Restoration of certain minimum benefits and other OASDI program changes: legislative history and summary of...

The Omnibus Budget Reconciliation Act of 1981 (Public Law 97-35), enacted on August 13, 1981, contained a provision to eliminate the minimum-benefit provision under the Social Security program for both current and future beneficiaries. Although a large majority of the members of both Houses of Congress accepted the measure in the broad context of the Reconciliation Act, there was considerable reaction against it and the provision was reconsidered. On December 29, 1981, new legislation restored the minimum benefit for current, but not future, beneficiaries. To lessen the cash-flow problems of the Old-Age and Survivors Insurance (OASI) program, Public Law 97-123 also authorizes borrowing among the several trust funds and calls for the coverage, for Social Security tax and benefit purposes, of sick pay during the first 6 months of nonwork. In this article, the Commissioner of Social Security traces the legislative development of these and other provisions contained in the new law. He points out that, although the added expenditures for minimum benefits ultimately will be offset by the coverage of sick pay, the net short-term effect of the two provisions will be higher program costs. The interfund borrowing provision, however, could permit the payment of benefits on a timely basis throughout 1982 and the first 6 months of 1983.