text: SECTION 1. SHORT TITLE.
  
      This Act may be cited as the ``Notch Fairness Act of 1998''.
  
  SEC. 2. NEW GUARANTEED MINIMUM PRIMARY INSURANCE AMOUNT WHERE 
                ELIGIBILITY ARISES DURING TRANSITIONAL PERIOD.
  
      (a) In General.--Section 215(a) of the Social Security Act is 
  amended--
              (1) in paragraph (4)(B), by inserting ``(with or without 
          the application of paragraph (8))'' after ``would be made'', 
          and by striking ``1984'' in clause (i) and inserting ``1989''; 
          and
              (2) by adding at the end the following:
      ``(8)(A) In the case of an individual described in paragraph (4)(B) 
  (subject to subparagraphs (F) and (G) of this paragraph), the amount of 
  the individual's primary insurance amount as computed or recomputed 
  under paragraph (1) shall be deemed equal to the sum of--
              ``(i) such amount, and
              ``(ii) the applicable transitional increase amount (if 
          any).
      ``(B) For purposes of subparagraph (A)(ii), the term `applicable 
  transitional increase amount' means, in the case of any individual, the 
  product derived by multiplying--
              ``(i) the excess under former law, by
              ``(ii) the applicable percentage in relation to the year in 
          which the individual becomes eligible for old-age insurance 
          benefits, as determined by the following table:
  
                    ``If the individual
                                                                         
                  becomes eligible for
                                                           The applicable
                  such benefits in:
                                                           percentage is:
                    1979...............................       55 percent 
                    1980...............................       45 percent 
                    1981...............................       35 percent 
                    1982...............................       32 percent 
                    1983...............................       25 percent 
                    1984...............................       20 percent 
                    1985...............................       16 percent 
                    1986...............................       10 percent 
                    1987...............................        3 percent 
                    1988...............................        5 percent.
      ``(C) For purposes of subparagraph (B), the term `excess under 
  former law' means, in the case of any individual, the excess of--
              ``(i) the applicable former law primary insurance amount, 
          over
              ``(ii) the amount which would be such individual's primary 
          insurance amount if computed or recomputed under this section 
          without regard to this paragraph and paragraphs (4), (5), and 
          (6).
      ``(D) For purposes of subparagraph (C)(i), the term `applicable 
  former law primary insurance amount' means, in the case of any 
  individual, the amount which would be such individual's primary 
  insurance amount if it were--
              ``(i) computed or recomputed (pursuant to paragraph 
          (4)(B)(i)) under section 215(a) as in effect in December 1978, 
          or
              ``(ii) computed or recomputed (pursuant to paragraph 
          (4)(B)(ii)) as provided by subsection (d),
  (as applicable) and modified as provided by subparagraph (E).
      ``(E) In determining the amount which would be an individual's 
  primary insurance amount as provided in subparagraph (D)--
              ``(i) subsection (b)(4) shall not apply;
              ``(ii) section 215(b) as in effect in December 1978 shall 
          apply, except that section 215(b)(2)(C) (as then in effect) 
          shall be deemed to provide that an individual's `computation 
          base years' may include only calendar years in the period after 
          1950 (or 1936 if applicable) and ending with the calendar year 
          in which such individual attains age 61, plus the 3 calendar 
          years after such period for which the total of such 
          individual's wages and self-employment income is the largest; 
          and
              ``(iii) subdivision (I) in the last sentence of paragraph 
          (4) shall be applied as though the words `without regard to any 
          increases in that table' in such subdivision read `including 
          any increases in that table'.
      ``(F) This paragraph shall apply in the case of any individual only 
  if such application results in a primary insurance amount for such 
  individual that is greater than it would be if computed or recomputed 
  under paragraph (4)(B) without regard to this paragraph.
      ``(G)(i) This paragraph shall apply in the case of any individual 
  subject to any timely election to receive lump sum payments under this 
  subparagraph.
      ``(ii) A written election to receive lump sum payments under this 
  subparagraph, in lieu of the application of this paragraph to the 
  computation of the primary insurance amount of an individual described 
  in paragraph (4)(B), may be filed with the Commissioner of Social 
  Security in such form and manner as shall be prescribed in regulations 
  of the Commissioner. Any such election may be filed by such individual 
  or, in the event of such individual's death before any such election is 
  filed by such individual, by any other beneficiary entitled to benefits 
  under section 202 on the basis of such individual's wages and self-
  employment income. Any such election filed after December 31, 1998, 
  shall be null and void and of no effect.
      ``(iii) Upon receipt by the Commissioner of a timely election filed 
  by the individual described in paragraph (4)(B) in accordance with 
  clause (ii)--
              ``(I) the Commissioner shall certify receipt of such 
          election to the Secretary of the Treasury, and the Secretary of 
          the Treasury, after receipt of such certification, shall pay 
          such individual, from amounts in the Federal Old-Age and 
          Survivors Insurance Trust Fund, a total amount equal to $5,000, 
          in 4 annual lump sum installments of $1,250, the first of which 
          shall be made during fiscal year 1999 not later than July 1, 
          1999, and
              ``(II) subparagraph (A) shall not apply in determining such 
          individual's primary insurance amount.
      ``(iv) Upon receipt by the Commissioner as of December 31, 1998, of 
  a timely election filed in accordance with clause (ii) by at least one 
  beneficiary entitled to benefits on the basis of the wages and self-
  employment income of a deceased individual described in paragraph 
  (4)(B), if such deceased individual has filed no timely election in 
  accordance with clause (ii)--
              ``(I) the Commissioner shall certify receipt of all such 
          elections received as of such date to the Secretary of the 
          Treasury, and the Secretary of the Treasury, after receipt of 
          such certification, shall pay each beneficiary filing such a 
          timely election, from amounts in the Federal Old-Age and 
          Survivors Insurance Trust Fund, a total amount equal to $5,000 
          (or, in the case of 2 or more such beneficiaries, such amount 
          distributed evenly among such beneficiaries), in 4 equal annual 
          lump sum installments, the first of which shall be made during 
          fiscal year 1999 not later than July 1, 1999, and
              ``(II) solely for purposes of determining the amount of 
          such beneficiary's benefits, subparagraph (A) shall be deemed 
          not to apply in determining the deceased individual's primary 
          insurance amount.''.
      (b) Effective Date and Related Rules.--
              (1) Applicability of amendments.--
                      (A) In general.--Except as provided in paragraph 
                  (2), the amendments made by this Act shall be effective 
                  as though they had been included or reflected in 
                  section 201 of the Social Security Amendments of 1977.
                      (B) Applicability.--No monthly benefit or primary 
                  insurance amount under title II of the Social Security 
                  Act shall be increased by reason of such amendments for 
                  any month before July 1999. The amendments made this 
                  section shall apply with respect to benefits payable in 
                  months in any fiscal year after fiscal year 2002 only 
                  if the corresponding decrease in adjusted discretionary 
                  spending limits for budget authority and outlays under 
                  section 3 of this Act for fiscal years prior to fiscal 
                  year 2003 is extended by Federal law to such fiscal 
  year after fiscal year 2002.
              (2) Recomputation to reflect benefit increases.--In any 
          case in which an individual is entitled to monthly insurance 
          benefits under title II of the Social Security Act for June 
          1999, if such benefits are based on a primary insurance amount 
          computed--
                      (A) under section 215 of such Act as in effect (by 
                  reason of the Social Security Amendments of 1977) after 
                  December 1978, or
                      (B) under section 215 of such Act as in effect 
                  prior to January 1979 by reason of subsection (a)(4)(B) 
                  of such section (as amended by the Social Security 
                  Amendments of 1977),
          the Commissioner of Social Security (notwithstanding section 
          215(f)(1) of the Social Security Act) shall recompute such 
          primary insurance amount so as to take into account the 
          amendments made by this Act.
  
  SEC. 3. OFFSET PROVIDED BY PROJECTED FEDERAL BUDGET SURPLUSES.
  
      Amounts offset by this Act shall not be counted as direct spending 
  for purposes of the budgetary limits provided in the Congressional 
  Budget Act of 1974 and the Balanced Budget and Emergency Deficit 
  Control Act of 1985.
target: Notch Fairness Act of 1998 - Amends title II (Old Age, Survivors and Disability Insurance) (OASDI) of the Social Security Act to revise the formula for the computation of minimum old age insurance benefits for individuals who reached age 65 in or after 1979 and to whom applies the 15-year transition period for the changes in benefit computation rules enacted in the Social Security Amendments of 1977. 
  Sets forth a schedule of additional benefit increases for such beneficiaries (and related beneficiaries), with percentages declining from 55 percent to five percent and keyed to the year an individual became eligible for such benefits between 1979 and 1988. 
  Allows such beneficiaries, in the alternative, to receive lump sum payments over four years totaling $5,000. 
  Provides that amounts offset by this Act shall not be counted as direct spending for purposes of the budgetary limits provided in the Congressional Budget Act of 1974 and the Balanced Budget and Emergency Deficit Control Act of 1985 (Gramm-Rudman-Hollings Act).
feat_title: Notch Fairness Act of 1998