AMENDED IN SENIOR SENATE OCTOBER 25, 2011

SENIOR SENATE FEDERAL PROPOSAL NO. 1

INTRODUCED BY SENIOR SENATOR EATON

(COAUTHOR: SENIOR ASSEMBLY MEMBER GLASMEIER)

LEGISLATIVE COUNSEL'S DIGEST

SFP 1: SOCIAL SECURITY FINANCING

UNDER EXISTING LAW, THE FEDERAL SOCIAL SECURITY ACT PROVIDES FOR BENEFITS FOR ELIGIBLE BENEFICIARIES, FUNDED PRIMARILY BY FEDERAL PAYROLL TAXES ON WORKERS AND EMPLOYERS. MEDICARE IS A FEDERAL HEALTH INSURANCE PROGRAM FOR, AMONG OTHERS, PEOPLE 65 YEARS OF AGE OR OLDER, AND PEOPLE UNDER 65 YEARS OF AGE WITH CERTAIN DISABILITIES.

THIS MEASURE WOULD MEMORIALIZE THE CONGRESS AND THE PRESIDENT TO ENACT LEGISLATION THAT WOULD ADDRESS THE SOLVENCY OF THE SOCIAL SECURITY TRUST FUNDS. THIS MEASURE WOULD ALSO ENCOURAGE THE LEGISLATURE OF THE STATE OF CALIFORNIA TO PASS A JOINT RESOLUTION URGING THE CONGRESS AND THE PRESIDENT TO ENACT APPROPRIATE LEGISLATION THAT WOULD ADDRESS THESE CONCERNS.

VOTE: MAJORITY.

SFP 1: RELATING TO SOCIAL SECURITY FINANCING

WHEREAS, ACCORDING TO THE 2009 ANNUAL REPORT OF THE BOARD OF TRUSTEES OF THE FEDERAL OLD-AGE AND SURVIVORS INSURANCE AND FEDERAL DISABILITY INSURANCE TRUST FUNDS (TRUSTEE’S REPORT), THE FINANCIAL CONDITION OF THE SOCIAL SECURITY AND MEDICARE PROGRAMS REMAIN CHALLENGING. PROJECTED LONG RUN PROGRAM COSTS ARE NOT SUSTAINABLE UNDER CURRENT PROGRAM PARAMETERS. SOCIAL SECURITY’S ANNUAL SURPLUSES OF TAX INCOME OVER EXPENDITURES FELL SHARPLY IN 2010 AND ARE EXPECTED TO DECREASE IN 2011 BECAUSE OF THE FICA TAX “HOLIDAY” GRANTED IN THE COMPROMISE OF DECEMBER 2010 AND BECAUSE OF THE ECONOMIC SLOW DOWN AND ENSUING RECESSION; AND

WHEREAS, ALSO ACCORDING TO THE 2009 TRUSTEE’S REPORT, THE DEFICITS WILL BE MADE UP BY REDEEMING TRUST FUND ASSETS FROM THE UNITED STATES TREASURY UNTIL RESERVES ARE EXHAUSTED IN THE YEAR 2037 AT WHICH POINT TAX INCOME WOULD BE SUFFICIENT TO PAY ABOUT THREE-FOURTHS OF SCHEDULED BENEFITS THROUGH 2083; AND

WHEREAS, CONGRESS, IN THE PAST, HAS TAKEN BIPARTISAN ACTION TO GUARANTEE CONTINUATION OF BENEFITS BY: (1) INCREASING THE TAX RATES OR THE TAX BASES, OR BOTH, (2) ESTABLISHING LIMITS TO EARNINGS OF BENEFICIARIES, (3) INCREASING THE RETIREMENT AGE, AND (4) REDUCING OR CHANGING, OR BOTH, THE BENEFIT CATEGORIES; AND

WHEREAS, CONGRESS, IN A BIPARTISAN EFFORT, MUST ACT IMMEDIATELY TO SHORE UP THE FINANCING OF THE SOCIAL SECURITY PROGRAMS, TO RESTORE CONFIDENCE IN THEM, AND TO ENSURE THEIR CONTINUATION; NOW, THEREFORE, BE IT

RESOLVED, BY THE SENIOR SENATE AND THE SENIOR ASSEMBLY, JOINTLY, THAT THE SENIOR LEGISLATURE OF THE STATE OF CALIFORNIA AT ITS 2011 REGULAR SESSION, A MAJORITY OF THE MEMBERS VOTING THEREFOR, HEREBY PROPOSES THAT THE SOLVENCY OF THE SOCIAL SECURITY TRUST FUNDS BE ADDRESSED; AND BE IT FURTHER

RESOLVED, THAT THE SENIOR LEGISLATURE OF THE STATE OF CALIFORNIA RESPECTFULLY MEMORIALIZES THE CONGRESS AND THE PRESIDENT TO ENACT APPROPRIATE LEGISLATION THAT WOULD ADDRESS THE CONCERNS SET FORTH IN THIS MEASURE; AND BE IT FURTHER

RESOLVED, THAT THE SENIOR LEGISLATURE OF THE STATE OF CALIFORNIA HEREBY ENCOURAGES THE LEGISLATURE OF THE STATE OF CALIFORNIA TO PASS A JOINT RESOLUTION URGING THE CONGRESS AND THE PRESIDENT TO ENACT APPROPRIATE LEGISLATION THAT WOULD ADDRESS THE CONCERNS SET FORTH IN THIS MEASURE; AND BE IT FURTHER

RESOLVED, THAT A COPY OF THIS MEASURE BE TRANSMITTED TO THE PRESIDENT AND VICE PRESIDENT, THE SPEAKER OF THE HOUSE OF REPRESENTATIVES, THE CHAIRPERSONS OF THE HOUSE AND SENATE COMMITTEES ON AGING, AND TO EACH SENATOR AND REPRESENTATIVE FROM CALIFORNIA IN THE CONGRESS OF THE UNITED STATES.

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RN 11 18066