Social Security benefits were increased in a multimillion-dollar bill that landed on Biden’s desk

WASHINGTON – The U.S. Senate passed a largely bipartisan bill early Saturday that would increase Social Security benefits for millions of Americans with pensions by ending two of the program’s decades-long policies – the deadweight elimination provision and the public pension equalization.

The legislation, which would cost more than $195 billion over 10 years, now goes to President Joe Biden for his signature. Although he has not yet publicly endorsed the bill, widespread support in the House and Senate could indicate he is likely to support passage of the measure.

The Senate vote was 76-20 and the House vote in November was 327-75.

Maine Republican Sen. Susan Collins said during Wednesday’s floor debate that a solution to the two provisions has been in the works for decades, noting that she held the first hearing on the issue in the upper house in 2003.

Collins later worked with the late California Democratic Senator Dianne Feinstein to introduce the first version of the bill in 2005 before working with former Maryland Democratic Senator Barbara Mikulski on another version in 2007.

“Social Security is the foundation of retirement income for most Americans, but many teachers, firefighters, police officers and other public servants often see their earned Social Security benefits unfairly reduced by two provisions,” Collins said.

The deadweight elimination provision, she said, “affects public servants who receive a pension from a job not covered by Social Security but also have worked in another job long enough to be eligible for Social Security benefits.”

The state pension equalization affects people who worked in jobs that were not entitled to social security but were entitled to a spousal pension. This pension offset, Collins said, could reduce a spouse’s Social Security benefit by two-thirds of the unfunded pension, which could result in 70% of those affected by the GPO losing their entire Social Security benefit.

“This issue is extremely important in my state of Maine because there is no Social Security component to the state pension system,” Collins said. “And among those most affected are school teachers in Maine.”

Collins called the WEP and GPO “an unfair, unjustified punishment.”

Click on Trust Funds

North Carolina Republican Senator Thom Tillis said the bill’s title sounded like “Motherhood and Apple Pie” but argued that wasn’t the right approach to address the problem.

He expressed concerns that the bill would reduce the Social Security trust fund by another $200 billion over the next decade and push back the bankruptcy date by six months.

“This chamber needs courage and needs to say what needs to be said – we are about to pass a $200 billion unfunded spending package on a trust fund that is likely to become insolvent in the next nine to 10 years, and we “We’re going to act as if someone else has to fix it,” Tillis said. “Well, if you’re a U.S. senator and you have your ballot, that falls to us.”

Tillis said he agreed with Collins and others who support the bill that the WEP and GPO need to be fixed, but said it should be part of a larger conversation about addressing Social Security’s impending bankruptcy.

“We don’t disagree about what we ultimately need to do,” Tillis said. “This is a disagreement about how to get here and how to have something that assesses downstream risk. It is therefore with some concern that I speak out and criticize the good work of Senator Collins. But I’m doing it because it’s so important that we do it right and have the courage to fix Social Security in the next few years.”

Ohio Democratic Sen. Sherrod Brown said during floor debate Wednesday that people who have paid into Social Security for the required amount of time should receive their full benefits.

“We know that Social Security is a cornerstone of our middle class – it is the retirement savings that Americans pay into and earn over the course of their lives,” Brown said. “You’re paying in for 40 quarters, you’re essentially paying in for 10 years. You deserve it. It should be there when you retire.”

Brown said it “makes no sense” that workers in certain public sector jobs, such as teachers, police officers and firefighters, would not be able to receive their full benefits.

“They protect our communities, they educate our children, they pay into Social Security like everyone else,” Brown said.

How do these provisions work?

According to a report from the nonpartisan Congressional Research Service, pension equalization reduces the “spousal or widow’s pensions of most people who also receive pensions based on federal, state or local employment that is not covered by Social Security.”

The windfall elimination provision changes the formula to reduce Social Security benefits for individuals “who are also eligible for retirement benefits based on earnings from activities not covered by Social Security,” the report said.

The pension settlement affects about 746,000 Americans, while the windfall affects 2.1 million.

“The proportion of Social Security recipients affected by the GPO varies widely by state,” the CRS report states. “States with a relatively larger share of GPO-affected beneficiaries tend to be those with a larger share of state and local government employees not covered by Social Security or those with more (civil servant pension) retirees.”

Pension equalization has a disproportionate impact on Social Security recipients in Alaska, Arizona, California, Colorado, Connecticut, Florida, Georgia, Hawaii, Idaho, Illinois, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Missouri, Nevada, New Hampshire and Mexico, Ohio , Rhode Island, Texas and Utah.

The windfall elimination provision affects a larger percentage of residents in Arizona, California, Colorado, Connecticut, Delaware, Florida, Georgia, Hawaii, Idaho, Illinois, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Missouri, Montana, Nevada, New Hampshire, New Mexico, Ohio, Oklahoma, Oregon, Rhode Island, Texas, Utah, Virginia and Washington, Wyoming.

“Similar to the GPO, the proportion of Social Security recipients affected by the WEP varies by state,” CRS wrote. “Typically, in states that have a larger share of state and local government employees not covered by Social Security or where there are more CSRS retirees, a relatively larger share of Social Security recipients are affected by the WEP.”

Support from the bipartisan House of Representatives

The U.S. House of Representatives voted 327-75 in November to approve the four-page bill introduced by Republican Rep. Garret Graves of Louisiana and Democratic Rep. Abigail Spanberger of Virginia.

Graves said during the floor debate that Social Security had functioned for 40 years by “treating people differently and discriminating against a particular group of workers.”

“These are police officers, teachers, firefighters and other public servants,” Graves said at the time. “I worked side by side with these people. They are not people who are overpaid. They are not people who are underemployed.”

Spanberger called the deadweight elimination provision and the federal pension equalization “two misguided provisions that were added to the Social Security Act in 1983 (and) have denied Americans the retirement security they worked for and expected.”

“For more than 40 years, public officials have tirelessly pleaded with their representatives in Congress to listen to their stories and right this blatant injustice,” Spanberger said. “Today, Congress will vote for the first time on the Social Security Fairness Act to repeal the WEP and GPO and finally put an end to this theft.”

Opposition to bill

Republican Rep. Jason Smith of Missouri, chairman of the Ways and Means Committee, said the two provisions affect about 4% of all Social Security recipients, more than 60% of which are concentrated in 10 states.

The two provisions, he said, “were introduced more than four decades ago to prevent workers with earnings exempt from Social Security payroll taxes from receiving more generous Social Security treatment than workers who contribute to Social Security throughout their working lives.” have accomplished.” ”

“Unfortunately, these policies still result in overly generous benefits for some while unfairly penalizing others,” Smith said, before arguing that the bill is not the right way to address the two provisions.

Smith said that eliminating the two provisions without replacement “potentially trades unfair treatment for preferential treatment.”

He also expressed concerns about how taking more money from the Social Security trust fund would affect solvency.

The nonpartisan Congressional Budget Office estimated the bill would cost $195.65 billion over the next decade and wrote in a letter to Iowa Republican Sen. Chuck Grassley that it would likely push Social Security’s bankruptcy date back by six months would be brought forward.

“If H.R. 82 were to take effect, the balance of the trust fund (old age and survivorship insurance) under CBO projects would be exhausted approximately half a year earlier than under current law,” wrote CBO Director Phillip L. Swagel. “The agency assumes that under current law, the balance of the AHV trust fund would be exhausted in fiscal year 2033.”

The Social Security Trustees’ 2024 report says the program will be able to pay full benefits by 2035. After that, Social Security could pay about 83% of benefits if Congress doesn’t negotiate a solution.

Last updated 7:11 am, December 21, 2024