text: SECTION 1. SHORT TITLE.
  
      This Act may be cited as the ``Social Security COLA Limitation Act 
  of 1994''.
  
  SEC. 2. LIMITATIONS ON COST-OF-LIVING ADJUSTMENTS.
  
      (a) In General.--
              (1) Reduction in increases applied to higher primary 
          insurance amounts.--Section 215(i)(2)(A) of the Social Security 
          Act (42 U.S.C. 415(i)(2)(A)) is amended--
                      (A) by redesignating clause (iii) as clause (vii); 
                  and
                      (B) in clause (ii), by striking ``The increase 
                  shall'' in the matter following subclause (III) and all 
                  that follows through ``Any increase'' and inserting the 
                  following:
      ``(iii) With respect to the amounts described in subclauses (I) and 
  (III) of clause (ii), the increase shall be derived by multiplying each 
  of such amounts (including each of those amounts as previously 
  increased under this subparagraph) by the applicable increase 
  percentage.
      ``(iv) With respect to primary insurance amounts described in 
  subclause (II) of clause (ii), the increase shall be derived by--
              ``(I) multiplying each of such amounts (including each such 
          amount as previously increased under this subparagraph) by the 
          applicable increase percentage,
              ``(II) determining among all such amounts as increased 
          under subclause (I) the greatest primary insurance amount which 
          is below the 20th percentile of such amounts, and
              ``(III) reducing each primary insurance amount as increased 
          under subclause (I) to the sum of such amount determined as if 
          there had been no reduction in such amount under this subclause 
          in any preceding year and the amount of the increase under 
          subclause (I) in the primary insurance amount described in 
          subclause (II).
      ``(v) Any amount increased under clause (iii) or clause (iv) which 
  is not a multiple of $0.10 shall be decreased to the next lower 
  multiple of $0.10.
      ``(vi) Any increase''.
              (2) Conforming amendment.--The last sentence of section 
          215(a)(4) of such Act (42 U.S.C. 415(a)(4)) is amended, in 
          subclause (I), by striking ``clause (iii) of subsection 
          (i)(2)(A)'' and inserting ``clause (vii) of subsection 
          (i)(2)(A)''.
      (b) Conforming Amendments To Maintain Current Levels of Cost-of-
  Living Adjustment Under Other Programs.--
              (1) Supplemental security income for the aged, blind, and 
          disabled.--Section 1617(a)(2) of the Social Security Act (42 
          U.S.C. 1382f(a)(2)) is amended by striking ``by the same 
          percentage'' and all that follows through ``percentage,'' and 
          inserting the following: ``by the applicable increase 
          percentage (within the meaning of section 215(i)(1)(C)) used in 
          determining the amount by which benefit amounts under title II 
          are increased for such month''.
              (2) Supplementary medical insurance.--Section 1839(a)(3)(B) 
          of such Act (42 U.S.C. 1395r(a)(3)(B)) is amended by striking 
          ``by a percentage'' and all that follows through ``November 1'' 
          and inserting the following: ``by the applicable increase 
          percentage (within the meaning of section 215(i)(1)(C)) used in 
          determining the amount by which benefit amounts under title II 
          are increased for the month of December preceding the year of 
          the promulgation''.
              (3) Certain veteran's benefits.--Section 3112 of title 38, 
          United States Code, is amended--
                      (A) in subsection (a), by striking ``by the same 
                  percentage by which such benefit amounts are 
                  increased'' and inserting ``by the applicable increase 
                  percentage (within the meaning of section 215(i)(1)(C) 
                  of such Act) used in determining the amount by which 
                  such benefit amounts are increased''; and
                      (B) in subsection (b)(1), by striking ``by the same 
                  percentage as the percentage by which such benefit 
                  amounts are increased'' and inserting ``by the 
                  applicable increase percentage (within the meaning of 
                  section 215(i)(1)(C) of such Act) used in determining 
                  the amount by which such benefit amounts are 
                  increased''.
              (4) Cost-of-living adjustments to limitations on benefits 
          and contributions under qualified plans.--Subsection (d) of 
          section 415 of the Internal Revenue Code of 1986 (relating to 
          cost-of-living adjustments) is amended by striking ``section 
          215(i)(2)(A)'' and inserting ``section 215(i)(2)(A)(iii)''.
      (c) Amendment to Prior Applicable Law.--Section 215(i)(4) of the 
  Social Security Act (42 U.S.C. 415(i)(4)) is amended by adding at the 
  end the following new sentence: ``The Secretary shall provide by 
  regulation for the continued application of this subsection as in 
  effect in December 1978 as provided by the preceding provisions of this 
  paragraph and the amendments referred to therein. Such regulations 
  shall provide for the application of the amendments to the preceding 
  provisions of this subsection made by section 2 of the Social Security 
  Solvency Enhancement Act of 1994 so as to have the same effect on the 
  corresponding provisions of this subsection as in effect in December 
  1978 and applicable in accordance with this paragraph.''.
  
  SEC. 3. EFFECTIVE DATE.
  
      The amendments made by this Act shall apply with respect to 
  adjustments under section 215(i) of the Social Security Act effective 
  with months after November 1994.
target: Social Security COLA Limitation Act of 1994 - Amends title II (Old Age, Survivors and Disability Insurance) of the Social Security Act to establish a flat-rate cost-of-living adjustment.  (Currently such adjustment is based on a beneficiary's actual benefit levels.)
feat_title: Social Security COLA Limitation Act of 1994