"OCCURRENCE OF MORE THAN ONE EVENT

"(e) If more than one of the events specified in subsections (c) or (d) and section 222(b) occurs in any one month which would occasion deductions equal to a benefit for such month, only an amount equal to such benefit shall be deducted.

"MONTHS TO WHICH EXCESSIVE EARNINGS ARE CHARGED

"(f) For the purposes of subsection (b)—

"(1) If an individual's earnings for a taxable year are not more than the product of $100 times the number of months in such year, no month in such year shall be charged with any excess earnings.

"(2) If an individual's earnings for a taxable year are in excess of $100 times the number of months in such year, the amount of his excess earnings (as defined in paragraph (4)) shall be charged to months as follows: There shall be charged to the first month of such taxable year an amount of his excess earnings equal to the sum of the payments to which he and all other persons are entitled for such month under section 202 on the basis of his wages and self-employment income (or the total of his excess earnings if such excess earnings are less than such sum) and the balance, if any, of such excess earnings shall be charged to each succeeding month in such year to the extent, in the case of each such month, of the sum of the payments to which such individual and all other persons are entitled for such month under section 202 on the basis of his wages and self-employment income, until the total of such excess has been so applied. Notwithstanding the preceding provisions of this paragraph, no part of the excess earnings of an individual shall be charged to any month (A) for which such individual was not entitled to a benefit under this title, (B) in which such individual was age 72 or over, or (C) in which such individual did not engage in self-employment and did not render services for wages (determined as provided in paragraph (6) of this subsection) of more than $100.

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'(3) As used in paragraph (2), the term 'first month of such taxable year' means the earliest month in such year to which the charging of excess earnings described in such paragraph is not prohibited by the application of clause (A), (B), or (C) thereof.

"(4) For purposes of paragraph (2), an individual's excess earnings for a taxable year shall be the excess of his earnings for such year over $100 multiplied by the number of months in such year, except that of the first $1,200 of such excess (or all of such excess if it is less than $1,200), an amount equal to one-half thereof shall not be included.

"(5) For purposes of clause (C) of paragraph (2)—

"(i) An individual will be presumed, with respect to any month, to have been engaged in self-employment in such month until it is shown to the satisfaction of the Secretary that such individual rendered no substantial services in such month with respect to any trade or business the net income or loss of which is includible in computing (as provided in paragraph (6) of this subsection) his net earnings or net loss from self-employment for any taxable year. The Secretary shall by regulations prescribe the methods and criteria for determining whether or not an individual has rendered substantial services with respect to any trade or business.

"(ii) An individual will be presumed, with respect to any month, to have rendered services for wages (determined as provided in paragraph (6) of this subsection) of more than $100 until it is shown to the satisfaction of the Secretary that such individual did not render such services in such month for more than such amount. “(6)(A) An individual's earnings for a taxable year shall be (i) the sum of his wages for services rendered in such year and his net earnings from self-employment for such year, minus (ii) any net loss from selfemployment for such year.

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(B) In determining an individual's net earnings from self-employment and his net loss from self-employment for purposes of subparagraph (A) of this paragraph and paragraph (5), the provisions of section 211, other than paragraphs (1), (4), and (5) of subsection (c), shall be applicable; and any excess of income over deductions resulting from such a computation

shall be his net earnings from self-employment and any excess of deductions over income so resulting shall be his net loss from self-employment. "(C) For purposes of this subsection, an individual's wages shall be computed without regard to the limitations as to amounts of remuneration specified in subsections (a), (g)(2), (g) (3), (h)(2), and (j) of section 209; and in making such computation services which do not constitute employment as defined in section 210, performed within the United States by the individual as an employee or performed outside the United States in the active military or naval service of the United States, shall be deemed to be employment as so defined if the remuneration for such services is not includible in computing his net earnings or net loss from self-employment. "(7) For purposes of this subsection, wages (determined as provided in paragraph (6) (C)) which, according to reports received by the Secretary, are paid to an individual during a taxable year shall be presumed to have been paid to him for services performed in such year until it is shown to the satisfaction of the Secretary that they were paid for services performed in another taxable year. If such reports with respect to an individual show his wages for a calendar year, such individual's taxable year shall be presumed to be a calendar year for purposes of this subsection until it is shown to the satisfaction of the Secretary that his taxable year is not a calendar year.

"(8) Where a month is charged with an individual's excess earnings and the excess earnings so charged are less than the total of the payments (without regard to such charging) to which all persons are entitled under section 202 for such month on the basis of his wages and self-employment income, the difference between such total and the excess so charged to such month shall be paid (if it is otherwise payable under this title) to such individual and other persons in the proportion that the benefit to which each of them is entitled (without regard to such charging and prior to the application of section 203 (a)) bears to the total of the benefits to which all of them are entitled (without regard to such charging and prior to the application of section 203(a)).

"PENALTY FOR FAILURE TO REPORT CERTAIN EVENTS

"(g) Any individual in receipt of benefits subject to deduction under subsection (c) (or who is in receipt of such benefits on behalf of another individual), because of the occurrence of an event specified therein, who fails to report such occurrence to the Secretary prior to the receipt and acceptance of an insurance benefit for the second month following the month in which such event occurred, shall suffer an additional deduction equal to that imposed under subsection (b), except that the first additional deduction imposed by this subsection in the case of any individual shall not exceed an amount equal to one month's benefit even though the failure to report is with respect to more than one month.

"REPORT OF EARNINGS TO SECRETARY

“(h) (1) (A) If an individual is entitled to any monthly insurance benefit under section 202 during any taxable year in which he has earnings or wages, as computed pursuant to paragraph (6) of subsection (f), in excess of the product of $100 times the number of months in such year, such individual (or the individual who is in receipt of such benefit on his behalf) shall make a report to the Secretary of his earnings (or wages) for such taxable year. Such report shall be made on or before the fifteenth day of the fourth month following the close of such year, and shall contain such information and be made in such manner as the Secretary may by regulations prescribe. Such report need not be made for any taxable year (i) beginning with or after the month in which such individual attained the age of 72, or (ii) if benefit payments for all months (in such taxable year) in which such individual is under age 72 have been suspended under the provisions of the first sentence of paragraph (3) of this subsection.

"(B) If the benefit payments of an individual have been suspended for all months in any taxable year under the provisions of the first sentence of paragraph (3) of this subsection, no benefit payment shall be made to such individual for any such month in such taxable year after the expiration of the period of three years, three months, and fifteen days following the close of such taxable year within such period the individual, or some other person entitled to benefits under this title on the basis of the same wages and self-employment

income, files with the Secretary information showing that a benefit for such month is payable to such individual.

"(2) If an individual fails to make a report required under paragraph (1), within the time prescribed therein for any taxable year and any deduction is imposed under subsection (b) by reason of his excess earnings (as defined in subsection (f)) for such year, he shall suffer additional deductions as follows: "(A) if such failure is the first one with respect to which an addiitonal deduction is imposed under this paragraph, such additional deduction shall be equal to his benefit or benefits for the last month of such year for which he was entitled to a benefit under section 202;

"(B) if such failure is the second one for which an additional deduction is imposed under this paragraph, such additional deduction shall be equal to two times his benefit or benefits for the last month of such year for which he was entitled to a benefit under section 202;

"(C) if such failure is the third or a subsequent one for which an additional deduction is imposed under this paragraph, such additional deduction shall be equal to three times his benefit or benefits for the last month of such year for which he was entitled to a benefit under section 202; except that the number of additional deductions required by this paragraph with respect to a failure to report earnings for a taxable year shall not exceed the number of months in such year for which such individual received and accepted insurance benefits under section 202 and for which deductions are imposed under subsection (b) by reason of his excess earnings (as defined in subsection (f)). In determining whether a failure to report earnings is the first or a subsequent failure for any individual, all taxable years ending prior to the imposition of the first additional deduction under this paragraph, other than the latest one of such years, shall be disregarded.

"(3) If the Secretary determines, on the basis of information obtained by or submitted to him, that it may reasonably be expected that an individual entitled to benefits under section 202 for any taxable year will suffer deductions imposed under subsection (b) by reason of his excess earnings (as defined in subsection (f)) for such year, the Secretary may, before the close of such taxable year, suspend the total or less than the total payment for each month in such year (or for only such months as the Secretary may specify) of the benefits payable on the basis of such individual's wages and self-employment income; and such suspension shall remain in effect with respect to the benefits for any month until the Secretary has determined whether or not any deduction is imposed for such month under subsection (b). The Secretary is authorized, before the close of the taxable year of an individual entitled to benefits during such year, to request of such individual that he make at such time or times as the Secretary may specify, a declaration of his estimated earnings for the -taxable year and that he furnish to the Secretary such other information with respect to such earnings as the Secretary may specify. A failure by such individual to comply with any such request shall in itself constitute justification for a determination under this paragraph that it may reasonably be expected that the individual will suffer deductions imposed under subsection (b) by reason of his excess earnings (as defined in subsection (f)) for such year. If, after the close of a taxable year of an individual entitled to benefits under section 202 for such year, the Secretary requests such individual to furnish a report of his earnings (as computed pursuant to paragraph (6) of subsection (f)- for such taxable year or any other information with respect to such earnings which the Secretary may specify, and the individual fails to comply with such request, such failure shall in itself constitute justification for a determination that such individual's benefits are subject to deductions under subsection (b) for each month in such taxable year (or only for such months thereof as the Secretary may specify) by reason of his excess earnings (as defined in subsection (f)) for such year.

"CIRCUMSTANCES UNDER WHICH DEDUCTIONS AND REDUCTIONS NOT REQUIRED

"(i) In the case of any individual, deductions by reason of the provisions of subsection (b), (c), or (h) of this section, or the provisions of section 222(b), shall, notwithstanding such provisions, be made from the benefits to which such individual is entitled only to the extent that such deductions reduce the total amount which would otherwise be paid, on the basis of the same wages and self-employment income, to such individual and the other individuals living in the same household.

"ATTAINMENT OF AGE SEVENTY-TWO

"(j) For the purposes of this section, an individual shall be considered as seventy-two years of age during the entire month in which he attains such age.

"NON COVERED REMUNERATIVE ACTIVITY OUTSIDE THE UNITED STATES

“(k) An individual shall be considered to be engaged in noncovered re munerative activity outside the United States if he performs services outside the United States as an employee and such services do not constitute employment as defined in section 210 and are not performed in the active military or naval service of the United States, or if he carries on a trade or business outside the United States (other than the performance of service as an employee) the net income or loss of which (1) is not includible in computing his net earnings from self-employment for a taxable year and (2) would not be excluded from net earnings from self-employment, if carried on in the United States, by any of the numbered paragraphs of section 211(a). When used in the preceding sentence with respect to a trade or business (other than the performance of service as an employee', the term 'Untied States' does not include Puerto Rico or the Virgin Islands in the case of an alien who is not a resident of the United States (including Puerto Rico and the Virgin Islands); and the term 'trade or business' shall have the same meaning as when used in section 162 of the Internal Revenue Code of 1954.

"GOOD CAUSE FOR FAILURE TO MAKE REPORTS REQUIRED

"(1) The failure of an individual to make any report required by subsection (g) or (h) (1) (A) within the time prescribed therein shall not be regarded as such a failure if it is shown to the satisfaction of the Secretary that he had good cause for failing to make such report within such time. The determination of what constitutes good cause for purposes of this subsection shall be made in accordance with regulations of the Secretary."

(b) The amendments made by subsection (a) shall be applicable with respect to deductions on account of excessive earnings, under section 203 of the Social Security Act (as amended by such subsection (a)), for months of taxable years which begin after the month following the month in which this Act is enacted and with respect to other deductions, made under such section as so amended, for months after the month following the month in which this Act is enacted.

(c) (1) Paragraph (5) of section 202 (q) of such Act is amended (A) by striking out "paragraph (1) or (2) of section 203 (b)" each place it appears therein, and inserting in lieu thereof "paragraph (1) or (2) of section 203 (c)", and (B) by striking out "section 203 (c)" and inserting in lieu thereof "section 203(b) or (d)".

(2) Paragraph (6) of such section 202 (q) is amended (A) by striking out "section 203 (b) (1) or (2)" and inserting in lieu thereof "section 203 (c) (1) or (2)", (B) by striking out "section 203 (c)" and inserting in lieu thereof "section 203 (b) or (d)", and (C) by striking out "paragraph (1) or (2) of section 203 (b)" and inserting in lieu thereof "paragraph (1) or (2) of section 203 (c)".

(3) The amendments made by this subsection shall be applicable only with respect to the computation, under section 202 (q) of the Social Security Act, of deductions made under section 203 of such Act, as amended by subsection (a) of this Act.

(d) (1) Section 215 (g) of such Act is amended by striking out "section 203 (a))" and inserting in lieu thereof "section 203 (a) and deduction under section 203 (b))".

(2) The amendment made by paragraph (1) shall be applicable only with respect to deductions made under section 203 of the Social Security Act, as amended by subsection (a) of this Act.

TITLE II-AMENDMENTS TO INTERNAL REVENUE CODE OF 1954

AMENDMENTS TO DEFINITION OF SELF-EMPLOYMENT INCOME

SEC. 201. (a) Section 1402 (b) (1) (C) of the Internal Revenue Code of 1954 (relating to definition of self-employment income) is amended by inserting "and before 1961" after "1958", and by striking out "; or" and inserting in lieu thereof "; and".

(b) Section 1402(b)(1) of such Code is further amended by adding at the end thereof the following new paragraph: "(D) for any taxable year ending after 1960, (i) $6,000, minus (ii) the amount of the wages paid to such individual during the taxable year; or".

AMENDMENTS TO DEFINITION OF WAGES

SEC. 202. Section 3121(a)(1) of such Code (relating to definition of wages) is amended by striking out "$4,800" each place it appears and inserting in lieu thereof "6,000".

MISCELLANEOUS TECHNICAL AMENDMENTS

SEC. 203. (a) The second sentence of section 3122 of such Code (relating to Federal service) is amended by striking out $4,800" and inserting in lieu thereof "$6,000".

(b) Section 6414(c) (1) of such Code (relating to special refunds of employment taxes) is amended

(1) by inserting "and prior to the calendar year 1961" after "the calendar year 1958";

(2) by inserting after "exceed $4,800," the following: "or (C) during any calendar year after the calendar year 1960, the wages received by him during such year exceed $6,000,"; and

(3) by inserting before the period at the end thereof the following: “and before 1961, or which exceeds the tax with respect to the first $6,000 of such wages received in such calendar year after 1960".

(c) Section 6413(c) (2) (A) of such Code (relating to refunds of employment taxes in the case of Federal employees) is amended by striking out "or $4,800 for any calendar year after 1958" and inserting in lieu thereof "$4,800 for the calendar year 1959 or 1960, or $6,000 for any calendar year after 1960".

EFFECTIVE DATES

SEC. 204. The amendments made by section 201 shall apply only with respect to taxable years beginning after 1960. The amendments made by sections 202 and 203 shall apply only with respect to remuneration paid after 1960.

AMENDMENT OF SOCIAL SECURITY ACT AND INTERNAL REVENUE CODE, RELATING TO MINIMUM INSURANCE BENEFITS

Mr. SALTONSTALL. Mr. President, I introduce, for appropriate reference, a bill which would amend title II of the Social Security Act and the Internal Revenue Code so as to increase the amount of earnings permitted without loss of benefits, to increase the minimum insurance benefits payable, to increase the amount of such benefits payable to widows, and to increase the amount of earnings upon which such benefits are based.

The House Ways and Means Committee has reported out a bill which will probably be passed by the other body today. This proposal includes some important and desirable improvements in the social security program, somewhat overlooked because of the attention given the problem of medical aid for the aged.

But there are some needed improvements in the social security system omitted from the House bill which have been discussed and proposed before, and which are not so complicated or ambitious that they could not be considered for amending legislation this year. My bill embodies four helpful changes in a compact, practical and responsible "package." I file it now for the timely attention of the Senate, to be considered along with the proposal from the House of Representatives.

I believe that our elderly citizens should be encouraged to be productive, contributing members of their community. This is perhaps the most important aspect of old age--the emptiness and feeling of unwantedness which comes to a person who feels that his or her talent or effort is not needed by others. If our aged people are treated as helpless and worthless in terms of a community's vigor and productivity they can never live out their lives in warmth and happiness. I have frequently advocated a change in the retirement test under the old-age, survivors, and disability insurance program which would encourage our older