Individual rights to economic benefits and grants

(a) Rights and benefits All vested rights and benefits which accrue to residents of the Commonwealth of Puerto Rico under the laws of the United States from past services or contributions, such as rights and benefits for veterans or relatives of veterans of the Armed Forces of the United States, retired Government employees, or beneficiaries of old age, disability, or survivors’ insurance benefits under the Social Security Act, shall not be interrupted after the proclamation of international sovereignty through free association but will continue until such time as said rights and benefits are completely extinguished according to the applicable laws of the United States. All services which must be rendered as part of these rights and benefits shall be made available through the Government of the nation of Puerto Rico in accordance with agreements reached by the two nations. (b) Social Security System Notwithstanding subsection (a), all contributions made by employees and employers in Puerto Rico to the Social Security system with respect to persons who, upon the proclamation of international sovereignty through free association, are residents of the nation of Puerto Rico and are not yet eligible for old age, disability, or survivors’ insurance benefits under the system, shall be transferred to the Government of the nation of Puerto Rico once said Government establishes its own social security system. The Government of the nation of Puerto Rico may not use these funds for any purpose other than the establishment and operation of a social security system. Upon the transfer described herein, the obligations of the United States Government under the Social Security Act with respect to such residents of the nation of Puerto Rico shall cease. (c) Other Federal transfer payments All other Federal transfer payments to individuals and to the Government of the Commonwealth of Puerto Rico shall be maintained in the form of annual block grants to be used discretionally by the Government of the nation of Puerto Rico— (1) during the 10 fiscal years following the proclamation of international sovereignty through free association, the annual block grants shall amount to the annual aggregate funding of all programs which currently extend to the Commonwealth of Puerto Rico, or of all programs which shall have been extended to the Commonwealth of Puerto Rico during the fiscal year immediately prior to the proclamation of international sovereignty through free association, whichever shall be greater; and (2) the annual block grants shall decrease thereafter on a straight-line basis, at the rate of ten percent each year, beginning on the eleventh fiscal year after the proclamation of international sovereignty through free association. At any time during the aforementioned transition period the terms of this subsection may be modified by agreement between the United States and the nation of Puerto Rico. (d) Revision The terms and conditions of this subsection may be revised as part of an agreement under the Articles of Free Association.