H.R. 1221 — Social Security and Medicare Lock-Box Act

This section provides the short title of the Act as the “Social Security and Medicare Lock-Box Act.”

This section establishes a Social Security Surplus Protection Account in the Federal Old-Age and Survivors Insurance Trust Fund and requires the Managing Trustee, as soon as practicable after the end of each fiscal year after FY2025, to transfer to the account amounts equal to the Social Security surplus for that fiscal year. It defines the Social Security surplus as the excess, if any, of specified payroll tax and self-employment tax receipts, plus the amount attributable to the taxation of Social Security benefits under sections 86 and 871(a)(3) of the Internal Revenue Code of 1986, over benefits paid from the trust fund and other amounts authorized under 42 U.S.C. 402(b) and paid from the trust fund during the fiscal year. The section also provides that amounts in the account are not available for investment by the Managing Trustee and delays the new transfer rules for fiscal years beginning on or after the first fiscal year after FY2025 for which Federal law authorizes a trust fund investment vehicle other than U.S. obligations.

This section establishes a Medicare Surplus Protection Account in the Federal Hospital Insurance Trust Fund and requires the Managing Trustee, after each fiscal year beginning after FY2025, to transfer into that account the amount of any Medicare Part A surplus for the year. It defines the surplus as the excess of Medicare payroll and self-employment tax receipts under sections 3101(b), 3111(b), and 1401(b) of the Internal Revenue Code of 1986 over Trust Fund benefit payments and other amounts paid from the Trust Fund during the fiscal year. The section also provides that the account balance may not be invested under current law and delays that restriction if, beginning after FY2025, federal law authorizes a different investment vehicle for Trust Fund amounts than obligations of the United States.

This section establishes the Social Security and Medicare Part A Investment Commission in the executive branch to study and recommend alternative investment vehicles for the Federal Old-Age and Survivors Insurance Trust Fund and the Federal Hospital Insurance Trust Fund, other than investment in obligations of the United States. It requires the Commission to submit a report to the President and Congress not later than October 1, 2025, with recommendations and any necessary administrative and legislative changes to authorize and implement those recommendations. This section provides that the Commission will consist of 8 members: 3 appointed by the President, including 1 chair; 2 appointed by the Speaker of the House of Representatives; 1 appointed by the House minority leader; 2 appointed by the Senate majority leader; and 1 appointed by the Senate minority leader. Members must have substantial experience, training, and expertise in managing financial investments and pension benefit plans, and they will serve for the life of the Commission. The Commission must meet at least once each month, may meet more often at the call of the chair, and may act by majority vote of a quorum of 3 members. Nonfederal members are paid at the daily rate for level IV of the Executive Schedule, and all members may receive travel, per diem, and other necessary expenses under title 5, United States Code. The Commission terminates 90 days after submitting its report.