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S.J.R. 13

This document includes Senate 2nd Reading Floor Amendments incorporated into the bill on Tue, Feb 21, 2012 at 3:13 PM by khelgesen. -->             

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Senate 2nd Reading Amendments 2-21-2012 kh/trv



Chief Sponsor: John L. Valentine

House Sponsor: Bradley M. Daw


             7      LONG TITLE
             8      General Description:
             9          This joint resolution of the Legislature S. [ and the Governor ] .S supports Social Security
             10      reform measures.
             11      Highlighted Provisions:
             12          This resolution:
             13          .    expresses support for the Social Security reform measures proposed by
             14      Congressman Jason Chaffetz.
             15      Special Clauses:
             16          None

             18      Be it resolved by the Legislature of the state of Utah:
             19          WHEREAS, Social Security is the largest single item in the federal budget;
             20          WHEREAS, in fiscal year 2011, the federal government spent $730 billion on Social
             21      Security, or 20% of the total 3.6 trillion federal budget;
             22          WHEREAS, over the next 75 years, Social Security's unfunded liability is $6.5 trillion;
             23          WHEREAS, Social Security has been running a deficit since 2010 and will be incurring
             24      annual deficits permanently unless the system is reformed;
             25          WHEREAS, opponents of Social Security reform argue that Social Security has a $2.6
             26      trillion trust fund that is backed by the full faith and credit of the United States Government,
             27      but these government bonds are simply obligations that the federal government owes itself, so

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     redeeming these Treasury IOU's requires the federal government to cut spending elsewhere,
             29      raise taxes, issue more debt to the public, or monetize debt through the Federal Reserve;
             30          WHEREAS, reform opponents have also falsely claimed that Social Security has not
             31      added a single penny to the deficit because Social Security is legally prohibited from deficit
             32      spending, but Social Security is now operating at a deficit on a cash basis;
             33          WHEREAS, while reform opponents counter that the Social Security Trust Fund paid
             34      $118 billion in interest in 2010 and about $115 billion in interest in 2011, but these payments
             35      are not real money, but are accounting mechanisms that transfer phantom money from one
             36      government account to another;
             37          WHEREAS, the Congressional Budget Office projects federal government non-interest
             38      spending to reach 25% of the Gross Domestic Product in 2035;
             39          WHEREAS, including interest, federal spending will reach 34% of the Gross Domestic
             40      Product;
             41          WHEREAS, since these levels are not sustainable, Congress must slow the growth in
             42      federal spending;
             43          WHEREAS, Representative Jason Chaffetz has announced his proposals for Social
             44      Security reform that he plans to introduce as legislation in the United States Congress;
             45          WHEREAS, the proposed reform implements longevity indexing by increasing normal
             46      retirement age from 67 for those born in 1960, to 68 for those born in 1966, and to 69 for those
             47      born in 1972;
             48          WHEREAS, in years after 1972, the normal retirement age is increased one month
             49      every two years, while keeping early retirement age unchanged at 62;
             50          WHEREAS, the proposed reform changes the cost of living allowance calculation from
             51      the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) to chained
             52      CPI-W which is a more accurate representation of inflation;
             53          WHEREAS, the proposed reform adds an additional bend point at the 50th percentile
             54      for calculating the primary insurance amount;
             55          WHEREAS, for workers with lifetime earnings above the 50th percentile, the primary
             56      insurance amount grows across generations by a combination of the CPI-W growth and average
             57      wage growth instead of just average wage growth;
             58          WHEREAS, change begins for newly eligible retirees in 2016 and ends in 2055;

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         WHEREAS, the proposed reform increases the number of years from 35 to 40 that are
             60      included for calculation of Average Indexed monthly earnings by adding one additional
             61      computational year for those becoming eligible in 2012, 2014, 2016, 2018, and 2020;
             62          WHEREAS, the proposed reform indexes the special minimum benefit to wages
             63      instead of CPI beginning in 2012;
             64          WHEREAS, in 2011, the special minimum benefits were $791 per month for 30 years
             65      of coverage and $394 per month for 20 years of coverage;
             66          WHEREAS, the proposed reform allows for five years of child care to be included as
             67      creditable coverage if not already creditable;
             68          WHEREAS, the proposed reform increases benefits by 5% for beneficiaries starting at
             69      age 85;
             70          WHEREAS, the proposed reform implements an annual means test that reduces the
             71      benefit up to 50% for couples earning more than $360,000 in the most recent tax year;
             72          WHEREAS, total Social Security benefits would continue to grow but at a slower rate,
             73      allowing the system to avoid insolvency;
             74          WHEREAS, the vast majority of retirees, particularly those with average or below
             75      average lifetime earnings, would receive a larger check than they are getting today;
             76          WHEREAS, some will actually receive an increase over what they would be getting
             77      without reform;
             78          WHEREAS, using current benefits as a baseline and adjusting these benefits for
             79      inflation, middle and lower income retirees in future years will get essentially the same or
             80      better benefits than current retirees; and
             81          WHEREAS, these measures must be taken very soon in order for the Social Security
             82      system to avoid an otherwise inevitable collapse:
             83          NOW, THEREFORE, BE IT RESOLVED that the Legislature of the state of Utah
             84      expresses support for the Social Security reform measures proposed by Congressman Jason
             85      Chaffetz.
             86          BE IT FURTHER RESOLVED that a copy of this resolution be sent to the Majority
             87      Leader of the United States Senate, the Speaker of the United States House of Representatives,
             88      the Social Security Administration, and to the members of Utah's congressional delegation.

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Legislative Review Note
    as of 2-3-12 10:43 AM

Office of Legislative Research and General Counsel

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