Senate passes Social Security Fairness Act

CNN
—

The US Senate passed a bill early Saturday to increase Social Security benefits for nearly 3 million federal, state and local public sector workers, which include firefighters, police officers and teachers.

In the roll call vote, 76 senators voted in favor of the bill and 20 senators voted against.

If the legislation is signed by President Joe Biden, it would apply to all benefits paid after December 2023.

The Social Security Fairness Act — which already passed the House with overwhelming bipartisan support in November — eliminates two policies that have reduced Social Security benefits for public employees. The affected workers are them who are eligible for public pensions from jobs where they did not pay into Social Security but who paid into the program through other jobs, or whose spouses did.

The first is Exclusion clause (WEP). “WEP reduces benefits for retired or disabled workers who have less than 30 years of substantial earnings from employment covered by Social Security if they also receive pensions based on non-covered employment,” according to the Congressional Budget Office.

The second provision that will be removed is Public pension compensation (GPO). “GPO reduces spouse or spousal benefits for survivors of persons receiving pensions based on non-covered employment,” CBO noted.

Americans can receive retirement benefits if they have paid into Social Security for at least 10 years and are also eligible for spousal or survivor benefits if their spouse paid into the program.

The Congressional Research Service estimates that “the two largest groups of Social Security beneficiaries that could be (or currently are) affected by the GPO and WEP are (1) about 28% of state and local government employees covered by alternative retirement systems; and (2) most permanent civilian Federal employees employed before January 1, 1984.”

The bill’s lead co-sponsors — outgoing Democratic Sen. Sherrod Brown of Ohio and Republican Sen. Susan Collins of Maine — have stressed that the alternative formulas used to determine Social Security benefits for retiree-eligible public employees penalized them for choosing to serve. their society.

Before a procedural vote earlier this week, Collins told the story of a retired elementary school teacher in Bangor, Maine, who returned to the workforce at age 72 after her husband — who had paid into Social Security for 40 years — died because her survivor benefits were cut by two-thirds due to the GPO provision. “She didn’t have the financial security anymore to stay retired,” Collins said.

After the final vote on Saturday, she noted in a statement that “In 2003, I held the first ever Senate hearing on the WEP and GPO, and I am pleased that now these unfair provisions of our Social Security system will finally be done away with .”

Those who are critical of the legislation mention that it is unpaid and say it will accelerate Social Security’s insolvency date.

CBO estimates that the legislation will cost nearly $200 billion over 10 years. Currently, Social Security is on track to become insolvent in 2033 — or, if combined with the Disability Trust, in 2035, at which point the system will only have enough revenue to pay 83% of promised benefits to everyone, subject to congressional reforms beforehand .

The Committee for a Responsible Federal Budget estimates that SSFA can advance the program’s insolvency date by six months.

Critics who believe the WEP provisions should be reformed but not eliminated argue that “it is a reasonable means of preventing the payment of overgenerous and unintended benefits to certain workers who would otherwise benefit from the regular Social Security system,” according to Congressional Research Service.