the other with such information and assist-
ance as he may require.
(b) The study shall inelude-
(1) an investigation of the feasibility and
desirability of maintaining the float periods
which are allowed as of the date of the en-
actment of this section in the procedures
governing the payment of monthly insur-
ance benefits under title II of the Social Se-
curity Act, and of the general feasibility and
desirability of making adjustments in such
procedures with respect to float periods; and
(2) a separate investigation of the feasibil-
ity and desirability of providing, as a specif-
ic form of adjustment in such procedures
with respect to float periods, for the transfer
each day to the general fund of the Treasury
from the Federal Old Age and Survivors In-
surance Trust Fund and the Federal Disabil-
ity Insurance Trust Fund, as appropriate, of
amounts equal to the amounts of the checks
referred to in subsection (a) which are paid
by the Federal Reserve Banks on such day.
(c) In conducting the study required by
subsection (a), the Secretaries shall consult
as appropriate, the Director of the Office of
Management and Budget, and the Director
shall provide the Secretaries with such in-
formation and assistance as they may re-
quire. The Secretaries shall also solicit the
views of other appropriate officials and or-
ganizations.
(d)(1) Not later than six months after the
date of the enactment of this Act, the Secre-
taries shall submit to the President and the
Congress a report of the findings of the in-
vestigation required by subsection (b)(1),
and the Secretary of the Treasury shall by
regulation make such adjustments in the
procedures governing the payment of
monthly insurance benefits under title 11 of
the Social Security Act with respect to float
periods (other than adjustments in the form
described in subsection (b)(2)) as may have
been found in such investigation to be nec-
essary or appropriate.
(2) Not later than twelve months after the
date of the enactment of this Act, the Secre-
taries shall submit to the President and the
Congress a report of the findings of the sepa-
rate investigation required by subsection
(b)(2), together with their recommendations
with respect theretos and, to the extent nec-
essary or appropriate to carry out such rec-
ommendations, the Secretary of the Treas-
ury shall by regulation make adjustments in
the procedures with respect to float periods
in the form described in such subsection.
TRUST FUND TRUSTEES' REPORTS
Sec. 155. (a) The next to last sentence of
section 201(c) of the Social Security Act is
amended by striking out "Such report shall
also include" and inserting in lieu thereof
the following: "Such report shall include an
actuarial opinion by the Chief Actuary of
the Social Security Administration certify-
ing that the techniques and methodologies
used are generally accepted within the actu-
arial profession and that the assumptions
and cost estimates used are reasonable, and
shall also include".
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(b) Section 1817(b) of such Act is amended
by inserting immediately before the last sen-
tence the following new sentence: "Such
report shall also include an actuarial opin-
ion by the Chief Actuarial Officer of the
Health Care Financing Administration cer--
tifying that the techniques and methodolo.
gies used are generally accepted within the
actuarial profession and that the assump-
tions and cost estimates used are reason-
able.
(c) Section 1841(b) of such Act is amended
by inserting immediately before the last sen-
tence the following new sentence: `Such
report shall also include an actuarial opin-
ion by the Chief Actuarial Officer of the
Health Care Financing Administration cer-
tifying that the techniques and methodolo-
gies used are generally accepted within the
actuarial profession and that the assump-
tions and cost estimates used are reason-
able.':
(d) Notwithstanding sections 2Q1(e)(2),
1817(b)(2), and 1841(b)(2) of the Social Secu-
rity Act, the annual reports of the Boards of
Trustees of the Trust Funds which are re-
quired in the calendar year 1983 under those
sections may be filed at any time not later
than forty-five days after the date of the en-
actment of this Act.
(e) The amendments made by this section
shall take effect on the date of the enactment
of this Act.
TITLE 11-ADDITIONAL PROVISIONS RE-
LATING TO LONG-TERM FINANCING
OF THE SOCIAL SECURITY SYSTEM
DNREABE IN MMUCA/SNl AGE
SEC. 201. (a) Section 216 of the Social Se-
curity Act is amended by adding at the end
thereof the following new subsection
"Retirement Age
"(l)(1) The term 'retirement age' means-
"(A) with respect to an individual who at-
tains eariv retirement age (as defined in
paragraph (2)) before January 1, 2000, 65
years of age;
"(B) with respect to an individual who at-
tains early retirement age after December
31, 1999, and before January 1, 2005,'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 retire-
ment age;
"(C) with respect to an individual who at-
tains early retirement age after December
31, 2004, and before January 1, 2017, 66
years af age;
"(D) with respect to an individual who at-
tains early retirement age after December
31, 2016 and before January 1, 2022, 66
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 retire-
ment age; and
'YE) with respect to an individual who at-
tains early retirement age after December
31, 2021, 67 years of age.
"(2) The term 'early retirement age' means
age 62 in the case of an old-age wife's, or
husband's insurance benefit, and age 60 in
the case of a widow's or widower's insur-
ance benefit.
"(3) The age increase factor for any indi-
vidual who attains early retirement age in a
calendar year within the period to which
subparagraph (B) or (D) of paragraph (1)
applies shall be determined as follows:
"(A) With respect to an individual who at-
tains early retirement age in the. 5-year
period consisting of the calendar years 2000
through 2004, the age increase factor shall be
equal to two-twelfths of the number of
months in the period beginning with Janu-
ary 2000 and ending with December of the
year in which. the individual attains early TITLE III-MISCELLANEOUS AND
retirement age. TECHNICAL PROVISIONS
"(B) With respect to an individual who at- PAxrA-E$JMINAIY N orQsU,en-BASED
tains early retirement age in the 5-period
consisting of the calendar years 2017
through 2021, the age increase factor shall be
equal to two-twelfths of the number of
months in the period beginning with Janu-
ary 2017 dnd ending with December of the
year in which the individual attains early
retirement age."
(b)(1) Section 202(q)(9) of such Act is
amended to read as follows:
"(9) The amount of the reduction for early
retirement specified in paragraph (1)-
"(A) for old-age insurance benefits, wife's
insurance benefits, and husband's insurance
benefits, shall be the amount specified in
such paragraph for the first 36 months of the
reduction period (as defined in paragraph
(6)) or adjusted reduction period (as defined
in paragraph (7)), and ,five-tweWu of 1 per-
cent for any additional months included in
such periods; and , .
"(B) for widow's insurance benefits and
widower's insurance benefits shall be peri-
odically revised by the Secretary such that-
"(il the amount of the reduction at early
retirement age as defined in section 216(a)
shall be 28.5 percent of the full benefit; and
'iii) the amount of the reduction for each
month in the reduction period (spedfled in
paragraph (6)) or the adjusted reduction
period (specified in paragraph (7)) shall be
established by linear interpolation between
28.5 percent at the month of attainment of
early retirement age and 0 percent at the
month of attainment of retirement age.':
Section 202(q)(1) of such Act is amended
by striking out "0" and inserting in lieu
thereof "Subject to paragraph (9), if".
(c) Title II of the Social Security Act is
further amended-
(1) by striking out 'age 65" or "age of 65
as the case may be, each place it appears in
the following sections and inserting in lieu
thereof in each instance `retirement age (as
defined in section 216(1))':?
(A) subsections (a), (b), (c), (d), (e), (f), (a),
(r), and (w) of section 202;
(B) subsections (c) and (f) of section 203;
(C) subsection (f) of section 215;
(D) subsections (h) and (i) of section 216,
and
(E) section 223(a); and
(2) by striking out "age sixty 1'lve" in sec-
tion 203(c) and inserting.in lieu thereof "re-
tirement age (as defined in section 216a))
and
(3) by striking out "age of sixty-five" in
section 223(a) and inserting in lieu thereof
"retirement age (as defined in section
216(l))'.
(d) The Secretary shall conduct a compre-
hensive study and analysis of the implica-
tions of the changes made by this section in
retirement age in the case of those individ-
uals (affected by such changes) who, because
they are engaged in physically demanding
employment or because they are unable to
extend. their working careers for health rea-
sons, may not benefit from improvements in
longevity. The Secretary shall submit to the
Congress no later than January 1, 1986, a
full report on the study and analysis. Such
report shall include any recommendations
for legislative changes including recommen-
dations with respect to the provision of Pro-
tection against the risks associated with
early retirement due to health consider-
ations, which the Secretary finds necessary
or desirable as a result of the findings con-
tained in this study.
DarmCF100
DIVORCED BUXaSNDe
Sae 301. (a)(1) Section 202(c)(1) of the
Social Security Act is amended, in the
matter preceding subparagraph (A), by in-
serting "and every divorced husband (as de-
fined in section 211(d))" before 114f an indi-
vidual" and by inserting "or such divorced
husband" after "V such husband'
(2) Section 202(c)(1) of such Act is further
amended-
(A) by striking out "and" at the end of
subparagraph (B);
(B) by redesigriating subparagraph (C) as
subparagraph (D), and by inserting after
subparagraph (B) the following new subpar-
agraph:
"(C) in the case of a divorced husband, is
not married and", and -
(C) by striking out the matter following
subparagraph (D) (as so redesignated) and
inserting in lieu thereof the following.,
`shall be entitled to a husband's insurance
benefit for each month, beginning with-
"(i) in the case of a husband or divorced
husband (as so defined) of an individual
who is entitled to an old-age insurance bene-
J14 if such husband or divorced husband has
attained age 65, the first month in which he
meets the criteria apse{ned in subpara-
graphs (A), (B), (C), and (D), or
"(ii) in the case of a husband or divorced
husband (as so defined) of-
"(1) an individual enttded to old-age in-
surance benefits if such husband or di-
vorced husband has not attained age 65, or
"(11) an individual entitled to disability
insurance benefits,
the first month throughout which he is such
a husband or divorced husband and meets
the criteria specified in subparagraphs (B),
(C), and (D) (if in such month he meets the
criterion specified in subparagraph (A)),
whichever is earlier, and ending with the
month preceding the month to which any of
the following occurs:
'YE) he dies,
"(F) such individual dies
"(G) in the case of a husband, they are di-
vorced and either (i) he has not attained age
62, or (it) he has attained age 62 but has not
been married to such iadividstal for a period
of 10 years immediately before the divorce
became effective
"(H) in the case of a divorced husband he
marries a person other than such individu-
al
"(I) he becomes entitled to an old-age or
disability insurance benefit based on a pri-
mary insurance amount which is equal to or
exceeds one-half of the primary insurance
amount of such individual, or
"(J) such individual is not entitled to dis-
ability insurance benefits and is not entitled
to old-age insurance benefits"
(3) Section 202(e)(3) of such Act is amend-
ed by inserting "(or, in the case of a di-
vorced husband, his former wife)" before
`for such month':
(4) Section 202(c) of such Act is further
amended by adding after paragraph (3) the
following new paragraph:
"(4) In the case of any divorced husband
who marries-
"(A) an individual entitled to benefits
under subsection (b), W. W. or (h) of this
section, or
"(B) an individual who has attained the
age of 18 and is entitled to benefits under
subsection (d), by reams of Paragraph
(1)(B)(ti) thereof,
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such divorced husbands entitlement to
benefits under this subsection, notwith-
standing the provisions of paragraph (1)
(but subject to subsection (s)), shall not be
terminated by reason of such marriage. ".
(5) Section 202(e) of such Act is further
amended by adding after paragraph (4) (as
added by paragraph (4) of this subsection)
the following new paraipapri
"(5)(A) Notwithshuutir g the preceding
provisions of this subsectio% escept as pro-
vided in subparagraph (a), the divorced
husband of an individriml who is not enti-
tled to old-age or disability insurance bene-
fits, but who has attained age 62 and is a
fully insured individual (as defined in sec-
tion 214), if such divorced husband
"(1) meets the requirements of subpara-
graphs (A) through (D) of Paragraph (1),
and
"(ii) has been divorced from such insured
individual for not less than 2 years,
shall be entitled to a husband's insurance
benefit under this subsection for each
month, in such amount and beginning and
ending with such months, as determined
(under regulations of the Secretary) in the
manner otherwise provided for husband's
insurance benefits under this subsection, as
if such insured individual had become enti-
tled to old-age insurance benefits on the date
on which the divorced husband first meets
the criteria for entitlement set forth in
classes (ii and (ii).
"(B) A husband's insurance benefit pro-
vided under this paragraph which has not
otherwise terminated in accordance with
subparagraph (E), (P), (H), or (I) of Para-
graph (1) shall terminate with the month
preceding the first month in which the in-
sured individual is no longer a fully insured
individual.'
(6) Section 202(c)(2)(A) of such Act is
amended by inserting "(or divorced hus-
band)" after "payable to such husband':
(7) Section 202(b)(3)(A) of such Act is
amended by striking out "(f)" and inserting
in lieu thereof "(c), U),".
(8) Section 202(c)(1)(D) of such Act (as re-
designated by paragraph (2) of this subsec-
tion) is amended by striking out 'his voile"
and inserting in lieu thereof "such individu-
al':
(9) Section 202(d)(5)(A) of such Act is
amended by inserting "(c), " after "(b), ?
(b)(1) Section 202(f)(1) of such Act is
amended, in the matter preceding subparts
graph (A), by inserting and every surviving
divorced husband (as defined in section
216(d))" before "of an individual" and by
inserting "or such surviving divorced hus-
band" after ' i/ such widower'
(2) Section 202(f)(1) of such Act is further
amended by striking out "his deceased wife"
in subparagraph (D) and in the matter fol-
lowing subparagraph (F) and inserting in
lieu thereof "such deceased individual".
(3) Section 202(f)(3)(B)(ii)(II) of such Act
(as amended by section 133(b)(1)(B) of this
Act) is amended, by inserting "or surviving
divorced husband" after "widower".
(4) Paragraph (3)(D) of section 202(f) of
such Act (as redesignated by section
133(b)(1)IA) of this Act), and paragraphs (4),
(54 and (6) of such section (as redesignated
by section 131(b)(3)(A) of this Act), are each
amended by inserting "or surviving di-
vorced husband" after "widower" wherever
it appears.
(5) Paragraph (3)(D) of section 202(f) of
such Act (as redesignated by section
133(b)(1)(A) of this Act) is further amended
by striking out 'wife" wherever it appears
and inserting in lieu thereof "individual".
(6) Section 202(g)(3)(A) of such Act is
amended by inserting "(c)," before "(f),":
(7) Section 202(h)(4)(A) of such Act is
amended by inserting "(c), " before "(e),"
CONGRESSIONAL RECORD - HOUSE March 24, 1988
ed by redesignating paragraph (4) as para-
graph (6), and by inserting after paragraph
(3) the Allowing new paragraphs:
"(4) The berm divorced husband' means a
man divorced from an individual, but only
if he had been married to such individual
for a period of 10 years immediately before
the date the divorce became efe Live.
"(5) The term 'surviving divorced hus.
band' means a man divorced from an indi.
vidual who has died, but only if he had been
married to the individual for a period of 10
years immediately before the divorce became
effective.":
(2) The heading of section 216(d) of such
Act is amended to read as follows:
"Divorced Spouses; Divorce".
(d)(1) Section 205Th) of such Act is amend-
ed by inserting "divorced husband," after
'husband,'; and by inserting "surviving di-
vorced husband," after "widower,":
(2) Section 205(c)(1)(C) of such Act is
amended by inserting "surviving divorced
husband,"after "wife,'.
"(a)(1) The term 'spouse' means a wife as
defined in subsection (b) or a husband as de-
fined in subsection (f).
"(2) The term 'surviving spouse' means a
widow as defined in subsection (c) or a wid-
ower as defined in subsection (g).';
EQUALIZATION OF BENEIITu UNDER BEC77 228
SEc. 305. (a) Section 228(b) of the Social
Security Act is amended-
(1) by striking out "(1) Except as provided
in paragraph (2), the" and inserting in lieu
thereof and
(2) by striking out paragraph (2).
(b) Section 228(e)(2) of such Act is amend-
ed by striking out "(B) the larger of' and all
that follows and inserting in lieu thereof
"(B) the benefit amount as determined with-
out regard to this subsection.':
(c) Section 228(c)(3) of such Act is amend-
ed to read as follows:
"(3) In the case of a husband or wife both
of whom are entitled to benefits under this
section for any month, the benefit amount of
each spouse, after any reduction under para-
REMARRIAGE OF SURVIVING SPOUSE BEFORE AGE graph (1), shall be further reduced (but not
of ELIGIBILITY below zero) by the excess (if any) of (A) the
Sec 302. Section 202(f)(1)(A) of the Social
Security Act is amended by striking out "has
not remarried" and inserting in lieu thereof
"is not masted?.
ILLZGITIMATE CHILDREN
Sire 303. (a) Section 216(h)(3) of the Social
Security Act is amended by inserting
"mother or" before 'father" wherever it ap-
pears.
(b) Section 216(h)(3)(A)(ii) of such Act is
amended by striking out all that follows
"time" and inserting in lieu thereof "such
applicant's application for benefits was
filed;':
(c) Section 216(h)(3)(B)(ii) of such Act is
amended by striking out "such period of dis-
ability began" and inserting in lieu thereof
"such applicants application for benefits
was filed",
(d) Section 216(h)(3) of such Act is further
amended-
(1) by striking out "his" wherever it ap-
pears and inserting in lieu thereof "his or
her"; and
(2) by striking out "he" in subparagraph
(B) and inserting in lieu thereof "he or she".
TRANSITIONAL INSURED STATUS
total amount of any periodic benefits under
governmental pension systems for which the
other spouse is eligible for such month, over
(B) the benefit amount of such other spouse
as determined without regard to this subsec-
tion.':
(d) Section 228 of such Act is further
amended-
(1) by striking out "he" wherever it ap-
pears in subsections (a) and (c)(1) and in-
serting in lieu thereof 'he or she'; and
(2) by striking out "his" in subsection
(c)(4)(C) and inserting in lieu thereof "his
or her",
(e) The Secretary shall increase the
amounts specified in section 228 of the
Social Security Act as amended by this sec-
tion, to take into account any general bene-
fit increases (as referred to in section
215(1)(3) of such Act), and any increases
under section 215(1) of such Act which have
occurred after June 1974 or may hereafter
occur.
FATHER 8 INSURANCE BENEFITS -
SEa 306. (a) Section 202(g) of the Social
Security Act is amended-
(1) by striking out "widow" wherever it
appears and inserting in lieu thereof ' sur-
SEC. 304. (a) Section 227(a) of the Social riving spouse";
Security Act is amended- (2) by striking out "widow's" wherever it
(1) by striking out "wife" wherever it ap- appears and inserting in lieu thereof "sur-
pears and inserting in lieu thereof "spouse"; viving spouses';
(2) by striking out "wife's" wherever it ap- (3) by striking out "wife's insurance bene-
pears and inserting in lieu thereof fits" and "he" in paragraph (1)(D) and in-
"spouse's'; serting in lieu thereof "a spouse's insurance
(3) by striking out "she" wherever it ap- benefit" and "such individual', respectively,
pears and inserting in lieu thereof "he or (4) by striking out "her" wherever it ap-
she"; pears and inserting in lieu thereof "his or
(4) by striking out "his" and inserting in her";
lieu thereof "the'; and (5) by striking out "she" wherever it ap-
(5) by inserting "or section 202(c)" after pears and inserting in lieu thereof "he or
"section 202(b)" wherever it appears. she';
(b) Section 227(b) and section 227(c) of (6) by striking out "mother" wherever it
such Act are amended- appears and inserting in lieu thereof
(1) by striking out "widow" wherever it 'parent';
appears and inserting in lieu thereof "sur- (7) by inserting "or father's" after "moth-
viving spouse"; er's" wherever it appears;
(2) by striking out "widow's" wherever it (8) by striking out "after August 1950";
appears and inserting in lieu thereof "sur- and
viving spouse's", (9) in paragraph (3)(A) (as amended by
(3) by striking out "her" wherever it ap- section 301(b)(7) of this Act)-
pears and inserting in lieu, thereof "the"; (A) by inserting "this subsection or" before
and "subsection (a)'; and
(4) by inserting "or section 202(f)" after (B) by striking out "(c)," and inserting in
"section 202(e)" wherever it appears, lieu thereof "(b), (c), (e), ",
(c) Section 216 of such Act is amended by (b) The heading of section 202(g) of such
inserting before subsection (b) the following Act is amended by inserting "and Father's"
new subsection; after 'Mother's':
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(1) Section 222(b)(1) of such Act is amend-
ed by striking out `or surviving divorced
wife" and inserting in lieu thereof `, surviv-
ing divorced wife, or surviving divorced
husband".
(m) Section 222(b)(2) of such Act is
amended by inserting "or fathers" after
"mothers" wherever it appears.
(n) Section 222(b)(3) of such Act is amend-
ed by inserting "divorced husband," after
"husband, "
(o) Section 223(d)(2) of such Act is amend-
ed by striking out "or widower" in subpara-
graphs (A) and (B) and inserting in lieu
thereof "widower, or surviving divorced hus-
band':
(p) Section 225(a) of such Act is amended
by inserting "or surviving divorced hus-
band" after `widower':
(q)(1) Section 226(e)(3) of such Act is
amended to read as follows:
"(3) For purposes of determining entitle-
ment to hospital insurance benefits under
subsection (b), any disabled widow aged 50
or older who is entitled to mother's insur-
ance benefits (and who would have been en-
titled to widows insurance benefits by
reason of disability if she had filed for such
widow's benefits), and any disabled widower
aged 50 or older who is entitled to father's
insurance benefits (and who would have
been entitled to widower's insurance bene-
fits by reason of disability if he had filed for
such widowers benefits), shalt upon appli-
cation for such hospital insurance benefits
be deemed to have filed for such widow's or
widower's insurance benefits.":
(2) For purposes of determining entitle-
ment to hospital insurance benefits under
section 226(e)(3) of such Act, as amended by
paragraph (1), an individual becoming enti-
tled to such hospital insurance benefits as a
result of the amendment made by such para-
graph shall, upon furnishing proof of his or
her disability within twelve months after the
month in which this Act is enacted, under
such procedures as the Secretary of Health
and Human Services may prescribe, be
deemed to have been entitled to the widow's
or widower's benefits referred to in such sec-
tion 226(e)(3), as so amended, as of the time
such individual would have been entitled to
such widows or widower's benefits if he or
she had filed a timely application therefor.
EFFECTIVE DATE OF PART A
SEC. 310. (a) Except as otherwise specifi-
cally provided in this title, the amendments
made by this part apply only with respect to
monthly benefits payable under title 11 of
the Social Security Act for months after the
month in which this Act is enacted.
(b) Nothing in any amendment made by
this part shall be construed as affecting the
validity of any benefit which was paid,
prior to the effective date of such amend-
ment as a result of a judicial determina-
tion.
PART B-COVERAGE
COVERAGE OF EMPLOYEES OF FOREIGN
AFFILIATES OF AMERICAN EMPLOYERS
SEC. 321. (a)(1) So much of subsection (1)
of section 3121 of the Internal Revenue Code
of 1954 (relating to agreements entered into
by domestic corporations with respect to for-
eign subsidiaries) as precedes the second
sentence of paragraph (1) thereof is amend-
ed to read as follows:
"(1) AGREEMENTS ENTERED INTO BY AMERI-
CAN EMPLOYERS WITH RESPECT TO FOREIGN
AFFILIATES.-
"(1) AGREEMENT WITH RESPECT TO CERTAIN
EMPLOYEES OF FOREIGN AFFILIATE.-The Secre-
tary shall, at the American employer's re-
quest enter into an agreement (in such
manner and form as may be prescribed by
the Secretary) with any American employer
CONGRESSIONAL RECORD - HOUSE March 24, 1983
(as defined in subsection (h)) who. desires to
have the insurance system established by
title II of the Social Security Act extended to
service performed outside the United States
in the employ of any 1 or more of such em-
ployer's foreign affiliates (as defined in
paragraph (8)) by all employees who are citi-
zens or residents of the United States, except
that the agreement shall not apply to any
service performed by, or remuneration paid
to, an employee if such service or remunera-
tion would be excluded from the term em-
ployment' or wages, as defined in this sec-
tion, had the service been performed in the
United States."
(2) Paragraph (8) of section 3121(l) of such
Code (defining foreign subsidiary) is
amended to read as follows:
`Y8) FOREIGN AFFILIATu DEFINED.-For pur-
poses of this subsection and section 210(a)
of the Social Security Act-
"(A) IN GENERAL -A foreign affiliate of an
American employer is any foreign entity in
which such American employer has not less
than a 10-percent interest.
`(B) DETERMINATION OF 10-PERCENT INTER-
EST.-For purposes of subparagraph (A), an
American employer has a 10-percent interest
in any entity if such employer has such an
interest directly (or through one or more en-
tities)-`W) in the case of a corporation, in the
voting stock thereof, and
"(ii) in the case of any other entity, in the
profits thereof "
(b) The clause (B) of section 210(a) of the
Social Security Act (defining employment)
which precedes paragraph (1) thereof (as
amended by section 323(a)(2) of this Act) is
further amended to read as follows: "(B)
outside the United States by a citizen or
resident of the United States as an employee
(i) of an American employer (as defined in
subsection (e) of this section), or (ii) of a
foreign affiliate (as defined in section
3121(1)(8) of the Internal Revenue Code of
1954) of an American employer during any
period for which there is in effect an agree-
ment, entered into pursuant . to section
3121(l) of such Code, with respect to such af-
filiate;":
(cl Subsection (a) of section 406 of the In-
ternal Revenue Code of 1954 (relating to
treatment of certain employees of foreign
subsidiaries for pension, etc., purposes) is
amended to read as follows:
"(a) TREATMENT As EMPLOYEES OF AMERICAN
EMPLOYER.-For purposes of applying this
part with respect to a pension, profit-shar-
ing, or stock bonus plan described in section
401(a), an annuity plan described in section
403(a), or a bond purchase plan described in
section 405(a), of an American employer (as
defined in section 3121(h)), an individual
who is a citizen or resident of the United
States and who is an employee of a foreign
affiliate (as defined in section 3121(1)(8)) of
such American employer shall be treated as
an employee of such American employer, if-
"(1) such American employer has entered
into an agreement under section 3121(l)
which applies to the foreign affiliate of
which such individual is an employee;
"(2) the plan of such American employer
expressly provides for contributions or bene-
fits for individuals who are citizens or resi-
dents of the United States and who are em-
ployees of its foreign affiliates to which an
agreement entered into by such American
employer under section 3121(l) applies; and
"(3) contributions under a funded plan of
deferred compensation (whether or not a
plan described in section 401(a), 403(a), or
405(a)) are not provided by any other person
with respect to the remuneration paid to
such individual by the foreign affiliate."
(d) Paragraph (1) of section 407(a) of such
Code (relating to certain employees of do-
mestic subsidiaries engaged in business out-
side the United States) is amended-
(1) by striking out "citizen of the United
States" and inserting in lieu thereof "citizen
or resident of the United States", and
(2) by striking out "citizens of the United
States" and inserting in lieu thereof "citi-
zens or residents of the United States".
(e)(1) Those provisions of subsection (1) of
section 3121 of such Code which are not
amended by subsection (a) of this section
are amended in accordance with the follow-
ing table:
Strike out (wherever it And insert
appears in the text or
heading):
domestic corporation...... American employer
domestic corporations..... American employers
subsidiary .......................... affiliate
subsidiaries ....................... affiliates
foreign corporation......... foreign entity
foreign corporations........ foreign entities
citizens ............................... citizens or residents
the word "a" where it an
appears before "domes-
tic".
(2)(A) Section 406 of such Code (other
than subsection (a) thereof) is amended in
accordance with the following table:
Strike out (wherever ap- And insert:
pearing in the text):
domestic corporation...... American employer
subsidiary .......................... affiliate
the word "a" where it an
appears before "domes-
tic":
(B) Paragraph (3) of subsection (cl of such
section 406 (as in effect before the amend-
ment made by subparagraph (A)) is amend-
ed by striking out "another corporation con-
trolled by such domestic corporation" and
inserting in lieu thereof `another entity in
which such American employer has not less
than a 10-percent interest (within the mean-
ing of section 3121()(8)(B))':
(CM) So much of subsection (d) of such
section 406 as precedes paragraph (1) there-
of is amended by striking out "another cor-
poration" and inserting in lieu thereof "an-
other taxpayer":
(ii) Paragraph (1) of subsection (d) of such
section 406 is amended by striking out "any
other corporation" and inserting in lieu
thereof "any other taxpayer".
(D)(i) The heading of such section 406 is
amended to read as follows:
"SEC. 406. EMPLOYEES OF FOREIGN AFFILIATES COV-
ERED BY SECTION 3121(1) AGREE-
MENTS"
(ii) The table of sections for subpart A of
part I of subchapter D of chapter 1 of such
Code is amended by striking out the item re-
lating to section 406 and inserting in lieu
thereof the following.:
"Sec. 406. Employees of foreign affiliates
covered by section 3121(l) agreements. "
(3) Clause (A) of the second sentence of
section 1402(b) of such Code (defining self-
employment income) is amended by striking
out "employees of foreign subsidiaries of do-
mestic corporations" and inserting in lieu
thereof "employees of foreign affiliates of
American employers":
(4)(A) Subparagraph (C) of section
6413(c)(2) of such Code (relating to special
refunds of FICA taxes in the case of employ-
ees of certain foreign corporations) is
amended-
(i) by striking out "FOREIGN CORPORATIONS"
in the heading and inserting in lieu thereof
"FOREIGN AFFILIATES", and
(ii) by striking out "domestic corpora-
tion" in the text and inserting in lieu there-
of `American employer":
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CONGRESSIONAL RECORD - HOUSE March 24, 1989
"(E) under or to an annuity contract de-
scribed in section 403(b), other than a pay-
ment for the purchase of such contract
which is made by reason of a?balary reduc-
tion agreement (whether evidenced by a
written instrument or otherwise),
"(F) under or to an exempt governmental
deferred compensation plan (as defined in
section 3121(v)(3)), or
"(G) to supplement pension benefits under
a plan or trust described in any of the fore-
going provisions of this paragraph to take
into account some portion or all of the in-
crease in the cost of living (as determined by
the Secretary of Labor) since retirement but
only if such supplemental payments are
under a plan which is treated as a welfare
plan under section 3(2)(B)(ii) of the Em-
ployee Retirement Income Security Act of
1974;":
(3) Subsection (b) of section 3306 of such
Code (defining wages) is amended-
(A) in paragraph (2), by striking out sub-
paragraph (A) and redesignating subpara-
graphs (B), (C), and (D) as subparagraphs
(A), (B), and (C), respectively,
(B) by striking out paragraphs (3) and (8),
and (C) in paragraph (10)(A)-
(i) by inserting "or" after `death,'; and
(ii) by striking out `or (iii) retirement
after attaining an age specified in the plan
referred to in subparagraph (B) or in a pen-
sion plan of the employer,':
(4)IA Subparagraph (A) of section
3306(b)(2) of such Code, as redesignated by
paragraph (3)(A), is amended to read as fol-
lows:
"(A) sickness or accident disability (but,
in the case of payments made to an employ-
ee or any of his dependents, this subpara-
graph shall exclude from the term 'wages'
only payments which are received under a
workman's compensation law), or':
(B) Subsection (b) of section 3306 of such
Code (defining wages) is amended by adding
at the end thereof the following new flush
sentence:
"Except as otherwise provided in regula-
tions presribed by the Secretary, any third
party which makes a payment included in
wages solely by reason of the parenthetical
matter contained in subparagraph (A) of
paragraph (2) shall be treated for purposes
of this chapter and chapter 22 as the em-
ployer with respect to such wages":
(C) Rules similar to the rules of subsec-
tions (d) and (e) of section 3 of the Act enti-
tled "An Act to amend the Omnibus Recon-
ciliation Act of 1981 to restore minimum
benefits under the Social Security Act"
(Public Law 97-123), approved December 29,
1981, shall apply in the administration of
section 3306(b)(2)(A) of such Code (as
amended by subparagraph (A)).
(c)(1) Section 209 of the Social Security
Act is amended by adding at the end thereof
(as amended by this Act) the following new
paragraphs:
"Nothing in any of the foregoing provi-
sions of this section (other than subsection
(a)) shall exclude from the term 'wages'
`(1) any employer contribution under a
qualified cash or deferred arrangement (as
defined in section 401(k) of the Internal
Revenue Code of 1954) to the extent not in-
cluded in gross income by reason of section
402(a)(8) of such Code, or
"(2) any amount which is treated as an
employer contribution under section
414(h)(2) of such Code.
"Any amount deferred under a nonquali-
fied deferred compensation plan (within the
meaning of section 3121(v)(2)(C) of the In-
ternal Revenue Code of 1954) shall be taken
into account for purposes of this title as of
the later of when the services are performed,
or when there is no substantial risk of for-
feature of the rights to such amount. Any
amount taken into amount as wages by
reason of the preceding sentence (and the
income attributable thereto) shall not there-
after be treated as wages for purposes of this
title. "
(2) Subsection '(e) of section 209 of such
Act is amended by adding before the semi-
colon at the end thereof the following: , or
(5) under or to an annuity contract de-
scribed in section 403(v) of the internal Rev-
enue Code of 1954, other than a payment for
the purchase of such contract which is made
by reason of a salary reduction agreement
(whether evidence by a written instrument
or otherwise), or (6) under or to an exempt
governmental deferred compensation plan
(as defined in section 3121(v)(3) of such
Code), or (7) to supplement pension benefits
under a plan or trust described in any of the
foregoing provisions of this subsection to
take into account some portion or all of the
increase in the cost of living (as determined
by the Secretary of Labor) since retirement
but only if such supplemental payments are
under a plan which is treated as a welfare
plan under section 3(2)(B)(ti) of the Em-
ployee Retirement Income Security Act of
1974;':
(3) Section 209 of such Act is amended-
(A) in subsection (b), by striking out para-
graph (1) and redesigning paragraphs (2),
(3), and (4) as paragraphs (1), (2), and (3),
respectively,
(B) by striking out subsections (c) and (i),
and
(C) in subsection (m)(1)-
(i) by inserting "or" after 'death,'; and
(ii) by striking out "or (C) retirement after
attaining an age specified in the plan re-
ferred to in paragraph (2) or in a pension
plan of the employer;':
(4) Section 203(f)(5)(C) of the Social Secu-
rity Act is amended by adding at the end
thereof the following new sentence: "The
term 'wages' does not include-
"({) the amount of any payment made to,
or on behalf of, an employee or any of his de-
pendents (including any amount paid by an
employer for insurance or annuities, or into
a fund, to provide for any such payment) on
account of retirement, or
"(ii) any payment or series of payments by
an emplolyer to an employee or any of his
dependents upon or after the termination of
the employee's employment relationship be-
cause of retirement after attaining an age
specified in a plan referred to in section
209(m)(2) or in a pension plan of the em-
ployer."
(d)(1) Except as otherwise provided in this
subsection, the amendments made by this
section shall apply to remuneration paid
after December 31, 1983.
(2) Except as otherwise provided in this
subsection, the amendments made by subsec-
tion (b) shall apply to remuneration paid
after December 31, 1984.
(3) The amendments made by this section
shall not apply to employer contributions
made during 1984 and attributable to serv-
ices performed during 1983 under a quali-
fied cash or deferred arrangement (as de-
fined in section 401(k) of the Internal Reve-
nue Code of 1954) if, under the terms of such
arrangement as in effect on March 24,
1983-
(A) the employee makes an election with
respect to such contribution before January
1, 1984, and
(B) the employer identifies the amount of
such contribution before January 1, 1984.
In the case of the amendments made by sub-
section (b), the preceding sentence shall be
applied by substituting "1985" for "1984"
each place it appears and by substituting
"during 1984"for "during 1983".
(4). In the case of an ageeement in exist-
ence on March 24, 1983, between a nonquali-
fied deferred compensation plan (as defined
in section 3121(v)(2)(C) of the Internal Rev-
enue Code of 1954, as added by this section)
and an individual-
(A) the amendments made by this section
(other than subsection (b)) shall apply with
respect to services performed by such indi-
vidual after December 31, 1983, and
(B) the amendments made by subsection
(b) shall apply with respect to services per-
formed by such individual after December
31, 1984.
The preceding sentence shall not apply in
the case of a plan to which section 457(a) of
such Code applies.
EFFECT OF CHANGES IN NAMES OF STATE AND
LOCAL EMPLOYEE GROUPS IN UTAH
Sire. 326. (a) Section 218(o) of the Social
Security Act is amended by adding at the
end thereof the following new sentence:
"Coverage provided for in this subsection
shall not be affected by a subsequent change
in the name of a group.".
(b) The amendment made by subsection
(a) shall apply with respect to name changes
made before, on, or after the date of the en-
actment of this section.
EFFECTIVE DATES OF INTERNATIONAL SOCIAL
SECURITY AGREEMENTS
SEC. 327. (a) Section 233(e)(2) of the Social
Security Act is amended by striking out
"during which each House of the Congress
has been in session on each of 90 days" and
inserting in lieu thereof "during which at
least one House of the Congress has been in
session on each of 60 days".
(b) The amendment made by subsection
(a) shall be effective on the date of the enact-
ment of this Act.
CODIFICATION OF ROWAN DECISION WITH
RESPECT TO MEALS AND LODGING
SEC. 328. (a)(1) Subsection (a) section 3121
of the Internal Revenue Code of 1954 (defin-
ing wages) is amended by striking out "or"
at the end of paragraph (17), by striking out
the period at the end of paragraph (18) and
inserting in lieu thereof ';' or'; and by in-
serting after paragraph (18) the following
new paragraph:
"(19) the value of any meals or lodging
furnished by or on behalf of the employer if
at the time of such furnishing it is reason-
able to believe that the employee will be able
to exclude such items from income under
section 119.'.
(2) Section 209 of the Social Security Act
is amended by striking out "or" at the end
of subsection (p), by striking out the period
at the end of subsection (q) and inserting in
lieu thereof or", and by inserting after
subsection (q) the following new subsection:
"(r) The value of any meals or lodging fur-
nished by or on behalf of the employer if at
the time of such furnishing it is reasonable
to believe that the employee will be able to
exclude such items from income under sec-
tion 119 of the Internal Revenue Code of
1954. ".
(b)(1) Subsection (a) of section 3121 of
such Code is amended by inserting after
paragraph (19) (as added by subsection (a)
of this section) the following new sentence:
"Nothing in the regulations prescribed for
purposes of chapter 24 (relating to income
tax withholding) which provides an exclu-
sion from 'wages' as used in such chapter
shall be construed to require a similar exclu-
sion from 'wages'in the regulations pre-
scribed for purposes of this chapter.".
(2) Section 209 of the Social Security Act
is amended by inserting immediately after
subsection (r) (as added by subsection (a) of
this section) the following new sentence:
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"Nothing in the regulations prescribed for
purposes of chapter 24 of the Internal Reve-
nue Code of 1954 (relating to income tax
withholding) which provides an exclusion
from 'cages' as used in such chapter shall be
construed to require a similar exclusion
from 'wages' in the regulations prescribed
for. purposes of this title.':
to) Subsection (b) of section 3306 of the In-
ternal Revenue Code of 1954 (defining
wages) is amended-
(1) by striking out "or" at the end of para-
graph (12),
(2) by striking out the period at the end of
paragraph (13) and inserting in lieu thereof
or',
(3) by adding immediately after para-
graph (13) the following new paragraph:
"(14) the value of any meals or lodging
furnished by or on behalf of the employer if
at the time of such furnishing it is reason-
able to believe that the employee will be able
to exclude such items from income under
section 119."; and
(4) by adding at the end thereof the follow-
ing new flush sentence:
"Nothing in the regulations prescribed for
purposes of chapter 24 (relating to income
tax withholding) which provides an exclu-
sion from 'wages' as used in such chapter
shall be construed to require a similar exclu-
sion from 'wages' in the regulations Pro-
scribed for Purposes of this chapter.
(d)(1) Except as provided in paragraph
(2), the amendments made by subsections
(a) and (b) shall apply to remuneration paid
after December 31, 1983.
(2) The amendments made by subsection
(c) shall apply to remuneration paid after
December 31, 1984.
TREATMENT OF CONTRIBUTION UNDER
SIMPLIFIED EMPLOYEE PENSION
Sec. 329, (a) Subparagraph (D) of section
3121(a) (5) of the Internal Revenue Code of
1954 (defining wages) is amended by strik-
ing out "section 219" and inserting in lieu
thereof "section 219(b)(2)'
(b) Subsection (e) of section 209 of the
Social Security Act, as amended by this Act,
is amended by striking out the semicolon at
the end thereof and inserting in lieu thereof
the following: , or (8) under a simplified
employee pension (as defined in action
408(k) of the Internal Revenue Code of 1954)
if at the time of the payment, it is reason-
able to believe that the employee will be enti-
tled, to a deduction under section 219(b)(2)
of such Code for such payment".
(c) Subparagraph (D) of section 3306(b)(5)
of the Internal Revenue Code of 1954 is
amended by striking out "section 219" and
inserting in lieu thereof 'section 219(b)(2)'
(d)(1) Except as provided in paragraph
(21, the amendments made by this section
shall apply to remuneration paid after De-
cember 31, 198E
(2) The amendments made by subsection
(c) shall apply to remuneration paid after
December 31, 1084L
PART C-OTHER AMENDMENTS
TECHNICAL AND CONFORMING AMENDMENTS TO
MAXIMUM FAMILY BENEFIT PROVISION
SEC 331. (a)(1) Section 203(a)(3)(A) of the
Social Security Act is amended by striking
out clause (ii) and inserting in lieu thereof
the following:
"(ii) an amount (I) initially equal to the
product of 1.75 and the primary insurance
amount that would be computed under sec-
tion 215(a)(1), for January of the year deter-
mined for purposes of this clause under the
following two sentences, with respect to
average indexed monthly earnings equal to
one-twelfth of the contribution and benefit
base determined for that year under section
230, and (II) thereafter increased in accord-
CONGRESSIONAL RECORD - HOUSE H 1743
anee with the : provisions of section
215(fZ(2EA)(iil. -,
The year established for purposes of clause
(ii) shall be 1883 or, if it occurs later with
respect to any individual, the year in which
occurred the month that the application of
the reduction provisions contained in this
subparagraph began with respect to benefits
payable on the basis of the wages and self-
employment income of the insured individu-
al. If for any month subsequent to the first
month for which clause (ii) applies (with re-
spect to benefits payable on the -basis of the
wages and self-employment income of the in-
sured individual) the reductiof under this
subparagraph ceases to apply, then the year
determined under the preceding sentence
shall be redetermined (fo? purposes of any
subsequent application of this subparagraph
with respect to benefits payable on the basis
of such wages and self-employment income)
as though this subparagraph had not been
previously applicable."(2) Section 203(a)(7) of such Act is amend-
ed by striking out everything that follows
"shall be reduced to an amount equal to"
and inserting in lieu thereof "the amount
determined in accordance with the provi-
sions of paragraph (3)(A)(ii) of this subsec-
tion, except that for this purpose the refer-
ences to Subparagraph (A) in the last two
sentences of paragraph (3)(A) shall be
deemed to be references to paragraph (7).':
(b) Clause (i) in the. last sentence of sec-
tion 203(b)(1) of such Act (as amended by
section 132(b) of this Act) is further amend-
ed by striking out 'penultimate sentence"
and inserting in lieu thereof 'ytrst sentence
of paragraph (4)':
(c) The amendments made by subsection
(a) shall be effective with respect to pay-
ments made for months after December 1983.
RE_A =AVON OF INURED STATUS REQUIREMENTS
FOR CERTAIN WOREERS PREVIOUSLY EN777LKD
TO A PERIOD Or DISARJTJ7'Y
Svc. 332. (a) Scott" :16(1)13) of the Social
Security Act is amended-
(1) by striking out the semicolon at the
end of clause (ii) of subparagraph (B) and
inserting in lieu thereof': or';' and
(2) by inserting after clause (ii) of such
subparagraph the following new clause:
'Viii) in the case of an individual (not oth-
erwise insured under clause (ill who. by
reason of clause (ii), had a prior period of
disability that began during a period before
the quarter in which he or she attained age
31, not less than one-half of the quarters be-
ginning after such individual attained age
21 and ending with such quarter are quar-
ters of coverage, or (if the number of quar-
ters in such period is less than 12) not lea
than 6 of the quarters in the 12-quarter
period ending with such quarter are quar-
ters of coverage.':
(b) Section 223(c)(1)(B) of such Act is
amended-
(1) by striking out the semicolon at the
end of clause (ii) and inserting in lieu there-
of " or', and
(2) by inserting after clause (ii) the follow-
ing new clause:
"(iii) in the case of an individual (not oth-
erwise insured under clause till who by
reason of section t16(il(3)(B)(ti1, had a
prior period of disability that began during
a period before the quarter in which he or
she attained age 31, not less than one-half of
the quarters beginning after such individual
attained age 21 and ending with the quarter
in which such month occurs are quarters of
coverage, or (if the number of quarters in
such period is less than 12) not less than 6 of
the quarters in the 12-quarter period ending
with Such quarter are quarters of coverage;':
(e) The amendments made by this section
shall be of active with respect to applica-
tions for disability insurance benefits under
section 223 of the Social Security Act, and
for disability determinations under section
216(i) of such Act, filed after-the date of the
enactment of this Act, except that no month-
ly benefits under title II of the Social Secu-
rity Act shall be payable or increased by
reason of the amendments trade by this sec-
tion for months before the month following
the month of enactment of this Act
PROTECTION OF BENIIJTd OF W.IG/TIJUTE
CHILDREN OF DISABLED BINEFZCIARJES
Sec. 333. (a) The last sentence of section
216(h)(3) of the Social Security Act is
amended by striking out, "subparagraph
(A1H1" and inserting in lieu thereof'subpar-
agraphs (A)(i) and (B)H)':
(b) The amendment made by subsection
(a) shall be effective on the date of the enact-
ment of this Act
OM-MONTH RS7RQk.-i VZr7 OF WIDOW'S MID
WIDOWER'S INSURANCE BENEFITS
SEC 334. (a) Section 2621.l(4)(B) of the
Social Security Act is amended-
(1) by redesignating clauses (iii) and (iv)
as clauses (iv) and W. respectively; and
(2) by adding after clause (ii) the follow-
ing new clause:
"(iii) Subparagraph (d) does not apply to
a benefit under subsection (e) or (f) for the
month immediately preceding the month of
application, if the insured individual died
in that preceding month.
(b) The amendments made by subsection
(a) shall apply with respect to survivors
whose applications for monthly benefits are
filed after the second month following the
month in which this Act is enacted.
NONISSIGNABUfl Y OF BENEI17S
Sec. 335. (a) Section 207 of the Social Se-
curity Act is amended-
(1) by inserting v(a)" before "The right",'
and
(2) by adding at the end thereof the follow-
ing new subsection:
"(b) No other provision of law, enacted
befor , on, or after the date of the enactment
of this section, may be construed to limit,
supersede, or otherwise modify the provi-
sions of this section except to the extent that
it does so by express reference to this sec-
tion.':
(b)(1) Section 459(a) of such Act is amend-
ed by inserting "(including section 207) "
after "any other provision of law."
(2)(A) Section 86(a) of the Internal Reve-
nue Code of 1954 (as added by section 121(0
of this Act) to amended by inserting "(not-
withstanding section 207 of the Social Secu-
rity Act)" before "includes':
(B) Section 871(a)(3)(A) of Such Code (as
added by section 121(c)(1) of this Act) is
amended by inserting "(notwithstanding
section 207 of the Social Security Act)" after
"income":
(c) The amendments made by subsection
(a) shall apply only with respect to benefits
payable or rights existing under the Social
Security Act on or after the date of the en-
actment of this act.
USE OF DEATH CERTIFICATES TO PREVENT ERRO-
NEOUS BENEFIT PAYMENTS TO DECEASED INDI-
VIDUAL.4
SeC 33& Section 205 of the Social Security
Act is amended by adding at the end thereof
the following new subsection:
"USE OF DEATH CERTIVICAVIN TO CORRECT
PROGRAM INFORMATION
"(r)(1) The Secretary shall undertake to es-
tablish a program under which--
"(A) States (or political subdivisions
thereof) voluntarily contract with the Secre-
tary to furnish the Secretary periodically
with information (in a form established by
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the Secretary in consultation with the
States) concerning individuals with respect
to whom death certificates (or equivalent
documents maintained by the States or sub-
divisions) have been officially filed with
them;
"(B) There will be (1) a comparison of
such information on such individuals with
information on such individuals in the re-
cords being used in the administration of
this Act, f2) validation of the results of such
comparisons, and (3) corrections in such re-
cords to accurately reflect the status of such
individual
"(2) Each State (or political subdivision
thereof) which ,Furnishes the Secretary with
information on records of deaths in the
State or subdivision under this subsection
may be paid by the Secretary from amounts
available for administration of this Act the
reasonable costs (established by the Secre-
tary in consultations with the States) for
transcribing and transmitting such infor-
mation to the Secretary.
"(3) In the cast of individuals with respect
to whom federally funded benefits are pro-
vided by (or through) a Federal or State
agency other than under this Act, the Secre-
tary shall to the extent feasible provide such
information through a cooperative arrange-
ment with such agency, for ensuring proper
payment of those benefits with respect to
such individuals if-
" under such arrangement the agency
provides reimbursement to the Secretary for
the reasonable cost of carrying out such ar-
rangement and
"(B) . such arrangement does not conflict
with the duties of the Secretary under para-
graph (1).
"(4) The Secretary may enter into similar
agreements with States to provide informa-
tion for their use in programs wholly funded
by the States if the requirements of (r)(3)(A)
and (r)(3)(B) are met.
"(S) The Secretary may use or provide for
the use of such records as may be corrected
under this section, subject to such safe-
guards as the Secretary determines are nec-
essary or appropriate to protect the infor-
mation from unauthorized use or disclosure,
for statistical and research activities con-
ducted by Federal and State agencies;
"(6) Information furnished to the Secre-
tary under this subsection may not be used
for any purpose other than the purpose de-
scribed in this subsection and is exempt
from disclosure under section 552 of title 5,
United States Code, and frorm, his require-
ments of action Wa o(such title.
"(7) The Secretary shall include informa-
tion on thk status of the Program established
under this section and impediments to the
effective implementation of the program in
the 1984 report required under section 704 of
the Act.":
PUBLIC PENSION OFFSET
Sac. 337. (a) Subsections (b)(4)(A),
(c)(2MA), (f)(2)(A), and (g)(4)(A) of section
202 of the Social Security Act, and para-
graph (7)(A) of section 202(e) of such Act (as
redesignated by section 131(a)(3)(A) of this
Act), are each amended-
(1) by striking out "by an amount equal to
the amount of any monthly periodic bene-
fit" and inserting in lieu thereof "by an
amount equal to two-thirds of the amount of
any monthly periodic benefit';' and
(2) by adding at the end thereof the follow-
ing new sentence: "The amount of the reduc-
tion in any benefit under this subparagraph,
if not a multiple of $0.10, shall be rounded
to the next higher multiple of $0.10.":
(b) The amendments made by subsection
(a) of this section shall apply only with re-
spect to monthly insurance benefits payable
under title II of the Social Security Act to
individuals who initially become eligible (as
defined in section 334 of Public Law 95-216)
for monthly periodic benefits (within the
meaning of the provisions amended by sub-
section (a)) for months after June'1983.
STUDY CONCERNING THE ESTABLISHMENT OF THE
SOCIAL SECURITY ADMINISTRATION AS AN INDE-
PENDENT AGENCY
SEC. 338. (a) There is hereby established,
under the authority of the Committee on
Ways and Means of the House of Repre-
sentatives and the Committee on Finance of
the Senate, a joint study panel to be known
as the Joint Study Panel on the Social Secu-
rity Administration (hereafter in this sec-
tion referred to as the "Panel). The duties
of the Panel shall be to conduct the study
provided for in subsection (c).
(b)(1) The Panel shall be composed of 3
members, appointed jointly by the chairmen
of the Committee on Ways and Means of the
House of Representatives and the Commit-
tee on Finance of the Senate and such chair-
men shall jointly select one member of the
Panel to serve as chairman of the Panel.
Members of the Panel shall be chosen, on the
basis of their integrity, impartiality, and
good judgment, from individuals who, as a
result of their training, experience, and at-
tainments, are widely recognized by profes-
sionals in the fields of government adminis-
tration, social insurance, and* labor rela-
tions as experts in those fields.
(2) Vacancies in the membership of the
Panel shall not affect the power of the re-
maining members to perform the duties of
the Panel and shall be filled in the same
manner in which the original appointment
was made.
(3) Each member of the Panel not other-
wise in the employ of the United States Gov-
ernment shall receive the daily equivalent of
the annual rate of basic pay payable for
level V of the Executive Schedule under sec-
tion 5316 of title 5, United States Code, for
each day during which such member is actu-
ally engaged in the performance of the
duties of the Panel Each member of the
Panel shall be allowed travel expenses in the
same manner as any individual employed
intermittently by the Federal Government is
allowed travel expenses under section 5703
of title 5, United States Code.
(4) By agreement between the chairmen of
the Committee on Ways and Means of the
House of Representatives and the Commit-
tee on Finance of the Senate, such Commit-
tees shall provide the Panel, an a reimbursi-
ble basis, office spaces clerical personnel,
and such supplies and equipment as may be
necessary for the Panel to carry out its
duties under this section. Subject to such
limitations as the chairmen of such Com-
mittees may jointly prescribe, the Panel may
appoint such additional personnel as the
Panel considers necessary and fix the torn-
pensation of such personnel as it considers
appropriate at an annual rate which does
not exceed the rate of basic pay then payable
for GS-18 of the General Schedule under sec-
tion 5332 of title 5, United States Code, and
may procure by contract the temporary or
intermittent services of clerical personnel
and experts or.consudtants, or organizations
thereof.
(5) Them are hereby authorized to be ap-
propriated to the Panel, from amounts in
the general fund of the Treasury not other-
wise appropriated, each sums as are neces-
sary to carry out the purposes of this sea
tion.
(c)(1) The Panel shall undertake, as soon'
as possible after the date of the enactment of
this Act, a thorough study with respect to
the implementation of removing the Social
Security Administration from the Depart-
March 24, 1983
ment of Health and Human Services and es-
tablishing it as an independent agency in
the executive, branch with its own independ-
ent administrative structure, including the
possibility of such a structure headed by a
board appointed, by the President, by and
with the advice and consent of the Senate.
(2) The Panel in its study under para-
graph (1) shall address, analyze, and report
specifically on the following matters:
(A) the manner in which the transition to
an independent agency would be conducted;
(B) the authorities which would have to be
transferred or amended in such a transition;
(C) any program or programs which would
be included within the jurisdiction of the
new agency;
(D) the legal and other relationships of the
Social Security Administration with other
organizations which would be required as a
result of establishing the Social Security Ad-
ministration as an independent agency; and
(E) any other details which may be neces-
sary for the development of appropriate leg-
islation to establish the Social Security ad-
ministration as an independent agency.
(d) The Panel shall submit to the Commit-
tee on Ways and Means of the House of Rep-
resentatives and the Committee on Finance
of the Senate, not later than April 1, 1984, a
report of the findings of the study conducted
under subsection (c), together with any rec-
ommendations the Panel considers appro-
priate. The Panel and all authority granted
in this section shall expire thirty days after
the date of the filing of its rep6rt under this
section.
LIMITATION ON PAYMENTS TO PRISONERS
SEC. 339. (a) Section 202 of the Social Se-
curity Act is amended by adding at the end
thereof the following new subsection:
(x)(1) Notwithstanding any other provi-
sion of this title, no monthly benefits shall
be paid under this section, or under section
223 to any individual for any month during
which such individual is confined in a jail,
prison, or other penal institution or correc-
tional facility, pursuant to his conviction of
an offense which constituted a felony under
applicable law, unless such individual is ac-
tively and satisfactorily participating in a
rehabilitation program which has been spe-
fically approved for such individual by a
court of law and, as determined by the Sec-
retary, is expected to result in such individ-
ual being able to engage in substantial gain-
ful activity upon release and within a rea-
sonable time.
(2) Benefits which would be payable to
any individual (other than a confined indi-
vidual to whom benefits are not payable by
reason of paragraph (11) under this title on
the basis of the wages and self-employment
income of such a confined individual but
for the provisions of paragraph (1), shall be
payable as though such confined individual
were receiving such benefits under this sec-
tion.
(3) Notwithstanding the provisions of sec-
tion 552a of title 5, United States Code, or
any other provision of Federal or State law,
any agency of the United States Govern-
ment or of any State (or political subdivi-
sion thereof) shall make available to the Sec-
retary, upon written request, the name and
social security account number of any indi-
vidual who is confined in a jail, prison, or
other penal institution or correctional fa-
cility under the jurisdiction of such agency,
pursuant to his conviction of an offense
which constituted a felony under applicable
law, which the Secretary may require to
carry out the provisions of this subsection.
(b) Section 223 of such Act is amended by
striking out subsection (f).
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(c) The amendments made by subsections
(a) and (b) shall. apply with respect to
monthly benefits payable for months begin-
ning on or a,/ter the date af enactment of
this Act.
REQUIREMENT OF PREVIOUS UNITED STATES RESI-
DENCY FOR ALIEN DEPENDEMB AND SURVIVORS
LIVING OUTSIDE THE UNITED STATES
SEC. 340. (a) Section 202(1) of the Social
Security Act is amended-
(1) in the heading, by adding after
"United States" the following: "; Residency
Requirements for Dependents and Survi-
vors'' and
(2) by adding at the end thereof the follow-
ing new paragraph:
"(111(A) Paragraph (2) and subparagraphs
(A), (B), (C), and (E) of paragraph (4) shall
apply with respect to an individual's month-
ly benefits under subsection (b), (e), (d), (e),
(f), (g), or (h) only if such individual meets
the residency requirements of this para-
graph with respect to those benefits.
"(B) An individual entitled to benefits
under subsection (b), (c), (e), Ul, or (g) meets
the residency requirements of this para-
graph with 'respect to those benefits only if
such individual has resided in the United
States, and while so residing bore a spousal
relationship to the person on whose wages
and self-employment income such entitle-
ment is based, for a total period of not less
than 5 years. Per purposes of this subpara-
graph, a period of time for which-an indi-
vidual bears a spousal relationship to an-
other person consists of a period throughout
which the individual has been, with respect
to such other person, a wife, a husband, a
widow, a widower, a divorced wife, a di-
vorced husband, a surviving divorced wife,
a surviving divorced husband, a surviving
divorced mother, a surviving divorced
father, or (as applicable in the course of
such period) any two or more of the forego-
ing.
"(C) An individual entitled to benefits
under subsection (d) meets the residency re-
quirements of this paragraph with respect to
those benefits only if-
"(i)(1) such individual has resided in the
United States (as the child of the person on
whose wages and 8W-employment income
such entitlement is based) for a total period
of not less than 5 years, or
"(111 the person on whose wages and self-
employment income such entitlement is
based, and the individual's other parent
(within the meaning of subsection (h)(3)), if
any, have each resided in the United States
for a total period of not less than 5 years (or
died while residing in the United States),
and
"(ii) in the case of an individual entitled
to such benefits as an adopted child, such
individual was adopted within the United
States by the person on whose wages and
self-employment income such entitlement is
based, and has lived.in the United States
with such person and received at least one-
half of his or her support from such person
for a period (beginning before such individ-
ual attained age 18) consisting of-
"(I) the year immediately before the month
in which such person became eligible for old-
age insurance benefits or disability insur-
ance benefits or died, whichever occurred
first, or
"(II) if such person had a period of dis-
ability which continued until he or she
became entitled to old-age insurance bene-
fits or disability insurance benefits or died,
the year immediately before the month in
which such period of disability began.
"(D) An individual entitled to benefits
under subsection (h) meets the residency re-
quirements of this paragraph with respect to
those benefits only if such individual has re?
sided in the United States, and while so re-
siding was a parent (within. the meaning of
subsection (h)(3)) of the person on whose
wages and self-employment income such en-
titlement is' based,' for a total period of not
less than 5 years.
"(E) This paragraph shu7l not apply with
respect to any individual who is a citizen or
resident, of a foreign country with which the
United States has an agreement in force
concluded pursuant to section 233, except to
the extent provided by such agreement.'.
(b) Paragraphs (2) and (4) of section 202(1)
of such Act are each amended by, striking
out Paragraph (1) shall not apply" and in-
serting in lieu thereof "Subject to paragraph
(11), paragraph (1) shall not apply';
(c) The amendments made by this section
shall apply with respect to any individual
who initially becomes eligible for benefits
under section 202 or 223 after December 31,
1984.
ADDITION OF PUBLIC IaMEERS TO TRUST FUND
BOARD OF TRUSTEES
SEC. 341. (a) Section 201(c) of the Social
Security Act is amended-
(1) by inserting before the period at the
end of the first sentence the following: 11. and
of two members of the public (both of whom
may not be from the same political party),
who shall be nominated by the President for
a term of four years and sub ect to cofir-
mation by the Senate'; and
(2) by adding at the end thereof the follow-
ing new sentence "A person serving on the
Board of Trustees shall not be considered to
be a fiduciary and shall not be personally
liable for actions taken in such capacity
with respect to the Trust Funds.';
(b) Section 1817(b) of such Act is amend-
ed-
(1) by inserting before the period at the
end of the first sentence the following: ; and
of two members of the public (both of whom
may not be from the same political party),
who shall be nominated by the President for
a term offour years and subject to confirma-
tion by the Senate" and
(2) by adding at the end thereof the follow.
ing new sentences "A person serving on the
Board of Trustees shall not be considered to
be a fiduciary and shall not be presonally
liable for actions taken in such capacity
with respect to the Trust Fund';
(c) Section 1841(b) of such Act is amend-
(1(1) by inserting before the period at the
end of the first sentence the following.' , and
of two members of the public (both of whom
may not be from the same political party),
who shall be nominated by the President for
a term of four years and subject to coniftr-
mation by the Senate ; and
(2) by adding at the end thereof the follow-
ing new sentence "A person serving on the
Board of Trustees shall not be considered to
be a fiduciary and shall not be personally
liable for actions taken in such capacity
with respect to the Trust Fund':
(d) The amendments made by this section
shall become effective on the date of enact-
ment of this Act.
PAYMENT SCHEDULE BY STATE AND LOCAL
OOVERRNMENTS
Sec. 342. (a) section 218(011)(A) Qf the
Social Security Act is amended to read as
follows:
(A) that the State will pay to the Secretary
of the Treasury-
(i) on the last day of each calendar month,
amounts equivalent to the sum of the taxes
which would be imposed by sections 3101
and 3111 of the Internal Revenue Code of
1954 with respect to the period which in-
cludes the first fifteen days of such calendar
month if the services for which wages were
paid in such period to employees covered by
H 1745
the agreement constituted employment cov-
ered by the agreement constituted employ-
ment as defined in section 3231 of such
Code, and
(ii) on the fifteenth day of the calendar
month- following such calendar month,
amounts equivalent to the sum of the taxes
which would be imposed by sections 3101
and 3111 of such Code with respect to the
period beginning with the sixteenth day of
such calendar month and ending with the
last day of such calendar month if the serv-
ices for which wages were paid 'in such
period to employees covered by the agree-
ment constituted employment as defined in
section 3121 of such Code; and';
(b) The amendments made by this section
shall apply to calendar months beginning
after December 31, 1983.
EARNING?SxARnva IMPLEMENTATION REPORT
REPORT
SEC 344. (a) The Secretary of Health and
Human Services (hereinafter in the Part re-
ferred to as the "Secretary") shall develop,
in consultation with the Senate Committee
on Finance and the Committee on Ways and
Means of the House Of Representatives, pro-
posals for earnings sharing legislation as de-
scribed in subsection (b). The Secretary shall
report such proposals to such committees
not later than July 1, 198! The report and
proposals provided to such committees
shall-
(1) take into account, discuss and analyze
the impact of earnings sharing on various
categories of social security beneficiaries
and include recommendations ,for the imple-
mentation of earnings sharing which may
be necessary to provide adequate protection
for particular classes of benefticiaries;
(2) include specific recommendations with
respect to an appropriate and feasible time
period or time periods for implementation
of such proposals along with recommenda-
tions for any transition -provisions which
may be necessary or appropriate' and
(3) provide cost-impact analyses on each
proposal presented
(b) For the purposes of subsection (a), the
term "earnings sharing" Were to proposals
that the combined earnings of a husband
and wife during the period of their marriage
shall be divided equally and shared between
them for social security benefit purposes.
(c) In preparing the report and proposals
required in subsection (a), the Secretary
shall include consideration and analysis of
the earnings sharing propofuis contained in
(1) S. 3, 98th Congress, 1st Session, (2) H.R.
1513, 97th Congress, 1st Session, and (3) the
earnings sharing option described in the
report entitled "Social Security and the
Changing -Roles of Men and Women", sub-
mitted to the Congress pursuant to Public
Law 95-216, the Social Security Amend-
ments of 1977.
(d) in carrying out subsections (a), (b),
and (c), the Secretary shall consult with the
Director of the Congressional Budget Office
Not later than 30 days after the Secretary
submits the report required in subsection
(a), the Director of the Congressional Budget
Office shall submit a report to the commit-
tees identified in such subsection on the
methodologies, recommendations, and anal-
yses used in the Secretary's report.
VETERANS' ADMINISTRATION REORGANIZATION
REORGANIZITION
SEC. 345. The requirements of section
210(b)(2)(A) of title 38, United States Code,
shall not apply to the planned administra-
tive reorganization at the Veterans' Admin-
istration Los Angeles Data Processing
Center involving the transfer of 25 full-time
equivalent employees from the Office of
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Data Management and Technology to the
Department of Medicine and Surgery of the
Veterans' Administration
SOOLL SECURITY CARDS
Sac. 346. (a) Section 205(cKV of the social
Security Act is amended by adding at the
end thereO the lbllowinp new subparagraph
"(D) The Secretary shall issue a social se-
curity card to each individual at the time of
the issuance of a social se ur$j account
number to such individual The social secu-
rity card hall bp made of banknote paper,
and fto the maximum extent practicable)
shall be a card which cannot be counterfeit-
ed."
(b) The amendment made by this section
shall apply with respect to all new and re-
placement social security cards issued more
than 193 days after the date of the enact-
ment of this Act,
(c) Within 90 days after the date of the en-
actment of this Act the Secretary of Health
and Human Services shall report to the Con-
gress on his plans for implementing the
amendment made by this section.
BUDGETARY TREATMENT OF TRUST FUND
OPERATIONS
Sze. 34& (a)(1) Title VII of the Social Se-
curity Act (as amended by section 143 of this
Act) is further amended by adding at the end
thereof the following new section:
`BUDGETARY TREATMENT OF TRUST FUND
OPERATIONS
`Sec. 710. The disbursements of the Feder-
al Old Age and Survivors Insurance Trust
Fund, the Federal Disability Insurance
Trust And. the Federal Hospital Insurance
Trust Fund, and the Federal Supplementary
Medical Insurance Trust Fund shall be
treated as a separate major functional cate-
gory in the budget of the United States Gov-
eminent as submitted by the President and
in the congressional budget, and the receipts
of such Trust Funds, including the taxes im-
posed under sections 1401, 3101, and 3111 of
the Internal Revenue Code of 1954, shall be
set forth separately in such budgets.'.
(2)(A) The amendment made by paragraph
(1) shall apply with respect to fiscal years
beginning on or after October 1, 1984, and
ending on or before September 30, 1992,
except that such amendment shall apply
with respect to the fiscal year beginning on
October 1, 1983, to the extent it relates to the
congressional budget.
(b) Effective for fiscal years beginning on
or after October 1, 1992, section 710 of such
Act (as added by subsection (a) of this sec-
tion) is amended to read as follows:
"BUDGETARY TREATMENT OF TRUST FUND
OPERATIONS
"SEC. 710. (a) The receipts and disburse-
ments of the Federal Old-Age and Survivors
Insurance Trust Fund, the Federal Disabil-
ity Insurance Trust Fund, and the Federal
Hospital Insurance Trust Fund and the
taxes imposed under sections 1403, 3101,
and 3111 of the Internal Revenue Code of
1954 shall not be included in the totals of
the budget of the United States Government
as submitted by the President or of the con-
gressional budget and shall be exempt from
any general budget limitation imposed by
statute on expenditures and net lending
(budget outlays) of the United States Gov-
ernment.
'1(b) The disbursements of the Federal Sup-
plementary Medical Insurance Trust Fund
shall be treated as a separate mayor func-
tional category in the budget of the United
States Government as submitted by the
President and in the congressional budget,
and the receipts of such Trust Fund shall be
set forth separately in such budgets. It
CONGRESSIONAL RECORD - HOUSE March 24, 1989
LIBERALIEATR)N OF EARNINGS TEST
SEC. 348. (a) Section 203(f)(3) of the Social
Security Act is amended by striking out "50
per centum. of his earnings for such year in
excess of the product of the applicable
exempt amount as determined under para-
graph (8)" and inserting in lies thereof the
following' 33% percent of his earnings for
such year in excess of the product of the ap-
plicable exempt amount as determined
under paragraph r8) in the case of an indi-
vidual who has attained retirement age (as
defined in section 216(1)) before the close of
such taxable year. or 50 percent of his earn-
ings for such year In excess of such product
in the case of any other individual"
(b) The amendment made by subsection
(a) shall apply only in the case of individ-
uals attaining retirement age (as defined in
section 210(l) of the Social Security Act)
after December 1989.
TITLE IV-SUPPLEMENTAL SECURITY
INCOME BENEFITS
INCREASE IN FEDERAL SSI BENEFIT STANDARD
Svc. 401. (a)(1) Section 1617 of the Social
Security Act is amended by adding at the
end thereof the following new subsection.,
"(c) Effective July 1, 1983-
"(1) each of the dollar amounts in effect
under subsections (aWIMA) and (b)(1) of sec-
tion 1611, as previously increased under this
section, shall be increased by $240 (and the
dollar amount in effect under subsection
(a)(1)(A) section 211 of Public Law 93-68, as
previously so increased, shall be increased
by $120),* and
"(2) each of the dollar amounts in.. effect
under subsections (a)(2)(A) and (b)(2) of sec-
tion 1611, as previously increased under this
section, shall be increased by $360. ?
(2) Section 1617(b) of such Act is amended
by striking out "this section" and inserting
in lieu thereof "subsection (a) of this sec-
tion":
(b) Section 1617(a)(2) of such Act is
amended by inserting , or, if greater (in
any case where the increase under title II
was determined on the basis of the wage in-
cream percentage rather than the CPI in-
crease percentage), the percentage by which
benefit amounts under title 11 would be in-
creased for such month if the increase had
been determined on the basis of the CPI in-
crease percentage," after "are increased for
such month":
ADJUSTMENTS IN FEDERAL SSI PASS-THROUGH
PROVISIONS
SEC. 402. Section 1618 of the Social Secu-
rity Act is amended by redesignating the
subsection (c) which was added by Public
Law 97-377 as subsection (d), and by adding
at the end thereof the following new subsec-
tion:
"(e)(1) For any particular month after
March 1983, a State which is not treated as
meeting the requirements imposed by para-
graph (4) of subsection (a) by reason of sub-
section (b) shall be treated as meeting such
requirements if and only if-
"(A) the combined level of its supplemen-
tary payments (to recipients of the type in-
volved) and the amounts payable (to or on
behalf of such recipients) under section
1611(b) of this Act and section 211(a)(1)(A)
of Public Law 93-66, for that particular
month,
is not less than-
"(B) the combined level of its supplemen-
tary payments (to recipients of the type in-
volved) and the amounts payable (to or on
behalf of such recipients) under section
1611(b) of this Act and section 211(a)(1)(A)
of Public Law 93-66, for March 1983, in-
creased by the amount of all cost-of-living
adjustments under section 1617 (and any
other benefit increases under this title)
which have occurred after March 1983 and
before that particular month.
"(2) in determining the amount of any in-
crease in the combined level involved under
paragraph (1)(B) of this subsection, any por-
tion of such amount which would otherwise
be attributable to the increase under section
1617(c) shall be deemed instead to be equal
to the amount of the cost-ol-living adjust-
ment which would have occurred in July
1983 (without regard to the 3-percent limita-
tion contained in section 215(i)(1)(B)) if
section 111 of the Social Security Act
Amendments of 1983 had not been enacted. ".
SSl ELIGIBILITY FOR TEMPORARY RESIDENTS OF
EMERGENCY SHELTERS FOR THE HOMELESS
SEC. 403. (a) Section 1611(e)(1) of the
Social Security Act is amended-
(1) by striking out "subparagraph (B) and
(C)" in subparagraph (A) and inserting in
lieu thereof "subparagraphs (B), (C), and
(D)'? and
(2) by adding at the end thereof the follow-
ing new subparagraph:
"(D) A person may be an eligible individu-
al or eligible spouse for purposes of this title
with respect to any month throughout which
he is a resident of a public emergency shelter
for the homeless (as defined in regulations
which shall be prescribed by the Secretary);
except that no person shall be an eligible in-
dividual or eligible spouse by reason of this
subparagraph more than three months in
any 12-month period.":
(b) The amendments made by subsection
(a) shall be effective with respect to months
after the month in which this Act is enacted.
DISREGARDING OF EMERGENCY AND OTHER IN-
HIND ASSISTANCE PROVIDED BY NONPROFIT OR-
GANIZATIONS
SEC. 404. (a) Section 1612(b)(13) of the
Social Security Act is amended by striking
out "any assistance received" and all that
follows down through "(B)" and inserting in
lieu thereof the following., "any support or
maintenance assistance furnished to or on
behalf of such individual (and spouse if
any) which (as determined under regula-
tions of the Secretary by such State agency
as the chief executive officer of the State
may designate) is based on need for such
support or maintenance, including assist-
ance received to assist in meeting the costs
of home energy (including both heating and
cooling), and which".
(b) Section 402(a)(36) of such Act is
amended by striking out "shall not include
as income" and all that follows down
through "(B)" and inserting in lieu thereof
the following: "shall not include as income
any support or maintenance assistance fur-
nished to or on behalf of the family which
(as determined under regulations of the Sec-
retary by such State agency as the chief ex-
ecutive officer of the State may designate) is
based on need for such support and mainte-
nance, including assistance received to
assist in meeting the costs of home energy
(including both heating and cooling), and
which".
(c) The amendments made by this section
shall be effective with respect to months
which begin after the month in which this
Act is enacted and end before October 1,
1984.
NOTIFICATION REGARDING SSI
SEC. 405. Prior to July 1, 1984, the Secre-
tary of Health and Human Services shall
notify all elderly recipients of benefits under
title II of the Social Security Act who may
be eligible for supplemental security income
benefits under title XVI of such act of the
availability of the supplemental security
income program, and shall encourage such
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of 1982 is amended by adding at the end Labor shall determine the percentage by (2) The amendment made by paragraph
thereof the following new paragraph: which the benefits and taxes in the base year (1) shall apply with respect to taxable year
"(5)(A) Except as provided in subpara- with the application of the action referred 1983 and taxable years thereafter.
graph (B), the maximum amount of Federal to in subparagraph (B!(ii)(I) are lower or (b) Section 3302(()(1) of such Code is
supplemental compensation payable to an greater, as the case may be, than such bene- amended by striking out "beginning before
individual shall not be reduced by reason of fits and taxes would have been without the January 1, 1988,":
any trade readjustment allowances to which application of such action. In making this AVERAGE EMPLOYER CONTRIBUTION RATE
the individual was entitled under the Trade determination, the Secretary shall deem the ~. ____...,..._.
Act of 1974. application of the action referred to in sub-
"(B) If an individual received any trade paragraph (B)(iil(I) to have been effective
readjustment allowance under the Trade Act for the base year to the same extent as such
of 1974 in respect of any benefit year, the action is effective for the year following the
maximum amount of Federal supplemental year for which the deferral is sought. Once a
compensation payable under this subtitle in deferral is approved under clause (ii)(I) of
respect of such benefit year shall be reduced subparagraph (B) a State must continue to
(but not below zero) so that (to the extent maintain its solvency effort. Failure to do so
possible by making such a reduction) the ag- shall result in the State being required to
gregate amount of- make immediate payment of all deferred in-
"(i) regular compensation, terest.
"(ii) extended compensation, "(ii) Increases in the taxable wage base
`(iii) trade readjustment allowances, and from $6,000 to $7,000 or increases after 1984
"(iv) Federal supplemental compensation, in the maximum tax rate to 5.4 percent shall
payable in respect of such benefit year does not be counted for purposes of meeting the
not exceed the aggregate amount which requirement of subparagraph (B).
would have been so payable had the individ- "(D) In the case of a State which produces
ual not been entitled to any trade readjust- a solvency effort of 50 percen 80 percen5
meet allowance " and 90 percent rather than the t 25 percent, 35
percent, 50 percent required under subpara-
PART B-PROVISIONS RELATING TO INTEREST graph (B), the interest shall be computed at
AND CREDIT REDUCTIONS an interest rate which is 1 percentage point
DEFERRAL OF INTEREST less than the otherwise applicable interest
Sec. 511. (a) Section 1202(b) of the Social "te'
Security Act is amended by adding at the "(9) Any interest otherwise due from a
end thereof the following new paragraphs: State on September 30 of a calendar year
"(8)(A) With respect to interest due under after 1982 may be deferred (and no interest
this section on September 30 of 1983, 1984, shall accrue on such deferred interest) for a
or 1985 (other than interest previously de- grace period of not to exceed 9 months if, for
(erred under paragraph (3)(C)), a State may the most recent 12-month period for which
pay 80 percent of such interest in four data are available before the date such inter-
annual installments of at least 20 percent est is otherwise due, the State had an aver
beginning with the year after the year in age total unemployment rate of 13.5 percent
or
which it is otherwise due, if such State / greater.
1202(b)(7) of such Act is
meets the criteria of subparagraph (B). No amended dcecby striking g out out "interest shall accrue on such deferred inter- , and before Janu-
ary 1, 19888's':
est. (c) Section 1202(b)(3)(C)0) of the Social
"(B) To meet the criteria of this subpar- Security Act is amended by striking the
graph a State must- matter that follows clause (II) and inserting
li) have taken no action since October 1, "No interest shall accrue on deferred inter-
1982, which would reduce its net unemploy- est.,,
ment tax effort or the net solvency of its un- CAP ON CREDIT REDUCTION
employment system (as determined { r .,,..._
Poses of section 3302(f) of the Internal Reve- SEc. 512. (a)(1) Section 3302(f) of the In-
nue Code of 1954); and terra) Revenue Code of 1954 is amended by
"(ii)(I) have taken an action (as certified adding at the end thereof the following new
by the Secretary of Labor) after March 31, paragraph:
11
(8) PARTIAL LIMITATION.-
1982, which would have increased revenue ?
liabilities and decreased benefits under the (Al In the case of a State which would
State's unemployment compensation system meet the requirements of this subsection for
(hereinafter referred to as a 'solvency effort) a taxable year prior to 1987 but for its fail-
by a combined total of the applicable per- ure to meet one of the requirements con-
para-
centage (as compared to such revenues and gained subparagraph
he reduction (Cl or (D) b
ction
benefits as would have been in effect with. graph (2 2c the reduction under subsection
tax-
out such State action) for the calendar year e in credits otherwise applicable
ear
for which the deferral is requested; or payers i such State for for such taxable e year
and each subsequent year (in a period of
?'//f1 have hnA f . fn E8C before April 1,
198$ and have some FSC entitlement re-
maining after that date. could also receive
additional weeks undsl? (b) above. However.
the combination of, their remaining basic
PSC entitlement received after April 1,
1983. and the additional weeks provided in
(b), cannot exceed the maxhu uma number of
weeks of bade. FMC benefits payable in the
State. shown in (a) above.
Section 303 provides for the coordination
of the PW extension with the Trade Read-
justment program.
Senate amendment
The FBC program is extended for 6
months from April 1, 1983 through Septem-
ber 30, 1983.
Effective April 1, 1883. !BC benefits
would be payable as follows
(a) Basic PSC Bendtta-Individuals
would begin receiving PW on or after April
1, 1988 could receive up to a maximum of:
(1) 14 weeks In States with average MR
6.0 percent and above:
(2) 12 weeks In States with average IUR
5.0 to 5.9 percent;
(3) 10 weeks in States with average IUR
4.0 to 4.9 percent;
(4) 8 weeks In all other States.
The maximum number of weeks payable
in a State after April 1, 1963 could be no
more than 4 weeks less than the maximum
number payable on March 27. 1963.
ibl Additional PSC bsnaitb.-Individuals
who exhaust FSC on or before April 1, 1983
could receive additional weeks of FSC bene-
fits up to a maximum of.
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N 1770 CONGRESSIONAL RECORD - HOUSE March ,4; 1983
(1) 8 weeks in States with IUR at 6.0 and Senate amendment
above Would prohibit the denial of FSC to any
(2) 8 weeks In.States with IUR at 5.0 to 5.9 otherwise eligible claimant for any week be-
(3) 4 weeks in all ether States. cause: (1) the claimant is attending training
(C) 7%ousiaawol FSC Benefits.-Individ- or an accredited educational institution on a
uais who.beein receiving FSC before April 1, full-time basis; or (2) because of State law
1988 and have some F'SC entitlement re- requirements that the claimant must be
manning after that date, could also receive
idifii-l -A.. 1}.l v..?e..e.. available for work, actively searching for
n a to s-...vn -
the sombinatien of their remaining basic
FSC entitlement received after April 1,
1983. and the additional weeks provided in
(b), can" exceed the maximum number of
weeks of basic FSC benefits payable in the
State, shown In (a) above.
(d) Phaseout FSC Benefits.-Individuals
who have out exhausted their FSC entitle-
ment on September 30, 1983. when the pro-
gram expires, would be eligible to receive up
to 50 percent of their remaining FSC enti-
tlement. No new claimants would be added
to the FSC program on or after September
30, 1983.
(e) New Qualfieation Reuuh emenL-
Claimants must have worked 26 weeks or
have earned the equivalent in wages during
their brae period to qualify for FSC. This
applies only to ci i_ imants becoming eligible
for FlSC on or after April 1, 1983.
Conference agreement
tent Basic !SC Benefits.-The conference
agreement follows the Senate amendment
with a madillextion in the provision under
which the maximum number of weeks pay-
'Me in a State after April 1, 1983 could be
no more than 4 weeks less than the maxi-
mum number of weeks payable under the
FNC law In effect. as of March 27, 1983.
Under the modification, this provision
would apply onnly in those States where the
msaleaum number of FSC weeks payable for
the hest weak beginning after March 27,
1983 or, If later, the first week FSC benefits
provided under this bill are payable was
more than 4 weeks less than the maximum
number of weeks payable under the FSC
law In effect an Marais 27, 1983.
(b) Additional FSC Benefits.-The confer-
ence agreement follows the House bill with
the following adjustment: , 10 additional
weeks would be payable In States with aver-
age IUR at 6.0 percent and above; 8 addi-
tional weeks would be payable in States
with average IUR at 4.0 to 5.9 percent; and,
8 additional weeks would be payable in all
other States.
(c) Transitional FSC Bene)4ts.-The con-
ference agreement follows the House bill.
(dl Phaseout FSC Benefits.-The confer-
ence agreement follows the Senate amend-
ment.
Ie) New Qualmscation Requirement-The
conference agreement follows the House
bill.
U) Coordination of FSC and Trade Read-
justment Assistance.-The conference agree-
ment follows the House bill.
2. LIMITATION ON DISQUALIFICATION or PSC
CLAIMANTS WHO ENROLL In TRAINING
Present law
The Federal Unemployment Tax Act pro-
vides, as a condition for employers in a
State to reserve the normal FUTA tax
credit, that the State law not deny unem-
ployment compensation to otherwise eligi-
ble claimants for any week during which
they are attandhig a training course with
the approval of the State agency. Many
States frequently disapprove of training,
however. In addition, State laws must pro-
vide that Individuals In approved training
must not be denied benefits because they
are unavailable for work, are not actively
searching for work, or have infused suitable
wart.
House bill
No provision.
work, or must not have refused work during
the training, unless the State agency deter-
mines that the training will not improve the
claimant's employment opportunities.
Effective upon enactment.
Conference agreement
The conference agreement follows the
Senate amendment.
3. DEFERRAL OF INTEREST PROVISION
Present law
Present law imposes interest of up to 10
percent per year on Federal unemployment
compensation loans obtained by the States
after April 1, 1982, except for "cash flow"
loans that States repay by the end of the
fiscal year in which the loans were obtained.
A State with high unemployment can defer
payment of, and extend the payment for, 75
percent of interest charges due in any year.
The States must pay one-third of the de-
ferred amount in each of the three years
following the fiscal year for which it is due.
Interest Is charged on the deferred interest.
In order to qualify for this deferral and ex-
tension of the payment period, the State in-
sured unemployment rate must have
equaled or exceeded 7.5 percent during the
first 6 months of the preceding calendar
year.
Home bill
No provision.
Senate amendment
(a) The Senate amendment makes the
provisions imposing Interest on loans to
States permanent.
(b) The amendment also allows States to
defer 80 percent of the interest due for a
fiscal year, effective for Interest accrued in
fiscal years 1983, 1984, and 1985. The de-
fected amount would be payable In 4 install-
ments in the succeeding years equal to at
least 20 percent of the original amount of
interest due: A State would be required to
meet conditions 1 and 2(A) or 2(B) below to
qualify for the deferral:
(1) no action has been taken to reduce its
tax effort or trust fund solvency; and
(2)(A) action (certified by the Secretary of
Labor) has been taken March 31, 1982
which Increases revenues and decreases
benefits by a total of 25 percent in the cal-
endar year Immediately following the fiscal
year for which the first deferral is request-
ed; and, deferral of interest due for the
Years Immediately following the year in
which the first year change is effective may
be received if changes of 35 and 50 percent
are made; or,
(B) for taxable year 1982, total State UC
tax revenues equaled at least 2 percent of
total wages paid by employers covered
under the State UC law.
(c) Interest will not be charged against
any interest for which payment is deferred
under current law deferral provisions or
those added by this bill and summarised in
(b) above.
(d) The amendment allows a State to
delay for up to nine months the payment of
interest due for any calendar year after
1982 during which the average total unem-
ployment rate In the State was 13.5 percent
or higher. The average total unemployment
rate for a State shall be computed using the
12 month period for which the most recent
information' Is available prior to the month
in which the interest is due. Interest will
not be charged against interest for which
payment is delayed.
(e) The amendment allows States to re-
ceive a discounted interest rate that would
be one percentage point below the interest
rate that would otherwise apply. This would
be authorized for interest accrued only for
fiscal years 1983, 1984, and 1985. It would be
available under the same conditions as the
new deferral above, except the required per-
centage changes in (2) would be higher at
50, 80, and 90 percent. respectively.
For purposes of determining whether a
State meets the conditions in (2) above, the
Secretary of Labor will provide an estimate
of the unemployment rate for the base year,
the calendar year in which the deferral is
requested. The level of benefits and revenue
liabilities will be determined using the State
law in effect before passage of the legisla-
tion. The estimate of changes as a result of
new legislation will be made from the base
year in each year for which a deferral is re-
quested. Changes in State law which auto-
matically provide for increases in benefit
amounts will be considered as if they were
in effect In the base year for purposes of de-
termining the change occuring as a result of
new legislation. The Secretary of Labor may
use historical growth rates for indexed
items if appropriate. Once a deferral is ap-
proved, a State must continue to maintain
its solvency effort. Failure to do so would
result in immediate payment of all deferred
interest.
Increases in the taxable wage base from
$6,000 to $7,000 after calendar year 1982
and increases in the maximum FUTA tax
rate to 5.4 percent after calendar year 1984
will not be counted for purposes of meeting
condition (2).
States will not be penalized or rewarded if
economic events change from those used in
the base year for computing eligibility
under conditions (2).
Conference agreement
The conference agreement follows the
Senate amendment.
- 4. CAP ON CREDIT REDUCTION
Present Law
The Federal Unemployment Tax Act
(FUTA) Imposes a Federal unemployment
compensation (UC) tax on employers in all
States at a rate of 3.5 percent on a taxable
wage base of $7,000. However, employers in
States generally receive a PUTA tax credit
of 2.7 percent, resulting in a net Federal tax
rate of 0.8 percent. States with Insufficient
State unemployment compensation rev-
enues to meet State unemployment compen-
sation obligations may borrow from the
Federal Unemployment Account. If a State
defaults on its loans from the Federal ac-
count, employers in the State begin to lose
the FUTA tax credit at the rate of at least
.3 percent a year. For example, because of
overdue Federal UC loans, sixteen States
are experiencing a reduction In the 2.7
credit for tax year 1982.
Specifically, If a Federal UC loan is not
entirely repaid by the State by the second
January 1 after the State receives the loan
and remains unpaid on the following No-
vember 10 of that year, the FUTA tax credit
applicable for that year for the State's em-
ployers is reduced by .3 percent. For each
succeeding year in which the loan remains
outstanding, the reduction is at least an ad-
ditional .3 percent (i.e., .6, .9, 1.2 percent,
etc.). Additional offset credit reductions
may apply to a State beginning in the
second year of repayment if certain criteria
are not met. Under legislation enacted in
the 1970's, credit reductions were not im-
posed from 1975-1980 for States satisfying
specific requirements.
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H 1772 CONGRESSIONAL RECORD - HOUSE
claimants of Extended Benefits and FSC
who are serving on Jury duty or are hospi-
talized for treatment of an emergency or
life-threatening condition. A State must
treat these individuals in accordance with
their own State unemployment compensa-
tion law.
Effective upon enactment.
Conference agreement
The conference agreement follows the
Senate amendment.
10. OPTION roa VOLUNTARY HEALTH INSUR-
ANCE DEDUCTION FROM UNEMPLOYMENT
BENEFITS
Present law
Section 3304(a)(4) of the Federal Unem-
ployment Tax Act prohibits States from
withdrawing money from the- State unem-
ployment trust fund for anything except
the payment of unemployment compensa-
tion benefits or to refund certain taxes erro-
neously paid by employers.
House bill
Provides States the option of deducting an
amount from the unemployment compensa-
tion benefits otherwise payable to an indi-
vidual and using the amount deducted to
pay for health insurance, if the individual
elects to have such a deduction made from
his benefits.
Senate amendment
No provision.
Conference agreement
The Conference agreement follows the
House bill.
11. TREATMENT OF CERTAIN ORGANIZATIONS
WHO WERE RETROACTIVELY GRANTED
501(cX3) STATUS
Present law
Unemployment insurance coverage as ex-
tended to employees of certain nonprofit or-
ganizations in 1970 and then extended to
employees of generally all nonprofit organi-
zations in 1976.
Under the 1970 and 1976 amendments,
nonprofit organizations were given the
option of financing unemployment benefits
paid to their former employees through the
State unemployment payroll tax system
that applies to private employers (contribu-
tion method) or by retroactively reimburs-
ing the State trust fund for the amount of
benefits paid to their former employees (re-
imbursement method).
Nonprofit employers who had voluntarily
covered their employees prior to the 1970 or
1976 amendments and financed benefit costs
by the contribution method, and after en-
actment of the 1970 or 1976 amendments
chose to switch to the reimbursement
method of financing, were permitted to
apply any accumulated balance in their ac-
counts toward costs incurred in the future
and paid for on a reimbursement basis. The
authority to make such a transfer, however,
was available for a limited . period of time
that expired shortly after enactment of the
1976 and 1970 amendments.
House bill
Allows a nonprofit organization that
elects to switch from the contribution to the
reimbursement method of financing unem-
ployment benefits to apply any accumulated
balance in its State unemployment account
to costs incurred after it switches to the re-
imbursement method, under the following
conditions:
(1) the organization did not elect to switch
to the reimbursement method under prior
authority because during these periods the
organization was treated as a 501(c)(4) orga-
nization by the IRS, but the organization
has been subsequently determined by the
IRS to be a 501(cX3) organization; and,
(2) the, organization elects to switch to the
reimbursement method before the earlier of
18 months after such election was first
available-to it under State law or January 1,
1984.
Senate amendments
No provision.
Conference agreement
The conference agreement follows the
House bill.
12. WAIVER or PENALTY TAx ON WITHDRAW-
ALS FROM INDIVIDUAL RETIREMENT Ac-
COUNTS (IRA'S) BY CERTAIN UNEMPLOYED
WORKERS
Present law
An individual generally is subject to a pen-
alty tax equal to 10 percent of any distribu-
tion from an individual retirement account
(IRA) to the individual for whose benefit
the IRA was established if the individual is
less than age 59% when the distribution is
made. However, the penalty tax does not
apply if the distribution is attributable to
the individual's becoming permanently and
totally disabled.
House bill
No provision.
Senate amendment
The 10 percent penalty tax would not
apply in the case of distributions from an
IRA to an individual who has at least 20
quarters of coverage under social security,
and who has received, within the preceding
12-month period, regular unemployment
compensation under State law, and has ex-
hausted all rights to such compensation in
his most recent benefit year. The amend-
ment would apply to withdrawals after the
date of enactment.
Conference agreement
The conference agreement follows the
House bill.
13. REEMPLOYMENT VOUCHERS
Present law
No provision.
House bill
No provision.
Senate amendment
Would permit claimants of Federal Sup-
plemental Compensation (FSC) to offer a
voucher equal to 75 percent of their maxi-
mum potential FSC benefits to prospective
employers in lieu of FSC benefits no later
than one month after they become eligible
for FSC. If the employer hires the claimant,
the State agency will certify the employer's
use of the following portions of the vouch-
er's face value in payment of Federal em-
ployment taxes (FUTA and FICA): (1) 25
percent within the first month of employ-
ment; (2) 25 percent in each of the the next
groups of three months of employment. If a
claimant cannot use the voucher or only
uses a portion, he would receive the balance
of his maximum potential FSC benefits, re-
duced by the payments made to employer or
the amount of FSC he would have received
for the period.
The employer must certify that the em-
ployment under the voucher meets the fol-
lowing conditions: (1) the employee will be
employed for an average of at least 30 hours
per week during the payment period; (2) dis-
placement of current employees, including
reduced non-overtime hours, will not occur;
and (3) the employee will not be hired to fill
a vacancy created by laying off or terminat-
ing a regular employee.
Also, no "payment may be made to a
claimant's base year employer.
Effective upon enactment.
March 24, 1983
Conference agreement
The conference agreement follows the
House bill.
TITLE VI. PROSPECTIVE PAYMENTS
FQR MEDICARE INPATIENT HOSPI-
TAL SERVICES
1. PROSPECTIVE PAYMENT AMOUNT
Present law
Under present law, medicare payment-
amounts are retrospectively determined
based upon a hospital's reasonable costs,
subject to the limits established by TEFRA.
Certain reimbursement limits are applied to
(1) hospital inpatient operating costs ("sec-
tion 223" limits) and (2) the rate of increase
in inpatient operating costs (this limit ex-
pires after fiscal year 1985).
House bill
Under the House bill, the Secretary would
be required to determine prospectively a
payment amount for each hospital dis-
charge. Hospital cases (discharges) would be
classified into "diagnosis related groups"
(DRG's).
Senate amendment
Same as the House bill.
2. DRO RATES
A. SEPARATE RATES
Present law
No provision.
House bill
Under the House bill, separate payment
rates would apply to urban and rural areas
in each of the 9 census divisions (the 50
States and the District of Columbia).
Senate amendment
Under the Senate amendment, separate
payment rates would apply to urban and
rural areas in each of the 4 census regions
(the 50 States and the District of Colum-
bia).
Conference agreement
The conference agreement follows the
House bill.
B. TERMINATION OF REGIONAL ADJUSTMENTS
Present law
No provision.
House bill
Under the house bill, regional adjust-
ments (i.e., by census divisions) would no
longer apply after the fourth year of the
program.
Senate amendment
Under the Senate amendment, regional
adjustments (i.e., by census regions) would
no longer apply after the third year of the
program.
Conference agreement
The conference agreement follows the
Senate amendment as it applies to the 9
census divisions.
3. EFFECTIVE DATE/TRANSITION
A. PHASE-IN PERIOD
Present law
Under present law, the section 223 limits
are authorized indefinitely; the rate of in-
crease limits will not apply to hospital cost
reporting periods beginning on or after Oc-
tober 1, 1985.
House bill
Under the House bill, implementation of
the new prospective payment system would
be phased in over a 3-year period, starting
with each hospital's first cost reporting
period beginning on or after October 1,
1983. During year one, 25% of the payment
would be based on regional DRO rates; 75%
of the the payment would be based on each
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H 1774 CONGRESSIONAL,RECORD - HOUSE
result of being required to enter the Social
Security system, by adjusting base costs for
individual hospitals and by adjusting the
DRG prospective rates to include these ad-
ditional costs.
Conference agreement
The conference agreement follows the
Senate amendment.
6. ANNUAL UPDATES
A. ANNUAL INCREASE
Present lam
Under present law, the rate of increase
limits are updated by the increase in a mar-
ketbasket of goods and services purchased
by hospitals, plus I percentage point.
House bill
Under the House bill, for fiscal year 1985,
payment amounts from the previous fiscal
year would be increased by the marketbas-
ket, plus 1 percentage point. There would be
an overall budget limitation to maintain
budget neutrality for fiscal year 1985.
Senate amendment
Same as the House bill.
B. SECRETARY'S DETERMINATION OF ANNUAL
INCREASE FACTOR
Present law
No provision.
House bill
Under the House bill, taking into consider-
ation the recommendations of the panel,
the Secretary must determine, for each
fiscal year beginning with fiscal year 1986,
the appropriate increase factor.
Senate amendment
'Under the Senate amendment, taking into
consideration the recommendations of the
commission, the Secretary must determine,
for each fiscal year beginning with fiscal
year 1986, the increase factor, such factor
must assure adequate compensation for the
efficient and effective delivery of medically
appropriate and necessary care of high qual-
ity.
Conference agreement
The conference agreement follows the
Senate amendment with a modification
which requires that the Secretary, in deter-
mining the increase factor, must ake into
account amounts necessary for the efficient
and effective
C. PUBLICATION OF SECRETARY'S
DETERMINATION
Present law
No provision.
House bill
Under the House bill, the Secretary must
publish in the Federal Register (1) not later
than the June 1 before each fiscal year be-
ginning with fiscal year 1986, his or her. de-
termination of the proposed increase factor
and (2) not later than the September 1
before such fiscal year, his or her final de-
termination of the increase factor. The Sec-
retary must include in the publication due
by June 1 the report of the panel's recom-
mendations for that fiscal year.
Senate amendment
Same as the House bill.
D. EXPERT PANEL/COMMISSION'S
DETERMINATION OF ANNUAL INCREASE FACTOR
Present law
No provision.
House bill
The House bill requires the Secretary to
appoint a panel of independent experts to
review the increase factor and make recom-
mendations to the Secretary on the appro-
priate percentage increase for fiscal years
beginning with fiscal year 1986. The panel
must take into account changes in the mar-
ketbasket, hospital productivity, technologi-
cal and scientific advances, quality of care,
and utilization of relatively costly, though
effective, methods of care.
Senate amendment
The Senate amendment contains a similar
provision, except the review of the increase
factor and recommendations to the Secre-
tary would be conducted by a commission
selected by the Office of Technology Assess-
ment, and would begin with fiscal year 1986.
Conference agreement
The conference agreement follows the
Senate amendment.
E. EXPERT PANEL/COMMISSION'S REPORT ON
ANNUAL INCREASE FACTOR
Present law
No provision.
House bill
Under the House bill, the panel must
report its recommendations on the increase
factor to the Secretary not later than May 1
before the beginning of each fiscal year, be-
ginning with fiscal year 1986.
Senate amendment
Under the Senate amendment, the com-
mission must report its recommendations on
the increase factor to the Secretary not
later than April 1 before the beginning of
each fiscal year, beginning with fiscal year
1986.
Conference agreement
The conference agreement follows the
Senate amendment.
7. RECALIBRATION OF DRO's
A. SECRETARY'S DETERMINATION OF DRG
RECALIBRATION
Present law
No provision.
House bill
Under the House bill, the Secretary world
be required to establish (and would be per-
mitted from time to time to make changes
in) a system of classification of inpatient
hospital discharges by DRGs and a method-
ology for classifying specific hospital dis-
charges within the DRGs. For each DRO,
the Secretary would be required to assign
(and would be permitted from time to time
to recompute) an appropriate weighting
factor which reflects the relative hospital
resources used for discharges classified
within that DRG compared to resources
used for discharges classified in other
DRGs.
Senate amendment
The Senate amendment contains a similar
provision except the Secretary would be re-
quired to adjust the classifications and
weighting factors at least once every 3 years
to reflect changes in treatment patterns,
technology, and other factors which may
change the relative use of hospital re-
sources. '
The conference agreement follows the
Senate amendment with a modification re-
quiring the Secretary to adjust the DRG
classifications and weighting factors for
fiscal year 1986 and subsequently, as neces-
sary, but no less often than once every four
years.
B. EXCEPT COMMISSION'S DETERMINATION OF
DRG RECALIBRATION
Present law
No provision.
House bill
No provision.
, March 24, 1989
Senate amendment
Under the Senate amendment, the com-
mission would be required to consult with,
and make recommendations to, the Secre-
tary with respect to changes in the DRGs,
based on its evaluation of scientific evidence
with respect to new practices, including the
use of new technologies and treatment mo-
dalities. The commission must report to
Congress its evaluation of any adjustments
to the DRGs made by the Secretary.
Conference agreement
The conference agreement follows the
Senate amendment.
8. ATYPICAL CASES/OUTLIERS
A. BASIS FOR OUTLIER PAYMENTS
Present law
No provision.
House bill
Under the House bill, the Secretary would
be required to make additional payments
where the length of stay for any case in a
DRG exceeds, by more than 30 days, the
average length of stay for cases within the
same DRG. In addition, if a case has some
other unusual length of stay or unusual
cost, the Secretary could provide additional
payment amounts.
Senate amendment
Under the Senate amendment, the Secre-
tary would be required to make additional
payments where (1) the length of stay ex-
ceeds the mean length of stay by some fixed
number of days or (2) by a certain number
of standard deviations, whichever is less.
Hospitals would be permitted to appeal for
additional payments for cases where
charges adjusted to costs are equal to or
greater than some multiple of the DRG
rates or some dollar criterion, whichever is
greater.
Conference agreement
The conference agreement follows the
Senate amendment. The managers are
equally concerned that adjustments may be
required for cases which have an unusually
short length of stay or which are signifi-
cantly less costly than the DRG payment.
The Secretary would be required to report
on this with recommendations on how to ad-
dress this issue.
B. PAYMENT LEVELS FOR OUTLIER CASES
Present law
No provision.
House bill -
Under the House bill, the additional pay-
ment amounts per case would be determined
by the Secretary.
Senate amendment
Under the Senate amendment, the
amount of additional payments would be de-
termined by the Secretary and approximate
the marginal cost of care beyond the outlier
cut-off criteria (days or dollar amounts).
Conference agreement
The conference agreement follows the
Senate amendment.
C. TOTAL PROPORTION OF OUTLIER PAYMENTS
Present law
No provision.
House bill
Under the House bill, the Secretary would
be required to provide additional payments
for outlier cases amounting to not less than
4 percent of total DRG related payments.
Senate amendment
Under the Senate amendment, the Secre-
tary would be required to provide additional
payments for outlier cases amounting to not
less than 5 percent, and not more than 6
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percent, of total projected or estimated
DRO related payments.
Conference agreement
The conference agreement follows the
Senate amendment.
9. CAPITAL ExpENszs
A. CAPITAL IN 01 AI.
Present law
Under present law, medicare reimburses
hospitals for the reasonable costs of capital
(including depreciation, interest and rent).
House bill
Under the House bill, capital expenses, as
defined by the Secretary, would be specifi-
cally excluded from the prospective pay-
ment proposal and would continue to be re-.,
imbursed on a reasonable cost basis.
Senate amendment
Under the Senate amendment, capital ex-
penses, as defined by the Secretary, would
be specifically excluded from the prospec-
tive payment system until October 1, 1986,
during which time they would continue to
be reimbursed on a reasonable cost basis.
After October 1, 1986, such expenses would
no longer be excluded.
Conference agreement
The conference agreement follows the
Senate amendment. The managers intend
that capital, as defined by the Secretary, In-
cludes return on equity. The managers also
note that the Secretary is required to com-
plete, within 18 months, a thorough review
of the methods by which capital, including
return on equity, can be incorporated into
the prospective payment system. Based on
this study, the Secretary shall develop, in
consultation with the Senate Committee on
Finance and the Committee on Ways and
Means of the House of Representatives, pro-
posals for legislation which would provide
for the inclusion of capital-related costs in
prospective payment. The managers expect
that additional legislation will be enacted by
Congress to deal with capital-related Issues
under the prospective payment system
before October 1, 1986. However, H the Sec-
retary has implemented a system of pros-
pective payment for capital without legisla-
tive action and the mandatory section 1122
capital planning approval provision has
gone into effect, the conferees intend that
the Secretary will adjust the prospective
payment for capital to reflect a disapproval
project under section 1122.
9. RErUR1I ON eXIVITY
Present law
Under present law, medicare reimburses
proprietary Institutions a return on equity.
House bill
The House bill provides for the phaseout
of return on equity for hospitals under the
prospective payment system over the three-
year transition period during which the
cost-based payment is being phased out
(75% in the first year. 50% In the second
year and 25% in the third year). No pay.
ment for a return on equity would be made
for cost reporting periods beginning on or
after October 1, 1988.
Senate amendment
No provision.
Conference agreement
Under the conference agreement, effective
with respect to cost reporting periods begin-
ning on or after the date of enactment, the
rate of return on equity will be reduced
from one and one-half times to an amount
equal to the rate of interest paid by the
Federal Treasury on the assets of the Hospi-
tal Insurance Trust Fund.
Present law
No provision.
House Mil
The House bill expresses the intent of
Congress that, in Implementing a system for
including capital related costs under a pros-
pective payment system, costs related to
capital projects initiated on or after March
1, 1983, mtay be distinguished and treated
differently from projects initiated before
such date.
Senate amendment
The Senate amendment expresses the
intent of Congress that, in implementing a
system for including capital-related costs
under a prospective payment system, costs
related to capital projects initiated on or
after the effective date of the implements
tion. of such system may or may not be dis-
tinguished and treated differently from
projects initiated before such date.
Conference agreement
The conference agreement follows the
Senate amendment. The managers believe
no assurances can be given that, under a
new system of paying for capital, projects
obligated (as defined by regulations under
section 1122) after the date of enactment of
this legislation will continue to be paid on a
reasonable cost basis.
D. SECTION 1122 CAPITAL APPROVAL
Present law
Under present law, the Secretary is au-
thorised to exclude from reimbursement to
providers certain costs related to capital ex-
penditures that have been disapproved by a
section 1122 planning agency.
House bill
Under the House bill, at the end of 3
years, medicare would not make payment
for a new capital project unless the State
had a section 1122 capital approval process
and the capital expenditures had been rec-
ommended by the State under such mecha-
nism.
Senate amendment
The Senate amendment changes for cost
reporting periods prior to October 1, 1988:
(1) the financing of reviews of capital proj-
ects from the Hospital Insurance Trust
Fund to general revenues; (2) Increases the
amount of capital projects that is subject to
the 1122 approval process from $100,000 to
$600.000',(3) exempts from the review proc-
ess expenditures made by or on behalf of a
health care facility where 75 percent of the
patients using the services of such facility
are enrollees in HMO's or CMP's and such
expenditures are for services and facilities
needed by such organization to operate effi.
ciently; and (4) requires hospitals to make
their overall expenditure plans and capital
budgets available to section 112$ agencies.
Conference agreement
The conference agreement follows the
provision in the House bill with the follow-
ing modification: the requirement that
medicare payment for new capital projects
be conditional on section 1122 approval
would be effective October 1, 1986, only if
no legislation were enacted by that date
which includes capital-related costs in the
prospective reimbursement system. In addi-
tion, effective upon enactment: (1) the fi-
nancing of reviews of capital projects would
be made from general- revenues, (2) the.
maximum thresholda state may use for de-
termining which capital projects are subject
to the section 1122 review progress would be
increased from $100,000 to $600,000; States
would be permitted to set a lower threshold;
(3) in order for a health care facility, where
75 percent of the patients are HMO or CMP
enrollers, to be exempt from the section
1122 review process because needed services
and facilities are not otherwise readily ac-
cessible, the organisation must establish
that one of the following five conditions is
met:
(a) the facilities are geographically dis-
persed.-
(b) the facilities are not available under a
contract of reasonable duration
(e) full and equal medical staff privileges
are not available
(d) the .arrangements are not administra-
tively feasible, or
(8) the services are more costly than if
provided by the HMO or CMP, and
(4) hospitals would be required to make
their overall expenditure plans and capital
budgets available to the section 1122 or
other appropriate agency.
10. MEDICAL EDUCATION EXPENSE5
Present law
Under present law, medicare reimburses
direct medical education expenses, such as
the salaries of interns and residents in ap-
proved education programs, on the basis of
reasonable Cost.
House Mil
Under the House bill, direct medical ex-
penses or approved educational programs
would be specifically excluded from pay-
ment determinations under the prospective
payment system and would be paid on the
basis of reasonable cost.
Senate amendment
Same as the House bill.
Present law
Under present law, the section 223 limits
provide an adjustment to recognise Individu-
al hospital differences In indirect costs due
to approved teaching activities.
House bill
Under the House bill, the Secretary Is re-
quired to provide additional payment
amounts under the prospective payment
system for hospitals with indirect costs of
medical education. The adjustment for such
payment amounts would equal twice the
section 223 adjustment, provided under reg-
ulations, In effect as of Jan. 1. 1983, for such
costs.
Senate amendment
Same as the House bill.
11. ExzNwnoNs, ExOQTIONS, AND
AeavsTisorre
A. PAYMENTS TO EXEMPTED HOSyITAL5 AND
HOSPITAL UNITS
Present law
No provision.
Howe bill
Under the House bill, hospitals or units of
hospitals exempted from the prospective
payment system would be subject to the sec-
tion 223 limits (until hospital cost reporting
periods beginning on or after October 1,
1985) and the rate of increase limits applica-
ble under current law.
Senate amendment
The Senate amendment contains a similar
provision, except the section 223 limits
would no longer apply for hospital cost re-
porting periods beginning on or after Octo-
ber 1, 1983.
Conference agreement
The conference agreement follows the
Senate amendment.
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Present law
Under present law, section 2V3 limits do
not apply to children's hospitals, long-term
can hospitals or to rural hospitals with less
than 50 beds. In addition, the Secretary is
required to provide exemptions, exceptions,
and adjustments to the section 223 limits as
he or she deems appropriate to take into se.
Count the special needs of psychiatric hospi-
tals.
House bill
Under the House bill, psychiatric, long-
term care, children's and rehabilitation hos-
pitals would be specifically exempted from
the prospective payment system. Upon re-
quest of a 'hospital, rehabilitation and psy-
chiatric units Which are distinct parts of
acute-eaare hospitals would also be specifical-
ly exempted.
Senate amendment
The Senate amendment contains a similar
provision, except (1) hospitals would not
have to request exemptions for distinct
parts of rehabilitation or psychiatric units
and (2) exemptions of any such hospitals or
hospital units would no longer apply when
the Secretary determines that adequate
data of clinical and statistical significance is
available to include these institutions and
units under the prospective payment
system.
Cbnfrersnce agreement
The conference agreement follows the
provision in the Hquse bill with a modifica-
tion that deletes the provision which condi-
tions granting of an exemption on the re-
ceipt by the Secretary of a request from a
hospital.
C. SOLE COMMUNITY HOSPITALS
1. Payments
Present law
Under present law, the Secretary is re-
quired to Provide exemptions, exceptions,
and adjustments to the section 223 limits as
he or she deems approprite to take into ac-
count the special needs of sole community
hospitals.
it incurs and for the reasonable cost of P. *s enA AM HaVRIII
maintenance of core staff and services. Present law
Present law
No provision.
House bill
Under the House bill, "sole community
hospitals" are defined as those that, by
reason of .factors such as isolated location or
absence of other hospitals (,as determined
b9 the. Secretary), is the sole source of impa-
tient hospital services reasonably available
in a geographical area to part A medicare
beneficiaries.
Senate amendment
. The Senate amendment contains a similar
provision, except includes weather and
travel conditions in the list of factors defin-
ing a.sole community hospital.
C.nference, aorgevmnt
The conference agreement follows the
Senate amendment.
D. PUBLIC AND OTHER HOSPITALS
Present law
Under present law, the Secretary is re-
quired to provide exemptions, exceptions,
and adjustments to the section 223 limits as
he or she deems-appropriate to take into ac-
count the special needs of public and other
hospitals that serve a disproportionate
number of low income or part A medicare
beneficiaries.
House bill
Under the House bill, the Secretary would
be required to provide exceptions and ad-
justments, as he or she deems appropriate,
to take into account the special needs of
public or other hospitals that serve a dispro-
portionately large number of low-income or
part A medicare beneficiaries.
Senate amendment
The Senate amendment contains a similar
provision, except also applies to regional
and national referral centers (including very
large acute care hospitals in rural areas).
Conference agreement
The conference agreement follows the
Senate amendment.
B. OTHER PROVIDERS
Present law
Under present law, the Secretary is re-
quired to provide exemptions, exceptions,
and adjustments to the "secticm 229" and
the rate of increase limits as he or she
deems appropriate to take into account the
special needs of new hospitals, risk-based
health maintenance organizations, hospitals
providing atypical or essential services and
to take account of extraordinary circum-
stances beyond a hospital's control;-and for
other purposes.
House bill
Under the House bill, the Secretary is re-
quired to provide, by regulation, for such
exceptions and adjustments as he or she
deems appropriate (including those that
may be appropriate with respect to public
and teaching hospitals and hospitals in-
valved extensively in treatment for, and re-
search on, cancer.)
Senate amendment
No provision.
Conference agreement
The conference agreement follows the
provision in the House bill with a modifica-
tion which deletes the requirement with re-
spect to public and teaching hospitals. The
conferees wish to make it clear that this au-
thority permits the Secretary to provide for
such exceptions and adjustments as may be
appropriate with respect to hospitals experi-
encing special .problems because of their lo-
cation in a particular census division.
Under regulation, special adjustments are
provided to the section 223 limits for hospi-
tals in Alaska and Hawaii.
House big
Under the House bill, the Secretary would
be authorized to ,provide exceptions and ad-
justments to take into account the special
needs of sole community hospitals.
Senate amendment
Under the Senate amendment, payments
to sole community hospitals for hospital
cost reporting periods' beginning on or after
October 1, 2983, would be on the same basis,
as payments to all other providers in the
first Year of the transition period: 25% of
the payment would be based on a blend of
national and regional DRG rates (25% na-
tional, 75% regional); 75% would be based
on each hospital's own cost base. In no case
would total medicare payments in these cost
reporting -yews beginning on or after Octo-
ber 1, 1983, and before October 1, 1986, be
less than the payments made in the preced-
ing year.
Conference agreement
The conference agreement follows the
provision in the Senate bill with modifica-
tions: (1) Conforms the basis of payment to
the first year blend of payment rates appli-
cable to other hospitals agreed to by the
conferees (Item 3a); and (2) here a sole com-
munity hospital experiences a change of
more than 5 percent in its total-volume over
a previous year, due to circumstances
beyond its control, the Secretary would be
required to provide an adjustment to fully
compensate the hospital for the fixed costs
House bill
Under the House bill, the Secretary is au-
thorized to provide adjustments to the DRG
payment amounts as he or she deems appro-
priate to take into account the unique cir-
cumstances of hospitals located in Alaska
and Hawaii.
Senate amendment
Same as the House bill.
HOSPITALS IN TERRITORIES, INCLUDING PUERTO
Present taw
No provision.
House bill
The House bill exempts from the prospec-
tive payment system hospitals located out-
side the fifty States or the District of Co-
lumbia (e.g., the territories, including
Puerto Rico).
Senate amendment
Same as the House bill. (See study sec-
tion.)
12. ADiussIONs AND QUALITY REVIEW
A. CONTRACTS WITH PROFESSIONAL LICVIUW
OHG*NITATIONB
Present law
Present law (title MI of the Social Secu-
rity Act) requires the Secretary to enter
into contracts for utilization and quality
control peer review with professional review
organizations (PROs) or other review orga-
nizations, including medicare intermediaries
(subject to certain conditions and limita-
tions).
House bill
Under the -House bill, effective October 1,
1984, as a condition for receipt of medicare
payments, a hospital receiving payments ac-
cording to the prospective l G rates would
be required to contract with a peer review
organization, in the area, designated by the
Secretary under Title XI for the review of
admissions, discharges, and quality of care
with respect to medicare hospital inpatient
services. The 12-month waiting period for
intermediaries to qualify as review organiza-
tions as specified in present law would begin
on the date the Secretary enters into con-
tracts or on October 1, 2988, whichever is
earlier.
Senate amendment
Under the Senate amendment, hospitals
receiving payments under the prospective
payment system would be required to enter
into an agreement with a peer review orga-
nization (if such as organization has a con-
tract with the Secretary under title XI for
the area in which the hospital is located).
The purpose of this contract is to provide
for the review of the validity of the diagnos-
tic information provided by such hospitals,
the completeness and adequacy of the care
provided, the appropriateness of admissions,
and the appropriateness of care provided to
patients designated by the hospitals as out-
liers. These reviews would be covered as a
hospital cost of care under part A but the
PRO would be paid by the secretary on
behalf of the hospital on the basis of a rate
per review established by the Secretary.
The amount expended will be no less than
an amount which reflects the rates per
review established in fiscal year 1982 for
both direct and administrative costs, adjust-
ed for inflation, and will be expended from
the trust fund and not subject to appropri-
ations.
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Conference agreement
The conference agreement follows the
Senate amendment with modifications.
Under the agreement, (1) hospitals receiving
payments under the prospective payment
system would be required from the date of
enactment through September 30, 1983, to
contract with a professional review organi-
sation (PRO), If there is a?PRO in the area
which has contracted with the Secretary
under title XI: (2) such hospitals would be
required, on or after October 1, 1984, to con-
tract with a PRO, in the area, designated by
the Secretary under title XI as a condition
of receiving payments under the medicare
program (if the Secretary has not contract-
ed with a PRO in the area such hospitals
would not receive payment); (3) the 12-
month waiting period for Intermediaries to
qualify as PROs (as specified in present law)
would begin on the date the Secretary
enters into contracts or on October 1. 1988.
whichever is earlier as in the House b111; (4)
where a contract between the Secretary and
a PRO is terminated after October 1. 1984,
the Secretary would be required to enter
into a new contract with a PRO In that area
within 6 months of such termination, during
which period hospitals would not be penal-
ised because no PRO exists in the area. and
(5) the amount expended for review pur-
poses must also be no less than an amount
equal to the total expenditures made during
1982 for review costs adjusted for Inflation.
B. MONITORUIG SYSTEM xSTAXLisI BY THE
SECRETARY
Present law
No provision.
House bill
Under the House bill, the Secretary would
be required to establish a system for moni-
toring admissions and discharges of both
hospitals receiving prospective payment and
hospitals reimbursed on a cost bass, utilis-
ing HCFA. medicare intermediaries. profes-
sional review - organisations/professional
standards review organizations, or such
other medical review authority, to review
admissions and discharge practices and
quality of, care.
Senate amendment
No provision.
Conference agreement
The conference agreement strikes the pro-
vision In the House bill but modifies the
review requirements of professional review
organisations (PROs) to Include review of
patterns admissions and discharges and
quality of care of hospitals receiving medi-
care payments.
C. PENALTIES FOR UNACCEPTABLE PRACTICES
Present law
No provision.
House bill
Under the House bill, the Secretary would
be authorized to take corrective action
where hospitals, paid according to the pros-
pective rates or on a cost bads, were deter-
mined to be engaged in unacceptable adms-
sons, medical, or other practices. The Sec-
retary would be permitted to disallow part
or all of the medicare payment with respect
to an unnecessary or multiple admissions. or
to require hospitals to take other corrective
action necessary where a provider was deter-
mined to have engaged in such practices.
Senate amendment
No provision.
Conference agreement
The conference agreement follows the
provision In the House bill with a modifies.
tion which authorizes the Secretary to take
such corrective action based on the findings
of the PRO.
13. PAYMENTS To HMO's AM CMP's
Present law
Current law provides that health mainte-
nance organizations (HMO's) and competi-
tive medical plans (CMP's) may be reim-
bursed ' either an ? the Wait of reasonable
costs or under a rsk-based contract, a pay-
ment equal to 95% of the adjusted average
per capita cost (AAPCC) for medicare en-
rollees in the HMO's area.
House NU
Under the House bill, the proposal would
permit, at its election, an HMO or a GNP
that receives medicare payments on a risk
bads to choose to have the Secretary direct-
ly pay hospitals for inpatient hospital serv-
ices furnished to medicare enrollees of the
HMO or CMP. The payment amount would
be at the DRO rate (or on the basis of rea-
sonable cost, as applicable) and would be de-
ducted from medicare payments to the
HMO or CMP.
Senate amendrrient
Similar provision.
Conference agreement
The conference agreement follows the
provision In the House bill with a technical
amendment.
14. STATS COST CONTROL SYSTEMS
A. AUTHORITY UNDER PRE-TETRA LEGISLATION
Present law
Under present law, the Secretary has au-
thority to establish medicare demonstration
projects. There are currently four State-
wide medicare demonstrations (MD. NJ,
NY, and MA) and one area-wide (Rochester.
NY) demonstration.
Howe bill
Under the House bill, the Secretary would
be expressly authorized to continue to de-
velop, carry out, or maintain medicare ex-
periments and demonstration projects.
Senate amendment
Same as the House bill.
B. AUTHORITY FOR sTATS PROGRAMS
Present law
Present law authorizes the Secretary. at
the request of a State, to pay for medicare
services according ro the State's hospital
cost control system If such system-
(1) applieF- to substantially all non-acute
care hospitals In the State;
(2) applies to at least 45% of all inpatient
revenues or expenses In the State;
(3) provides assurances that payors, hospi-
tal employees and patients are treated equi-
tably; and
(4) provides assurances that the State's
system will not result In greater medicare
expenditures over a three-year period than
would otherwise have been made. (To date.
no State systems have been approved under
this authority).
House bill
Under the House bill, the Secretary would
be prohibited from (1) denying a State ap-
plication on the ground that the State's
system In based on a payment methodology
other than DRCIs, or (2) requiring that
medicare expenditures under the State 'a
system be less than the expenditures which
would have been made under the Federal
prospective payment system. It Includes the
4 requirements In TZFRA for approval of a
State system and adds a fifth requirement:
if the Secretary determines that the State
system will not preclude an HMO or CMP
from negotiating directly with
hospitals
with respect to payment for inpatient hospi-
tal services.
Senate amendment
The Senate amendment contains the same
provision, except adds a sixth requirement
H 1777
that States must provide for a prohibition
on payments under part B for ncnphysican
services provided to Inpatients.
Conference agreement
The conference agreement follows the
Senate amendment with a modification
under which the Secretary would be re-
quired to Issue regulations setting forth the
conditions under which States could waive
restrictions under State systems relating to
payments for certain non-physician services
provided to hospital inpatients.
C. CONTINUATION OP CURRENT STATE PROGRAMS
Present law
No provision.
House bill
Under the House bill, for those States
which currently have a medicare waiver the
Secretary would be required to continue the
State Program ff. and for so long as, the
conditions described above are met.
Senate amendment
Same as the House bill.
D. REQUIRED STAYS PROGRAMS
Present law
NO provision.
House bill
Under the House bill, the Secretary would
be required to approve any State program
which meets the followio 8 requirements In
addition to the condition indicated above,
that the system: (1) is operated directly by
the State or an entity designated by State
law; (2) is prospective. (3), provides for hos-
pitals to make such reports as the Secretary
requires; (4) provides satisfactory assur-
ances that It will not result In admissions
practices which will reduce treatment to low
income, high cost, or emergency patients;
(5) will not reduce payments without, 60
days notice to the Secretary and to hospi-
tals; and (6) provides satisfactory assurances
that, In the development of its program, the
State has consulted With local officials con-
cerning the impact of the progress on pub-
licly owned hospitals.
The Secretary would be required to re-
spond to requests from States applying
under these 11 conditions within 00 days of
the date the request 14 submitted.
Senate amendment
Same as the House bill.
E. MODIFICATION OF EXISTING CONTRACTS
Present law
Under current demonstration project
agreements between the Secretary and the
States of New York and Massachusetts, the
States are required to maintain a rate of in-
crease in medicare hospital costs which to
1.5 percent below the national rate of In-
crease in such costs.
House bill
Under the House bill, the Secretary would
be required, upon request of a State, to
modify the terms of an existing demonstra.
tion agreement (entered into after August
1982 and in effect as of March 1. 1983-New
York and . Massachusetts) so that the dem-
onstration project Is not required to main-
tain the rate of Increase in medicare hospi-
tal costs In that State below the national
rate of Increase in such costs.
Senate amendment
The Senate amendment contains a similar
provision, except provides that such demon-
stration agreements be modified so that the
percentage by which such project Is re-
gpred to maintain a rate of, Increase In such
costs in that State below the national rate
of Increase be decreased by one-half of one
percentage point for the contract year, be-
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H 1780
hangs on the health and growth of the
American economy-and that our as-
sumptions are often guided more by
hope than reality.
The conference agreement that has
been shaped, first by the Greenspan
Commission and then on the floors of
both houses, is strongly anchored to
reality. It is a cautious, fair plan that
raises enough revenue to ease the
system through the decade-and also
closes the enormous deficit built up in
the next century.
The agreement reflects not only the
spirit of the House-passed bill (H.R.
1900) but the letter as well.
The major differences entering the
conference centered around the long-
term formula, the "fail safe" mecha-
nism in the short term and coverage of
new Federal workers. House conferees,
stiffened by the. courageous choices
made right here 2 weeks ago, demand-
ed and won the Pickle proposal to
raise the retirement age from 65 to 67
over the first quarter of the next cen-
tury-instead of the Senate plan to si-
multaneously raise the retirement age
and cut benefits
CONGRESSIONAL RECORD - HOUSE March 24, 1989
It subjects to taxation up to one-half
of benefits on incomes exceeding
$25,000 for singles and $32,000 for cou-
ples.
It advances FICA tax increases in
1984 and 1988 while providing an indi-
vidual income tax credit offset for
1984.
It changes the offsetting income tax
credit against the self-employed FICA
tax to 2.7 percent in 1984, 2.3 percent
in 1985, and 2 percent from 1986 to
1989.
It liberalizes the earnings test by re-
ducing benefits $1 for every $3, rather
than the present $2 of outside earn-
ings beginning in 1990.
It tightens restrictions on proliferat-
ing income deferral plans that protect
compensation from FICA taxes.
It permits benefits to widows or wid-
owers in the month when a spouse
dies.
It permits interfund borrowing with
special provisions to protect the integ-
rity of the hospital insurance fund.
It advances to the first of each
month the Treasury Department's
House conferees rejected a Senate' payment.of estimated revenues to the
+l..+ .......lA social security trust funds.
""fei1 safe"
r
i
i
_
ov
s
on
demand cuts in cost-of-living adjust-
ments to pay for any falling off of rev-
enue through the end of the decade.
The conferees also rejected a Senate
amendment to delay the effective date
of coverage of new Federal employees
until a supplementary pension plan is
designed.
There remains no doubt that the
Congress will design a formula that
permits newly hired employees to be
covered by such a supplemental retire-
ment program. The conference agree-
ment covers all new Federal workers,
beginning January 1, 1984.
In addition, the conference agree-
ment covers members of Congress, ad-
ministration officials (including the
President), sitting Federal judges and
most nonprofit employees, as of Janu-
ary 1, 1984.
It delays the cost-of-living adjust-
ment (COLA) from June 1983 to De-
cember 1983.
It stabilizes the COLA by pegging
payments to the lower of wages or
prices, beginning in 1985, but only if
reserves are below 15 percent. This re-
serve trigger increases to 20 percent in
1989. A "catch up" in benefits is also
established. Under moderate economic
assumptions, it is unlikely that the
stabilizer will take effect.
It phases down over 5 years the pri-
vate pension offset against social secu-
rity benefits from the current 90 per-
cent of the first benefit formula brack-
et, to 40 percent, beginning in 1986-
permitting no more than one-half of
the amount of the private pension to
be offset. All current employees newly
covered by the bill are exempted from
this offset formula change.
It increases the annual delayed re-
tirement credit from 3 to 8 percent be-
tween 1990 and 2010.
It increases the Federal supplemen-
tal security income (581) benefit by
$20 for individuals and $30 for couples,
and delays the cost-of-living adjust-
ment for 6 months, both changes ef-
fective July 1, 1983.
It extends by 6 months Federal sup-
plemental compensation (FSC) which
will provide 8 to 14 weeks of benefits
for workers who have exhausted all
other State and Federal benefits. Indi-
viduals who have already run out of
their original FSC benefits are now
eligible for between 6 and 10 more
weeks of compensation.
It provides Federal tax and interest
relief for States whose unemployment
trust funds have had to borrow from
the Federal Government, but only if
substantial steps have been taken to
bolster the solvency of their systems.
It phases in a prospective payment
system for medicare over 3 years (as
proposed by the Senate), and adjusts
for regional differences (as proposed
by the House).
The passage of this bill through
Congress over the last 2 months is as
remarkable as it is monumental. In
the face of crisis we have shown that
we can rise above partisan differences;
that we can withstand enormous pres-
sure from special interest; that we can
raise the level of national confidence
in Government.
We have reason to be very proud of
ourselves tonight. Beyond these doors
we may never receive the recognition
we have earned. But we know that
when we must work together-we can.
It is in that spirit that I ask you to
support this conference report.
^ 2310
Mr. CONABLE. Mr. Speaker, I yield
myself 12 minutes.
(Mr. CONABLE asked and was given
permission to revise and extend his re-
marks.)
Mr. CONABLE. The distinguished
chairman has done a good job of ex-
plaining the entire bill and I am going
to limit my further remarks on this
matter just to those issues that were
changed in the conference.
The report also adds some interest-
ing tax provisions and these were cov-
ered in part by the chairman; tax-
exempt income is included in the base
for determing the taxability of social
security benefits, self-employment tax
credit was increased so that the credit
is in 1984, 2.7 percent, 1985, 2.3 per-
cent and in 1986, through 1989, 2 per-
cent.
Now that is a greater help to your
self-employed and your farmers than
what is included in the original House
bill. This self-employment tax credit
then which was somewhat controver-
sial when the bill originally passed has
been improved over the House version,
if you wish to give a larger credit to
your self-employed and your farmers.
It was as much as the Senate version;
it was a compromise figure.
Effective in 1990 and thereafter the
credit would terminate and be re-
placed with a system designed to
achieve parity between employees and
the self-employed. The base of the
self-employment tax would be adjust-
ed downward to reflect the fact that
employees do not pay FICA tax on the
value of the employer's FICA tax. De-
duction would be allowed for income
tax purpose for half of the self-em-
ployment tax liability in recognition
that employees do not pay income tax
on the value of the employer's FICA
tax; and the effect of that, Mr. Speak-
er, is also to give a better deal to farm-
ers and self-employed after 1990 than
they got under the original House bill.
Deferred compensation under sec-
tion 457 of the Internal Revenue Code
will be subject to the FICA tax as will
certain forms of nonqualified deferred
compensation. But provisions with po-
tential impact on cafeteria, plans were
deleted so that their tax treatment is
unchanged from existing law. In other
words, if you had employers in re-
sponse to the Tax Act in 1978 adopted
cafeteria plans giving a wide range of
options to their employees, they need
not fear anything that is in this provi-
sion.
We have not changed the law with
respect to them in ways that might
work against the desirability of cafete-
ria plans.
Finally the conference agreement
makes changes in the FUTA tax base
to conform with the changes in the
FICA tax base. In the medicare title
the House insisted upon and retained
the nine separate regional census divi-
sions used to phase in the new pros-
pective payment system. We accept
the other body's provision to move to
a national payment rate in 3 years,
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H 1782 CONGRESSIONAL RECORD - HOUSE
I ask my colleagues to join with me
in an expression of appreciation to a
man, I think along side of CLAUDE
PEPPER, who has done more for the
senior citizens and for the young
people of our country than any indi-
vidual in the House of Representa-
tives.
Mr. Speaker, I yield 15 seconds to
the gentleman from Texas, Mr. JAKE
Picxi.E, for remarks.
Mr. CONABLE. Mr. Speaker, will
the gentleman yield?
Mr. PICKLE. I yield to the gentle-
man from New York.
Mr. CONABLE. I thank the gentle-
man for yielding.
I do not want to use the gentleman's
full 15 seconds.
The gentleman is always saying
"That dog won't hunt." I think this
bill is not a dog and it will hunt. And I
think it is largely due to the gentle-
man. To know him is to love him,
friends.
Mr. PICKLE. Mr. Speaker, I hasten
to thank my friend Chairman RosTEN-
xowaxI and my friend Mr. CoNABLE.
This has been a long, difficult task
for all of us and no one person can
take credit for this moment. I think
this is the House's finest moment. It
shows that we can make structural
changes in a program even as vital as
social security, the most important of
all our national domestic programs. A
lot of us can take credit.
We hope we have done the right
thing. We believe and pray that we
have. We have given assurance, I be-
lieve, to Americans that tonight
throughout this land they can feel
that social security is secure for as far
as we can humanly and legislatively
guarantee it.
I take this moment though to thank
first the commission for having
brought us this package. If we had not
had the President's Commission, we
could not have put together this type
of legislative program.
I thank my chairman, DAN RosTEN-
xowsxi, who has been steadfast and
fair and impartial and who has held
this conference in a masterful manner.
I thank the leadership, the Speaker,
whose speech a week ago, in support
of Senator PEPPER'S measure, was mag-
nificent and gave us a feeling again
that we were approaching this in a bi-
partisan manner.
And I thank the majority leader and
the minority leader for their support.
I thank my subcommittee and the
Members of.the full Ways and Means
Committee for their strong support
and guidance.
And if I may, Mr. Speaker, I would
like to add one other group, and those
of us who have been chairmen or sub-
committee chairmen know how much
we owe to our staffs. My subcommittee
staff and the Ways and Means Com-
mittee staff have performed in a most
professional manner. Our country
owes them a great debt of thanks be-
cause we cannot know how much they
have given.
So I salute you.
^ 2330
Now, Mr. Speaker, I conclude by
saying that I think perhaps the most
important part of this package is that
we have made a structural change by
raising the age gradually in the future
to 66 and 67, 25 and 40 years down the
road. I think America, has accepted it.
Tonight we have come of age, and I
think we can assure the solvency of
this system.
I would like to believe then, Mr.
Speaker, that all of us together, as
Daniel Webster says to us on the
plaque high above our heads, that "we
,have done something in our time
worthy to be remembered."
The conference report we bring to
you today represents a good, solid
compromise that will give assurance to
the American people the Congress has
acted responsibly on social security.
We retain the long-term provisions
of the House bill-which offer the best
assurance to America that Congress
can make structural changes when
they are needed in our important
social programs. I will note that al-
though he proposed a different solu-
tion on the House floor, our dear
friend and esteemed colleague, the
gentleman from Florida (Mr. PEPPER)
has told me of the options available in
the conference, he preferred the
House -version. I thank him again for
his statemanship, his friendship and
his concern for our elderly and for this
program.
In this conference, we also provide
backup procedures for the near term
to give the best assurance we can that
the Congress will not have to face
social security financing again any-
time soon.
We have addressed a multitude of
issues in a fair and balanced manner.
And at the same time we have pre-
served intact the basic structure and
purpose of the social security pro-
gram. As confidence has dwindled in
the program in recent years, many in-
dividuals and groups have come for-
ward to say that social security no
longer works. That is true only if the
Congress does not act, and the Con-
gress has proved in this bill that it can
act. Social security is and will remain
secure because Congress always will
stand ready to deal with whatever
problems may come its way.
The bill fundamentally is a financ-
ing bill. That is always the toughest.
But I am immensely proud of the re-
sponse of the Congress to this chal-
lenge. We have addressed this issue
without rancor and with serious con-
sideration and in a healthy, bipartisan
manner. Mr. Speaker, we cannot over-
estimate the importance of having
kept this program as free of partisan-
ship as humanly possible. All of Amer-
ica can feel good tonight that this bill
is neither a Democratic or a Repuibli-
can bill but is a straightforward ap-
proach to our most important national
domestic program.
March 24, 1983
Now, I will touch on some of the
major provisions in the bill.
Basically the bill follows the agree-
ment first laid out by the National
Commission on Social Security.
It extends coverage to new Federal
hires and to nonprofit employees as of
January 1, 1984. This has been one of
the most hotly contested and impor-
tant parts of this package. Some Fed-
eral employees may feel that they
have been hard hit or done in by this
change. I say to them again that they
have not. This change will be benefi-
cial for the Federal Government and
for its employees, present and future.
The Federal retirement system will be
the sounder for it, and the Federal em-
ployee will be more secure. Extension
of coverage to nonprofits means that
many of our workers who can benefit
the most from social security coverage
will now be covered. This, too, is a
good step forward.
The conference agreement also ends
the ability of State or local govern-
ments to opt out of social security and
establishes a revised formula so that
employees who derive a so-called wind-
fall by having only a part of their
earnings under social security will re-
ceive a benefit that is more in accord-
ance with that of someone at their
same overall wage level.
The conference agreement contains
a one time delay of the cost-of-living
increase from June to December 1983,
which will have important savings
both in the short and long term.
The agreement for the first time
provides for the inclusion of social se-
curity benefits in the taxable income
of individuals with substantial outside
income, whether that income is tax-
able or not. It makes changes in the
tax rates but provides for credits to
offset some of the impact of these
taxes.
The agreement includes two incen-
tives long sought by various individ-
uals and groups who want to encour-
age individuals to work longer. In par-
ticular, beginning in 1990 it contains
an increase in the delayed retirement
credit to 8 percent and it liberalizes
the earnings test so that instead of
offsetting $1 of benefits for every $2
earned, it offsets $1 for every $3
earned.
And, the bill contains key provisions
to insure benefit payments. It provides
a new accounting procedure so that
the reserves in the funds will be high-
est at the first of each month, when
benefits must be paid. It provides for
continued interfund borrowing-but
with important safeguards to protect
lending funds. It provides for a report
and recommendations to the Congress
for action in case all the other proce-
dures prove inadequate. And it pro-
vides for a permanent stabilizer, which
will protect the funds during times of
high inflation and low wage growth
such as we have recently experienced.
This stabilizer would stipulate that
the COLA would be increased by the
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CONGRESSIONAL RECORD - HOUSE March 24, 1983
tients, physicians, and hospitals have
little incentive to control costs. Pa-
tients pay very little of their hospital
expenses directly. In addition, hospi-
tals are fully reimbursed under medi-
care for the costs they incur.
The prospective reimbursement
system that has been included in this
bill would provide incentives for pro-
viders to deliver services more effi-
ciently and control costs. In addition,
reimbursements for the same medicare
service, which often vary dramatically,
would be similar. It is important to
note that the set payments to hospi-
tals, for services will be payment in full
and not negotiable. Therefore, while
promoting efficiency in services, this
proposal would cause no increase in
costs to the patients.
Mr. Speaker, today is important be-
cause it gives' the social security
system a clean slate-so to speak-
with regard to financial soundness.
Again. I commend the members of the
Ways and Means Committee and the
Senate Finance Committee for their
hard work in formulating this compro-'
raise in a timely manner. With passage
of this social security legislation, our
senior citizens can be assured of our
continued support and of their finan-
cial future. In addition, those who
have not retired yet can be assured
that the social security system which
they continue to pay into will provide
them benefits in the years to come.
? Mr. ROYBAL. Mr. Speaker, I rise in
support of the conference report be-
cause its passage is the only way to
insure the full and prompt payment of
social security benefits to the 36 mil-
lion current beneficiaries who might
otherwise have their benefits inter-
rupted or delayed within the next few
months.
I commend the leadership, the re-
sponsible members of the Ways and
Means Committee and the National
Commission on Social Security
Reform for their good efforts in bring-
ing passable legislation to the floor
within the tight ttmef nes required.
However, I mast say that I. like many
others, am dissatisfied with many pro-
visions of the final conference report.
Of special concern are the provisions
passed by the other House which
could unduly damage our relationships
with other nations and may cause
severe hardships for some U.S. resi-
dents and U.S. citizens living abroad.
Less than 6.7 percent of all benefici-
aries and less than 0.6 percent of all
benefit payments are paid to nonciti-
zens outside the United States-yet
the provisions inserted by the other
body to reduce or prohibit payments
to citizens of about one-third of the
nations of the world will adversely
affect our relationship with countries
on all five populated continents. These
provisions put up unnecessary barriers
which could be used by other nations
to justify the imposition of continnu-
ationn or significant barriers to the free
and urdr*dbited export of U.S. goods,
services and technological expertise to
those countries. It can also be expect-
ed that some of the affected countries
will respond with even harsher treat-
ment of U.S. citizens receiving similar
benefits from those countries.
Social security legislation is simply
not the place to enact these major
changes in trade and immigration/nat-
uralization policy. The Congress will
be considering and, hopefully, passing
good legislation on both these issues in
this Congress. The provisions from the
other body set the wrong tone at the
beginning of these great debates. They
also establish errors in policy which
will have to be corrected by the subse-
quent legislation.
The specific provisions which cause
these problems are:
First, section 124 of the other body's
bill which, in effect, unilaterally re-
peals the informal reciprocal under-
standings fdr the payment of social se-
curity benefits between the United
States and 44 countries Including Aus-
tria, Belgium, Brazil, Canada, Costa
Rica, Denmark, El Salvador, Finland,
France, Mexico, Panama, t2)e Philip-
pines, Poland, Portugal, Spain,
Sweden, Turkey and the United King-
dom.
Although, under the legislation, the
United States could still negotiate a
formalized reciprocity agreement with
these countries, there would be no
practical responsibility of negotiating
and Implementing agreements with all
44 countries before the provision's ef-
fective date of January 1985. In the 5
years since the Social Security Admin-
istration was granted authority to con-
clude such agreements, only three
agreements-with Italy, Switzerland
and West Germany-have been imple-
mented.
In addition, the provision could per-
manently prevent any formal or infor-
mal reciprocity agreement with some
other friendly countries-like Austra-
lia-whose income maintenance pro-
grams are sufficiently different from
the U.S. system so that no formalized
agreements could ever be authorized
or concluded under the statute.
Second, section 131 of the other
body's bill establishes section 6050F(c)
of the Internal Revenue Code which
could abrogate provisions fn treaties of
friendship, commerce and navigation
(PCN) with eight countries and might,
in the view of several other countries,
violate tax treaties they have with the
United States.
This new IRC section requires with-
holding of a nonrefundable income tax
of 15 percent of a nonresident alien's
social security benefits. Only the Eng-
lish, whose tax treaty with the United
States requires payment of full social
security benefits, would be exempted.
Since withholding does not apply to
U.S. citizens and since nonresident
aliens are required to pay U.S. Income
taxes on social security benefits even
if their total income is below the
Income thresholds which trigger the
taxation of benefits for U.S. citizens,
other countries will object that the
United States is breaking the equal
treatment traditions by which citizens
of both countries are treated as each
country treats its own citizens. Ger-
many, Greece, Ireland, Israel, Italy,
Japan, The Netherlands and Nicara-
gua may be particularly concerned
since they may consider that their 27-
year-old FCN treaty with the United
States protects them from such non-
"national treatment" of their citizens.
Third. an amendment by the Junior
Senator from Oklahoma reduces or
eliminates payments to legal residents
and U.S. citizens who are dependents
of affected noncitizens. It could also
lead to a discriminatory review of the
eligibility of millions of U.S. citizens
and law-abiding noncitizens who are
suspected of being illegal immigrants
to the United States.
Most of the people who would have
their benefits eliminated next January
are already aged, disabled or survivor
beneficiaries living in the United
States. All of them have worked in the
United States, paid social security
taxes and met the same social security
eligibility requirements that are the
prerequisites for receipt of any social
security benefit.
In the Senate debate, the amend-
ments sponsor stated that this provi-
sion would not apply to illegal aliens
who may be given legal status through
a general amnesty provision in future
immigration legislation. However, the
amendment's legislative language spe-
cifically requires a noncitizen to prove
he/she legally entered the United
States with permission to work. There-
fore, under the legislative provisions,
current legal status might not be
enough to permit full payments.
Inclusion of these provisions is un-
fortunate because: First, they will
harm our relationships with substan-
tial numbers of our allies while achiev-
ing trivial savings for social security;
second, they may lead to similar re-
sponses by other countries toward U.S.
citizens; and third, they could be detri-
mental to our efforts to expand U.S.
exports.
Other provisions which concern me
include the provision to reduce or
eliminate the COLA after 1989 if the
trust funds' reserves are low. This "fail
safe" automatically puts the entire fi-
nancial burden for solving any future
problem on those beneficiaries who
are least likely to have the ability for
financial sacrifice.
Furthermore, the tax credits for the
self-employed are still inadequate and
the final formula for reducing "wind-
fall" benefits to civil service annu-
itants is still too severe.
We also need to move swiftly to pro-
vide current and future civil servants
and nonprofit employees with statu-
tory guarantees that they will not un-
fairly forfeit any rights to benefits
currently available to them.
In addition, the bill does not index
the income thresholds for the taxation
of -benefits which, without Indexing,
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March a 1988 CONGRESSIONAL RECORD -- HO
will eventually affect a majority of the proves to be the remedy which will re-
the
elderly. Nor is there an inciesse in the store the system to some, degree of
me
thresholds -for married couples to 150 fiscal solvency. We should not assume
M
percent of the individual's threshold. that this, is all we have to do with re-
liev
Finally. the bill still depends entirely spect to reforms In, the system. We
wor
on benefit cuts early in the next een- should =WatWn our of tpttmsntto
tury to solve a problem which may or ridding the system of fraud and waste
~
may not.become severe until the third We should look to new revenue possi-
ben
decade of the next century. bilities for the system. However-the hea
Mr Speaker. I know that, once we most important thing we must do is
It
have solved the immediate crisis in preserve the basic integrity of the
yea
social security, we will have more time system for those millions of men and
laci
to look at the finer details. of this leg- women who faithfully contributed to
to t
islation and to correct some of these the system during their working years
reti
problems. with the expectation that they would
HOUSErity
B
As chairman- of the Aging Commit- have a secure retirement income. To
tect
tee, I sum my colleagues, the elderly Jeopardize this is to break a covenant
pro
and the workers who are the future el- between the American people and
secu
derly. that the Aging Committee will their Government.
effi
monitor the impact of all -legislation This legislation is a difficult proposi-
pus
affecting them- We will develop cre- Lion to accept; It has been since the
ative and realistic proposals which will time its foundation was developed in
pos
maintain the viability of the Social se- the National Commission on Social Se-
? M
curity system; and other programs to curity Reform. However the time has
com
improve them so that they are fairer come to simply, accept our fate and
wor
to beneficiaries and taxpayers regard- vote for this bill for the sake of the
com
less of their race, creed, color, sex, or , biggest issue' of all-saving the social
mesn
ethnic background.? security system.f
dou
? Mr. BIAGGI. Mr. Speaker, I rise in ? Mr. WYDEN. Mr. Speaker, most of
sbie
support although still qualified, of us here tonight understand that we
regi
H.R. 1900 the Social Security Reform have a gun at our, heads. If Congress
Stat
Act of 1983. 'The conference report refuses to act. by the end of the
tan
before us is ' essentially the same bill summer the retirement security of
T
we passed several weeks ago. It still millions of Americans will be in Jeop-
con
contains the same positive and nega- ardy. We have a sword of Damocles tive features but now as before this hanging over us, and the fear of its all
legislation is fbsoluteiy essential Uwe dropping should we fail to pass a bill,
flor
are to keep the social security system will be the impetus we need to get 218
orga
alive past July. or more votes tonight.
by a
I -regret the fact that the conferees But I would like to caution my col-
has
did not retain the Senate amendment leagues not to imagine that we have
cove
to delay for i year the mandatory cov- adopted a fallproof package that will
tion
erage under social security of all new permit us to avoid ' revisiting this issue
wou
Federal ? and postal workers.. That for the next 75 years. We hive not.
men
would have been the far more equita- 'his is ?particularly- true with regards
dou
ble route to travel on thin issue and to the issue of the retlremesat age.
tax
one which I have urged. I maintain Both Houses have voted to raise the
such
that for the amount of revenue this normal retirement we beyond 65. I op-
ploy
proyision will produce-it is not worth posed this move because I tMnk it will the cost to Federal and postal workers work a hardship on millions of older
late
the
not to mention, the future of the civil Americans whose health makes it vir-
cal
service retirement system. tually impossible to work, but who still-
sect
The essence of this legislation is cannot qualify for disability. When
Act
that it will produce $168 billion in des- the retirement age is raised these
prev
perately needed new funds for social older workers will simply fall between
emp
security sufficient to carry it through the cracks.
Its immediate crisis and beyond. I Last week I proposed an amendment
men
regret the fact that a large amount of to the package before us that would
orga
this is financed in a way that could partially compensate older workers in
taril
produce hardship for people such as poor health when the retirement age
pate
the 6-month delay in the cost-of-living is raised. Under my proposal, which
sion
increase for the 36 million on social se- was developed ,with Senator Baemsy
curity. of New Jersey. workers between 62
However we know this bill for what and the increased retirement we could
avoi
it is-strong medicine to cure a deeper- receive a new retirement benefit if
need
ately ill patient. The alternative for they could demonstrate inability to
have
not acting is Very simple-but nothing continue working in the occupation
thro
we want to be party to. Social security they had held during the previous 10-
could miss its first payroll in history year period. The actuaries at the
Th
as early as July. A total of 36 million Social Security Administration esti-
sign
elderly Americans eculd be deprived of meted that the cost of this provision
whe
their social security checks and for 26 would not exceed 0.04 percent of pay-
sity
percent of them--this is 90 percent roll.
ploy
and more of their income. Unfortunately, neither the House
tion
Whether we, agree with all or Just nor the Senate agreed to this proposal
bers
parts of this bill Congress should be and it is not before. us tonight. In
30 p
commended for its 'expeditious eonsid- stead. both the House and the Senate
tion
eration of this legislation. We hope it voted to undertake a .study to look at
ploy
H 1785
implications or raising the retire-
nt age.
r. Speaker, a study is fine, but I be-
e we need more. Millions of older
kers whose health it too poor to
wong, blleed,, should not have their
disa
efits cut, simply because of their
l
th
.
is true that we have almost 20
rs to recognise the health problems
ng some of our older workers and
ake action to insure that they can
re with dignity.
ut let us not wait that long to pro-
vulnerable older workers. Such
tection should 'be part of a social
rity system that ts.:1$ r. Just. and
cient and I urge my! colleagues to
h for its inc uslom at the earliest
sible opportunity.*
r. DICKS. Mr..Spaker, I want to
mend the conferees for their fine
k on this, vital ' legislation, and to
ment on one of the Senate amend-
ta which corrects an unintended
ble payment of the unreimburs-
employers' share of !FICA by the
onalized me& al " school for the
es of Washington, Alaska, Mon-
a, and Idaho.
he House and Senate bills and the
ference report extend social secu-
coverage on a maAdstory basis to
a. As a result. of such
nisations who are Woo employed
state university pf a State which
agreed to provide bocial security
rage to its employees under sec-
218 of the Social Security Act
ld have been, without this amend-
t. subject to uttreimbursable
ble payment of social security
es. Although present law prevents
double taxation where the em-
ers of the some itadividual are re-
d corporations- ton 3121(s) of
code-or are init nts of politi-
subdivisions of the same State-
ion 218(eX2) of the Social Security
-there is no provision' which would
ent double taxation where one
loyer is a nonprofit organization another employer II an instru-
t of a State Indeed. since exempt
nisations up to. now could volun-
y decide whether or not to partici-
in social security, such a provi-
was not needed, By mandating
won d only m it3-ect-anthe bill
ism to
d double taxation did created the
to allow exempt Organizations to
equivalent relies to that available
ugh a single paymaster system.
e amendment is specifically de-
ed to prevent double taxation
re one employer is a mate univer-
medical school and the other em-
er is a related nongeofit organiza-
which also ere o s faculty mem-
of such medical sdsool. At least
ercent or more of the organiza-
's employees must also be em-
ed by such medical school.
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 Approved For Release 2008/10/29: CIA-RDP85-00003R000200110005-9
H 1786
Under the amendment adopted in
the conference report, a State univer-
sity and nonprofit organization which
meet the stated requirements are con-
sidered to be related corporations
under section 3121(s) of the code. Fur-
thermore, soiely for purposes of sec-
tions 3102. 3111. and 3121(aXl) of the
code, a portion of the remuneration
actually paid by the nonprofit organi-
zation from its own funds and on its
own paychecks will be deemed to have
been paid by the university. Such re-
muneration will not be subject to the
section 3102 deduction from the em-
ployee's wages or to the section 3111
employer tax since employment by a
State is not subject to social security
taxation under sections 3101, 3102,
and 3111 of the code. Such employ-
ment is subject to social security cov-
erage only pursuant to section 218 of
the Social Security Act and for the
purpose of that section, a university
meeting the ? requirements of this
amendment will not be deemed to
have paid any amounts actually paid
by the nonprofit organization. There-
fore, there is no question that the
amendment does not affect the duty
of a State university to report wages
subject to social security or to pay or
make a return of social security contri-
butions.
The portion of remuneration paid by
the related nonprofit organization
which is deemed paid by the university
is that portion which, when added to
the total amount of remuneration ac-
tually paid by the university during
the entire calendar year, exceeds the
social security wage and contribution
base. If the employee by the end of
the calendar year has been paid less
than the wage and contribution base
by the university, that part of the em-
ployee's remuneration from the non-
profit organization needed to bring his
entire compensation up to the wage
and benefit base will retain its charac-
ter as wages paid by the nonprofit or-
ganization and therefore will be sub-
ject to the social security tax. If the
employee by the end of the year has
been paid an amount equal to or great-
er than the wage and contribution
base by the university, then the entire
amount paid by the nonprofit organi-
zation will be considered as paid by
the university. Thus, where the em-
ployee's total wages from both the
university and the nonprofit organiza-
tion exceed the wage and contribution
base, it is intended that social security
contributions will be made in full on
the base amount but will not be paid
more than once. Similarly, where the
employee's total wages from both
sources do not exceed the base, social
security contributions will be made on
the full amount paid to the employee.
The determination of whether remu-
neration paid by the nonprofit organi-
zation, when added to remuneration
paid by the university during the cal-
endar year, exceeds the wage and con-
tribution base will be made through-
out the year as wages are paid to the
CONGRESSIONAL RECORD - HOUSE March 24, 1986
employee. Any excess amounts deduct-
ed from an employee's wages by the
nonprofit organization would be recov-
ered by the employee under sections
31 and 6413(c) of the code. Any excess
amounts paid as an employer tax by
the organization will be treated as
amounts paid in error. Of course, the
organization will be deemed to have
sufficient knowledge of the error to be
able to correct it with respect to each
employee only when the organization
has sufficient knowledge to be able to
determine the total amount of the
excess paid for the entire taxable year.
Usually, the organization will have
such knowledge in whichever of the
following social security reporting pe-
riods occurs first during the year. The
period in which remuneration to date
paid by the university to the employee
reaches the wage and contribution
base, the period in which the employ-
ee permanently terminates employ-
ment, or the last reporting period for
the calendar year. Any overpayments
of the employer tax will be the subject
of a claim for refund or credit by the
nonprofit organization in the social se-
curity reporting period in which the
organization first has sufficient knowl-
edge of the error to correct it or in the
next subsequent reporting period.?
? Mr. HEF'ri L of Hawaii. Mr. Speak-
er, the Social Security Act amend-
ments that we are considering today
have been developed at the expense of
everyone for the benefit of everyone.
We are calling upon the entire country
to make sacrifices to insure that a pro-
gram that is vital to the entire country
survives, not just in the short term,
but for years to come.
If we did not act today to address
the funding crisis that the system
faces, the social security trust fund
will have difficulty in meeting its obli-
gations as early as this July 1983.
Therefore, our first job as Members of
Congress in considering this social se-
curity reform legislation has been to
insure that social security recipients
do not experience any interruption in
'their benefit checks. We all represent
countless constituents who rely on this
program who must live from one
check to the next. Therefore, it is im-
perative that we act today to pass this
program.
The Social Security Act Amend-
ments of 1983 correct all three critical
problems facing this vital retirement
program. First, this legislation will
correct the immediate funding crisis
that would otherwise place July bene-
fit checks in jeopardy. Second, we are
correcting the short-term funding
crisis that is expected to cause the
trust fund to fall short of its benefit
payment needs by between $150 billion
and $200 billion by 1990. Finally, we
have taken the bold and necessary
step of addressing combined effects of
several recent years of low birth rates
and a high number of future retirees
when the "baby boom" generations of
the 1940's and 1950's begin reaching
retirement age would again force the
system into funding difficulties.
I commend the National Commis-
sion, and I commend the Congress-in
particular my distinguished chairman,
Mr. Prcxza, with whom I had the
privilege of working as a member of
the Social Security Subcommittee-for
developing the comprehensive, biparti-
sa,n package that we are voting on
today. I am sure that many of my col-
leagues feel, as I do, that this package
could be improved, that certain provi-
sions are objectionable and that cer-
tain changes should be made. Howev-
er, such feelings are inevitable in a
process that requires compromise and
consensus to accomplish the critical
goal of rescuing our social security
system.
Despite such objections, however.
the provisions of this legislation have
been designed so that no one group in
this country is asked to make inordi-
nate sacrifices in order to insure the
integrity of the trust fund, both in the
short and the long term. Instead, all
groups must sacrifice a little to accom-
plish this goal in as fair a manner as
possible.
Mr. Speaker, if for no other reason, I
support this legislation today because
the alternative is totally unacceptable.
We have come to 'what we all hope and
believe is the end of a long road. We
can now go home knowing that we
have faced up to one of the most im-
portant and most controversial issues
of our time and that the social secu-
rity system is secure for years to
come.*
? Mr. FISH. Mr. Speaker, this confer-
ence committee on social security de-
leted what I believe to be a very unfor.
tunate provision added in the other
body. That provision would have pro-
hibited an individual who is an undoc-
umented alien from receiving any
social security benefits if that person
paid into the social security system
while in undocumented status.
Such a provision is unfortunate be-
cause it amounts to scapegoating those
undocumented aliens who, although
they are in this country technically il-
legally, in fact have been contributors
to our economy and our society.
We are talking about individuals
who have worked in this country, who
answered the job lure which brought
them from their home countries. They
are here because of our failure to con-
trol our borders. We are penalizing
them when they have been doing what
any sensible person would do, come to
this country and answer the many
"help wanted" signs we have posted
for them.
The Senate amendment made abso-
lutely no allowance for any equities
built up through long residence and
commendable contribution to our soci.
ety. Conceivably, an undocumented
alien could become a successful busi-
nessman in the United States, have a
number of American-born children,
and hence, American citizen children.
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