(f) Subsection (b) of section 1106 of such Act is amended by striking out "Federal Old-Age and Survivors Insurance Trust Fund and the Federal Disability Insurance Trust Fund" and inserting in lieu thereof "Federal Social Insurance Trust Fund, which shall be allocated to the appropriate Accounts thereof".

(g) The amendment made by the preceding subsection of this section shall become effective on January 1, 1962, except that the report required by section 201 (c) (2) of the Social Security Act, as in effect prior to the enactment of this Act, to be made not later than March 1, 1962, shall be made as provided in such section and shall be regarded as the report required by section 706 (f) (2) of the Social Security Act, as amended by this Act, to be made not later than March 1, 1962.

INCREASE IN EARNINGS BASE

Definition of Wages

SEC. 103. (a)(1) Paragraph (3) of section 209 (a) of the Social Security Act is amended by inserting “and prior to 1962” after “1958".

(2) Such section 209 (a) is further amended by adding at the end thereof the following new paragraph:

"(4) That part of remuneration which, after remuneration (other than remuneration referred to in the succeeding subsections of this section) equal to $5,000 with respect to employment has been paid to an individual during any calendar year after 1961, is paid to such individual during such calendar year;".

Definition of Self-employment Income

(b)(1) Subparagraph (C) of section 211(b)(1) of such Act is amended by inserting "and prior to 1962" after "1958"; and by striking out "; or" and inserting in lieu thereof "; and".

(2) Such section 211(b) (1) is further amended by adding at the end thereof the following new subparagraph:

"(D) For any taxable year ending after 1961, (i) $5,000, minus (ii) the amount of wages paid to such individual during the taxable year; or".

Definitions of Quarter and Quarter of Coverage

(c) (1) Clause (ii) of section 213(a) (2) of such Act is amended by striking out "1958" and inserting in lieu thereof "1958 and before 1962, or $5,000 in the case of a calendar year after 1961".

(2) Clause (iii) of section 213 (a) (2) of such Act is amended by striking out "1958" and inserting in lieu thereof “1958 and before 1962, or $5,000 in the case of a taxable year ending after 1961".

Table for Determining Primary Insurance Amount

(d) (1) The table in section 215 (a) of such Act is amended by striking out all the figures in columns II, III, IV, and V beginning with the line which reads

(2) The amendment made by paragraph (1) shall be applicable with respect to monthly insurance benefits under title II of such Act for months after December 1961 and with respect to lump-sum death payments in the case of deaths after December 1961.

Average Monthly Wage

(e) Paragraph (1) of section 215(e) of such Act is amended by striking out "and the excess over $4,800 in the case of any calendar year after 1958" and inserting in lieu thereof "the excess over $4,800 in the case of any calendar year after 1958 and before 1962, and the excess over $5,000 in the case of a calendar year after 1961".

TECHNICAL AMENDMENTS

Suspension in Case of Aliens

SEC. 104. (a) Subsection (t) of section 202 of such Act is amended by adding at the end thereof the following new paragraph:

"(9) No payments shall be made under title XVI with respect to services furnished to an individual in any month for which the prohibition in paragraph (1) against payment of benefits to him is applicable (or would be if he were entitled to any such benefits)."

Persons Convicted of Subversive Activities

(b) Subsection (u) of such section is amended by striking out "and" before the phrase "in determining the amount of any such benefit payable to such individual for any such month," and inserting after such phrase "and in determining whether such individual is entitled to health insurance benefits under title XVI for any such month,".

Advisory Council on Social Security Financing

(c) (1) Subsection (a) of section 116 of the Social Security Amendments of 1956 is amended by striking out "of the Federal Old-Age and Survivors Insurance Trust Fund and of the Federal Disability Insurance Trust Fund" and inserting in lieu thereof "of the Federal Social Insurance Trust Fund". Such subsection is further amended by inserting before the period at the end thereof "and the health insurance benefits program".

(2) Subsection (d) of such section is amended by striking out "Federal OldAge and Surivivors Insurance Trust Fund and the Federal Disability Insurance Trust Fund" and inserting in lieu thereof "Federal Social Insurance Trust Fund".

(3) Subsection (f) of such section is amended by striking out ", the adequacy of benefits under the program, and all other aspects of the program" and inserting in lieu thereof "and the health insurance benefits program, the adequacy of benefits under the program, and all other aspects of the program".

TITLE II-AMENDMENTS TO THE INTERNAL REVENUE CODE OF 1954 CHANGES IN TAX SCHEDULES

Self-Employment Income Tax

SEC. 201. (a) Section 1401 of the Internal Revenue Code of 1954 (relating to the rate of tax on self-employment income) is amended to read as follows: "SEC. 1401. RATE OF TAX.

"In addition to other taxes, there shall be imposed for each taxable year, on the self-employment income of every individual, a tax as follows

"(1) in the case of any taxable year beginning after December 31, 1961, and before January 1, 1963, the tax shall be equal to 41⁄2 percent of the amount of the self-employment income for such taxable year;

"(2) in the case of any taxable year beginning after December 31, 1962, and before January 1, 1966, the tax shall be equal to 5% percent of the amount of the self-employment income for such taxable year;

"(3) in the case of any taxable year beginning after December 31, 1965, and before January 1, 1969, the tax shall be equal to 6% percent of the amount of the self-employment income for such taxable year; and

"(4) in the case of any taxable year beginning after December 31, 1968, the tax shall be equal to 7% percent of the amount of the self-employment income for such taxable year."

Tax on Employees

(b) Section 3101 of such Code (relating to rate of tax on employees under the Federal Insurance Contributions Act) is amended to read as follows:

"SEC. 3101. RATE OF TAX.

"In addition to other taxes, there is hereby imposed on the income of every individual a tax equal to the following percentages of the wages (as defined in section 3121(a)) received by him with respect to employment (as defined in section 3121 (b)) —

"(1) with respect to wages received during the calendar year 1962, the rate shall be 3 percent;

"(2) with respect to wages received during the calendar years 1963 to 1965, both inclusive, the rate shall be 34 percent;

"(3) with respect to wages received during the calendar years 1966 to 1968, both inclusive, the rate shall be 4 percent; and

"(4) with respect to wages received after December 31, 1968, the rate shall be 44 percent."

Tax on Employers

(c) Section 3111 of such Code (relating to rate of tax on employers under the Federal Insurance Contributions Act) is amended to read as follows: "SEC. 3111. RATE OF TAX.

"In addition to other taxes, there is hereby imposed on every employer an excise tax, with respect to having individuals in his employ, equal to the following percentages of the wages (as defined in section 3121(a)) paid by him with respect to employment (as defined in section 3121 (b)) —

“(1) with respect to wages paid during the calendar year 1962, the rate shall be 3 percent;

"(2) with respect to wages paid during the calendar years 1963 to 1965, both inclusive, the rate shall be 334 percent;

"(3) with respect to wages paid during the calendar years 1966 to 1968, both inclusive, the rate shall be 44 percent; and

"(4) with respect to wages paid after December 31, 1968, the rate shall be 44 percent."

Effective Dates

(d) The amendment made by subsection (a) shall apply with respect to taxable years beginning after December 31, 1961. The amendments made by subsections (b) and (c) shall apply with respect to remuneration paid after December 31, 1961.

INCREASE IN TAX BASE

Definition of Self-Employment Income

SEC. 202. (a) (1) Subparagraph (C) of section 1402 (b)(1) of the Internal Revenue Code of 1954 is amended by adding "and before 1962" after "1958"; and by striking out "or" and inserting in lieu thereof "and".

(2) Such section 1402(b) (1) is further amended by adding at the end thereof the following new subparagraph:

"(D) for any taxable year ending after 1961, (i) $5,000, minus (ii) the amount of the wages paid to such individual during the taxable year; or".

Definition of Wages

(b) Section 3121(a)(1) of such Code is amended by striking out "$4,800" wherever it appears and inserting in lieu thereof "$5,000".

Federal Service

(c) Section 3122 of such Code is amended by striking out "$4,800" and inserting in lieu thereof "$5,000".

Returns in the Case of Governmental Employees in Guam and American Samoa (d) Section 3125 of such Code is amended by striking out "$4,800" wherever it appears and inserting in lieu thereof "$5,000".

Special Refunds of Employment Taxes

(e) (1) Section 6413 (c) (1) of such Code is amended

(A) by inserting "and prior to the calendar year 1962" after "the calendar year 1958";

(B) by inserting "or (C) during any calendar year after the calendar year 1961, the wages received by him during such year exceed $5,000," after "exceed $4,800,"; and

(C) by inserting before the period at the end thereof "and before 1962, or which exceeds the tax with respect to the first $5,000 of such wages received in such calendar year after 1961".

(2) Section 6413(c) (2) (A) of such Code 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, 1960, or 1961, or $5,000 for any calendar year after 1961".

Effective Date

(f) The amendments made by subsections (b), (c), and (d) shall be applicable with respect to remuneration paid after 1961.

TECHNICAL AMENDMENT

SEC. 203. Section 3121 (1) (6) of the Internal Revenue Code of 1954 is amended by striking out so much thereof as precedes clause (A) and inserting in lieu thereof:

"DEPOSITS IN TRUST FUND.-For purposes of section 706 of the Social Security Act, relating to appropriations to the Federal Social Insurance Trust Fund, such remuneration-".

The amendment made by this section shall be effective January 1, 1962.

TITLE III-RAILROAD RETIREMENT AMENDMENTS

PART A-HEALTH INSURANCE BENEFITS FOR AGED UNDER THE RAILROAD RETIREMENT ACT

Health Insurance Benefits for the Aged

SEC. 301. (a) The Railroad Retirement Act of 1937 is amended by adding after section 20 of such Act the following new section:

"Health Insurance Benefits for the Aged

"SEC. 21. (a) For the purposes of this section, and subject to the conditions hereinafter provided, the Board shall have the same authority to determine the rights of individuals described in subsection (b) of this section to have payments made on their behalf for health insurance benefits consisting of inpatient hospital services, skilled nursing home services, home health services, and outpatient hospital diagnostic services within the meaning of title XVI of the Social Security Act as the Secretary of Health, Education, and Welfare has under such title XVI with respect to individuals to whom such title applies. The rights of individuals described in subsection (b) of this section to have payment made on their behalf for the services referred to in the next preceding sentence shall be the same as those of individuals to whom title XVI of the Social Security Act applies and this section shall be administered by the Board as if the provisions of such title XVI were applicable, references to the Secretary of Health, Education, and Welfare were to the Board, references to the Federal Social Insurance Trust Fund were to the Railroad Retirement Account, references to the United States or a State included Canada or a subdivision thereof, and the provisions of sections 1607 and 1612 of such title XVI were not included in such title. For purposes of section 11, a determination with respect to the rights of an individual under this section shall, except in the case of a provider of services, be considered to be a decision with respect to an annuity. "(b) Except as otherwise provided in this section, every individual who"(A) has attained age sixty-five and

"(B) (i) is entitled to an annuity, or (ii) would be entitled to an annuity had he ceased compensated service and, in the case of a spouse, had such spouse's husband or wife ceased compensated service, or (iii) had been awarded a pension under section 6, or (iv) bears a relationship to an

employee which, by reason of section 3(e), has been, or would be, taken into account in calculating the amount of an annuity of such employee or his survivor,

shall be entitled to have payment made for the services referred to in subsection (a), and in accordance with the provisions of such subsection. The payments for services herein provided for shall be made from the Railroad Retirement Account (in accordance with, and subject to, the conditions applicable under section 10(b) in making payment of other benefits) to the hospital, skilled nursing facility, or home health agency providing such services, including such services provided in Canada to individuals to whom this subsection applies but only to the extent that the amount of payments for services otherwise hereunder provided for an individual exceeds the amount payable for like services provided pursuant to the law in effect in the place in Canada where such services are furnished.

"(c) No individual shall be entitled to have payment made for the same services, which are provided for in this section, under both this section and title XVI of the Social Security Act, and no individual shall be entitled to have payment made under both this section and such title XVI for more than ninety days of inpatient hospital services or more than one hundred and eighty days of skilled nursing home services or more than one hundred and fifty units of such services during any benefit period, or more than two hundred and forty visits in any calendar year in which home health services are furnished. In any case in which an individual would, but for the preceding sentence, be entitled to have payment for such services made under both this section and such title XVI, payment for such services to which such individual is entitled shall be made in accordance with the procedures established pursuant to the next succeeding sentence, upon certification by the Board or by the Secretary of Health, Education, and Welfare. It shall be the duty of the Board and such Secretary with respect to such cases jointly to establish procedures designed to minimize duplications of requests for payment for services and determinations and to assign administrative functions between them so as to promote the greatest facility, efficiency, and consistency of administration of this section and title XVI of the Social Security Act; and, subject to the provisions of this subsection to assure that the rights of individuals under this section or title XVI of the Social Security Act shall not be impaired or diminished by reason of the administration of this section and title XVI of the Social Security Act. The procedures so established may be included in regulations issued by the Board and by the Secretary of Health, Education, and Welfare to implement this section and such title XVI, respectively.

"(d) Any agreement entered into by the Secretary of Health, Education, and Welfare pursuant to title XVI of the Social Security Act shall be entered into on behalf of both such Secretary and the Board. The preceding sentence shall not be construed to limit the authority of the Board to enter on its own behalf into any such agreement relating to services provided in Canada or in any facility devoted primarily to railroad employees.

"(e) A request for payment for services filed under this section shall be deemed to be a request for payment for services filed as of the same time under title XVI of the Social Security Act, and a request for payment for services filed under such title shall be deemed to be a request for payment for services filed as of the same time under this section.

"(f) The Board and the Secretary of Health, Education, and Welfare shall furnish each other with such information, records, and documents as may be considered necessary to the administration of this section or title XVI of the Social Security Act."

Amendment Preserving Relationship Between Railroad Retirement and Old-Age, Survivors, Disability, and Health Insurance Systems

(b) Section (1) (q) of such Act is amended by striking out "1960" and inserting in lieu thereof "1961".

Financial Interchange Between Railroad Retirement Account and Federal Social Insurance Trust Fund

(c) (1) Section 5(k) (2) of such Act is amended: (A) by striking out paragraphs (A) and (B) and redesignating paragraphs (C), (D), and (E) as (A), (B), and (C), respectively; (B) by substituting "Federal Social Insurance Trust "and" for "Federal Old-Age and Survivors Insurance Trust Fund" wherever such