Sec. 501. Conversion to chained CPI
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Paragraph
(3)of section 1(f) of the Internal Revenue Code of 1986 is amended to read as follows: For purposes of paragraph (2), the cost-of-living adjustment for any calendar year is— for adjustments first beginning before 2017, the product of— the CPI fraction for calendar years before 2017, multiplied by the Chained CPI fraction for calendar years after 2016, reduced by 1, and for adjustments first beginning after 2016, the Chained CPI fraction for years after 2016. The CPI fraction for calendar years before 2017 is the fraction— the numerator of which is the CPI for the calendar year 2015; and the denominator of which is the CPI for the calendar year 1992. The Chained CPI fraction for calendar years after 2016 is the fraction— the numerator of which is the Chained CPI for the preceding calendar year, and the denominator of which is the Chained CPI for the calendar year 2015. . Paragraph
(4)of section 1(f) of such Code is amended to read as follows: CPI and chained cpi for any calendar year For purposes of paragraph (3)— The CPI for any calendar year is the average of the Consumer Price Index as of the close of the 12-month period ending on August 31 of such calendar year. The Chained CPI for any calendar year is the average of the Chained Consumer Price Index as of the close of the 12-month period ending on August 31 of such calendar year. . Paragraph
(5)of section 1(f) of such Code is amended to read as follows: For purposes of paragraph (4)— The term Consumer Price Index means the last Consumer Price Index for all urban consumers published by the Department of Labor. For purposes of the preceding sentence, the revision of the Consumer Price Index which is most consistent with the Consumer Price Index for calendar year 1986 shall be used. The term Chained Consumer Price Index means the most recent estimate of the Chained Consumer Price Index for all urban consumers published by the Department of Labor. . Subclause
(II)of section 36B(b)(3)(A)(ii) of such Code is amended by striking consumer price index and inserting Chained Consumer Price Index (as defined in section 1(f)(5)(B)) . Subclause
(II)of section 36B(f)(2)(B)(ii) of such Code is amended by striking by substituting and inserting calendar year 2017 for calendar year 1992 in subparagraph
(B)thereof by substituting . calendar year 2017 for calendar year 2015 in subparagraph
(C)thereof Clause
(ii)of section 45R(d)(3)(B) of such Code is amended by striking by substituting and inserting calendar year 2016 for calendar year 1992 in subparagraph
(B)thereof by substituting . calendar year 2016 for calendar year 2015 in subparagraph
(C)thereof Subparagraph
(B)of section 125(i)(2) of such Code is amended by striking by substituting and inserting calendar year 2016 for calendar year 1992 in subparagraph
(B)thereof by substituting . calendar year 2016 for calendar year 2015 in subparagraph
(C)thereof Subclause
(II)of section 4980I(b)(3)(C)(v) of such Code is amended by striking for and inserting 1992 in subparagraph
(B)thereof for . 2015 in subparagraph
(C)thereof Clause
(ii)of section 5000A(c)(3)(D) of such Code is amended by striking by substituting and inserting calendar year 2015 for calendar year 1992 in subparagraph
(B)thereof by substituting . calendar year 2015 for calendar year 2015 in subparagraph
(C)thereof Paragraph
(1)of section 6721(f) of such Code is amended by striking determined by substituting . calendar year 2015 for calendar year 1992 in subparagraph
(B)thereof Paragraph
(1)of section 6722(f) of such Code is amended by striking determined by substituting . calendar year 2015 for calendar year 1992 in subparagraph
(B)thereof The amendments made by this subsection shall apply to taxable years beginning after December 31, 2016. Section 215(i)(1)(D) of the Social Security Act ( 42 U.S.C. 415(i)(1)(D) ) is amended to read as follows: the term CPI increase percentage , with respect to a base quarter or cost-of-living computation quarter in any calendar year, means the percentage (rounded to the nearest one-tenth of 1 percent) by which the Chained Consumer Price Index for All Urban Consumers (as published in its initial form by the Bureau of Labor Statistics of the Department of Labor) for such base quarter or cost-of-living computation quarter exceeds such index for the later of— the most recent calendar quarter (prior to such base quarter or cost-of-living computation quarter) which was a base quarter under subparagraph (A)(ii); or the most recent cost-of-living computation quarter under subparagraph (B); . Section 215(i)(1)(G) of such Act ( 42 U.S.C. 415(i)(1)(G) ) is amended to read as follows: the Chained Consumer Price Index for All Urban Consumers for a base quarter, a cost-of-living computation quarter, or any other calendar quarter shall be the arithmetical mean of such index (as published in its initial form by the Bureau of Labor Statistics of the Department of Labor as of the end of such quarter) for the 12-month period ending with such quarter. . Section 215(i)(1) of such Act, as in effect in December 1978, and as applied in certain cases under the provisions of such Act as in effect after December 1978, is amended— in subparagraph (B), by striking and after the semicolon; in subparagraph (C), by striking for the 3 months in such quarter. and inserting for the 12 months in the 12-month period ending with such quarter; and ; and by adding at the end the following new subparagraph: the term Consumer Price Index means the Chained Consumer Price Index for All Urban Consumers (C–CPI–U), as published in its initial form by the Bureau of Labor Statistics of the Department of Labor. . Section 215(i)(4) of the Social Security Act ( 42 U.S.C. 415(i)(4) ) is amended by inserting and by section 501(b) of the America First Act after 1986, . The amendments made by this subsection shall apply with respect to increases described in section 215(i) of the Social Security Act, and to increases under programs dependent on Social Security cost-of-living adjustments, effective with the month of December for years after 2015. Notwithstanding any other provision of law, and except as provided in this section, for purposes of determining the amount of any cost-of-living increase or similar adjustment under a Federal program or law effective in the month of December 2016 and thereafter, any such increase for the period for which the percentage change is determined shall be deemed to be, in lieu of the increase otherwise determined under applicable law, the increase determined under such applicable law by substituting the Chained CPI for the CPI. In any case in which the amount of a cost-of-living increase effective in the month of December 2015 and thereafter is determined under applicable law by reference to a change in the CPI over a period which is determined by reference to a base period which remains constant from year to year, any such increase for any period shall be deemed to be, in lieu of the increase otherwise determined under applicable law, the increase, expressed as a percentage increase, equal to the product of— the CPI fraction prior to 2017; multiplied by the Chained CPI fraction after 2016, reduced by 1. The CPI fraction prior to 2017 is the fraction— the numerator of which is the CPI for the period, ending with or during 2015, which corresponds to the base period; and the denominator of which is the CPI for the base period. The Chained CPI fraction after 2016 is the fraction— the numerator of which is the Chained CPI for the period, ending with or during the year preceding the year in which the determination takes effect, which corresponds to the base period; and the denominator of which is the most recently published estimate of the Chained CPI for the period, ending with or during 2015, which corresponds to the base period. Subject to subparagraph
(B)and the effective date under subsection (b)(4), this section and the amendments made by this section shall apply to any cost-of-living increase or other adjustment which is determined by reference to an adjustment made under section 215(i) of the Social Security Act ( 42 U.S.C. 415(i) ). Section 1617 of the Social Security Act ( 42 U.S.C. 1382f ) is amended— in subsection (a), in the matter preceding paragraph (1), by striking Whenever and inserting Subject to subsection (d), whenever ; and by adding at the end the following: Notwithstanding subsection (a), with respect to benefits payable under this title for December 2016 and months thereafter, whenever benefit amounts under title II are increased by any percentage effective with any month as a result of a determination made under section 215(i), each of the dollar amounts in effect for such month under subsections (a)(1)(A), (a)(2)(A), (b)(1), and (b)(2) of section 1611, and subsection (a)(1)(A) of section 211 of Public Law 93–66 , as specified in such subsections or as previously increased under this section, shall be increased by 1/12 of the cost-of-living adjustment determined under paragraph
(2)for the most recent prior calendar year (and rounded, when not a multiple of $12, to the next lower multiple of $12). The cost-of-living adjustment determined under this paragraph is, with respect to a calendar year, the percentage equal to the sum of— the Chained CPI increase percentage determined under paragraph
(3)for the year; and the difference of— the product of the CPI increase percentage determined under paragraph
(4)for the year and the applicable transition factor under paragraph (5); and the product of the Chained CPI increase percentage determined under paragraph
(3)for the year and the applicable transition factor under paragraph (5). The Chained CPI increase percentage determined under this paragraph for a calendar year is the fraction (expressed as a percentage)— the numerator of which is the Chained Consumer Price Index for All Urban Consumers for the preceding calendar year (as published by the Bureau of Labor Statistics of the Department of Labor); and the denominator of which is the Chained Consumer Price Index for All Urban Consumers for calendar year 2015 (as so published). The CPI increase percentage determined under this paragraph for a calendar year is the fraction (expressed as a percentage)— the numerator of which is the Consumer Price Index for all urban consumers for the preceding calendar year (as published by the Bureau of Labor Statistics of the Department of Labor); and the denominator of which is the Consumer Price Index for all urban consumers for calendar year 2015 (as so published). The applicable transition factor under this paragraph is— for benefits effective for months beginning after November 30, 2016, and before December 1, 2017, 0.8; for benefits effective for months beginning after November 30, 2017, and before December 1, 2018, 0.6; for benefits effective for months beginning after November 30, 2018, and before December 1, 2019, 0.4; for benefits effective for months beginning after November 30, 2019, and before December 1, 2020, 0.2; and for benefits effective for months beginning after November 30, 2020, 0.0. . Section 1617(b) of such Act ( 42 U.S.C. 1382f(b) ) is amended by inserting or
(d)after subsection
(a). This subsection shall apply to revisions to the poverty line made pursuant to 42 U.S.C. 9902(2) , and any programs for which adjustments or eligibility thresholds are based upon the poverty line as defined in that section. CPI and chained cpi For purposes of this subsection— the CPI for any period means the average monthly Consumer Price Index for such period, or a component thereof, as determined under the applicable law in connection with any cost-of-living increase or similar adjustment required for such period (without regard to this subsection); and the Chained CPI for any period means, except as provided in paragraph (2)(C)(ii), the Chained Consumer Price Index for all urban consumers (as published in its initial form by the Bureau of Labor Statistics of the Department of Labor) for such period, or a component thereof, determined under applicable law in the same manner as the CPI for such period would be determined. Sections 8340(a)(2) and 8462(a)(2) of title 5, United States Code, are each amended by striking 3 months comprising such quarter and inserting 12-month period ending with such quarter . Section 1401a(h) of title 10, United States Code, is amended by striking three months comprising that quarter and inserting 12-month period ending with such quarter . The amendments made by this subsection shall apply with respect to cost-of-living increases effective with the month of December of years after 2015.
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- Pub. L. 93-66
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