BEA 1990 (Contents)
Budget Enforcement Act of 1990
Section 13304
Title XIII—Budget Enforcement
Subtitle C—Social Security
SEC. 13304. REPORT TO THE CONGRESS BY THE BOARD OF TRUSTEES OF THE OASDI TRUST FUNDS REGARDING THE ACTUARIAL BALANCE OF THE TRUST FUNDS.
Section 201(c) of the Social Security Act (42 U.S.C. 401(c)) is amended by inserting after the first sentence following clause (5) the following new sentence: “Such statement shall include a finding by the Board of Trustees as to whether the Federal Old-Age and Survivors Insurance Trust Fund and the Federal Disability Insurance Trust Fund, individually and collectively, are in close actuarial balance (as defined by the Board of Trustees).”.
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COUNSEL NOTES
CODIFICATION
Section 13304 (BEA 1990) is not classified to the U.S. Code.
OASDI Trust Fund Report
This section amended the Social Security Act (title 42 of the U.S. Code) by requiring additional information to be provided to Congress by the Board of Trustees of the Social Security program. The Summary of the 2018 Annual Reports by the Social Security and Medicare Boards of Trustees included this information regarding the Social Security trust funds:
The Social Security program provides workers and their families with retirement, disability, and survivors insurance benefits. Workers earn these benefits by paying into the system during their working years. Over the program’s 83-year history, it has collected roughly $20.9 trillion and paid out $18.0 trillion, leaving asset reserves of $2.9 trillion at the end of 2017 in its two trust funds.
The Old-Age and Survivors Insurance (OASI) Trust Fund, which pays retirement and survivors benefits, and the Disability Insurance (DI) Trust Fund, which pays disability benefits, are by law separate entities. However, to summarize overall Social Security finances, the Trustees have traditionally emphasized the financial status of the hypothetical combined OASI and DI Trust Funds. The combined funds – designated OASDI – satisfy the Trustees’ test of short-range (ten-year) financial adequacy because the Trustees project that the combined fund asset reserves at the beginning of each year will exceed that year’s projected cost throughout the short-range projection period. However, the funds fail the test of long-range close actuarial balance.
Status of the Social Security and Medicare Programs: A Summary of the 2018 Annual Reports (Office of the Chief Actuary) 2018
See: https://www.ssa.gov/oact/TRSUM/
BEA 1990 JOINT EXPLANATORY STATEMENT ON SOCIAL SECURITY
The Joint Explanatory Statement of Managers on the Conference Report for the Budget Enforcement Act of 1990 included this description of the amendments made to the Social Security program:
VI. TREATMENT OF SOCIAL SECURITY
Current Law
Under current law, the Social Security trust funds are off-budget but are included in deficit estimates and calculations made for purposes of the sequestration process. However, Social Security benefit payments are exempt from any sequestration order.
Section 310(g) of the Congressional Budget Act of 1974 prohibits the consideration of reconciliation legislation “that contains recommendations” with respect to Social Security. (A motion to waive this point of order requires 60 votes in the Senate and a simple majority in the House.)
House Bill
The House bill reaffirms the off-budget status of Social Security and removes the trust funds-excluding interest receipts-from the deficit estimates and calculations made in the sequestration process. The House bill retains the current law exemption of Social Security benefit payments from any sequestration order.
The House bill creates a “fair wall” point of order (as free-standing legislation) to prohibit the consideration of legislation that would change the actuarial balance of the Social Security trust funds over a 5-year or 75-year period. In the case of legislation decreasing Social Security revenues, the prohibition would not apply if the legislation also included an equivalent increase in Medicare taxes for the period covered by the legislation.
Senate Amendment
The Senate amendment also reaffirms the off-budget status of Social Security and removes the trust funds from the deficit estimates and calculations made in the sequestration process. However, unlike the House bill, the Senate amendment removes the gross trust fund transactions-including interest receipts-from the sequestration deficit calculations. The Senate amendment also retains the current law exemption of Social Security benefit payments from any sequestration order.
The Senate amendment also creates a procedural fire wall to protect Social Security financing, but does so by expanding certain budget enforcement provisions of the Congressional Budget Act of 1974. The Senate amendment expands the prohibition in Section 310(g) of the Budget Act to specifically protect Social Security financing, prohibits the consideration of a reported budget resolution calling for a reduction in Social Security surplus, and includes Social Security in the enforcement procedures under Sections 302 and 311 of the Budget Act. The Senate amendment also requires the Secretary of Health and Human Services to provide an actuarial analysis of any legislation affecting Social Security, and generally prohibits the consideration of legislation lacking such an analysis.
For more on the budgetary treatment of Social Security under current law and historically, see Senate Comm. on the Budget, Social Security Preservation Act, S. Rep. No. 101-426, 101st Cong. 2d Sess. (1990).
Conference Agreement
The conference agreement incorporates the Senate position on the budgetary treatment of the Social Security trust funds, reaffirming their off-budget status and removing all their transactions from the deficit estimates and calculations made in the sequestration process.
Further, the conference agreement provides that the “fire wall” procedure proposed by the House shall apply only to the House and that the “fire wall” procedures proposed by the Senate shall apply only to the Senate.
U.S. House of Representatives, Omnibus Budget Reconciliation Act of 1990: Conference Report to Accompany H.R. 5835, House Report 101-964 (October 27, 1990), pp. 1160-1161. (Budget Enforcement Act of 1990).
LEGISLATIVE HISTORY NOTES
Pub. L. 101–508, title XIII, §13304, Nov. 5, 1990, 104 Stat. 1388, 1388–627; (Budget Enforcement Act of 1990).
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Budget Counsel 