Senate Will Soon Vote on Speeding Up Social Security Insolvency
December 12, 2024
Senate Majority Leader Chuck Schumer (D-NY) announced yesterday that the Senate would vote on the Social Security Fairness Act, which passed the House in November. This bill would repeal the Windfall Elimination Provision (WEP) and Government Pension Offset (GPO), two policies that reduce Social Security benefits for those who are otherwise eligible for non-Social Security government pensions.
The Congressional Budget Office estimates that enacting this bill would hasten Social Security insolvency by six months and add $196 billion to deficits over a decade.
Because of the advanced insolvency, we estimate that repealing WEP and GPO would reduce lifetime Social Security benefits by $25,000 for the typical couple retiring at insolvency, including more than $8,000 in the first year alone.
The following is a statement from Maya MacGuineas, president of the Committee for a Responsible Federal Budget:
It is truly astonishing that at a time when we are just nine years away from the trust fund for the nation’s largest program being completely exhausted, lawmakers are about to consider speeding that up by six months. And add on top of that another $200 billion in new borrowing as a result. We are racing to our own fiscal demise.
Even worse is that repealing WEP and GPO does nothing to address the windfalls they are intended to eliminate – instead, it just restores windfalls for folks who have other government pensions. What an incredulous set of events.
Hastening Social Security’s insolvency will only make its consequences worse; benefits will be cut by an additional 1 percent while reducing lifetime benefits for a typical couple by $25,000. We should be talking about how to prevent this cut, not make it bigger and happen sooner.
The Senate should reject WEP and GPO repeal. Instead, they should come together to try to fix the issues with WEP and GPO as part of a comprehensive package to strengthen Social Security, prevent insolvency, and make the program’s finances sustainable over the long term.
Committee for a Responsible Federal Budget
QUINNSCOMMENTARY 
Andrew Biggs’ thoughts on the legislation follow. Again, I say eliminate windfalls, don’t crap on everyday American workers with modest benefits. I arbitrarily recommend a phase out with a 50% offset, starting at $25,000/year (Social Security plus public pension) 100% on combined benefits of $35,000 a year, as of 1/1/84, indexed for inflation after 1983.
Jack
Will Republicans Approve Quarter-Million Dollar Windfalls For Government Employees?
By Andrew G. Biggs
Forbes
December 19, 2024
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It’s looking that way.
The United States Senate is approaching a vote on the so-called “Social Security Fairness Act,” legislation that would eliminate adjustments to Social Security benefits for a select of public sector employees who are not covered by Social Security but instead participate in alternate government pension systems as a substitute for Social Security. The Social Security Fairness Act overwhelmingly passed the House in early December and on December 18 cleared a key Senate procedural vote by 73 to 27. Senate Majority Leader has promised a final vote before the Senate leaves for Christmas. While Democratic support for the Social Security Fairness Act is to be expected, given public employee unions’ strength in the party, for Republicans to support this legislation would betray principles of both fairness and fiscal conservatism.
… The Social Security Fairness Act would repeal two Social Security benefit rules, the Government Pension Offset (GPO) and the Windfall Elimination Provision (WEP). The GPO affects the Social Security spousal benefits paid to individuals who did not participate in Social Security but instead receive benefits from an alternative state or local government pension. The WEP affects the Social Security benefits of public sector employees who qualified for benefits both under an alternate public pension plan and Social Security. … The Social Security Fairness Act would restore these windfalls. … It is one thing for Congressional Democrats to vote to repeal the Government Pension Offset. Public sector employees are core supporters of the Democratic Party and such transactional politics, while wrong, aren’t exactly unexpected. (The D’s abuse is so public, so blatant, in terms of vote buying and being in the public employees/union workers pocket, that he has to forgive it here)!
But for Republicans to restore potentially massive Social Security windfalls to retired public employees who may not have paid a penny into Social Security and who already have high-quality government pension plans, at the cost of nearly $200 billion over 10 years and a year off of the life of Social Security’s trust, fund is a travesty of both fairness and fiscal conservatism.
He is wrong, however, there are tens of millions of Americans receiving the spousal benefit who never paid in a penny to Social Security (or only paid in so little that the spousal benefit exceeds their own benefit based on their work record) – but we only crap on those who worked for a different government entity where they had no control over the decisions made by the state or local government.
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So, here is the guts of the bill, as passed by the senate, with a 3/4ths majority (all but veto proof):
Text: S.597 — 118th Congress (2023-2024)
Introduced in Senate (03/01/2023)
118th CONGRESS
1st Session
S. 597
To amend title II of the Social Security Act to repeal the Government pension offset and windfall elimination provisions.
IN THE SENATE OF THE UNITED STATES
March 1, 2023
Mr. Brown (for himself, Ms. Collins, Ms. Baldwin, Mr. Blumenthal, Mr. Booker, Mr. Casey, Mr. Cassidy, Ms. Cortez Masto, Ms. Duckworth, Ms. Hassan, Ms. Hirono, Mr. Hickenlooper, Mr. King, Mr. Markey, Mr. Menendez, Mr. Merkley, Mr. Murphy, Ms. Murkowski, Mr. Padilla, Mr. Reed, Mr. Sanders, Ms. Smith, Ms. Warren, and Mr. Whitehouse) introduced the following bill; which was read twice and referred to the Committee on Finance
Jack note: Almost all (all but one) of the above senators are Democrats.
A BILL
To amend title II of the Social Security Act to repeal the Government pension offset and windfall elimination provisions.
Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,
SECTION 1. Short title.
This Act may be cited as the “Social Security Fairness Act”.
SEC. 2. Repeal of government pension offset provision.
(a) In general.—Section 202(k) of the Social Security Act (42 U.S.C. 402(k)) is amended by striking paragraph (5). …
SEC. 3. Repeal of windfall elimination provisions.
(a) In general.—Section 215 of the Social Security Act (42 U.S.C. 415) is amended—
(1) in subsection (a), by striking paragraph (7);
(2) in subsection (d), by striking paragraph (3); and
(3) in subsection (f), by striking paragraph (9). …
Jack Note: Best part follows below – this may be RETROACTIVE to cover all of 2023!
SEC. 4. Effective date.
The amendments made by this Act shall apply with respect to monthly insurance benefits payable under title II of the Social Security Act for months after December 2023. Notwithstanding section 215(f) of the Social Security Act, the Commissioner of Social Security shall adjust primary insurance amounts to the extent necessary to take into account the amendments made by section 3.
Yahoo!
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Why treat a non working spouse better (no SS offset for his spousal benefit, or survivor benefit) than a working spouse who earned a pension (say as a teacher for 35 years)? Don’t we want to encourage productive work? Limit WEP and GPO to windfalls – pensions and SS totaling over $25,000 a year (back to 1983) indexed for inflation.
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Al Lindquist
let’s take someone I know who spent years in the public and private sector–retired with 33 years of service in the public sector with pension adjusted annually for inflation–a side hustle, which was profitable while “in service” for 33-years became full time upon age 55 retirement–then the business really exploded and after expenses he was netting close to $250,000 for many years and paying whatever the ceiling was that year.
paying his 6%+ as the employee (he was self-employed) and 6% + as the employer (1/2 tax deductible as employer expense) he was paying big bucks for 22+ years before he really retired.
caught up with WEP his SS benefit was reduced accordingly–the question he has, discussed over many lunches, was why was he penalized? he paid into the system as a young teen and early adult and then as a self-employed person and for years the maximum–what’s the logic behind the penalty?
so what that he has a public pension? he paid into SS and nobody cared that he had also paid into a public retirement system at 7% of salary for 33-years–he received no reduction paying into 2 systems so why a penalty on the way out?
I understand where we are now with deficits in the SS program–but what’s the logic for this WEP–GPO to begin with?
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I am a federal retiree affected by WEP but my SS coverage was part time work in high school & college, a few Army years, and two years after graduation. The amount I contributed to SS was very small. WEP reduces my SS payment in half ($500 a month now). But I also have a very nice federal pension after a long career there so for me that is fair. Some who split their work near equal public/private may need some SS adjustment but this bill would get me more than I should.
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Your Dems at work.
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The article is short on specifics but long on recommendations. Don’t repeal the GPO and WEP but come together to address the issues with it. What issues and how would addressing them not hasten “insolvency”? Was this law fair to start with?
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IMHO this law corrected an abuse of the SS process by some highly compensated federal retirees in the 1980s. It is fair to those who have most of their working careers in one of the sectors. But for those who had somewhat equal splits of public & private there cold be some unintended consequences. There were bills proposed in the House that addressed those kind of modifications. By the way this particular bill had very broad bipartisan support in the House.
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As someone affected by WEP, I suggest Mr. Quinn return some of his SS pension for the benefit of the country. Why should I give up part of my SS pension to save SS? The is not a gimme. This is money that I paid into SS that will be withheld from me only because I chose to be a public servant.
I know a teacher who wasn’t even aware of this provision. She had to work second jobs to supplement her income. The $250,000+ example cited is an extreme exception. Most public servants do not have Cadillac pensions. After 14 years my public service pension was very little.
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