Congress approves changes to Social Security that expand benefits for some public sector workers
The U.S. Senate early Saturday legislation that will expand Social Security for millions of public workers. Image courtesy Social Security Administration
The U.S. Senate early Saturday passed legislation that will expand Social Security for millions of public sector workers. The bill heads to President Joe Biden for his signature.
By a 76-20 vote, the Senate approved the measure called the Social Security Fairness Act, which would eliminate two federal policies that prevent nearly 3 million people, including police officers, firefighters, postal workers, teachers and others with a public pension, from collecting full Social Security benefits. Advertisement
The House passed the bill in November, 327-75.
The Senate held its first hearings into the policies in 2003.
“The Senate finally corrects a 50-year mistake,” Senate majority leader Chuck Schumer, D-New York, said after senators approved the legislation at 12:15 a.m. Saturday.
“Millions of retired teachers and firefighters and letter carriers and state and local workers have waited decades for this moment. No longer will public retirees see their hard-earned Social Security benefits robbed from them, thanks to this bill.”
The Senate wrapped up its current session.
The two policies to be eliminated would be the Windfall Elimination Provision that impacts 2 million retirees and the Government Pension Offset that affects 800,000. Advertisement
WEP reduces up to half of the Social Security benefits for those with a “non-covered” pension income. The jobs are typically public sector roles that didn’t contribute Social Security payroll taxes.
GPO) reduces survivor or spousal benefits when a person’s pension is non-covered. It cuts the Social Security benefit by two-thirds of the pension amount. If two-thirds of the pension is more than the Social Security benefit, the benefit could be reduced to zero.
“You shouldn’t penalize people for income outside of a system when you’ve paid into it and earn that benefit,” said John Hatton, vice president of policy and programs at the National Active and Retired Federal Employees Association, ahead of the vote told CNBC. “It’s been 40 years trying to get this repealed.”
The legislation would add a projected $195 billion to federal deficits over a decade, according to the Congressional Budget Office.
The Social Security Trust Fund used to pay retirement benefits may be depleted in nine years, when just 79% of benefits may be payable.
Sen. Rand Paul, R-Kentucky, proposed an amendment to offset costs by gradually raising the retirement age to 70 while also adjusting for life expectancy. Social Security’s full retirement age, which is when beneficiaries receive 100% of the benefits earned, is currently age 67 for individuals born in 1960 or later. Advertisement
“It is absurd to entertain a proposal that would make Social Security both less fair and financially weaker,” Paul said at the time. “To undo the damage made by this legislation, my amendment to gradually raise the retirement age to reflect current life expectancies will strengthen Social Security by providing almost $400 billion in savings.”
