In a move that could significantly impact the retirement income of millions of Americans, a bipartisan group of U.S. lawmakers is pushing to repeal a set of Social Security rules that reduce benefits for individuals who also receive pension income from certain public service jobs.
The proposed legislation, known as the Social Security Fairness Act, would erase the Windfall Elimination Provision (WEP) and the Government Pension Offset (GPO), which have long been criticized for penalizing public servants and their spouses with pensions. The WEP is believed to reduce benefits for about 2 million Americans, while the GPO rule affects about 800,000 Americans.
The discharge petition put forth by House Representatives, Garret Graves and Abigail Spanberger, on September 10, 2024 has now hit the required 218 signatures needed to force a vote, but whether the act is passed remains to be seen.
Understanding the WEP and GPO
The WEP and GPO were enacted in the 1980s to prevent what was perceived as “double-dipping” by individuals who earned pensions from jobs not covered by Social Security while also accruing Social Security benefits through other employment. The WEP reduces Social Security benefits for individuals who get a pension from a job that didn’t require them to pay taxes into the program (despite having worked other jobs that did), while the GPO cuts spousal and survivor benefits for those receiving a government pension.
Critics say the provisions disproportionately affect teachers, police officers, firefighters and other public sector professionals who dedicated their careers to service but often lacked the option to participate in Social Security. They contend the current rules significantly reduce retirement income, leaving many retirees struggling to make ends meet.
A recent Senate hearing featured the story of a 75-year-old Rhode Island teacher who has kept working because retiring wouldn’t provide enough income. She currently receives Social Security survivor benefits from her late husband, but starting her own pension draw could cause those benefits to vanish due to the pension offset.
“She is basically a slave to her job as a result,” said Roger Boudreau, president of the Rhode Island American Federation of Teachers Retirees Chapter.
The Social Security Fairness Act
If passed, the act would repeal the WEP and GPO, ensuring that retirees receive their full Social Security benefits regardless of their pension income.
Republicans and Democrats have rallied around the bill, acknowledging the need to address unintended consequences of the WEP and GPO. Advocacy groups and labor unions representing public sector workers have also lined up behind it.
“For more than 40 years, millions of Americans who paid into Social Security during their careers have been stripped of their retirement benefits,” Graves and Spanberger said in a joint statement touting support for the bill.
“We cannot drag our feet on addressing this basic issue of fairness.”
Challenges and prospects
Despite this sentiment, the bill still faces significant hurdles. A big one is cost: Repealing the rules could add nearly $200 billion to the Social Security program’s expenditures. Because Social Security reform has always been politically contentious, any changes are likely to face opposition.
Critics of the repeal say it could create a new set of inequities and further strain the already financially challenged safety net, which is projected to run short of money in 2035.
But proponents say the bipartisan support underlines growing awareness of the negative impact of the WEP and GPO on retirees. They also argue the current political climate, with increasing calls for social and economic justice, provides a unique opportunity to address perceived inequities brought on by the rules.
Social Security’s sustainability
As lawmakers grapple with the complex issues surrounding Social Security reform, the voices of those affected by the WEP and GPO are growing louder. Whether the bill ultimately succeeds or not, it has spotlighted what many say are flawed rules that prevent some retirees from getting the benefits they’ve earned.
