Will the Senate Vote to Boost Social Security for Public Workers in the Next 6 Weeks?

Public employees across the nation are anxiously waiting to see if the Senate will approve a bill in the upcoming six weeks that would grant them access to Social Security benefits they believe they deserve.

Last week, a bipartisan majority in the U.S. House of Representatives passed the Social Security Fairness Act, which aims to abolish the Windfall Elimination Provision (WEP) and the Government Pension Offset (GPO). These provisions currently reduce Social Security payments for retirees who also receive pensions from jobs that did not pay into the Social Security system. The bill now sits in the Senate, awaiting a vote, and must be passed by December 31st, or it will expire.

Both WEP and GPO impact nearly three million Americans, including police officers, firefighters, postal workers, and public school teachers.

“For the past five decades, billions of dollars have been withheld from public servants who have earned pensions and Social Security benefits,” stated Rafael Sanchez, a former employee of the State of California who retired after 30 years and then worked three years in the private sector in Idaho, contributing to Social Security.

Impact of WEP and GPO on Social Security Benefits

• Windfall Elimination Provision (WEP) decreases Social Security benefits for individuals who receive “non-covered” pension income from employment, typically in public sectors, where Social Security payroll taxes were not collected. The reduction can be substantial, up to 50% of the pension amount.
• Government Pension Offset (GPO) lowers survivor or spousal benefits if the pension is non-covered. GPO impacts fewer individuals, but it slashes the Social Security benefit by two-thirds of the pension amount. If two-thirds of your government pension exceeds your Social Security benefit, your benefit could be reduced to zero.

These rules were designed to prevent what was seen as potential overpayment by Social Security to individuals who did not contribute to the system through payroll taxes, according to policy experts. Since Social Security aims to replace a higher portion of earnings for lower-paid workers compared to higher-paid workers, those with substantial government salaries could potentially benefit unduly in the eyes of the system’s designers.

Is There Fairness in WEP and GPO?

Many argue that these provisions unfairly penalize individuals who have worked in public sector jobs. Sara Fischer, a 65-year-old from Detroit, Michigan, who retired early from the federal courts after 25 years, finds the provisions particularly unjust. She knew she would not receive her full pension due to early retirement but planned to supplement her income by working in the private sector, contributing to Social Security. However, her Social Security payments are reduced by approximately $600 due to WEP.

“I don’t think Social Security should pay me more than what someone with 11 years of contributions would receive, but what WEP does is ignore how much I paid into Social Security during the years I contributed. It simply cuts my Social Security because I was a government employee,” Fischer explained.

Additionally, Bill Callahan, a 67-year-old retired teacher from Middlebury, Connecticut, pointed out that the reduction also affects the annual cost-of-living adjustment (COLA). “Our COLA is calculated after the deduction from GPO or WEP, which means we lose out each year,” he remarked.

For instance, instead of receiving a COLA on the approximately $839 he would have gotten without WEP, Callahan’s COLA is calculated on the reduced $359, resulting in a significantly smaller monthly increase.

The Cost of Eliminating WEP and GPO

Eliminating WEP and GPO as proposed in the Social Security Fairness Act would cost $196 billion over ten years and could expedite Social Security’s insolvency by about six months, leading to earlier benefit reductions, according to the Committee for a Responsible Federal Budget (CRFB).

Maya MacGuineas, president of the CRFB, stated, “These provisions are not flawless, and there are numerous proposals to modify them, but total repeal would be a step in the wrong direction.”

The Center on Budget and Policy Priorities suggests a proportional approach that would calculate benefits based on income earned from jobs that contributed to Social Security, a method that would not hasten the program’s insolvency.

Will the Senate Approve the Social Security Fairness Act?

Senate Majority Leader Chuck Schumer has not yet scheduled a vote for the Act, and he has until the end of the year to do so, according to The Senior Citizens League, a nonpartisan senior group. If not passed by then, the bill will expire, and lawmakers will need to start anew.

When contacted, Schumer’s office had not responded to inquiries about his plans to bring the bill to a vote. However, the bill currently has 62 bipartisan Senate sponsors, more than the 60 required to overcome a filibuster and pass the bill.

“They have the necessary votes,” said Callahan. “This shouldn’t be about politics. It’s about fairness.”