The Senate passes the Social Security Fairness Act

The Senate passes the Social Security Fairness Act



CNN

The U.S. Senate passed a bipartisan bill early Saturday to increase Social Security benefits for nearly three million federal, state and local public workers, including firefighters, police officers and teachers.

In the roll-call vote, 76 senators voted in favor of the bill and 20 senators voted against it.

If the bill is signed by President Joe Biden, it would apply to all benefits payable after December 2023.

The Social Security Fairness Act, which passed the House of Representatives with overwhelming bipartisan support back in November, repeals two policies that have reduced Social Security benefits for public workers. The affected employees are these who are entitled to state pensions from jobs in which they did not pay into social security, but who paid into the program through other jobs or whose spouses did.

The first is the Windfall Elimination Provision (WEP). “The WEP reduces benefits for retired or disabled workers who have earned significant income from Social Security employment for less than 30 years if they also receive pensions based on non-Social Security employment,” according to the Congressional Budget Office.

The second provision to be eliminated is the Government Pension Offset (GPO). “The GPO reduces the spousal or survivor benefits of individuals receiving pensions based on uninsured employment,” CBO noted.

Americans can receive retirement benefits if they have paid into Social Security for at least 10 years and continue to do so are also eligible for spousal or survivor benefits if their spouse paid into the program.

The Congressional Research Service estimates that “the two largest groups of Social Security recipients potentially (or currently) affected by GPO and WEP are (1) approximately 28% of state and local government employees covered by alternative retirement plans; and (2) most permanent civilian federal employees hired before January 1, 1984.”

The bill’s key co-sponsors — outgoing Democratic Sen. Sherrod Brown of Ohio and Republican Sen. Susan Collins of Maine — have stressed that the alternative formulas for determining Social Security benefits for retired public workers penalize them for choosing to serve their communities decided.

Before a procedural vote earlier this 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 paid Social Security for 40 years — died because of her The survivor benefits were reduced by two-thirds due to the GPO provision. “She no longer had the financial security to remain retired,” Collins said.

After Saturday’s final vote, she noted in a statement: “In 2003, I first held a Senate hearing on the WEP and the GPO, and I am pleased that these unfair provisions in our Social Security system will finally be abolished.”

Critics of the law point out that it is unpaid and say: it will accelerate Social Security’s insolvency date.

The CBO estimates the legislation will cost nearly $200 billion over 10 years. Currently, the Social Security Trust Fund is on track to become insolvent by 2033 – or, if combined with the Disability Trust Fund, by 2035. At that point, the system will only have enough revenue left to cover 83% of the total promised benefits to be paid out to everyone unless there are reforms in Congress first.

The Committee for a Responsible Federal Budget estimates that the SSFA could advance the program’s insolvency date by six months.

Critics who believe the WEP provisions should be reformed but not abolished claim that “they are a reasonable means of preventing the payment of overly generous and unintended benefits to certain workers who would otherwise be covered by the regular Social Security benefit formula.” would benefit,” according to the Congressional Research Service.

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