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Senate passes Social Security Fairness Act

By Jeanne Sahadi
Senate passes Social Security Fairness Act
CNN—The US Senate passed a bipartisan bill early Saturday to increase Social Security benefits for close to 3 million federal, state and local public sector workers, which includes firemen, policemen and teachers.In the roll call vote, 76 senators voted in favor of the bill, and 20 senators voted against it.If the legislation is signed into law by President JoeBiden, it would apply to all benefits payable 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 service employees. The workers affected are thosewho are eligible for government pensions from jobs where they didn’t pay into Social Security but who did pay into the program through other jobs or whose spouses did so.The first is theWindfall Elimination Provision(WEP). “The WEP reduces benefits for retired or disabled workers who have fewer than 30 years of significant earnings from employment covered by Social Security if they also receive pensions on the basis of noncovered employment,” according to the Congressional Budget Office.The second provision that will be eliminated is theGovernment Pension Offset (GPO). “The GPO reduces thespousalorsurviving spousal benefitsof people who receive pensions on the basis of noncovered employment,” CBO noted.Americans can receive retirement benefits if they have paid into Social Security for at least 10 years and arealso entitled to 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 may be (or are currently) affected by the GPO and WEP are (1) about 28% of state and local government employees covered by alternative staff retirement systems; and (2) most permanent civilian federal employees hired before January 1, 1984.”The bill’s chief co-sponsors — outgoing Democratic Sen. Sherrod Brown of Ohio and Republican Sen. Susan Collins of Maine — have stressed that the alternate formulas used to determine the Social Security benefits for pension-eligible public sector workers penalized them for choosing to serve their communities.Before a procedural vote earlier in the week, Collins told the story of a retired public 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 did not have the financial security any longer to remain 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 the GPO, and I am pleased that now these unfair provisions in our Social Security system will finally be done away with.”Those who are critical of the legislation cite the fact that it is unpaid for and sayit will hasten Social Security’s insolvency date.The CBO estimates the legislation will cost nearly $200 billion over 10 years. Currently, theSocial Security trust fund is on track to become insolventby 2033 — or, if combined with the disability trust fund, by 2035, at which point the system will only have enough revenue coming in to pay out 83% of promised benefits to everyone barring any congressional reforms beforehand.The Committee for a Responsible Federal Budget estimates the SSFA could advance the program’s insolvency date by six months.Critics who think the WEP provisions should be reformed but not eliminated contend that “it is a reasonable means to prevent payment of overgenerous and unintended benefits to certain workers who would otherwise profit from the Social Security regular benefit formula,” according to the Congressional Research Service.