automatic adjustments in benefits and in the contribution and benefit base

automatic adjustments in benefits and in the contribution and benefit base Adjustments in Benefits Sec. 202. (a) (1) Section 215 of the Social Security Act is amended by adding at the end thereof the following new subsection: “Cost-of-Living Increases in Benefits “(i) (1) For purposes of this subsection— “(A) the term ‘base quarter’ means (i) the calendar quarter ending on June 30 in each year after 1972, or (ii) any other calendar quarter in which occurs the effective month of a ’general benefit increase under this title; “(B) the term ‘cost-of-living computation quarter’ means a base quarter, as defined in subparagraph (A)(i), in which the Consumer Price Index prepared by the Department of Labor 86 Stat. 413exceeds, by not less than 3 per centum, such Index in the later of (i) the last prior cost-of-living computation quarter which was established under this subparagraph, or (ii) the most recent calendar quarter in which occurred the effective month of a general benefit increase under this title; except that there shall be no cost-of-living computation quarter in any calendar year in which a law has been enacted providing a general benefit increase under this title or in which such a benefit increase becomes effective; and “(C) the Consumer Price Index for a base quarter, a cost-of-living computation quarter, or any other calendar quarter shall be the arithmetical mean of such index for the 3 months in such quarter. “(2) (A) (i) The Secretary shall determine each year beginning with 1974 (subject to the limitation in paragraph (1)(B) and to subparagraph (E) of this paragraph) whether the base quarter (as defined in paragraph (1)(A)(1)) in such year is a cost-of-living computation quarter. “(ii) If the Secretary determines that such base quarter is a cost-of-living computation quarter, he shall, effective with the month of January of the next calendar year (subject to subparagraph (E)) as provided in subparagraph (B), increase the benefit amount of each individual who for such month is entitled to benefits under section 227 or 228, and the primary insurance amount of each other individual under this title, by an amount derived by multiplying each such amount (including each such individual’s primary insurance amount or benefit amount under section 227 or 228 as previously increased under this subparagraph) by the same percentage (rounded to the nearest onetenth of 1 percent) as the percentage by which the Consumer Price Index for such cost-of-living computation quarter exceeds such index for the most recent prior calendar quarter which was a base quarter under paragraph (1)(A)(ii) or, if later, the most recent cost-of-living computation quarter under paragraph (1)(B) Any such increased amount which is not a multiple of $0.10 shall be increased to the next higher multiple of $0.10. “(B) The increase provided by subparagraph (A) with respect to a particular cost-of-living computation quarter shall apply (subject to subparagraph (E)) in the case of monthly benefits under this title for months after December of the calendar year in which occurred such cost-of-living computation quarter, and in the case of lump-sum death payments with respect to deaths occurring after December of such calendar year. “(C) (i) Whenever the level of the Consumer Price Index as published for any month exceeds by 2.5 percent or more the level of such index for the most recent base quarter (as defined in paragraph (1)(A)(ii)) or, if later, the most recent cost-of-living computation quarter, the Secretary shall (within 5 days after such publication) report the amount of such excess to the House Committee on Ways and Means and the Senate Committee on Finance. “(ii) Whenever the Secretary determines that a base quarter in a calendar year is also a cost-of-living computation quarter, he shall notify the House Committee on Ways and Means and the Senate Committee on Finance of such determination on or before August 15 of such calendar year, indicating the amount of the benefit increase to be provided, his estimate of the extent to which the cost of such increase would be met by an increase in the contribution and benefit 86 Stat. 414base under section 230 and the estimated amount of the increase in such base, the actuarial estimates of the effect of such increase, and the actuarial assumptions and methodology used in preparing such estimates. “(D) If the Secretary determines that a base quarter in a calendar year is also a cost-of-living computation quarter, he shall publish in the Federal Register on or before November 1 of such calendar year a determination that a benefit increase is resultantly required and the percentage thereof. He shall also publish in the Federal Register at that time (along with the increased benefit amounts which shall be deemed to be the amounts appearing in sections 227 and 228) a revision of the table of benefits contained in subsection (a) of this section (as it may have been most recently revised by another law or pursuant to this paragraph); and such revised table shall be deemed to be the table appearing in such subsection (a). Such revision shall be determined as follows: “(i) The headings of the table shall be the same as the headings in the table immediately prior to its revision, except that the parenthetical phrase at the beginning of column II shall reflect the year in which the primary insurance amounts set forth in column IV of the table immediately prior to its revision were effective. “(ii) The amounts on each line of column I and column III, except as otherwise provided by clause (v) of this subparagraph, shall be the same as the amounts appearing in each such column in the table immediately prior to its revision. “(iii) The amount on each line of column II shall be changed to the amount shown on the corresponding line of column IV of the table immediately prior to its revision. “(iv) The amounts on each Line of column TV and column V shall be increased from the amounts shown in the table immediately prior to its revision by increasing each such amount by the percentage specified in subparagraph (A)(ii) of this paragraph. The amount on each line of column V shall be increased, if necessary, so that such amount is at least equal to one and one-half times the amount shown on the corresponding line in column IV. Any such increased amount which is not a multiple of $0.10 shall be increased to the next higher multiple of $0.10. “(v) If the contribution and benefit base (determined under section 230) for the calendar year in which the table of benefits is revised is lower than such base for the following calendar year, columns III, IV, and V of such table shall be extended. The amounts on each additional line of column III shall be the amounts on the preceding line increased by $5 until in the last such line of column III the second figure is equal to one-twelfth of the new contribution and benefit base for the calendar year following the calendar year in which such table of benefits is revised. The amount on each additional line of column IV shall be the amount on the preceding line increased by $1.00, until the amount on the last line of such column is equal to the last line of such column as determined under clause (iv) plus 20 percent of one-twelfth of the excess of the new contribution and benefit base for the calendar year following the calendar year in which such table of benefits is revised (as determined under section 230) over such base for the calendar year in which the table of benefits is revised. The amount in each additional line of column V shall be equal to 1.75 times the amount on the same line of column IV. Any 86 Stat. 415such increased amount which is not a multiple of $0.10 shall be increased to the next higher multiple of $0.10. “(E) Notwithstanding a determination by the Secretary under subparagraph (A) that a base quarter in any calendar year is a cost-of-living computation quarter (and notwithstanding any notification or publication thereof under subparagraph (C) or (D)), no increase in benefits shall take effect pursuant thereto, and such quarter shall be deemed not to be a cost-of-living computation quarter, if during the calendar year in which such determination is made a law providing a general benefit increase under this title is enacted or becomes effective. “(3) As used in this subsection, the term ‘general benefit increase under this title’ means an increase (other than an increase under this subsection) in all primary insurance amounts on which monthly insurance benefits under this title are based.” (2) (A) Effective January 1, 1974, section 203(a) of such Act is amended by striking out “the table in section 215(a)” in the matter preceding paragraph (1) and inserting in lieu thereof “the table in or deemed to be in section 215 (a)”. (B) Effective January 1, 1974, section 203(a)(2) of such Act (as amended by section 201(b) of this Act) is further amended to read as follows: “(2) when two or more persons were entitled (without the application of section 202(j)(1) and section 223(b)) to monthly benefits under section 202 or 223 for January 1971 or any prior month on the basis of the wages and self-employment income of such insured individual and the provisions of this subsection as in effect for any such month were applicable in determining the benefit amount of any persons on the basis of such wages and self-employment income, the total of benefits for any month after January 1971 shall not be reduced to less than the largest of— “(A) the amount determined under this subsection without regard to this paragraph, “(B) the largest amount which has been determined for any month under this subsection for persons entitled to monthly benefits on the basis of such insured individual’s wages and self-employment income, or “(C) if any persons are entitled to benefits on the basis of such wages and self-employment income for the month before the effective month (after September 1972) of a general benefit increase under this title (as defined in section 215 (i)(3)) or a benefit increase under the provisions of section 215 (i), an amount equal to the sum of amounts derived by multiplying the benefit amount determined under this title for the month before such effective month including this subsection, but without the application of section 222(b), section 202 (q), and subsections (b), (c), and (d) of this section), for each such person for such month, by a percentage equal to the percentage of the increase provided under such benefit increase (with any such increased amount which is not a multiple of $0.10 being rounded to the next, higher multiple of $0.10); but in any such case (i) paragraph (1) of this subsection shall not be applied to such total of benefits after the application of subparagraph (B) or (C), and (ii) if section 202(k)(2)(A) was applicable in the case of any such benefits for a month, and ceases to apply for a month after such month, the provisions of sub-86 Stat. 416paragraph (B) or (C) shall be applied, for and after the month in which section 202(k)(2)(A) ceases to apply, as though paragraph (1) had not been applicable to such total of benefits for the last month for which subparagraph (B) or (C) was applicable, or”. (3) (A) Effective January 1, 1975, section 215 (a) of such Act (as amended by section 201(c) of this Act) is further amended— (i) by inserting “(or, if larger, the amount in column IV of the latest table deemed to be such table under subsection (i)(2)(D))” after “the following table” in paragraph (1)(A); and (ii) by inserting “(whether enacted by another law or deemed to be such table under subsection (i)(2)(D))” after “effective month of a new table” in paragraph (2). (B) Effective January 1, 1975, section 215(b)(4) of such Act (as amended by section 201(d) of this Act) is further amended to read as follows: “(4) The provisions of this subsection shall be applicable only in the case of an individual— “(A) who becomes entitled to benefits under section 202(a) or section 223 in or after the month in which a new table that appears in (or is deemed by subsection (i)(2)(D) to appear in) subsection (a) becomes effective: or “(B) who dies in or after the month in which, such table becomes effective without being entitled to benefits under section 202 la) or section 223; or “(C) whose primary insurance amount is required to be recomputed under subsection (f)(2).” (C) Effective January 1, 1975, section 215(c) of such Act (as amended by section 201(e) of this Act) is further amended to read as follows: “Primary Insurance Amount Under Prior Provisions “(c) (1) For the purposes of column II of the latest table that appears in (or is deemed to appear in) subsection (a) of this section, an individual’s primary insurance amount shall be computed on the basis of the law in effect prior to the month in which the latest such table became effective. “(2) The provisions of this subsection shall be applicable only in the case of an individual who became entitled to benefits under section 202(a) or section 223, or who died, before such effective month.” (4) Effective January 1, 1975, sections 227 and 228 of such Act (as amended by section 201(g) of this Act) are further amended by striking out “$58.00” wherever it appears and inserting in lieu thereof “the larger of $58.00 or the amount most recently established in lieu thereof under section 215(i)”, and by striking out “$29.00” wherever it appears and inserting in lieu thereof “the larger of $29.00 or the amount most recently established in lieu thereof under section 215(1)” Adjustments in Contribution and Benefit Base (b) (1) Title II of the Social Security Act is amended by adding at the end thereof the following new section: 86 Stat. 417 “adjustment of the contribution and benefit base “Sec. 230. (a) Whenever the Secretary pursuant to section 215(i) increases benefits effective with the first month of the calendar year following a cost-of-living computation quarter, he shall also determine and publish in the Federal Register on or before November 1 of the calendar year in which such quarter occurs (along with the publication of such benefit increase as required by section 215(i)(2)(D)) the contribution and benefit base determined under subsection (b) which shall be effective (unless such increase in benefits is prevented from becoming effective by section 215(i)(2)(E)) with respect to remuneration paid after the calendar year in which such quarter occurs and taxable years beginning after such year. “(b) The amount of such contribution and benefit base shall be the amount of the contribution and benefit base in effect in the year in which the determination is made or, if larger, the product of— “(1) the contribution and benefit base which was in effect with respect to remuneration paid in (and taxable years beginning in) the calendar year in which the determination under subsection (a) with respect to such particular calendar year was made, and “(2) the ratio of (A) the average of the taxable wages of all employees as reported to the Secretary for the first calendar quarter of the calendar year in which the determination under subsection (a) with respect to such particular calendar year was made to the latest or (B) the average of the taxable wages of all employees as reported to the Secretary, for the first calendar quarter of 1973 or the first calendar quarter of the most recent calendar year in which an increase in the contribution and benefit base was enacted or a determination resulting in such an increase was made under subsection (a), with such product, if not a multiple of $300, being rounded to the next higher multiple of $300 where such product is a multiple of $150 but not of $300 and to the nearest multiple of $300 in any other case. “(c) For purposes of this section, and for purposes of determining wages and self-employment income under sections 209, 211, 213, and 215 of this Act and sections 1402. 3121, 3122, 3125, 6413, and 6654 of the Internal Revenue Code of 1954, the ‘contribution and benefit base’ with respect to remuneration paid in (and taxable years beginning in) any calendar year after 1973 and prior to the calendar year with the first month of which the first increase in benefits pursuant to section 215(i) of this Act becomes effective shall be $12,000 or (if applicable) such other amount as may be specified in a law enacted subsequent to the law which added this section.”