INDIVIDUAL SECURITY SYSTEM ACT OF 2026.

By Greg Penglis and Grok AI, October 15, 2025.

Introduction:

It is one of the biggest problems we face as a nation. It affects everyone. Everyone who works pays in. Everyone upon retirement wants enough out to live on. That’s not how it was designed. I’ve always felt Social Security was a second income tax that created yet another fund for Congress to pillage. That’s why it keeps going broke, they keep raising the retirement age, they keep cutting benefits, keep raising the payroll tax, keep scaring people into accepting this nonsense, and they keep bringing in illegal aliens to work illegally, illegally pay into the system, and then illegally collect from it.

There is the huge problem of non-citizens all over the world who were born here, but their parents were foreign nationals, and so they are not US citizens per the 14th Amendment. They can never participate in this system until they go through the full naturalization process and become 14th Amendment compliant naturalized citizens.

Social Security was always a Ponzi Scheme which worked as long as enough workers paid in to support those collecting in retirement. But people are living longer and collecting longer. People are having fewer children to support the system. And the whole thing was a lie from the start, because people believed they were paying in to a system where they would their money back out, plus interest and growth in the economy. But it was never that way. When people paid in, that money was immediately paid out and distributed to those who were collecting. Money in, money out. And money siphoned off to Congress for whatever they wanted.

Congress controls Social Security. They can do anything they want and you have to take it. And worst of all, it’s going broke. The system as it exists has only ten years by Social Security’s own calculations. Young folks are hopeless about there being money for them when they retire. And as things stand they are right.

So, does anyone actually want to fix this? No. Does anyone want a new system that will be self funding, create independent and individual retirement accounts that people actually own, that they can pass on to their families, and that pay many times more than Social Security? Apparently not because nothing has been proposed to do that.

Until now…

Once again, the Action Radio Citizen Legislature, with the help of Grok AI, has solved the problem. This bill will over time completely and seamlessly, transfer the Social Security System, to an Individual Security System. Yes it is entirely possible. It works. It’s been checked all kinds of ways by AI. And this is the best, possibly the only plan of its kind in the country to SOLVE THE SOCIAL SECURITY CRISIS!

Of course if y’all don’t share it, report on it, get it into the news, get it to the pollsters, get it to Congress, get it to political candidates, and get the word out that no one gets elected to federal office without this, then and only then will you have the unparalleled prosperity and freedom this Act brings.

Or, you can do nothing, and the system collapses in 10 years.

The choice is entirely up to YOU!

Below are concise bullet points for the bill’s introduction, designed to explain the Individual Security System Act of 2026 to the public in simple, approachable language. They highlight key features, savings, timeline, protections, and benefits, making complex concepts clear and reassuring for those unfamiliar with retirement policy.

Replaces Social Security with a Better System: Ends the old Social Security program (projected to go broke by 2035) with the Individual Security System (ISS), giving workers personal retirement accounts they own, with higher benefits (e.g., $6,600/month at age 65 for a $62,000 earner vs. $2,800 under Social Security).

Saves Trillions: Saves $2.39 trillion annually by 2075 compared to Social Security’s projected $4 trillion cost, with ISS accounts growing to $55 trillion in worker-owned assets, ensuring no insolvency.

Fair Transition Timeline: Starts January 1, 2026; fully replaces Social Security by 2051. Workers under 40 join ISS, those over 50 stay in Social Security, and those 40-50 choose. Everyone gets benefits until death.

Ironclad Account Security: Personal accounts can’t be touched by Congress, courts, creditors, or divorce/child support orders. They’re your property, held by private firms, not government IOUs like Social Security.

Flexible Investment Options: Choose from 10 investment plans (safe to high-growth, 2-7% returns) or an automatic plan that lowers risk as you age, ensuring your savings grow (e.g., $900,000 by age 65 for a $62,000 earner).

Limits ISS participation to United States citizens: as defined by the Fourteenth Amendment, including those born or naturalized in the U.S. and subject to its jurisdiction, while allowing children born to foreign nationals not subject to U.S. jurisdiction to join the program upon completing the full naturalization process to become legal U.S. citizens.

Parents Payout Boosts Families: $10,000/year per child under 18 ($5,000 per parent, or $10,000 for custodial parents if one is deceased), tax-free, protected from court orders, encouraging family growth.

Universal Pension for All: $1,000/month for life at age 65 for most retirees (except the wealthiest 20%), ensuring no one falls through the cracks, especially low-income seniors.

Helps Middle and Working Class Most: Higher pensions, tax-free payouts, and parents payouts benefit average workers and families, not just the rich. Wealthy retirees refund contributions if ineligible.

No Fees, Transparent Management: Private firms manage accounts with no fees, overseen by a new agency with annual reports and a hotline for questions.

Protects Fathers and Widowed Parents: Equal payouts for mothers and fathers, with special support for custodial parents who’ve lost a spouse, ensuring fairness in family court.

Tax-Free Benefits: All ISS pensions, parents payouts, and refunds are free from federal income tax, maximizing your income.

Supports Medicare and SSI: Keeps Medicare and Supplemental Security Income fully funded, so healthcare and low-income aid continue uninterrupted.

HERE IS THE BILL:

Section 1: Short Title

This Act may be cited as the “Individual Security System Act of 2026”.

Section 2: Findings

Congress finds that:

(1) The Federal Old-Age, Survivors, and Disability Insurance program (OASDI, 42 U.S.C. §§ 401-434) is projected to become insolvent by 2035, threatening benefits for 65,000,000 beneficiaries (per SSA 2023 Annual Report).

(2) The Individual Security System (ISS), established by this Act, provides a sustainable, defined-contribution pension system for United States citizens, delivering higher benefits (e.g., $6,600/month at age 65 for a $62,000 earner vs. $2,800 under OASDI), achieving solvency through 2075 with $55,000,000,000,000 in assets.

(3) The ISS encourages family formation through parents payouts ($10,000/year per child, adjusted for inflation), supports retirees with a universal pension ($1,000/month), and ensures fairness by refunding contributions to ineligible high-asset retirees.

(4) Limiting participation to United States citizens, as defined by the first sentence of section 1 of the Fourteenth Amendment to the Constitution, ensures the system serves Americans exclusively, consistent with national interests.

Section 3: Repeal of Old-Age, Survivors, and Disability Insurance Program

(a) Repeal:

(1) In General: Subchapter II of Chapter 7 of Title 42, United States Code (42 U.S.C. §§ 401-511), establishing the Federal Old-Age, Survivors, and Disability Insurance program (OASDI), is repealed effective January 1, 2051, except as provided in subsection (b).

(2) Purpose: The repeal eliminates the OASDI program, projected to become insolvent by 2035 (per SSA 2023 Annual Report), replacing it with the Individual Security System (ISS) established under section 4, which ensures solvency through 2075 with approximately $55,000,000,000,000 in individual security system account assets, providing higher benefits (e.g., $6,600/month at age 65 for a worker earning $62,000 annually, compared to $2,800 under OASDI).

(b) Transition Period:

(1) Continuation of OASDI Benefits: During the transition period from January 1, 2026, and continuing until the death of all eligible beneficiaries, benefits under 42 U.S.C. §§ 401-434 shall be paid to individuals enrolled in OASDI under section 1507 of title 42, United States Code, as added by section 4 of this Act, estimated at 65,000,000 beneficiaries in 2026 (per SSA data).

(2) Funding: Benefits during the transition period shall be funded by:

(A) Taxes imposed under sections 3101(a), 3111(a), and 1401(a) of the Internal Revenue Code of 1986 (26 U.S.C. §§ 3101(a), 3111(a), 1401(a)), reduced gradually as provided in subsection (c).

(B) Amounts appropriated from the general fund of the Treasury not otherwise appropriated, estimated at approximately $700,000,000,000 annually in 2026, sufficient to pay benefits to all eligible beneficiaries until their death.

(3) Eligibility: Only workers born on or before December 31, 1975, or those born between January 1, 1976, and December 31, 1986, who elect to remain in OASDI under section 1507(c) of title 42, United States Code, shall be eligible for OASDI benefits. No new OASDI enrollments or benefits shall be permitted after December 31, 2050.

(1) Gradual Reduction: The OASDI payroll tax imposed under sections 3101(a), 3111(a), and 1401(a) of the Internal Revenue Code of 1986 (26 U.S.C. §§ 3101(a), 3111(a), 1401(a)) shall be reduced linearly from 12.4 percent in 2026 to 0 percent by January 1, 2051, at a rate of approximately 0.496 percent per year, reflecting the declining OASDI participant population (from approximately 67,500,000 workers in 2026 to 0 by 2051).

(2) Implementation: The Secretary of the Treasury shall adjust the tax rates annually, ensuring collections are sufficient to fund OASDI benefits, estimated at $500,000,000,000 in 2026, decreasing to $0 by 2051.

(d) Preservation of Other Programs:

(1) Medicare: The Medicare program under subchapter XVIII of Chapter 7 of Title 42, United States Code (42 U.S.C. §§ 1395-1395lll), is unaffected by this section and continues to provide benefits, funded by the 3 percent payroll tax under section 1510(a) of title 42, United States Code.

(2) Supplemental Security Income: The Supplemental Security Income program under subchapter XVI of Chapter 7 of Title 42, United States Code (42 U.S.C. §§ 1381-1385), is unaffected by this section and continues to provide benefits to approximately 7.5 million low-income individuals annually (per SSA 2023 data).

(3) Other Provisions: All other provisions of Chapter 7 of Title 42, United States Code, not within sections 401-434, remain in effect, including administrative procedures under section 405 (42 U.S.C. § 405).

(e) Coordination with Individual Security System:

(1) Transition Rules: The transition from OASDI to ISS shall be governed by section 1507 of title 42, United States Code, ensuring workers under age 40 in 2026 participate in ISS, workers over age 50 remain in OASDI, and workers aged 40-50 choose permanently between systems.

(2) Funding Assurance: Appropriations under section 1511 of title 42, United States Code, ensure sufficient funding for OASDI benefits until the death of all beneficiaries and ISS benefits thereafter, eliminating the insolvency risk projected for 2035.

(3) Administration: The Individual Security Administration, established under section 1513 of title 42, United States Code, shall assume ISS functions, while the Social Security Administration continues OASDI administration until all benefits are paid.

(f) Severability and Non-Judicial Review: If any provision of this section, or the application thereof to any person or circumstance, is held invalid, the remainder of this section and the Act shall not be affected thereby. No provision of this Act, including determinations of severability, is subject to judicial review, as such review is not a power delegated to the judiciary under Article III of the Constitution of the United States.

Section 4: Establishment of Individual Security System

(A) In General:

The United States Code is amended by adding a new subchapter to Title 42, Chapter 7, and by amending Title 26 to establish the Individual Security System (hereinafter referred to as “ISS”), a defined-contribution pension system to replace the Old-Age, Survivors, and Disability Insurance program (42 U.S.C. §§ 401-434) by January 1, 2051, providing secure, sustainable retirement benefits for all eligible United States citizens through individual security system accounts, a universal pension, and parents payouts, funded by worker contributions and general revenue, ensuring long-term solvency and higher benefits than the current program.

(B) New Subchapter in Title 42:

Title 42, Chapter 7 of the United States Code is amended by adding at the end the following new subchapter:

Subchapter XXII– Individual Security System

42 U.S.C. § 1500 – Definitions

For purposes of this subchapter:

(1) Individual Security System (ISS): The term “Individual Security System” or “ISS” means the pension system established under this subchapter to provide retirement benefits to eligible United States citizens through individual security system accounts funded by contributions, a universal pension, and parents payouts, replacing the Federal Old-Age, Survivors, and Disability Insurance program (42 U.S.C. §§ 401-434).

(2) Taxable wages: The term “taxable wages” means wages as defined in section 3121(a) of the Internal Revenue Code of 1986 (26 U.S.C. § 3121(a)) and net earnings from self-employment as defined in section 1402(a) of such Code (26 U.S.C. § 1402(a)), not exceeding $200,000 in any calendar year, adjusted annually beginning January 1, 2027, by the percentage increase in the Consumer Price Index for All Urban Consumers (CPI-U) as determined under section 415(i) of this title (42 U.S.C. § 415(i)).

(3) Worker: The term “worker” means any United States citizen, as defined in section 1514 of this subchapter, engaged in employment as defined in section 3121(b) of the Internal Revenue Code of 1986 (26 U.S.C. § 3121(b)) or self-employment as defined in section 1402(b) of such Code (26 U.S.C. § 1402(b)), including employees, independent contractors, Members of Congress, members of the uniformed services, and first responders, without exemption.

(4) Eligible retiree: The term “eligible retiree” means a United States citizen aged 65 or older whose total assets, excluding the value of their primary residence, are below the asset threshold for the top 20 percent of United States households, initially set at $500,000 for calendar year 2026 and adjusted annually by the percentage increase in the CPI-U as determined under section 415(i) of this title (42 U.S.C. § 415(i)).

(5) Parents payout: The term “parents payout” means an annual payment of $10,000 per child under age 18, adjusted annually beginning January 1, 2027, by the percentage increase in the CPI-U as provided in section 1500(2), awarded jointly to married parents or divided equally ($5,000 each), or $5,000 individually to a mother or father for any other marital status, verified by the child’s Social Security number and tax return data, paid yearly via direct deposit or check. The entitlement to such payout, whether joint or individual, shall not be affected by any court orders or judgments, including those related to divorce, child support, or custody.

(6) Individual Security Administration: The term “Individual Security Administration” means the agency established under section 1513 of this subchapter within the Department of Health and Human Services to administer and regulate the ISS.

(7) Individual security system account: The term “individual security system account” means an individual retirement account established for a worker under section 1503 of this subchapter, funded by contributions, managed by a private firm approved by the Individual Security Administration, with no management fees.

(8) Programmed withdrawal: The term “programmed withdrawal” means a monthly pension payment beginning automatically at 50 percent of the full amount at age 60 and 100 percent at age 65, continuing until the individual security system account is exhausted, calculated based on the account balance and adjusted for actuarial factors and expected investment returns as prescribed by the Individual Security Administration. Retirees may adjust payments to extend over a longer period for extended life expectancy or to increase monthly payments to address health or other financial needs, in accordance with regulations issued under section 1504.

(9) Commissioner: The term “Commissioner” means the Commissioner of the Individual Security Administration.

(10) Secretary: The term “Secretary” means the Secretary of the Treasury, except where otherwise specified.

42 U.S.C. § 1501 – Establishment and Purpose

(a) Establishment: There is hereby established, effective January 1, 2026, the Individual Security System, a defined-contribution pension system to provide retirement benefits to eligible United States citizens through individual security system accounts, a universal pension for eligible retirees, and parents payouts, fully replacing the Federal Old-Age, Survivors, and Disability Insurance program (42 U.S.C. §§ 401-434) by January 1, 2051.

(b) Purpose: The purpose of the ISS is to ensure retirement security for all eligible United States citizens by providing benefits that exceed those of the Old-Age, Survivors, and Disability Insurance program (delivering approximately $6,600 per month for a worker earning $62,000 annually at age 65, or $3,300 per month at age 60, compared to $2,800 under OASDI), preventing the projected insolvency of such program by 2035, and achieving long-term solvency through self-funded accounts and general revenue appropriations, while supporting families through parents payouts to encourage childbirth.

42 U.S.C. § 1502 – Contributions

(a) Imposition of Tax: For each calendar year beginning on or after January 1, 2026, every worker participating in the ISS under section 1507 of this subchapter shall pay a tax equal to 15 percent of their taxable wages, not exceeding $200,000 (adjusted annually by the CPI-U as provided in section 1500(2) of this subchapter), which shall be deposited into their individual security system account.

(b) Employees:

(1) Withholding: The tax imposed under subsection (a) shall be withheld by the employer from the wages of each worker participating in the ISS, as and when paid, in the same manner as taxes under section 3101 of the Internal Revenue Code of 1986 (26 U.S.C. § 3101).

(2) Deposit: Amounts withheld shall be deposited monthly by the employer into the Treasury of the United States, as prescribed by section 6302 of the Internal Revenue Code of 1986 (26 U.S.C. § 6302), and transferred within 10 business days to the worker’s individual security system account, as directed by the Individual Security Administration.

(1) Payment: Workers engaged in self-employment shall pay the 15 percent tax on their net earnings from self-employment, not exceeding $200,000 (adjusted annually), either through withholding by platforms issuing payments (pursuant to section 6041 of the Internal Revenue Code of 1986 (26 U.S.C. § 6041)) or through quarterly estimated tax payments as prescribed by section 6654 of such Code (26 U.S.C. § 6654).

(2) No Deduction: No deduction shall be allowed for the tax imposed under this subsection, ensuring uniform treatment with employee contributions.

(d) Universal Participation: The tax imposed under this section applies to all workers who are United States citizens, as defined in section 1514 of this subchapter, without exemption, except that workers participating in the Old-Age, Survivors, and Disability Insurance program under section 1507 of this subchapter are exempt from this tax. Pension plans governed by the Employee Retirement Income Security Act of 1974 (29 U.S.C. §§ 1001-1461) remain separate, but all eligible citizens contribute to the ISS unless enrolled in OASDI.

(e) Certification and Records: The Commissioner shall establish and maintain records of taxable wages and contributions for each worker, in accordance with reports submitted under section 6051 of the Internal Revenue Code of 1986 (26 U.S.C. § 6051) for employees and section 6011 of such Code (26 U.S.C. § 6011) for self-employed individuals, certifying amounts to the Secretary for deposit into individual security system accounts.

42 U.S.C. § 1503 – Individual Security System Accounts

(a) Creation of Accounts: For each worker participating in the ISS under section 1507 of this subchapter, an individual security system account shall be established, effective January 1, 2026, or upon the worker’s election to participate, whichever is later, managed by a private firm approved by the Individual Security Administration under section 1508 of this subchapter.

(b) Funding: Each individual security system account shall consist of:

(1) Amounts deposited as contributions under section 1502 of this subchapter.

(2) Investment earnings and gains, net of losses, as provided in section 1503A of this subchapter.

(c) Investment of Accounts: Accounts shall be invested in accordance with the investment plans specified in section 1503A of this subchapter, as selected by the worker or assigned under the graduated plan.

(d) Ownership and Protection:

(1) Ownership: Each individual security system account is owned by the worker for whom it is established, and benefits are based solely on the account balance, contributions, and earnings.

(2) Protection from Legal Process and Court Orders: Individual security system accounts, including all contributions, investment earnings, and gains, are the sole property of the worker and shall not be subject to any legal action, court order, judgment, or process, including but not limited to family court proceedings, divorce settlements, child support orders, alimony, or any other claim, whether by local, State, Federal, or international authorities, private entities, or individuals. Such accounts are exempt from creditors, bankruptcy proceedings under section 522(d) of title 11, United States Code (11 U.S.C. § 522(d)), and any form of seizure, attachment, or redirection, ensuring they remain exclusively under the worker’s control, except as provided in subsection (e) or section 1504(c).

(3) Prohibited Transactions: No worker may borrow against, pledge, or otherwise encumber an individual security system account, except as provided for lump-sum distributions under section 1504(c).

(4) Prohibition on Congressional Access or Appropriation: Individual security system accounts, including all contributions, investment earnings, and gains, shall not be subject to appropriation, expenditure, or borrowing by Congress or any agency of the United States, nor shall such accounts or their balances be replaced with or exchanged for any obligation of the United States, including Treasury securities or other instruments of indebtedness. The funds in each account shall remain the exclusive property of the worker, held and managed by private firms approved under section 1508 of this subchapter, and shall not be treated as part of the general fund of the Treasury or any other federal fund.

(e) Death of Worker:

(1) Before Age 60: If a worker dies before age 60, the balance of their individual security system account shall be distributed to their designated beneficiary or, if none, to their estate, in a lump sum or as an annuity, as prescribed by the Individual Security Administration.

(2) After Age 60: If a worker dies after beginning payouts, remaining payments continue to a spouse or designated beneficiary until the account is exhausted, as provided in section 1504.

(f) Account Statements: The Individual Security Administration shall ensure that each worker receives an annual statement of their individual security system account balance, contributions, investment plan selection, and projected retirement benefits, accessible online and by mail, in a format understandable to the average person (e.g., showing a $62,000 earner’s account growing to approximately $900,000 over 35 years, yielding $6,600/month at age 65 or $3,300/month at age 60).

42 U.S.C. § 1503A – Investment Plans

(a) Investment Plan Options: The Individual Security Administration shall prescribe regulations within 180 days of enactment establishing 10 investment plans for individual security system accounts, designated as Plans 1 through 10, ranging from lowest risk and return to highest risk and return, to provide workers with choices balancing safety and growth. Each plan shall consist of diversified investments, including stocks, bonds, and other securities, managed by approved private firms under section 1508 of this subchapter, with no management fees.

(b) Plan Descriptions:

(1) Plan 1 (Lowest Risk): Consists of 80 percent U.S. Treasury securities (maturities 1-10 years) and 20 percent investment-grade corporate bonds, targeting a nominal return of 2 percent (0 percent real return after 2 percent inflation), with minimal volatility (standard deviation approximately 2 percent). Suitable for workers prioritizing capital preservation.

(2) Plan 2: Consists of 70 percent U.S. Treasury securities, 20 percent investment-grade corporate bonds, and 10 percent large-cap U.S. equities, targeting a nominal return of 2.5 percent (0.5 percent real), with low volatility (standard deviation approximately 3 percent).

(3) Plan 3: Consists of 60 percent U.S. Treasury securities, 20 percent investment-grade corporate bonds, and 20 percent large-cap U.S. equities, targeting a nominal return of 3 percent (1 percent real), with low-moderate volatility (standard deviation approximately 4 percent).

(4) Plan 4: Consists of 50 percent U.S. Treasury securities, 20 percent investment-grade corporate bonds, 20 percent large-cap U.S. equities, and 10 percent international bonds, targeting a nominal return of 3.5 percent (1.5 percent real), with low-moderate volatility (standard deviation approximately 5 percent).

(5) Plan 5: Consists of 40 percent U.S. Treasury securities, 20 percent investment-grade corporate bonds, 30 percent large-cap U.S. equities, and 10 percent international equities, targeting a nominal return of 4 percent (2 percent real), with moderate volatility (standard deviation approximately 6 percent).

(6) Plan 6: Consists of 30 percent U.S. Treasury securities, 20 percent investment-grade corporate bonds, 40 percent large-cap U.S. equities, and 10 percent international equities, targeting a nominal return of 4.5 percent (2.5 percent real), with moderate volatility (standard deviation approximately 8 percent).

(7) Plan 7: Consists of 20 percent U.S. Treasury securities, 20 percent investment-grade corporate bonds, 50 percent large-cap U.S. equities, and 10 percent small-cap U.S. equities, targeting a nominal return of 5 percent (3 percent real), with moderate-high volatility (standard deviation approximately 10 percent).

(8) Plan 8: Consists of 10 percent U.S. Treasury securities, 20 percent investment-grade corporate bonds, 50 percent large-cap U.S. equities, 10 percent small-cap U.S. equities, and 10 percent international equities, targeting a nominal return of 5.5 percent (3.5 percent real), with high volatility (standard deviation approximately 12 percent).

(9) Plan 9: Consists of 60 percent large-cap U.S. equities, 20 percent small-cap U.S. equities, 10 percent international equities, and 10 percent high-yield bonds, targeting a nominal return of 6 percent (4 percent real), with high volatility (standard deviation approximately 15 percent).

(10) Plan 10 (Highest Risk): Consists of 70 percent large-cap U.S. equities, 20 percent small-cap U.S. equities, and 10 percent emerging market equities, targeting a nominal return of 7 percent (5 percent real), with very high volatility (standard deviation approximately 18 percent). Suitable for workers seeking maximum growth with higher risk tolerance.

(1) Automatic Enrollment: Unless a worker selects a specific plan under subsection (b), their individual security system account shall be invested in the Graduated Investment Plan, which automatically adjusts the investment allocation every 5 years from age 20 to age 60 to reduce risk as the worker ages.

(2) Allocation Schedule:

(A) Ages 20-24: Invested in Plan 10 (70 percent large-cap U.S. equities, 20 percent small-cap U.S. equities, 10 percent emerging market equities; 7 percent nominal return, 18 percent volatility).

(B) Ages 25-29: Invested in Plan 9 (60 percent large-cap U.S. equities, 20 percent small-cap U.S. equities, 10 percent international equities, 10 percent high-yield bonds; 6 percent nominal return, 15 percent volatility).

(C) Ages 30-34: Invested in Plan 8 (10 percent U.S. Treasury securities, 20 percent investment-grade corporate bonds, 50 percent large-cap U.S. equities, 10 percent small-cap U.S. equities, 10 percent international equities; 5.5 percent nominal return, 12 percent volatility).

(D) Ages 35-39: Invested in Plan 7 (20 percent U.S. Treasury securities, 20 percent investment-grade corporate bonds, 50 percent large-cap U.S. equities, 10 percent small-cap U.S. equities; 5 percent nominal return, 10 percent volatility).

(E) Ages 40-44: Invested in Plan 6 (30 percent U.S. Treasury securities, 20 percent investment-grade corporate bonds, 40 percent large-cap U.S. equities, 10 percent international equities; 4.5 percent nominal return, 8 percent volatility).

(F) Ages 45-49: Invested in Plan 5 (40 percent U.S. Treasury securities, 20 percent investment-grade corporate bonds, 30 percent large-cap U.S. equities, 10 percent international equities; 4 percent nominal return, 6 percent volatility).

(G) Ages 50-54: Invested in Plan 4 (50 percent U.S. Treasury securities, 20 percent investment-grade corporate bonds, 20 percent large-cap U.S. equities, 10 percent international bonds; 3.5 percent nominal return, 5 percent volatility).

(H) Ages 55-59: Invested in Plan 3 (60 percent U.S. Treasury securities, 20 percent investment-grade corporate bonds, 20 percent large-cap U.S. equities; 3 percent nominal return, 4 percent volatility).

(I) Age 60 and Older: Invested in Plan 1 (80 percent U.S. Treasury securities, 20 percent investment-grade corporate bonds; 2 percent nominal return, 2 percent volatility).

(3) Transition: The Individual Security Administration shall prescribe regulations for automatic reallocation of account balances at the start of each 5-year period, ensuring no fees are charged for transitions. For example, a worker contributing $9,300 annually (15 percent of $62,000) from age 20, following the Graduated Investment Plan, accumulates approximately $900,000 by age 65, yielding $6,600/month at age 65 or $3,300/month at age 60.

(d) Worker Selection:

(1) Election: A worker may select any plan under subsection (b) at any time by submitting a form prescribed by the Individual Security Administration, effective the first day of the following month.

(2) Default: If no election is made, the worker’s account shall be invested in the Graduated Investment Plan under subsection (c).

(3) Notification: The Individual Security Administration shall provide annual notices to workers explaining plan options, risks, and returns, in plain language. Such notices shall include an explanation of standard deviation as a measure of investment risk, indicating how much returns may vary from the expected average (e.g., Plan 10’s 18 percent standard deviation means returns may fluctuate widely, risking losses in bad years, while Plan 1’s 2 percent standard deviation means stable but lower returns).

(e) Regulations: The Individual Security Administration shall issue regulations within 180 days of enactment specifying investment standards, diversification requirements, and risk disclosures for each plan, ensuring transparency and protection against undue risk. Regulations shall include stress-testing requirements to ensure plans withstand market downturns (e.g., 20 percent equity market decline).

(f) Performance Reporting: The Individual Security Administration shall publish annual reports on the performance of each plan, including actual returns, volatility, and comparisons to benchmarks (e.g., S&P 500 for equities, Bloomberg U.S. Aggregate Bond Index for bonds), accessible online and by mail.

42 U.S.C. § 1504 – Pension Payouts

(a) Eligibility for Payouts: A worker with an individual security system account shall receive pension payouts beginning automatically at age 60 (50 percent) and age 65 (100 percent), based on the balance of their individual security system account, including contributions and investment earnings.

(b) Programmed Withdrawals:

(1) Partial Payout at Age 60: Every worker shall receive 50 percent of their monthly programmed withdrawal beginning at age 60, calculated by dividing the account balance at age 60 by the number of months required to exhaust the account based on actuarial factors and expected investment returns (approximately 3 percent real return, as prescribed by the Individual Security Administration), and multiplying by 0.5. For example, a $900,000 balance yields approximately $6,600 per month at age 65, or $3,300 per month at age 60.

(2) Full Payout at Age 65: Every worker shall receive 100 percent of their monthly programmed withdrawal beginning at age 65, calculated as provided in paragraph (1) without the 50 percent reduction, continuing until the account is exhausted.

(3) No Penalty: The automatic commencement of payouts at age 60 shall not reduce the worker’s full monthly benefit at age 65 or thereafter, ensuring no penalty for early access, unlike reductions under section 402(q) of this title (42 U.S.C. § 402(q)).

(4) Flexible Adjustments: A retiree may adjust their programmed withdrawal to extend payments over a longer period to account for extended life expectancy (e.g., to age 95) or to increase monthly payments to address health or other financial needs (e.g., by 20 percent for medical expenses), as prescribed by the Individual Security Administration.

(5) Regulations: The Individual Security Administration shall prescribe regulations within 180 days of enactment to enable retirees to determine withdrawal amounts within the 50 percent and 100 percent framework at ages 60 and 65, respectively, ensuring sustainability of the account through the retiree’s life expectancy (e.g., age 85, based on Social Security Administration actuarial tables).

(1) Annuities: A worker may elect to receive payouts as a fixed or variable annuity, purchased from an approved provider, meeting standards prescribed by the Individual Security Administration for cost and reliability, beginning at age 60 (50 percent) or age 65 (100 percent).

(2) Lump Sum: A worker may elect a lump-sum distribution of up to 10 percent of their account balance at age 60 or 65, with the remainder paid as programmed withdrawals or an annuity.

(3) Election Process: Elections under this subsection shall be made in writing to the Individual Security Administration no later than 60 days before age 60 or 65, irrevocable except as provided in regulations.

(d) Tax Exemption: Payouts from individual security system accounts, whether as programmed withdrawals, annuities, or lump sums, are exempt from Federal income tax under section 408(p)(10) of the Internal Revenue Code of 1986 (26 U.S.C. § 408(p)(10)).

(e) Survivor Benefits: If a worker dies after beginning payouts, remaining payments shall continue to a spouse or designated beneficiary until the account is exhausted, or as an annuity if elected, as prescribed by the Individual Security Administration.

(f) Cost-of-Living Adjustments: Payouts may be adjusted annually to reflect investment performance, as prescribed by the Individual Security Administration, to maintain purchasing power, but shall not decrease below the initial amount calculated at age 60 or 65.

42 U.S.C. § 1505 – Universal Pension

(a) Entitlement: Every eligible retiree shall be entitled to a universal pension of $1,000 per month, beginning January 1, 2026, for ISS participants and January 1, 2038, for OASDI participants, payable for life, funded by amounts appropriated from the general fund of the Treasury not otherwise appropriated.

(b) Means-Testing and Refunds:

(1) Asset Threshold: An eligible retiree is a United States citizen aged 65 or older whose total assets (including bank accounts, investments, and real property, excluding the primary residence) are below the threshold for the top 20 percent of United States households, initially $500,000 for calendar year 2026, adjusted annually by the CPI-U as provided in section 1500(4) of this subchapter.

(2) Refund for Ineligible Retirees: A worker whose assets exceed the threshold at age 65 may elect to receive a lump-sum refund of their ISS contributions (excluding investment earnings) paid under section 1502, as verified by the Commissioner, payable within 90 days of application. Contributions under section 1502 remain mandatory for all workers during their working years, regardless of future eligibility for the universal pension.

(3) Verification: The Commissioner shall verify asset eligibility and contribution refunds using information provided by the Secretary under section 6103 of the Internal Revenue Code of 1986 (26 U.S.C. § 6103), including tax returns and financial disclosures. For example, a retiree with $400,000 in savings qualifies for the pension, while one with $600,000 may receive a refund of contributions (e.g., $325,500 for 35 years at $9,300/year).

(c) Payment: The universal pension shall be paid monthly by the Commissioner via direct deposit or check, in the same manner as benefits under section 405 of this title (42 U.S.C. § 405), beginning the first month after the retiree attains age 65.

(d) Appropriation: There is hereby appropriated to the Commissioner, for each fiscal year beginning on or after October 1, 2025, out of any moneys in the Treasury not otherwise appropriated, amounts sufficient to pay universal pensions and contribution refunds under this section, estimated at approximately $490,000,000,000 annually for 40,000,000 eligible retirees and refunds by 2038.

(e) Non-Taxable: Payments and refunds under this section are exempt from Federal income tax under section 408(p)(10) of the Internal Revenue Code of 1986 (26 U.S.C. § 408(p)(10)).

42 U.S.C. § 1506 – Parents Payout

(a) Entitlement: For each calendar year beginning on or after January 1, 2026, a mother and father of a child under age 18, where both parents and child are United States citizens as defined in section 1514 of this subchapter, shall be entitled to a parents payout, paid yearly via direct deposit or check, as follows:

(1) Joint Payout for Married Parents: $10,000 per child, adjusted annually by the CPI-U as provided in section 1500(5), awarded jointly to married parents or divided equally ($5,000 each).

(2) Individual Payout for Other Parents: $5,000 per child, adjusted annually by the CPI-U, awarded individually to a mother and father for any other marital status, or $5,000 to the mother if only the mother is identified, or $10,000 to the custodial parent if the other parent is deceased, regardless of custodial status.

(3) Equal Treatment: Both mother and father shall receive equal payouts ($5,000 each), regardless of marital status, custodial arrangements, or tax filing status, ensuring fathers are not disadvantaged compared to mothers.

(4) Protection from Court Orders: The entitlement to a parents payout, whether joint or individual, shall not be affected by any court orders or judgments, including those related to divorce, child support, or custody.

(5) Relation to Child Tax Credit: The parents payout is in addition to, and does not affect eligibility for, the Child Tax Credit under section 24 of the Internal Revenue Code of 1986 (26 U.S.C. § 24).

(b) Verification:

(1) Documentation: Eligibility shall be verified by the Commissioner based on the child’s Social Security number, birth certificate or adoption record, and tax return data (e.g., Form 1040, Schedule 8812) submitted by the parent, in coordination with the Secretary under section 6103 of the Internal Revenue Code of 1986 (26 U.S.C. § 6103).

(2) Citizenship: The Commissioner shall verify that both parents and child are United States citizens per section 1514 of this subchapter, using documentation such as a U.S. passport, birth certificate, or Certificate of Naturalization.

(3) Example: A single mother with two children under 18 receives $10,000 annually ($5,000 per child, paid yearly). Married parents with one child receive $10,000 ($5,000 each, paid yearly). A custodial parent whose spouse is deceased receives $10,000 per child (paid yearly).

(1) Yearly Payments: Payouts shall be made yearly by the Commissioner via direct deposit or check, in the same manner as benefits under section 405 of this title (42 U.S.C. § 405).

(2) Regulations: The Individual Security Administration shall issue regulations within 180 days of enactment to govern payment procedures.

(d) Appropriation: There is hereby appropriated to the Commissioner, for each fiscal year beginning on or after October 1, 2025, out of any moneys in the Treasury not otherwise appropriated, amounts sufficient to fund parents payouts under this section, estimated at approximately $120,000,000,000 annually for 12,000,000 parents, adjusted for CPI-U.

(e) Non-Taxable: Parents payouts are exempt from Federal income tax under section 408(p)(10) of the Internal Revenue Code of 1986 (26 U.S.C. § 408(p)(10)).

42 U.S.C. § 1507 – Transition Rules

(a) Workers Under Age 40:

(1) Enrollment: Each worker born after December 31, 1986, who is a United States citizen as defined in section 1514 of this subchapter, shall participate in the ISS, paying the tax imposed under section 1502 of this subchapter beginning January 1, 2026, and shall not be eligible for benefits under the Old-Age, Survivors, and Disability Insurance program (42 U.S.C. §§ 401-434).

(2) New Entrants: Any United States citizen entering the workforce (as defined in section 1500(3)) after December 31, 2025, shall participate in the ISS.

(b) Workers Over Age 50:

(1) Continued OASDI Participation: Each worker born on or before December 31, 1975, who is a United States citizen, shall remain in the Old-Age, Survivors, and Disability Insurance program, paying taxes under sections 3101(a), 3111(a), and 1401(a) of the Internal Revenue Code of 1986 (26 U.S.C. §§ 3101(a), 3111(a), 1401(a)) and receiving benefits under sections 401-434 of this title (42 U.S.C. §§ 401-434) until their death, supplemented by the universal pension under section 1505 of this subchapter beginning January 1, 2038.

(2) Benefit Amount: Benefits shall be calculated as provided in section 402 of this title (42 U.S.C. § 402), averaging approximately $1,800 per month for a worker earning $60,000 annually, plus $1,000 per month universal pension from 2038, totaling approximately $2,800 per month.

(1) Election Period: Each worker born between January 1, 1976, and December 31, 1986, who is a United States citizen, may elect to participate in the ISS (paying the 15 percent tax under section 1502) or remain in the Old-Age, Survivors, and Disability Insurance program (paying the tax under 26 U.S.C. §§ 3101(a), 3111(a), 1401(a), as reduced under section 3(c) of this Act) at any time between their 40th and 50th birthdays (calendar years 2026 through 2036).

(2) Election Process: The election shall be made by filing a form prescribed by the Secretary with the Internal Revenue Service, irrevocable upon submission. If no election is made by the worker’s 50th birthday, the worker shall remain in the Old-Age, Survivors, and Disability Insurance program. For example, a worker electing ISS at age 45 in 2028 contributes 15 percent until age 65, receiving approximately $6,600 per month at age 65 or $3,300 per month at age 60; electing OASDI receives approximately $2,800 per month from 2038 (including universal pension).

(3) Notification: The Commissioner shall notify each worker reaching age 40 of their election rights, including estimated benefits under ISS and OASDI, via mail and online, in a format understandable to the average person.

(d) Phase-Out of OASDI:

(1) Continuation of Benefits: Benefits under the Old-Age, Survivors, and Disability Insurance program shall be paid to eligible individuals until their death, estimated at 65,000,000 beneficiaries in 2026 costing approximately $1,200,000,000,000 annually, funded by taxes under sections 3101(a), 3111(a), and 1401(a) of the Internal Revenue Code of 1986 (26 U.S.C. §§ 3101(a), 3111(a), 1401(a)), as reduced under section 3(c) of this Act, and amounts appropriated from the general fund of the Treasury.

(2) Termination of New Enrollments: No new OASDI enrollments or benefits shall be awarded after December 31, 2050, and all provisions of sections 401-434 of this title (42 U.S.C. §§ 401-434) are repealed effective January 1, 2051, as provided in section 3 of this Act, except for the payment of benefits to existing beneficiaries until their death.

(e) Universal Pension During Transition:

(1) ISS Participants: The universal pension under section 1505 of this subchapter shall be paid to all eligible ISS retirees beginning January 1, 2026, ensuring no retiree receives less than $1,000 per month in addition to their ISS pension.

(2) OASDI Participants: The universal pension shall be paid to all eligible OASDI retirees beginning January 1, 2038, ensuring no retiree receives less than $1,000 per month in addition to their OASDI benefit (e.g., $2,800/month total for a $60,000 earner).

42 U.S.C. § 1508 – Individual Security Administration

(a) Establishment: There is hereby established within the Department of Health and Human Services the Individual Security Administration, headed by a Commissioner appointed by the President, by and with the advice and consent of the Senate, serving a term of 5 years, removable only for cause.

(b) Duties: The Commissioner shall:

(1) Approve private firms to manage individual security system accounts, ensuring compliance with no-fee and tax-exempt requirements under section 501(c)(29) of the Internal Revenue Code of 1986 (26 U.S.C. § 501(c)(29)).

(2) Prescribe investment standards for plans under section 1503A, targeting an average annual nominal return of 5 percent, with risk adjustments based on worker age.

(3) Administer the universal pension under section 1505 and parents payouts under section 1506, including eligibility verification and payment processing.

(4) Monitor fund performance, publishing annual reports on returns, assets (estimated at $55,000,000,000,000 by 2075), and compliance, accessible online and by mail.

(5) Establish a toll-free hotline and online portal for workers to access account information, file complaints, and receive benefit projections (e.g., showing a $62,000 earner’s pension of approximately $6,600 per month at age 65 or $3,300 per month at age 60).

(6) Coordinate with the Secretary to ensure accurate contribution deposits and benefit payments.

(1) Provide annual account statements to workers, detailing contributions, investment plan selection, and projected pensions, in plain language.

(2) Ensure transparency of investment options under section 1503A, including risk and return profiles, understandable to the average person.

(3) Establish procedures for workers to appeal account management disputes, modeled on section 405(g) of this title (42 U.S.C. § 405(g)).

(d) Appropriation: There is hereby appropriated to the Individual Security Administration, for each fiscal year beginning on or after October 1, 2025, out of any moneys in the Treasury not otherwise appropriated, amounts necessary to carry out its functions, estimated at $150,000,000 annually.

42 U.S.C. § 1509 – Administration and Enforcement

(a) Administration:

(1) IRS Role: The Secretary, through the Internal Revenue Service, shall collect and deposit ISS contributions under section 1502 of this subchapter, verify parents payout eligibility in coordination with the Commissioner, and maintain records of taxable wages pursuant to section 6051 of the Internal Revenue Code of 1986 (26 U.S.C. § 6051).

(2) ISA Role: The Commissioner shall administer the universal pension under section 1505, verify eligibility for parents payouts under section 1506, manage individual security system accounts under section 1503, and oversee investment plans under section 1503A, in accordance with procedures under section 405 of this title (42 U.S.C. § 405).

(3) Coordination: The Secretary and Commissioner shall enter into agreements to share information necessary for administration, including access to tax records under section 6103 of the Internal Revenue Code of 1986 (26 U.S.C. § 6103).

(b) Enforcement:

(1) Penalties for Non-Compliance: Any person who fails to withhold or remit ISS contributions under section 1502 shall be subject to penalties under section 6672 of the Internal Revenue Code of 1986 (26 U.S.C. § 6672), including liability for 100 percent of the unpaid tax. Willful evasion of contributions shall be subject to penalties under section 7201 of such Code (26 U.S.C. § 7201), including a fine of not more than $100,000 or imprisonment for not more than 7 years, or both.

(2) Fraud Prevention: Any person who misrepresents assets to obtain the universal pension or claims parents payouts fraudulently shall be subject to a civil penalty of not more than $10,000 per violation, in addition to repayment of amounts received, as determined by the Commissioner.

(3) Whistleblower Protections: Individuals reporting fraud or non-compliance under this subchapter shall be protected under section 7623 of the Internal Revenue Code of 1986 (26 U.S.C. § 7623), with rewards up to 30 percent of recovered amounts.

(1) Administrative Review: A worker or retiree may request a hearing before an administrative law judge to resolve disputes regarding contributions, parents payouts, universal pension eligibility, or account management, following procedures under section 405(b) of this title (42 U.S.C. § 405(b)).

(2) Judicial Review: Decisions of the administrative law judge may be reviewed by a Federal district court under section 405(g) of this title (42 U.S.C. § 405(g)).

42 U.S.C. § 1510 – Coordination with Other Programs

(a) Medicare: The Medicare program under subchapter XVIII of this chapter (42 U.S.C. §§ 1395-1395lll) is preserved, funded by a 3 percent payroll tax under sections 3101(b), 3111(b), and 1401(b) of the Internal Revenue Code of 1986 (26 U.S.C. §§ 3101(b), 3111(b), 1401(b)), providing hospital and medical insurance benefits to approximately 65,000,000 beneficiaries annually.

(b) Other Social Security Programs: Programs under subchapter XVI (Supplemental Security Income, 42 U.S.C. §§ 1381-1383f) and other non-OASDI provisions of this chapter remain in effect, unaffected by this subchapter.

(c) ERISA Plans: The Employee Retirement Income Security Act of 1974 (29 U.S.C. §§ 1001-1461) governs private-sector employee benefit plans, including defined benefit and defined contribution plans, such as union-sponsored multiemployer pension plans as defined in section 1002(37) of title 29, United States Code (29 U.S.C. § 1002(37)). Such plans remain separate from the ISS, but all workers who are United States citizens, as defined in section 1514 of this subchapter, shall contribute to the ISS under section 1502 unless enrolled in the Old-Age, Survivors, and Disability Insurance program under section 1507.

42 U.S.C. § 1511 – Funding

(a) Individual Security System Accounts: Each individual security system account shall be funded by contributions under section 1502 of this subchapter, estimated at approximately $1,550,000,000,000 annually in 2026 for 82,500,000 workers, increasing to $2,300,000,000,000 by 2051 for 150,000,000 workers.

(b) OASDI Transition: Benefits under the Old-Age, Survivors, and Disability Insurance program during the transition period (2026 and continuing until the death of all beneficiaries) shall be funded by:

(1) Taxes imposed under sections 3101(a), 3111(a), and 1401(a) of the Internal Revenue Code of 1986 (26 U.S.C. §§ 3101(a), 3111(a), 1401(a)), as reduced under section 3(c) of this Act, estimated at approximately $500,000,000,000 annually in 2026 from 67,500,000 workers, decreasing to $0 by 2051.

(2) Amounts appropriated from the general fund of the Treasury, estimated at approximately $700,000,000,000 annually in 2026, sufficient to pay benefits to all eligible beneficiaries until their death.

(c) Universal Pension and Parents Payouts: There is hereby appropriated, for each fiscal year beginning on or after October 1, 2025, out of any moneys in the Treasury not otherwise appropriated, amounts sufficient to fund:

(1) Universal pensions and contribution refunds under section 1505, estimated at approximately $490,000,000,000 annually for 40,000,000 eligible retirees and refunds by 2038.

(2) Parents payouts under section 1506, estimated at approximately $120,000,000,000 annually for 12,000,000 parents, adjusted for CPI-U.

(d) Solvency: The ISS is designed to be solvent through at least 2075, with individual security system accounts generating approximately $55,000,000,000,000 in assets by 2075, funded by contributions under section 1502, eliminating the insolvency risk of the Old-Age, Survivors, and Disability Insurance program projected for 2035, saving approximately $2,390,000,000,000 annually by 2075 compared to OASDI’s projected $4,000,000,000,000.

42 U.S.C. § 1512 – Regulations and Reporting

(a) Regulations: Not later than 180 days after the date of enactment of this Act, the following shall issue regulations to implement this subchapter:

(1) The Commissioner of the Individual Security Administration, for individual security system account management, investment standards, consumer protections, universal pension administration, parents payouts, and citizenship verification.

(2) The Secretary of the Treasury, for collection and deposit of contributions under section 1502.

(b) Reporting: The Individual Security Administration shall submit to Congress, not later than April 1 of each year beginning in 2027, a report detailing:

(1) Total individual security system account assets (estimated at $55,000,000,000,000 by 2075).

(2) Average investment returns and fund performance.

(3) Number of participants and beneficiaries.

(4) Solvency projections, confirming no risk of insolvency through 2075, unlike the Old-Age, Survivors, and Disability Insurance program.

(5) Compliance and enforcement actions, including fraud prevention measures.

(c) Public Access: Reports under subsection (b) shall be published online and available to the public in a format understandable to the average person, including examples of benefits (e.g., a $62,000 earner receiving approximately $6,600 per month at age 65 or $3,300 per month at age 60).

42 U.S.C. § 1513 – Establishment of Individual Security Administration

(a) Establishment: There is hereby established within the Department of Health and Human Services the Individual Security Administration, which shall assume responsibility for administering the Individual Security System under this subchapter, including individual security system accounts, universal pensions, parents payouts, and investment plans, replacing the functions of the Social Security Administration with respect to the ISS.

(b) Commissioner: The Individual Security Administration shall be headed by a Commissioner, appointed by the President, by and with the advice and consent of the Senate, serving a term of 5 years, removable only for cause. The Commissioner shall report to the Secretary of Health and Human Services and have the authority to issue regulations, administer benefits, and enforce compliance under this subchapter.

(1) Administer individual security system accounts under section 1503 and investment plans under section 1503A.

(2) Verify eligibility and process payments for universal pensions under section 1505 and parents payouts under section 1506.

(3) Verify citizenship status under section 1514, in coordination with the Secretary of Homeland Security and the Secretary of State as necessary.

(4) Coordinate with the Secretary of the Treasury for contribution collection under section 1502 and information sharing under section 6103 of the Internal Revenue Code of 1986 (26 U.S.C. § 6103).

(5) Maintain records of contributions, account balances, and benefit payments, in accordance with procedures under section 405 of this title (42 U.S.C. § 405).

(6) Provide consumer protections, including annual account statements and a toll-free hotline, as specified in section 1508(c).

(e) Transition from Social Security Administration: The Commissioner of Social Security shall transfer to the Individual Security Administration all records, personnel, and resources necessary to administer the ISS, effective January 1, 2026, in accordance with regulations issued by the Secretary of Health and Human Services. The Social Security Administration shall continue to administer the Old-Age, Survivors, and Disability Insurance program under sections 401-434 of this title (42 U.S.C. §§ 401-434) until all benefits are paid to eligible beneficiaries.

42 U.S.C. § 1514 – Citizenship Eligibility

(a) Eligibility Limited to United States Citizens:

(1) In General: Participation in the Individual Security System, including contributions under section 1502, individual security system accounts under section 1503, universal pensions under section 1505, and parents payouts under section 1506, is limited to workers and retirees who are United States citizens, as defined in subsection (b), and, for parents payouts, their children who are United States citizens.

(2) Exclusions: The following are ineligible to participate in the ISS:

(A) Non-citizens, including permanent residents, visa holders, refugees, or individuals with any temporary status under the Immigration and Nationality Act (8 U.S.C. §§ 1101 et seq.).

(B) Individuals born in the United States to foreign nationals who are not subject to the jurisdiction of the United States, as defined in subsection (b)(2), regardless of any designation as a United States citizen, except as provided in subsection (b)(3).

(b) Definition of United States Citizen:

(1) General Definition: A United States citizen is an individual who meets the requirements of the first sentence of section 1 of the Fourteenth Amendment to the Constitution of the United States, which provides: “All persons born or naturalized in the United States, and subject to the jurisdiction thereof, are citizens of the United States and of the State wherein they reside.” This includes those born in the United States or its territories to parents subject to the jurisdiction of the United States, naturalized citizens, or citizens by parentage under section 301 of the Immigration and Nationality Act (8 U.S.C. § 1401).

(2) Not Subject to Jurisdiction: An individual born in the United States to foreign nationals who are not subject to the jurisdiction of the United States, as described in the first sentence of section 1 of the Fourteenth Amendment, shall not be considered a United States citizen for purposes of this subchapter, regardless of any prior designation of citizenship.

(3) Eligibility Through Naturalization: Children born to foreign nationals in the United States who are not full Fourteenth Amendment-compliant United States citizens can be eligible for the Individual Security System upon completing the full naturalization process as foreign nationals to become legal and full United States citizens under section 311 of the Immigration and Nationality Act (8 U.S.C. § 1422).

(1) Process: The Commissioner shall verify citizenship status for all workers, retirees, and children eligible for parents payouts, using documentation such as a U.S. passport, birth certificate, or Certificate of Naturalization, in coordination with the Secretary of Homeland Security and the Secretary of State, as prescribed by regulations.

(2) Disputes: Any individual denied participation or benefits due to citizenship status may appeal the decision through the administrative and judicial review process under section 1509(c) of this subchapter.

(d) Severability and Non-Judicial Review: If any provision of this section, or the application thereof to any person or circumstance, is held invalid (e.g., regarding the interpretation of “subject to the jurisdiction thereof”), the remainder of this subchapter and the Act shall not be affected thereby. No provision of this Act, including determinations of severability, is subject to judicial review, as such review is not a power delegated to the judiciary under Article III of the Constitution of the United States.

(1) Chapter 21, Subchapter E – Individual Security System Contributions:

26 U.S.C. § 3141 – Tax on Employees and Self-Employed

(a) Imposition of Tax:

(1) Employees: There is hereby imposed on the taxable wages of every worker participating in the Individual Security System under section 1507 of title 42, United States Code (42 U.S.C. § 1507), who is a United States citizen as defined in section 1514 of such title, a tax equal to 15 percent of such wages, not exceeding $200,000 in any calendar year, adjusted annually by the percentage increase in the Consumer Price Index for All Urban Consumers as provided in section 415(i) of title 42, United States Code (42 U.S.C. § 415(i)).

(2) Self-Employed: There is hereby imposed on the net earnings from self-employment of every worker participating in the Individual Security System who is a United States citizen a tax equal to 15 percent of such earnings, not exceeding $200,000 (adjusted annually as provided in paragraph (1)).

(b) Withholding:

(1) Employees: The tax imposed under subsection (a)(1) shall be withheld by the employer from wages as and when paid, in the same manner as taxes under section 3101 of this title.

(2) Self-Employed: The tax imposed under subsection (a)(2) shall be paid through withholding by platforms issuing payments (pursuant to section 6041 of this title) or through quarterly estimated tax payments under section 6654 of this title.

(c) Deposit: Amounts collected under this section shall be deposited monthly into the Treasury of the United States, as prescribed by section 6302 of this title, and transferred within 10 business days to the worker’s individual security system account as directed by the Individual Security Administration under section 1508 of title 42, United States Code (42 U.S.C. § 1508).

(d) Verification of Parents Payouts: The Secretary shall coordinate with the Commissioner of the Individual Security Administration to verify eligibility for parents payouts under section 1506 of title 42, United States Code (42 U.S.C. § 1506), using the child’s Social Security number and tax return data (e.g., Form 1040, Schedule 8812) under section 6103 of this title (26 U.S.C. § 6103), ensuring equal payouts of $5,000 per child for each parent, adjusted for CPI-U, regardless of marital or custodial status.

26 U.S.C. § 3142 – Penalties

(a) Failure to Withhold or Remit: Any person required to withhold or remit the tax imposed under section 3141 who fails to do so shall be liable for penalties under section 6672 of this title, including liability for 100 percent of the unpaid tax.

(b) Willful Evasion: Any person who willfully evades or attempts to evade the tax imposed under section 3141 shall be subject to penalties under section 7201 of this title, including a fine of not more than $100,000 or imprisonment for not more than 7 years, or both.

(2) Chapter 21, Subchapter A – OASDI Tax Phase-Out:

26 U.S.C. § 3101(a) – Old-Age, Survivors, and Disability Insurance

Amend section 3101(a) by adding at the end the following new paragraph:

“(2) Phase-Out: The tax imposed under paragraph (1) shall be reduced linearly from 6.2 percent in 2026 to 0 percent by January 1, 2051, at a rate of approximately 0.248 percent per year, as prescribed by the Secretary, in accordance with section 3(c) of the Individual Security System Act of 2026.”

26 U.S.C. § 3111(a) – Old-Age, Survivors, and Disability Insurance

Amend section 3111(a) by adding at the end the following new paragraph:

”26 U.S.C. § 1401(a) – Old-Age, Survivors, and Disability Insurance

Amend section 1401(a) by adding at the end the following new paragraph:

“(2) Phase-Out: The tax imposed under paragraph (1) shall be reduced linearly from 12.4 percent in 2026 to 0 percent by January 1, 2051, at a rate of approximately 0.496 percent per year, as prescribed by the Secretary, in accordance with section 3(c) of the Individual Security System Act of 2026.”

(3) Chapter 1, Subchapter A, Part IV, Subpart B:

26 U.S.C. § 62(a) – Adjusted Gross Income Defined

Amend section 62(a) by adding at the end the following new paragraph:

“(22) ISS Contributions: The amount paid as contributions under section 3141 of this title for the Individual Security System, deductible above-the-line.”

(4) Chapter 1, Subchapter B, Part VII:

26 U.S.C. § 408(p) – Simple Retirement Accounts

Amend section 408(p) by adding at the end the following new paragraph:

“(10) Tax Exemption for ISS Payouts: Distributions from individual security system accounts under section 1504 of title 42, United States Code (42 U.S.C. § 1504), including programmed withdrawals, annuities, and lump sums, universal pension payments and contribution refunds under section 1505 of such title, and parents payouts under section 1506 of such title, are exempt from Federal income tax as qualified retirement distributions.”

(5) Chapter 1, Subchapter F, Part I:

26 U.S.C. § 501(c) – List of Exempt Organizations

Amend section 501(c) by adding at the end the following new paragraph:

“(29) ISS Account Management Firms: Corporations or other entities managing individual security system accounts under section 1503 of title 42, United States Code (42 U.S.C. § 1503), which charge no fees for administration or investment management, are exempt from tax under this subtitle.”

(6) Chapter 1, Subchapter B, Part III:

26 U.S.C. § 86 – Taxation of Social Security Benefits

Amend subsection (d) by adding at the end the following new paragraph:

“(5) Exclusion of Individual Security System Benefits: This section shall not apply to distributions from individual security system accounts, universal pensions, or parents payouts under Subchapter XXII of Chapter 7 of Title 42, United States Code (42 U.S.C. §§ 1500-1514), which are exempt from taxation under section 408(p)(10) of this title.”

(7) Chapter 1, Subchapter U:

26 U.S.C. § 6050F – Returns Relating to Social Security Benefits

Amend subsection (c) by adding at the end the following new paragraph:

“(3) Exclusion of Individual Security System Benefits: This section shall not apply to distributions from individual security system accounts, universal pensions, or parents payouts under Subchapter XXII of Chapter 7 of Title 42, United States Code (42 U.S.C. §§ 1500-1514).”

(8) Chapter 7, Subchapter II, Section 407:

42 U.S.C. § 407 – Assignment of Benefits

Amend by adding at the end the following new subsection:

“(c) Exclusion of Individual Security System Benefits: This section shall not apply to benefits or accounts under Subchapter XXII of this chapter (Individual Security System, 42 U.S.C. §§ 1500-1514), which are governed by section 1503(d) and section 1506(a)(4) of this title.”

(D) Medicare Tax Amendments:

(1) Chapter 21, Subchapter A, Section 3101:

26 U.S.C. § 3101(b) – Hospital Insurance

Amend section 3101(b)(1) by striking “1.45 percent” and inserting “1.5 percent”.

(2) Chapter 21, Subchapter B, Section 3111:

26 U.S.C. § 3111(b) – Hospital Insurance

Amend section 3111(b)(1) by striking “1.45 percent” and inserting “1.5 percent”.

(3) Chapter 2A, Section 1401:

26 U.S.C. § 1401(b) – Hospital Insurance

Amend section 1401(b)(1) by striking “2.9 percent” and inserting “3 percent”.

Section 5: Effective Date

This Act shall take effect on January 1, 2026, except that regulations under section 1512 of title 42, United States Code, as added by section 4, shall be issued not later than 180 days after the date of enactment of this Act.

ENDORSEMENTS:

BILL STATUS:

COMMENTS: