1

Reduce the COLA for OASDI benefits by 0.33 percentage point beginning Dec. 2001.

2

Eliminate the hiatus in the currently scheduled increase in NRA. Increase early retirement reduction factors and delayed retirement credits.

3

Adjust the PIA levels of retired worker beneficiaries newly eligible after 2011 to reflect changes in life expectancy (based on period life expectancies at age 62). This provision does not apply to disabled worker beneficiaries. In addition, only a proportion of the amount of reduction due to this provision would apply to the benefits of retired worker beneficiaries who convert from disabled worker beneficiary status.

4

Increase the benefit computation period by up to 5 additional years for new eligibles (by one additional year for new eligibles in each year 2002, 2004, 2006, 2008, and 2010). For two-earner couples, however, cap the benefit computation period for the earner with the lower PIA at 35 years. In conjunction with increasing the benefit period, phase in including earnings for all years in calculating the AIME. This provision does not apply to disabled worker beneficiaries.

5

Credit all revenue from taxation of OASDI benefits to the OASDI trust funds by 2019 (phase revenue from HI to OASDI during the period 2010-2019).

6

Beginning in 2008, establish a minimum PIA level for newly eligible beneficiaries with quarters of coverage equal to twice their number of elapsed years (reduced for any years of disabled worker entitlement). The minimum PIA level will be fully phased in by 2012, and would equal 100% of the applicable poverty level for newly eligible beneficiaries with quarters of coverage equal to four times their number of elapsed years (reduced for any years of disabled worker entitlement).

7

Reduce the 32 and 15 PIA-formula factors by 2.5 percent (multiply by 0.975) for each year 2012-2030. Factors for those newly eligible after 2029 are 19.8 and 9.3, respectively. This provision does not apply to disabled worker beneficiaries. Only a proportion of the amount of reduction due to this provision would apply to the benefits of retired worker beneficiaries who convert from disabled worker beneficiary status.

8

Reduce PIA levels 1.5 percent (multiply by 0.985) each year for those newly eligible in years 2031-2060. This provision does not apply to disabled worker beneficiaries. Only a proportion of the amount of reduction due to this provision would apply to the benefits of retired worker beneficiaries who convert from disabled worker beneficiary status.

9a

Beginning in 2003, for each worker who is under age 55 in 2003, redirect 3 percent of their first $10,000 of OASDI taxable earnings and 2 percent of their taxable earnings above $10,000 to individual accounts. The $10,000 threshold is increased after 2003 by the increase in the Average Wage Index.

9b

Disbursements from individual accounts are considered OASDI benefits for income tax.

10

Transfer amounts (specified as percentages of taxable payroll) to the OASI Trust Fund from the General Fund of the Treasury for years after 2001.

11

Over the period 2002-2004, gradually increase the benefit and contribution base so by the end of this period 86 percent of all OASDI covered earnings is taxable. After 2004, maintain this level of 86 percent.

12

Establish a new bend point in the PIA formula equal to 196% of the present-law first bend point. PIA formula factors would be initially set at 90, 32, 32, and 15 (yielding the same benefit as current law). Beginning with new eligibles in 2006, the second formula factor would be increased each year by 3.8, the third formula factor would be decreased each year by 1.2, and the fourth formula factor would be decreased each year by 0.5, until reaching factors of 90, 70, 20, and 10 for newly eligible beneficiaries in 2015 and later.

Total for Provisions 1 through 12 (including interaction among provisions)