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.
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.)
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