The Senate passed a bipartisan bill, 76-20, on December 20 that revises how public pension beneficiaries are treated for Social Security purposes — the bill now awaits President Joe Biden’s signature.
The Social Security Fairness Act ( H.R. 82 ) removes provisions from the Social Security Act that reduce or eliminate benefits for public service workers who also receive benefits from a state or local government. The bill, which passed the House 327-75 back in November, specifically does away with the windfall elimination provision and government pension offset for Social Security beneficiaries after December 2023.
H.R. 82 is sponsored by Representatives Abigail Spanberger (D-VA) and Garret Graves (R-LA). The two lawmakers were able to bring the bill to the House floor via a discharge petition after the Ways and Means Committee failed to take it up.
A Senate companion bill, S. 597, was sponsored by Senators Sherrod Brown (D-OH) and Susan Collins (R-ME).
Targeted provisions.
The windfall elimination provision reduces Social Security benefits for workers who also receive a public pension or disability benefit from job that is not covered by Social Security. The provision was intended to prevent workers who receive noncovered pensions from being treated as long-time, low-wage earners — and consequentially receiving higher Social Security benefits. But proponents of H.R. 82 say the windfall elimination provision “unfairly” reduces or eliminates Social Security benefits for public service workers.
The government pension offset reduces to two-thirds the payment of Social Security spousal benefits to spouses and widows who receive their own pensions from jobs not covered by Social Security. The government pension offset “cuts – or often, altogether eliminates — Social Security survivor benefits for retirees who dedicated their entire careers to serving our communities, simply for choosing careers of service,” the bill sponsors said in a November letter to Senate leadership.
Cutting the windfall eliminates provision will impact an estimated 2 million beneficiaries, while removing the government pension offset is estimated to impact nearly 800,000 beneficiaries.
Reactions.
Collins, who held the first Senate hearing on the windfall elimination provision and government pension offset in 2003, said she was “pleased that now these unfair provisions in our Social Security system will finally be done away with.” She added that the bill “is a victory for thousands of teachers, first responders, and public servants” and “will help millions of Americans retire with dignity and receive the Social Security benefits they earned through years of work.”
In passing the bill, Spanberger and Graves said in a joint press release, “Congress showed up for the millions of Americans — police officers, firefighters, teachers, federal employees, and other local and state public servants — who worked a second job to care for their families or began a second career to afford to live.” The lawmakers added that “Americans across the country have for more than four decades implored their representatives in Congress to listen to their stories and protect their retirement security and ability to support their families. Today, a bipartisan majority of the U.S. Senate voted to correct this glaring injustice.”
Opposition.
While H.R. 82 overwhelmingly passed both chambers, it was not without criticisms — which largely came down to costs. The Congressional Budget Office estimates that the changes will cost nearly $200 billion over a 10-year period.
Rising Senate Finance Committee Chair Mike Crapo (R-ID) said he was “disappointed that the Finance Committee did not have the opportunity to examine ways to address the WEP and GPO that would be fair to all Social Security beneficiaries and not hurt Social Security’s long-term solvency.”
Crapo introduced an amendment that would delay implementation of the H.R. 82’s provisions until other changes are made to offset the negative impacts on the Social Security trust fund. Crapo’s amendment was not specific about what those changes should be.
Senator Chuck Grassley (R-IA) — also concerned with the cost of the legislation and its impacts on Social Security trust fund solvency — offered a different take on how to address the discrepancy in treatment of public servants in his proposed amendment. His amendment would repeal the windfall elimination provision and government pension offset for current state and local employees who are “under 52 or with at least 10 years until retirement” only if they join Social Security.
“Most states have opted into Social Security for the vast majority of their workers,” explained Grassley on the Senate floor December 20. “These States’ government employees and retirees covered by Social Security see no benefit” under H.R. 82, he contended.
Grassley said his proposed amendment could “increase Social Security solvency by $100 billion” if all states participate.
Senators Ted Cruz (R-TX) and Rand Paul (R-KY) also offered amendments — that were ultimately rejected — targeting the cost of the legislation. Paul’s proposal would have adjusted the retirement age, while Cruz’s amendment would have replaced the windfall elimination provision with a new formula for calculating benefits and provided for an additional monthly payment to those impacted by the provision.
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