Social Security and Medicare Lock-Box Act

I 118TH CONGRESS 1ST SESSION H. R. 853 To amend titles II and XVIII of the Social Security Act to establish a Social Security Surplus Protection Account in the Federal Old-Age and Survivors Insurance Trust Fund to hold the Social Security surplus and a Medicare Surplus Protection Account in the Federal Hospital Insurance Trust Fund to hold the Medicare surplus, to provide for suspension of investment of amounts held in such Accounts until enact- ment of legislation providing for investment of the Trust Funds in investment vehicles other than obligations of the United States, and to establish a Social Security and Medicare Part A Investment Commis- sion to make recommendations for alternative forms of investment of the Social Security and Medicare surpluses. IN THE HOUSE OF REPRESENTATIVES FEBRUARY 6, 2023 Mr. WALBERG introduced the following bill; which was referred to the Committee on Ways and Means A BILL To amend titles II and XVIII of the Social Security Act to establish a Social Security Surplus Protection Account in the Federal Old-Age and Survivors Insurance Trust Fund to hold the Social Security surplus and a Medicare Surplus Protection Account in the Federal Hospital In- surance Trust Fund to hold the Medicare surplus, to provide for suspension of investment of amounts held in such Accounts until enactment of legislation providing for investment of the Trust Funds in investment vehicles other than obligations of the United States, and to estab- VerDate Sep 11 2014 21:13 Feb 28, 2023 Jkt 039200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6652 E:\BILLS\H853.IH H853 pbinns on DSKJLVW7X2PROD with $$_JOB 2 •HR 853 IH lish a Social Security and Medicare Part A Investment Commission to make recommendations for alternative forms of investment of the Social Security and Medicare surpluses. Be it enacted by the Senate and House of Representa- 1 tives of the United States of America in Congress assembled, 2 SECTION 1. SHORT TITLE; FINDINGS. 3 (a) SHORT TITLE.—This Act may be cited as the 4 ‘‘Social Security and Medicare Lock-Box Act’’. 5 (b) FINDINGS REGARDING SOCIAL SECURITY AND 6 MEDICARE PART A.—The Congress finds the following: 7 (1)(A) Long-term projections show serious 8 problems facing the fiscal health of the trust funds 9 associated with Social Security and Medicare Hos- 10 pital Insurance. 11 (B) According to the 2020 Annual Report of 12 the Board of Trustees of the Federal Old-Age and 13 Survivors Insurance and Federal Disability Insur- 14 ance Trust Funds, the assets of the combined Fed- 15 eral Old-Age and Survivors Insurance Trust Fund 16 and the Federal Disability Insurance Trust Fund 17 will be exhausted in 2035, and the Disability Insur- 18 ance Trust Fund alone will be depleted in 2065. 19 (C) According to the 2020 Annual Report of 20 the Board of Trustees of the Federal Hospital In- 21 VerDate Sep 11 2014 21:13 Feb 28, 2023 Jkt 039200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H853.IH H853 pbinns on DSKJLVW7X2PROD with $$_JOB 3 •HR 853 IH surance, the assets of the Federal Hospital Insur- 1 ance Trust Fund will be exhausted in 2026. 2 (2) The Trustees of these trust funds encourage 3 lawmakers to address the long-term financial chal- 4 lenges of the Social Security and Medicare programs 5 as soon as possible. 6 (3) Social Security and Medicare are meant to 7 provide a secure and stable base so that older Amer- 8 icans can live in dignity. 9 (4) Protecting the future surpluses of these 10 trust funds can only occur when meaningful reform 11 has been enacted by Congress. Any path to solvency 12 must include the protection of future surpluses. 13 SEC. 2. INTERIM PROTECTIONS FOR SOCIAL SECURITY 14 TRUST FUND SURPLUS. 15 Section 201(d) of the Social Security Act (42 U.S.C. 16 402(d)) is amended— 17 (1) by striking ‘‘It shall be the duty’’ and in- 18 serting ‘‘(1) Except as provided in paragraph (2), it 19 shall be the duty’’; 20 (2) by striking ‘‘(1) on original issue at the 21 issue price, or (2)’’ and inserting ‘‘(A) on original 22 issue at the issue price, or (B)’’; and 23 (3) by adding at the end the following new 24 paragraph: 25 VerDate Sep 11 2014 21:13 Feb 28, 2023 Jkt 039200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H853.IH H853 pbinns on DSKJLVW7X2PROD with $$_JOB 4 •HR 853 IH ‘‘(2)(A) There is established in the Federal Old-Age 1 and Survivors Insurance Trust Fund a Social Security 2 Surplus Protection Account. As soon as practicable after 3 the end of each fiscal year after fiscal year 2024, the Man- 4 aging Trustee shall transfer to the Account, from amounts 5 otherwise available in the Trust Fund, amounts equivalent 6 to the social security surplus for such fiscal year. Such 7 amounts shall be transferred from time to time to the Ac- 8 count, such amounts to be determined on the basis of esti- 9 mates by the Managing Trustee, and proper adjustments 10 shall be made in amounts subsequently transferred to the 11 extent prior estimates were in excess of or were less than 12 the correct amount. 13 ‘‘(B) For purposes of subparagraph (A), the term ‘so- 14 cial security surplus’ means, for any fiscal year, the excess, 15 if any, of— 16 ‘‘(i) the sum of— 17 ‘‘(I) the taxes imposed for such fiscal year 18 by chapter 21 (other than sections 3101(b) and 19 3111(b)) of the Internal Revenue Code of 1986 20 with respect to wages (as defined in section 21 3121 of such Code) reported to the Secretary of 22 the Treasury or his delegates pursuant to sub- 23 title F of such Code, as determined by the Sec- 24 retary of the Treasury by applying the applica- 25 VerDate Sep 11 2014 21:13 Feb 28, 2023 Jkt 039200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H853.IH H853 pbinns on DSKJLVW7X2PROD with $$_JOB 5 •HR 853 IH ble rates of tax under such chapter 21 (other 1 than sections 3101(b) and 3111(b)) to such 2 wages, less the amounts specified in clause (1) 3 of subsection (b) of this section for such fiscal 4 year; 5 ‘‘(II) the taxes imposed by chapter 2 6 (other than section 1401(b)) of the Internal 7 Revenue Code of 1986 with respect to self-em- 8 ployment income (as defined in section 1402 of 9 such Code) reported to the Secretary of the 10 Treasury on tax returns under subtitle F of 11 such Code, as determined by the Secretary of 12 the Treasury by applying the applicable rate of 13 tax under such chapter (other than section 14 1401(b)) to such self-employment income, less 15 the amounts specified in clause (2) of sub- 16 section (b) of this section for such fiscal year; 17 and 18 ‘‘(III) the amount equivalent to the aggre- 19 gate increase in tax liabilities under chapter 1 20 of the Internal Revenue Code of 1986 which is 21 attributable to the application of sections 86 22 and 871(a)(3) of such Code to payments from 23 the Trust Fund; over 24 ‘‘(ii) the sum of— 25 VerDate Sep 11 2014 21:13 Feb 28, 2023 Jkt 039200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\H853.IH H853 pbinns on DSKJLVW7X2PROD with $$_JOB 6 •HR 853 IH ‘‘(I) benefits paid from the Trust Fund 1 during the fiscal year; and 2 ‘‘(II) amounts authorized to be made avail- 3 able from the Trust Fund under subsection (g) 4 of this section which are paid from the Trust 5 Fund during such fiscal year. 6 ‘‘(C) Notwithstanding paragraph (1), the balance in 7 the Account shall not be available for investment by the 8 Managing Trustee. 9 ‘‘(D)(i) The preceding provisions of this paragraph 10 shall not apply with respect to fiscal years commencing 11 with or after the first fiscal year, after fiscal year 2024, 12 for which a provision of Federal law takes effect and au- 13 thorizes, for amounts in the Trust Fund, an investment 14 vehicle other than obligations of the United States. 15 ‘‘(ii) A provision of Federal law shall be deemed to 16 meet the requirements of clause (i) if such provision in- 17 cludes the following: ‘This Act shall be considered to be 18 a provision of Federal law meeting the requirements of 19 section 201(d)(2)(D)(i) of the Social Security Act.’.’’. 20 SEC. 3. INTERIM PROTECTIONS FOR MEDICARE PART A 21 TRUST FUND SURPLUS. 22 (a) IN GENERAL.—Section 1817(c) of the Social Se- 23 curity Act (42 U.S.C. 1395i(c)) is amended— 24 VerDate Sep 11 2014 21:13 Feb 28, 2023 Jkt 039200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\H853.IH H853 pbinns on DSKJLVW7X2PROD with $$_JOB 7 •HR 853 IH (1) by striking ‘‘It shall be the duty’’ and in- 1 serting ‘‘(1) Except as provided in paragraph (2), it 2 shall be the duty’’; 3 (2) by striking ‘‘(1) on original issue at the 4 issue price, or (2)’’ and inserting ‘‘(A) on original 5 issue at the issue price, or (B)’’; and 6 (3) by adding at the end the following new 7 paragraph: 8 ‘‘(2)(A) There is established in the Federal Hospital 9 Insurance Trust Fund a Medicare Surplus Protection Ac- 10 count (in this paragraph referred to as the ‘Account’). As 11 soon as practicable after the end of each fiscal year after 12 fiscal year 2024, the Managing Trustee shall transfer to 13 the Account, from amounts otherwise available in the 14 Trust Fund, amounts equivalent to the Medicare part A 15 surplus for such fiscal year. Such amounts shall be trans- 16 ferred from time to time to the Account, such amounts 17 to be determined on the basis of estimates by the Man- 18 aging Trustee, and proper adjustments shall be made in 19 amounts subsequently transferred to the extent prior esti- 20 mates were in excess of or were less than the correct 21 amount. 22 ‘‘(B) For purposes of subparagraph (A), the term 23 ‘Medicare part A surplus’ means, for any fiscal year, the 24 excess, if any, of— 25 VerDate Sep 11 2014 21:13 Feb 28, 2023 Jkt 039200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\H853.IH H853 pbinns on DSKJLVW7X2PROD with $$_JOB 8 •HR 853 IH ‘‘(i) the sum of— 1 ‘‘(I) the taxes imposed for such fiscal year 2 by sections 3101(b) and 3111(b) of the Internal 3 Revenue Code of 1986 with respect to wages 4 (as defined in section 3121 of such Code) re- 5 ported to the Secretary of the Treasury or his 6 delegates pursuant to subtitle F of such Code, 7 as determined by the Secretary of the Treasury 8 by applying the applicable rates of tax under 9 such sections to such wages; and 10 ‘‘(II) the taxes imposed by section 1401(b) 11 of the Internal Revenue Code of 1986 with re- 12 spect to self-employment income (as defined in 13 section 1402 of such Code) reported to the Sec- 14 retary of the Treasury on tax returns under 15 subtitle F of such Code, as determined by the 16 Secretary of the Treasury by applying the ap- 17 plicable rate of tax under such section 1401(b) 18 to such self-employment income; over 19 ‘‘(ii) the sum of— 20 ‘‘(I) benefits paid from the Trust Fund 21 during the fiscal year; and 22 ‘‘(II) amounts authorized to be made avail- 23 able from the Trust Fund under subsection (f) 24 of this section (or section 201(g)) which are 25 VerDate Sep 11 2014 21:13 Feb 28, 2023 Jkt 039200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\H853.IH H853 pbinns on DSKJLVW7X2PROD with $$_JOB 9 •HR 853 IH paid from the Trust Fund during such fiscal 1 year. 2 ‘‘(C) Notwithstanding paragraph (1), the balance in 3 the Account shall not be available for investment by the 4 Managing Trustee. 5 ‘‘(D)(i) The preceding provisions of this paragraph 6 shall not apply with respect to fiscal years commencing 7 with or after the first fiscal year, after fiscal year 2024, 8 for which a provision of Federal law takes effect and au- 9 thorizes, for amounts in the Trust Fund, an investment 10 vehicle other than obligations of the United States. 11 ‘‘(ii) A provision of Federal law shall be deemed to 12 meet the requirements of clause (i) if such provision in- 13 cludes the following: ‘This Act shall be considered to be 14 a provision of Federal law meeting the requirements of 15 section 1817(c)(2)(D)(i) of the Social Security Act.’.’’. 16 SEC. 4. SOCIAL SECURITY AND MEDICARE PART A INVEST- 17 MENT COMMISSION. 18 (a) ESTABLISHMENT.—There is established in the ex- 19 ecutive branch of the Government a Social Security and 20 Medicare Part A Investment Commission (in this section 21 referred to as the ‘‘Commission’’). 22 (b) STUDY AND REPORT.—As soon as practicable 23 after the date of the enactment of this Act, the Commis- 24 sion shall conduct a study to ascertain the most effective 25 VerDate Sep 11 2014 21:13 Feb 28, 2023 Jkt 039200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\H853.IH H853 pbinns on DSKJLVW7X2PROD with $$_JOB 10 •HR 853 IH vehicles for investment of the Federal Old-Age and Sur- 1 vivors Insurance Trust Fund and the Federal Hospital In- 2 surance Trust Fund, other than investment in the form 3 of obligations of the United States. Not later than October 4 1, 2024, the Commission shall submit a report to the 5 President and to each House of the Congress setting forth 6 its recommendations for such vehicles for investment, to- 7 gether with proposals for such administrative and legisla- 8 tive changes as the Commission determines necessary to 9 authorize and implement such recommendations. 10 (c) COMPOSITION.—The Commission shall be com- 11 posed of— 12 (1) 3 members appointed by the President, of 13 whom 1 shall be designated by the President as 14 Chairman; 15 (2) 2 members appointed by the Speaker of the 16 House of Representatives; 17 (3) 1 member appointed by the minority leader 18 of the House of Representatives; 19 (4) 2 members appointed by the majority leader 20 of the Senate; and 21 (5) 1 member appointed by the minority leader 22 of the Senate. 23 (d) MEMBERSHIP REQUIREMENTS.—Members of the 24 Commission shall have substantial experience, training, 25 VerDate Sep 11 2014 21:13 Feb 28, 2023 Jkt 039200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6201 E:\BILLS\H853.IH H853 pbinns on DSKJLVW7X2PROD with $$_JOB 11 •HR 853 IH and expertise in the management of financial investments 1 and pension benefit plans. 2 (e) LENGTH OF APPOINTMENTS.—Members of the 3 Commission shall serve for the life of the Commission. A 4 vacancy on the Commission shall be filled in the manner 5 in which the original appointment was made and shall be 6 subject to any conditions that applied with respect to the 7 original appointment. 8 (f) ADMINISTRATIVE PROVISIONS.— 9 (1) MEETINGS.—The Commission shall meet— 10 (A) not less than once during each month; 11 and 12 (B) at additional times at the call of the 13 Chairman. 14 (2) EXERCISE OF POWERS.— 15 (A) IN GENERAL.—The Commission shall 16 perform the functions and exercise the powers 17 of the Commission on a majority vote of a 18 quorum of the Commission. Three members of 19 the Commission shall constitute a quorum for 20 the transaction of business. 21 (B) VACANCIES.—A vacancy on the Com- 22 mission shall not impair the authority of a 23 quorum of the Commissi [Text truncated for display. Full text available on Congress.gov.]