Strengthening Social Security Act of 2019

I 116TH CONGRESS 1ST SESSION H. R. 2654 To improve the retirement security of American families by strengthening Social Security. IN THE HOUSE OF REPRESENTATIVES MAY 9, 2019 Ms. SA´NCHEZ (for herself, Mr. POCAN, Mr. LYNCH, Mr. CARTWRIGHT, Mr. COHEN, Ms. LEE of California, Ms. SCHAKOWSKY, Ms. WILD, Ms. NOR- TON, Ms. PINGREE, Ms. MCCOLLUM, Mr. RICHMOND, Ms. WASSERMAN SCHULTZ, Mr. SMITH of Washington, Mr. RUSH, and Mr. THOMPSON of Mississippi) introduced the following bill; which was referred to the Com- mittee on Ways and Means, and in addition to the Committee on Edu- cation and Labor, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned A BILL To improve the retirement security of American families by strengthening Social Security. 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. 3 This Act may be cited as the ‘‘Strengthening Social 4 Security Act of 2019’’. 5 VerDate Sep 11 2014 05:43 May 22, 2019 Jkt 089200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\H2654.IH H2654 kjohnson on DSK79L0C42 with BILLS 2 •HR 2654 IH SEC. 2. DETERMINATION OF TAXABLE WAGES AND SELF- 1 EMPLOYMENT INCOME ABOVE CONTRIBU- 2 TION AND BENEFIT BASE AFTER 2020. 3 (a) DETERMINATION OF TAXABLE WAGES ABOVE 4 CONTRIBUTION AND BENEFIT BASE AFTER 2020.— 5 (1) AMENDMENTS TO THE INTERNAL REVENUE 6 CODE OF 1986.—Section 3121 of the Internal Rev- 7 enue Code of 1986 is amended— 8 (A) in subsection (a)(1), by inserting ‘‘the 9 applicable percentage (determined under sub- 10 section (c)(1)) of’’ before ‘‘that part of the re- 11 muneration’’; and 12 (B) in subsection (c), by striking ‘‘(c) IN- 13 CLUDED AND EXCLUDED SERVICE.—For pur- 14 poses of this chapter, if’’ and inserting the fol- 15 lowing: 16 ‘‘(c) SPECIAL RULES FOR WAGES AND EMPLOY- 17 MENT.— 18 ‘‘(1) APPLICABLE PERCENTAGE OF REMUNERA- 19 TION IN DETERMINING TAXABLE WAGES.—For pur- 20 poses of subsection (a)(1), the applicable percentage 21 for a calendar year shall be equal to— 22 ‘‘(A) for 2021, 80 percent, 23 ‘‘(B) for 2022 through 2024, the applica- 24 ble percentage under this paragraph for the 25 VerDate Sep 11 2014 05:43 May 22, 2019 Jkt 089200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H2654.IH H2654 kjohnson on DSK79L0C42 with BILLS 3 •HR 2654 IH previous year, decreased by 20 percentage 1 points, and 2 ‘‘(C) for 2025 and each year thereafter, 0 3 percent. 4 ‘‘(2) INCLUDED AND EXCLUDED SERVICE.—For 5 purposes of this chapter, if’’. 6 (2) AMENDMENTS TO THE SOCIAL SECURITY 7 ACT.—Section 209 of the Social Security Act (42 8 U.S.C. 409) is amended— 9 (A) in subsection (a)(1)(I)— 10 (i) by inserting ‘‘and before 2021’’ 11 after ‘‘1974’’; and 12 (ii) by inserting ‘‘and’’ after the semi- 13 colon; 14 (B) in subsection (a)(1), by adding at the 15 end the following new subparagraph: 16 ‘‘(J) The applicable percentage (deter- 17 mined under subsection (l)) of that part of re- 18 muneration which, after remuneration (other 19 than remuneration referred to in the succeeding 20 subsections of this section) equal to the con- 21 tribution and benefit base (determined under 22 section 230) with respect to employment has 23 been paid to an individual during any calendar 24 year after 2020 with respect to which such con- 25 VerDate Sep 11 2014 05:43 May 22, 2019 Jkt 089200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H2654.IH H2654 kjohnson on DSK79L0C42 with BILLS 4 •HR 2654 IH tribution and benefit base is effective, is paid to 1 such individual during such calendar year;’’; 2 and 3 (C) by adding at the end the following new 4 subsection: 5 ‘‘(l) For purposes of subsection (a)(1)(J), the applica- 6 ble percentage for a calendar year shall be equal to— 7 ‘‘(1) for 2021, 80 percent, 8 ‘‘(2) for 2022 through 2024, the applicable per- 9 centage under this subsection for the previous year, 10 decreased by 20 percentage points, and 11 ‘‘(3) for 2025 and each year thereafter, 0 per- 12 cent.’’. 13 (3) EFFECTIVE DATE.—The amendments made 14 by this subsection shall apply with respect to remu- 15 neration paid in calendar years after 2020. 16 (b) DETERMINATION OF TAXABLE SELF-EMPLOY- 17 MENT INCOME ABOVE CONTRIBUTION AND BENEFIT 18 BASE AFTER 2020.— 19 (1) AMENDMENTS TO THE INTERNAL REVENUE 20 CODE OF 1986.—Section 1402 of the Internal Rev- 21 enue Code of 1986 is amended— 22 (A) in subsection (b)(1), by striking ‘‘that 23 part of the net earnings’’ and all that follows 24 through ‘‘minus’’ and inserting the following: 25 VerDate Sep 11 2014 05:43 May 22, 2019 Jkt 089200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H2654.IH H2654 kjohnson on DSK79L0C42 with BILLS 5 •HR 2654 IH ‘‘an amount equal to the applicable percentage 1 (as determined under subsection (d)(2)) of that 2 part of the net earnings from self-employment 3 which is in excess of the difference (not to be 4 less than zero) between (i) an amount equal to 5 the contribution and benefit base (as deter- 6 mined under section 230 of the Social Security 7 Act) which is effective for the calendar year in 8 which such taxable year begins, and’’; and 9 (B) in subsection (d)— 10 (i) by striking ‘‘(d) EMPLOYEE AND 11 WAGES.—The term’’ and inserting the fol- 12 lowing: 13 ‘‘(d) RULES AND DEFINITIONS.— 14 ‘‘(1) EMPLOYEE AND WAGES.—The term’’; and 15 (ii) by adding at the end the fol- 16 lowing: 17 ‘‘(2) APPLICABLE PERCENTAGE OF NET EARN- 18 INGS FROM SELF-EMPLOYMENT IN DETERMINING 19 TAXABLE SELF-EMPLOYMENT INCOME.—For pur- 20 poses of subsection (b)(1), the applicable percentage 21 for a taxable year beginning in any calendar year re- 22 ferred to in such paragraph shall be equal to— 23 ‘‘(A) for 2021, 80 percent, 24 VerDate Sep 11 2014 05:43 May 22, 2019 Jkt 089200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\H2654.IH H2654 kjohnson on DSK79L0C42 with BILLS 6 •HR 2654 IH ‘‘(B) for 2022 through 2024, the applica- 1 ble percentage under this paragraph for the 2 previous year, decreased by 20 percentage 3 points, and 4 ‘‘(C) for 2025 and each year thereafter, 0 5 percent.’’. 6 (2) AMENDMENTS TO THE SOCIAL SECURITY 7 ACT.—Section 211 of the Social Security Act (42 8 U.S.C. 411) is amended— 9 (A) in subsection (b)— 10 (i) in paragraph (1)(I)— 11 (I) by striking ‘‘or’’ after the 12 semicolon; and 13 (II) by inserting ‘‘and before 14 2021’’ after ‘‘1974’’; 15 (ii) by redesignating paragraph (2) as 16 paragraph (3); and 17 (iii) by inserting after paragraph (1) 18 the following: 19 ‘‘(2) For any taxable year beginning in any cal- 20 endar year after 2020, an amount equal to the appli- 21 cable percentage (as determined under subsection 22 (l)) of that part of net earnings from self-employ- 23 ment which is in excess of the difference (not to be 24 less than zero) between— 25 VerDate Sep 11 2014 05:43 May 22, 2019 Jkt 089200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\H2654.IH H2654 kjohnson on DSK79L0C42 with BILLS 7 •HR 2654 IH ‘‘(A) an amount equal to the contribution 1 and benefit base (as determined under section 2 230) that is effective for such calendar year, 3 and 4 ‘‘(B) the amount of the wages paid to such 5 individual during such taxable year, or’’; and 6 (B) by adding at the end the following: 7 ‘‘(l) For purposes of subsection (b)(2), the applicable 8 percentage for a taxable year beginning in any calendar 9 year referred to in such paragraph shall be equal to— 10 ‘‘(1) for 2021, 80 percent, 11 ‘‘(2) for 2022 through 2024, the applicable per- 12 centage under this subsection for the previous year, 13 decreased by 20 percentage points, and 14 ‘‘(3) for 2025 and each year thereafter, 0 per- 15 cent.’’. 16 (3) EFFECTIVE DATE.—The amendments made 17 by this subsection shall apply with respect to taxable 18 years beginning during or after calendar year 2021. 19 SEC. 3. ADJUSTMENTS TO BEND POINTS IN DETERMINING 20 PRIMARY INSURANCE AMOUNT AND INCLU- 21 SION OF SURPLUS EARNINGS FOR BENEFIT 22 DETERMINATIONS. 23 (a) ADJUSTMENTS RELATING TO FIRST BEND 24 POINT.— 25 VerDate Sep 11 2014 05:43 May 22, 2019 Jkt 089200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\H2654.IH H2654 kjohnson on DSK79L0C42 with BILLS 8 •HR 2654 IH (1) INCREASE IN FIRST BEND POINT FACTOR.— 1 (A) IN GENERAL.—Section 215(a)(1)(A)(i) 2 of the Social Security Act (42 U.S.C. 3 415(a)(1)(A)(i)) is amended by striking ‘‘90 4 percent’’ and inserting ‘‘95 percent’’. 5 (B) EFFECTIVE DATE; APPLICATION 6 RULE.—The amendment made by subparagraph 7 (A) shall apply with respect to computations or 8 recomputations of primary insurance amounts 9 made on or after January 1, 2025, except that 10 section 215(a)(1)(A)(i) of the Social Security 11 Act shall be applied by making the following 12 substitutions for ‘‘95 percent’’ for computations 13 and recomputations made in the following cal- 14 endar years: 15 (i) for calendar year 2025, by sub- 16 stituting ‘‘91 percent’’; 17 (ii) for calendar year 2026, by sub- 18 stituting ‘‘92 percent’’; 19 (iii) for calendar year 2027, by sub- 20 stituting ‘‘93 percent’’; and 21 (iv) for calendar year 2028, by sub- 22 stituting ‘‘94 percent’’. 23 VerDate Sep 11 2014 05:43 May 22, 2019 Jkt 089200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\H2654.IH H2654 kjohnson on DSK79L0C42 with BILLS 9 •HR 2654 IH (2) INCREASE IN FIRST BEND POINT.—Section 1 215(a)(1)(B) of such Act (42 U.S.C. 415(a)(1)(B)) 2 is amended— 3 (A) by redesignating clause (iii) as clause 4 (iv); and 5 (B) by inserting after clause (ii) the fol- 6 lowing new clause: 7 ‘‘(iii) With respect to computations or recompu- 8 tations of primary insurance amounts made on or 9 after January 1, 2025, the amount determined 10 under clause (i) of this subparagraph for purposes 11 of subparagraph (A)(i) for such calendar year shall 12 be increased by— 13 ‘‘(I) for calendar year 2026, 1 percent, 14 ‘‘(II) for each of calendar years 2027 15 through 2039, the percent determined under 16 this clause for the preceding year increased by 17 1 percentage point, and 18 ‘‘(III) for calendar year 2040 and each 19 year thereafter, 15 percent.’’. 20 (3) APPLICATION OF INCREASE; RECOMPUTA- 21 TIONS.—The amendments made by this subsection 22 shall apply with respect to every individual who be- 23 comes entitled to old-age or disability insurance ben- 24 efits under title II of the Social Security Act, or who 25 VerDate Sep 11 2014 05:43 May 22, 2019 Jkt 089200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\H2654.IH H2654 kjohnson on DSK79L0C42 with BILLS 10 •HR 2654 IH dies (before becoming so entitled), in any calendar 1 year. Notwithstanding section 215(f)(1) of the Social 2 Security Act, the Commissioner of Social Security 3 shall recompute the primary insurance amount of 4 each such individual on the first day of each cal- 5 endar year during the period beginning with cal- 6 endar year 2025 and ending with calendar year 7 2040 to the extent necessary to carry out the 8 amendments made by this section. 9 (b) INCLUSION OF SURPLUS AVERAGE INDEXED 10 MONTHLY EARNINGS IN DETERMINATION OF PRIMARY 11 INSURANCE AMOUNTS.—Section 215(a)(1)(A) of the So- 12 cial Security Act (42 U.S.C. 415(a)(1)(A)) is amended— 13 (1) in clauses (i), (ii), and (iii), by inserting 14 ‘‘basic’’ before ‘‘average indexed monthly earnings’’ 15 each place it appears; 16 (2) in clause (ii), by striking ‘‘and’’ at the end; 17 (3) in clause (iii), by adding ‘‘and’’ at the end; 18 and 19 (4) by inserting after clause (iii) the following 20 new clause: 21 ‘‘(iv) 5 percent of the individual’s surplus aver- 22 age indexed monthly earnings,’’. 23 (c) BASIC AIME AND SURPLUS AIME.— 24 VerDate Sep 11 2014 05:43 May 22, 2019 Jkt 089200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6201 E:\BILLS\H2654.IH H2654 kjohnson on DSK79L0C42 with BILLS 11 •HR 2654 IH (1) BASIC AIME.—Section 215(b)(1) of such 1 Act (42 U.S.C. 415(b)(1)) is amended— 2 (A) by inserting ‘‘basic’’ before ‘‘average’’; 3 and 4 (B) in subparagraph (A), by striking 5 ‘‘paragraph (3)’’ and inserting ‘‘paragraph 6 (3)(A)’’ and by inserting before the comma the 7 following: ‘‘to the extent such total does not ex- 8 ceed the contribution and benefit base for the 9 applicable year’’. 10 (2) SURPLUS AIME.— 11 (A) IN GENERAL.—Section 215(b)(1) of 12 such Act (as amended by paragraph (1)) is 13 amended— 14 (i) by redesignating subparagraphs 15 (A) and (B) as clauses (i) and (ii), respec- 16 tively; 17 (ii) by inserting ‘‘(A)’’ after ‘‘(b)(1)’’; 18 and 19 (iii) by adding at the end the fol- 20 lowing new subparagraph: 21 ‘‘(B)(i) An individual’s surplus average indexed 22 monthly earnings shall be equal to the quotient obtained 23 by dividing— 24 VerDate Sep 11 2014 05:43 May 22, 2019 Jkt 089200 PO 00000 Frm 00011 Fmt 6652 Sfmt 6201 E:\BILLS\H2654.IH H2654 kjohnson on DSK79L0C42 with BILLS 12 •HR 2654 IH ‘‘(I) the total (after adjustment under para- 1 graph (3)(B)) of such individual’s surplus earnings 2 (determined under clause (ii)) for such individual’s 3 benefit computation years (determined under para- 4 graph (2)), by 5 ‘‘(II) the number of months in those years. 6 ‘‘(ii) For purposes of clause (i) and paragraph (3)(B), 7 an individual’s surplus earnings for a benefit computation 8 year are the total of such individual’s wages paid in and 9 self-employment income credited to such benefit computa- 10 tion year, to the extent such total (before adjustment 11 under paragraph (3)(B)) exceeds the contribution and 12 benefit base for such year.’’. 13 (B) CONFORMING AMENDMENT.—The 14 heading for section 215(b) of such Act is 15 amended by striking ‘‘Average Indexed Monthly 16 Earnings’’ and inserting ‘‘Basic Average In- 17 dexed Monthly Earnings; Surplus Average In- 18 dexed Monthly Earnings’’. 19 (3) ADJUSTMENT OF SURPLUS EARNINGS FOR 20 PURPOSES OF DETERMINING SURPLUS AIME.—Sec- 21 tion 215(b)(3) of such Act (42 U.S.C. 415(b)(3)) is 22 amended— 23 (A) in subparagraph (A), by striking ‘‘sub- 24 paragraph (B)’’ and inserting ‘‘subparagraph 25 VerDate Sep 11 2014 05:43 May 22, 2019 Jkt 089200 PO 00000 Frm 00012 Fmt 6652 Sfmt 6201 E:\BILLS\H2654.IH H2654 kjohnson on DSK79L0C42 with BILLS 13 •HR 2654 IH (C)’’ and by inserting ‘‘and determination of 1 basic average indexed monthly income’’ after 2 ‘‘paragraph (2)’’; 3 (B) by redesignating subparagraph (B) as 4 subparagraph (C); and 5 (C) by inserting after subparagraph (A) 6 the following new subparagraph: 7 ‘‘(B) For purposes of determining under paragraph 8 (1)(B) an individual’s surplus average indexed monthly 9 earnings, the individual’s surplus earnings (described in 10 paragraph (2)(B)(ii)) for a benefit computation year shall 11 be deemed to be equal to the product of— 12 ‘‘(i) the individ [Text truncated for display. 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