Date: November 8, 1995

H.R. 2491


On October 26, 1995, the House passed budget reconciliation legislation (H.R. 2491, the Seven-Year Balanced Budget Reconciliation Act of 1995) by
a vote of 227 to 203.

On October 27, the Senate passed H.R. 2491 by a vote of 52 to 47 after striking the text of the House-passed bill and insert ing the text of S. 1357,
the Bala nced Budget Reconciliation Act of 1995, as amended.

Both bills incorporate provisions of interest to SSA, including some of the provisions of the welfare reform legisla tion passed by both chambers (H.R. 4), Medicare reform and tax provisions.

The House has named conferees. The Senate Republican leadership has chose n conferees, but has not re leased the names pending the selection of
conferees by the Senate Democratic leadership. it is expected that, once all conferees are named, a conference will be convened to reconcile the differences between the House- and Senate-passed bills.

Below are the provisions of interest in both bills. Section I includes provisions contained in both the House a nd Senate bills; effective dates are omitted in instances where they differ. Section II contains provisions that appear in the House bill only. Section III contains provisions that are reflected in the Senate bill only.



Eliminate SSI Benefits for Individuals Disabled by Drug Addiction or Alcoholism (DAA)

  • Prohibits SSI eligibility, including cash SSI benefits a nd Medicaid coverage, to those individuals whose DAA is a contributing factor material to their disability.

SSI Eligibility Based on Childhood Disability

  • Eliminates the comparable severity standard and the individualized functional assessment (IFA) in evaluating disability for individuals under the age of 18.

Continuing Disability Reviews and Eligibility Redeterminations

  • Requires that the eligibility of childhood disability recipients be redetermined during the one-year period that begins when such recipient attains age 18, by applying the initial eligibility criteria for individuals age 18 and older.

Receipt of Benefits in Two or More States

  • Prohibits SSI eligibili ty for 10 years for individuals who have been convicted in a State or Fed eral court of having fraudulently misrepresented their State of residence in order to receive SSI, AFDC, Medicaid , or food stamp benefits simultaneously from two or more States. Effective upon enactment.

Fugitive Felons and Parole and Probation Violations

  • Prohibits SSI eligibility for fugitive felons a nd parole and probation violators and requires SSA to provide to law enforcement personnel, upon their request, the addresses of S8I recipients who are fleeing to avoid prosecution, custody, or confinement, are involved in parole or probation violations, or have information related to offieia l law enforcement activities. Effective upon enactment.


Expansion of the Federal Parent Locator Service

  • Requires HHS to transmit to SSA, for verification purposes, certain information about individuals and employers maintained under the Federal Parent Locator Service. SSA would be required to verify the accuracy of, correct, or supply to the extent possible, and report to HHS the name, SSN, and birth date of individuals and the employer identification number of employers. SSA would be reimhursed by HHS for the cost of this verification service.

Collection and Use of SSNs for Use in Child Support Enforcement

  • Provides that State child support enforcement procedures would have to require that t he SSN of any applicant for a professional license, commercial driver's license, occupational license, or marriage license be recorded on the application. The SSN of any person subject to a divorce decree. support order, or paternity determination or acknowledgement would have to be placed in the pertinent records. SSN's would also have to be recorded on death certificates.

Public Debt Limit

  • Increases the statutory limit on t he public debt from $4.9 to $5.5 trillion.



SSI Eligibility Based on Childhood Disability

Current Childhood Disability Recipients

  • Provides that eligibility for cash benefits would be continued only for those recipients who meet or equal a listed impairment.

  • Provides that eligibility for all other current recipients, i.e., those who were found to be disabled on t he basis of an IFA, would be terminated.

  • Provides, with respect to current recipients, that the new eligibility criteria shall not apply during the first 6 months beginning after the month of enactment.

New Childhood Disability Applicants

  • Provides that to be eligible for cash benefits, new applicants must have an impairment which meets or equals a listed imp airment, be either in an institution, or be required to be in stitutionalized if not for receipt of personal assistance.

  • Provides that applicants who have an imp airment which meets or equals a listed impairment, but do not meet the requirement relating to institutionalization, would be eligible for services under an SSI block grant program which is being established by this Act.

Continuing Disability Reviews and Eligibility Redeterminations

  • Requires that the continuing eligibility of--

    • childhood disability recipients with nonpermanent impairments be reviewed at least once every 3 years; and

    • children eligible on the basis of low birth weight be reviewed after the child has received benefits for 12 months.

Cash Benefits for Certain Qualifying Children

  • Permits the payment of SSI cash benefits for qualifying children who accompany their military parents outside the United states.

SSI Block Grant Program for Children with Disabilities

  • Establishes a block grant program which would enable States to provide authorized medical and non-medical services to individual who have an impairment which meets or equals a listed impairment. This program shall be effective beginning with fiscal year 1997.

  • Requires that the regulations needed to implement these provisions be issued within 3 months of enactment.

  • Requires that recipients whose eligibility would be terminated under this Act be notified within 1 month of enactment.

Except as noted earlier, provides that these amendments shall be applicable to benefits for months beginning 90 or more days after the date of enactment, without regard to whether regulations have been issued to implement such amendments.

Payments for SSI-Eligible Children in Medical Facilities

  • Provides that individuals who a re in a medical facility and whose care is being paid for through private insurance would be eligible for an SSI benefit of up to $30 a month. (Although the title indicates that this provision applies only to children, as drafted the provision would apply to all eligible individuals.)

Delay in Child's Eligibility for SSI

  • Provides that, in the case of parents who disposed of their assets or their child's assets (or a guardian who disposed of his ward's assets) within 36 months of the child's application for SSI benefits, the child's eligibility for benefits will be delayed for a number of months equal to t he compensated value of the divested resource divided by the SSI Federal benefit rate.

Repeal Maintenance of Effort Requirement

  • Eliminates the maintenance of effort requirement ("passalong") for States with regard to their State supplementary payment programs.
    Effective for calendar quarters beginning after September 1995.


  • Requires SSA to submit an annual report to the Congress on the Listing of Impairments that are applicable to children and to recommend any necessary revisions to the listings.
  • Requires SSA to s ubmit a report to the House Committee on Ways a nd Means and the Senate Committee on Finance, not later than October 1, 1998, on the activities relating to the eligibility redeterminations that are required for SSI childhood disability recipients at the time they attain age 18.

Noncitizen Benefit Eligibility

  • Prohibits SSI eligibility for any noncitizen, with the following exceptions:

    • refugees for the first 5 years after their entry;

    • lawful permanent residents over age 75 who have resided in the United States for at least 5 years;

    • legal permanent residents who cannot take the naturalization examination because of physical or developmental disability or mental impairment; and

    • individuals lawfully present who are on active duty or have been honorably discharged from the U.S. armed forces, their spouses and unmarried dependent children.

  • Provides that noncitizens who are on the SSI rolls at the time of enactment and who are not in one of the excepted statuses could remain on the rolls for 1 year, after which they would be ineligible.

Soonsor-To-Alien Deeming

  • Requires the deeming of the sponsor's (and spouse's, if any) income and resources to the immigrant until the immigrant becomes a U.S. citizen. The provision would not apply to noncitizens whose sponsors signed a ffidavits of support before the da te such affidavits are required to be legally enforceable.

Legally Enforceable Sponsors' Affidavits of Support

  • Makes the sponsorship affidavit of support legally enforceable by the Federal, State, or local government that provides means-tested support--including SSI--to a noncitizen for a period of 10 years after the noncitizen last receives benefits.

  • Requires the Federal, State, or local government that provided assistance to the noncitizen to request reimbursement from the sponsor. If the sponsor does not respond or refuses to abide by repayment plans, the government entity may take legal action against the sponsor.


Taxation of Social Security Benefits

Gradually repeals, effective with taxable years beginning in 1996, the provision subjecting to Federal income tax up to 85 percent of Social Security benefits when income exceeds certain thresholds.

  • The maximum percentage of Social Security benefits subject to income tax in 1996 would be 75 percent; in 1997, 65 percent; in 1998, 60 percent; in 1999, 55 percent; in 2000 and later, 50 percent.

  • Revenues resulting from the taxation of Social Security benefits above the 50 percent level during the phase-out period would be dedicated to the OASDI Trust Funds (rather than the Medicare HI Trust Fund).

Credit for Employer Tax on Tips

  • Revises the provision for a business tax credit for tips for food and beverage establishments (enacted in OBRA of 1993) by providing that the credit would be available regardless of whether the tips are reported under section 6053 of the Interna l Revenue Code (which provides for informational returns with respect to tips).

The provision a ffects neither the amount of tips covered and taxable for Social Security purposes nor the amount of Social Security taxes credited to the Social Security trust funds.

Coal Act Reachback

  • Amends the provisions of the Coal Industry Retiree Health Benefits Act of 1992 to restrict the assignment of retired or deceased miners to coal operators for purposes of determining liability for health benefit premiums. Under the amendment, assignments of miners for premium liability purposes could only be to coal operators who:

    • Were signatories of the 1988 ag reement between the United Mine Workers of America a nd the Bituminous Coalmine Operators of America; or

    • Had agreed to provide the same benefits as provided by the 1988 agreement during the term of the 1988 agreement.

  • Additionally, provides that operators who paid the full amount of their contractual liability result ing from their withdrawal from coal miners'
    health benefit plans could not have miners assigned to them.

Medicare Part B Premium

  • Increases the 1996 Part B premium to $53.50, instead of the $42.50 currently scheduled. (Would permanently es t ablis h the Part B premium at 31.5 percent of program costs.)

Medicare Part B Premium for High-Income Individuals

  • Increases Part B premiums for individuals with modified adjusted gross incomes over $75,000 a nd $125,000 for joint filers (married individuals not filing joint returns who live with their spouses for any portion of the year would have a zero threshold). The amount of the increase would be phased in until it would equal 100 percent of program cos ts for individuals with modified adjusted gross incomes over $100,000; over $150,000 for joint filers if only one spouse is enrolled in Part B; and $175,000 if both spouses are enrolled in Part B. This premium amount would conti nue to be deducted from the person's Social Security payment. The increase is effective for months after December 1996.

Medical Savings Account

  • Provides rules for the establishment of medical savings accounts (trusts exclusively created for the purpose of paying for medical care or long-term care insurance for an individual and his or her spouse or dependents). Also provides for exclusion of employer contributions to these accounts from gross income for income tax purposes and from covered wages for Social Security tax and benefit purposes.

Debt Collection

  • Generally enhances the effectiveness of Federal debt collection efforts. Among other provisions, establis hes a centralized, government-wide
    de bt collection process managed by t he Department of the Treasury which wou ld expand the use of administrative offset (recovery of debt incurred under one Federal program by withholding from other Federal payments due the debtor). Social Security and SSI benefits would continue to be exempt from administrative offset.

Electronic Funds Transfer (EFT)

  • Requires that recipients who become eligible for any Federal payments after 90 days afte r enactment would be paid by EFT. The head of an agency could waive the requirement for EFT if the recipient certifies in writi ng that he or she does not have an account capable of accepting EFT. Beginning in January 1999, all Federal payments would be made by EFT, unless the Secretary of the Treasury waived the EFT requirement for persons for whom EFT would impose a hardship, or under certain other limited circumstances.



SSI Benefits for Individuals Disabled by Drug Alldiction or Alcoholism

  • Establishes a new category --SSI disability beneficiary with a DA&A condition. All s uch bene ficia ries who have a DA&A condition would be subject to representative payee requirements, including preference to organizations as payees, and would be referred for substance abuse treatment.

  • Repeals the current law provision that requires demonstration projects on innovative approaches for referral, monitoring, and treatment of SSI DA&A recipients.

  • Requires notifica tion of affected SSI DA&A recipients within 90 days of enactment. Such recipients who wish to reapply for SSI benefits must do so within 4 months after enactment . SSA would be required to make a determination of their eligibility within 1 year after enactment.

Effective upon enactment for new applicants. SSI eligibility of DA&A recipients on the rolls at the time of enactment would continue until, January 1, 1997.

Additional Accountability Requirements for Payees of SSI Beneficiaries

  • Requires SSA to advise representative payees of specific examples of appropriate ways to spend SSI cash benefits and the proper role of a representative payee.

  • Requires payees to document expenditures and keep contemporaneous records of expenditures.

  • Removes statutory requirement for an nual reports by payees and modifies current provisions for review of reports to apply to a sample of contemporaneous records.

  • Provides that the Commissioner, at the request of the representative payee, would pay any lump-sum payment for the benefit of an SSI-eligibIe child into a dedicated savings account that could only be used for:

    • education and job skills training;

    • special equipment or housing modification; and

    • appropriate therapy and rehabilitation.

Funds contained in, and interest earned on, such account would be excluded from the determination of the individual's resources under SSI.

Effective upon enactment.


Restrictions on Eligibility for Benefits

  • Eliminates references to maladaptive behavior in the domain of personal/behavioral function in sections 112.00C.2 . and 112.02B.2.c.(2)
    of the Listing of Impairments. These changes would apply to applicants for benefits for months beginning on or after the date of enactment of this Act, without regard to whether regulations have been issued to implement such changes.

  • Requires SSA, within 1 year after t he date of enactment, to redetermine the eligibility of any recipient who was receiving benefits as of the date of enactment and whose eligibility for such benefits would terminate by reason of these amendments. Such redeterminations would be given priority over other redetermination reviews. Requires SSA to notify recipients affected by this provision within 90 days after enactment date.

These amendments would apply to such recipients for months beginning on or after January 1, 1997.

Continuing Disability Reviews and Redeterminations

  • Requires SSA to review, at least once every 3 years , the continuing eligibility for SSI benefits of each individual under age 18 with a nonpermanent impairment. The medical improvement review standard (MIRS) would be applicable. At the time of such review, the parent/guardian must present evidence that the child is receiving appropriate treatment.

  • Requires SSA to review the continuing eligibility for SSI disability benefits of a n individual whose low birth weight is a contributing factor material to the finding that such individual is disabled . These reviews must be conducted not later than 12 months after the birth of the individual. The MIRS would be applicable. At the time of such review, the parent/guardian must present evidence that the child is receiving appropriate treatment.

These amendments would apply to benefits for months beginning on or after the date of enactment, without regard to whether regulations have been
issued to implement them.

Limited Eligibility of Noncitizens for SSI Benefits

  • Provides generally that noncitizens would be ineligible for SSI, with the following exceptions:

    • noncitizens admitted to the United States as refugees under section 207 of the Immigration and Nationality Act (INA), or as asylees under section 208 of the INA, or whose deportations have been withheld under section 243(h) of the INA would remain eligible for SSI during the first 5 years after their arrival in the United States;

    • noncitizens who are United States military veterans who were honorably discharged and spouses and unmarried dependent children of such veterans who are lawfully present in the United States;

    • noncitizens who have worked sufficient quarters of coverage to be fully insured under title II; and

    • noncitizens who have been battered or subjected to extreme cruelty if the application of the prohibition of eligibility would endanger such individual.

Requires notification of all noncitizens affected by the provision within 90 days from date of enactment. Any noncitizen who desires to reapply for benefits after such notification would be required to do so within 120 days after enactment, and the Commissioner would be required to make a determination of their eligibility within 1 year after enactment.

Effective upon enactment for new applicants. The SSI eligibility of aliens on the rolls at the time of enactment who do not meet one of the exceptions would continue until January 1, 1997.

  • Repeals current-law SSI sponsor-to-alien deeming provisions effective upon enactment.

  • Deems the full amount of a sponsor's and s ponsor's spouse's income and resources to an individual regardless of whether he or she has become a U.S. citizen. (Deeming would not apply to noncitizens eligible for SSI, except for those who are fully insured for title II but have not yet worked 40 quarters.) Deeming would continue for 5 years after the first day the individual is lawfully present in the United States or until the date specified in the sponsors hip affidavits of support, whichever period is longer. Effective upon enactment.

  • Requires determination of individuals' ability to provide themselves with food and she lter in the abse nce of SSI benefits taking into account their other income, including sponsors' contributions. If determined to be u nable to meet those needs, only the amount of the sponsors ' income and resources actually provided would be deemed. Effective upon enactment.

  • Requires sponsors' affidavits of support to include sponsors' agreement to support the individuals unti l they have worked 40 quarters in the United States even if they become U.S. citizens. Effective with respect to new affidavits entered in to 90 days after enactment.


National Commission on the Future of Disability

  • Establishes a National Commiss ion on the Future of Disability, whose expenses would be paid from funds otherwise appropriated for SSA.
    The Commission would be required to undertake a comprehensive study of all matters related to the nature, purpose, and adequacy of all Federal programs serving individuals with disabilities and to report recommendations for changes to the President and the Congress.

The Commission members should be appointed within 60 days after the date of enactment and would serve for the life of the Commission, i.e., a 2-year period.

Requires the Commiss ion to submit an interim report, at the end of the first year, to the President and the Congress. This report must include a detailed statement of the findings a nd conclusions of the Commission, together with the Commission's recommendations for legislative and administrative actions.

A final report, which discusses both the Commission's final findings, conclusions, and recommendations and an assessment of the extent to which the recommendations contained in its interim report have been implemented , would be required no later than the date on which the Commission terminates. Upon receipt, the President would he required to print each report a nd make it available to the public upon request.

Study of Disability Determination Process

  • Requires SSA, from funds otherwise appropriated, to contract with the National Academy of Sciences, or some ot her independent entity, to conduct a comprehensive study of the disability determination process under titles II a nd XVI of t he Social Security Act, including the validity, reliability, equity, and consistency of the Listing of Impairments with current scientific knowledge and standards. Effective not later than 90 days after the date of enactment.

The study would include an examination of the appropriateness of the definitions of disability under both titles and the advantages and disadvantages of alternative definitions.

Would require SSA, through the appropriate entity, to issue an interim report and a final report of the findings and recommendations resulting from the study to the President and the Congress, not later than 18 months a nd 24 months, respectively, from the date of the contract for such study.

Improvements to the Childhood Disability Process

  • Requires SSA to issue a request for comments in the Federal Register, not later than 60 days after enactment, regarding improvements in the disability evaluation and determination procedures for individuals under age 18. Also, directs SSA to promptly review such comments and issue any necessary regulations not later than 18 months after enactment.

Study by the General Accounting Office

  • Requires the Comptroller General of the United States to study and report not la ter than January 1, 1998 on the impact of the amendments of this legislation on the SSI program.

Annual Report on the SSI Program

  • Requires that not later than May 30 of each year, the Commissioner report to the President and Congress regarding the SSI program,
    • a comprehensive description of the program;
    • historical and current data on allowances and denials, reconsiderations, administrative law judge hearings, and appeals, characteristics of recipients and program costs;
    • projections of future numbers of recipients and program costs, through atleast 25 years;
    • information on redeterminations, utilization of work incentives, administrative costs, State supplementation programs;
    • summaries of relevant research; and
    • a historical s ummary of statutory changes to the SSI law.

    In addition, each member of the Social Security Advisory Council would be permitted to include in this annual report their views on the SSI program.


Fraud Under Means-Tested Welfare and Public Assistance Programs

  • Provides that, if an individual is found ineligible for benefits under any public assistance program, including SSI, due to a finding of fraud , any other public assistance benefits for which he or she is eligible would not be increased. Effective upon enactment.

Denial of Federal Means-Tested Benefits to Non-Custodial Parents Who Arc Delinquent in Paying Child Support

  • Provides that non-custodial parents who are more than 2 months delinquent in paying child support are ineligible to receive any meanstested
    Federal benefits . A non-custodial parent who becomes delinquent in child support a second or any subsequent time, would not he eligible to receive any means-tested Federal benefits for a 2-year period, beginning on the date that such parent failed to meet the terms of support. Effective upon enactment.


Regular Report to INS on Illegal Aliens

  • Requires the Commissioner to report to Immigration and Naturalization Service (INS) no less than four times a year, and upon the request of the INS, the name, address, and other identifying information of every individual the Commissioner knows to be in the United States illegally. In addition, States with State supplementary agreements under section 1616(a) must ag ree to do the same.

Development of Prototype of Counterfeit-Resistant Social Security Card

  • Requires SSA to develop a prototype of a counterfeit-resistant Social Security card made of plastic or polyester which uses security features, such as magnetic stripes, holograms, etc., and provides reliable proof of citizenship or legal resident alien status.

  • SSA is to conduct a study, and within 1 year of the date of enactment, issue a report to Congress on the different methods of improving the Social Security card application process. The study is to evaluate the cost and workload implications of issuing a counterfeit-resistant card for all individuals over a 3, 5, and l0-year period. In addition, the study is to evaluate the feasibility and cost implications of imposing a user fee for replacement cards. Appropriations would be authorized from the OASI trust fund to fund the study.

Prohibition on Payment of Federal Benefits to Certain Persons

  • Generally, prohibits payment of Federal benefits, including Social Security benefits, with some exceptions, to any person who is not lawfully present in the United States. A person lawfully present in the U.S. includes a U.S. citizen, a permanent resident alien, an alien whose deportation has been withheld under section 243(h) of the INA, an asylee, a re fugee, a parolee who has beeu paroled for a period of at least 1 year, a national, or a national of the U.S. (as defined in section 10l(a)(17) of the INA).

Sense of the Senate on RET

  • Provides that the Congress intends to pass legislation before the end of 1995 to raise the Social Security earnings limit for working seniors age 65 through 69 in a manner which will ensure the financial integrity of the Social Security trust funds and will be consistent with the goal of achieving a balanced budget in seven years.

Increase in the Annual Exempt Amount

  • Increases the annual exempt amounts under the earnings test, over the amounts otherwise determined, for all Social Security beneficiaries to the extent that additional revenue is generated by extending to employees of all businesses (other than personal service corporations) the current $1 million limit on the deductibility of an employee's compensation as a business expense.

Medicare Part B Premium

  • Increases the 1996 Part B premium to $53, instead of the $42.50 currently scheduled. Also, would gradually increase the Part B premium to $89 by 2002.

Medicare Part B Premium for High-lncome Individuals

  • Increases Part B premiums for individuals with modified adjusted gross in comes over $50,000 and $75,000 for joint filers (married individuals not filing joint returns who live with their spouses for any portion of the year would have a zero threshold). The amount of the increase would be phased in until it would equal 100 percent of program costs for individuals with modified adjusted gross incomes over $100,000 and over $150,000 for joint filers. This premium amount would continue to be deducted from the person's Social Security payment. The increase is effective for months after December 1996.

Medicare Coverage of State and Local Government Employees

  • Extends mandatory Medicare coverage, effective January 1996, to State and local government employees hired before April 1, 1986. (Those hired on or after that date are already covered under Medicare.) Under a special transitional provision, if an affected person works in State and local government employment during the first calendar quarter of 1996, prior State and local government employment will be treated as covered employment for purposes of meeting Medicare insured status requirements.