The Senate has not yet acted on the legislation passed by the House of Representatives that could change how much money millions of people get from Social Security.
The Social Security Fairness Act was passed by the House on November 12. It now goes to the Senate, where it will be fully supported by both parties.
Federal laws that would be thrown out by the measure would cut the Social Security benefits of about 2.8 million Americans who work for federal, state, or local governments.
This fall, the bill got a lot of attention when its House sponsors, Republicans Garret Graves from Louisiana and Democrats Abigail Span berger from Virginia, were able to get a vote on it by filing a discharge petition.
This is a process that brings a bill to the House floor for consideration without a report from the committee in charge.
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If passed, the Social Security Fairness Act would get rid of the government pension offset and the windfall elimination provision.
The WEP lowers Social Security benefits for people who get pensions from public sector jobs that do not or did not have to pay Social Security payroll taxes.
This is true even if they have paid into Social Security through other jobs and are otherwise eligible for benefits. This includes state and federal employees. At the moment, this provision affects about 2 million beneficiaries.
If you worked for the federal, state, or local government and did not pay payroll taxes into Social Security, the Government Pension Offset (GPO) cuts your spousal or survivor benefits. About 800,000 retirees are affected by this rule. To put it simply, the bill would
- Repeal restrictions that limit Social Security payouts for people who also receive state or local government pensions.
- Removes the government pension offset GPO), which may lower social security benefits for spouses, widows, and widowers receiving a government pension.
- Removes the windfall elimination provision (WEP), which in some cases reduces social security payments for those who also receive a pension or disability benefit from an employer who has not withheld social security contributions.
How will this new bill impact Social Security benefits?
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It would be better for everyone who is currently covered by the WEP and GPO if the bill passed the Senate and was signed by the President.
In 2020, the Urban Institute did a study that said getting rid of both provisions would increase benefits for 4.5% of all beneficiaries by 2025, which is about $7,300 more per year on average.
However, the Congressional Budget Office says it will cause the government deficit to grow by $195 billion over ten years. A date for the Senate vote has not yet been set. When it is finally passed, it will cover all benefits that are due to be paid after December 2023.
The letter that came out this week was signed by Span berger, Graves, Susan Collins (R-ME), and Sherrod Brown (D-OH), all of whom are Senate sponsors.
It asked Senate Majority Leader Chuck Schumer and Minority Leader McConnell to bring a bill to Parliament for a vote.
They said that Americans who were protected by the rules would be punished for things like getting our mail, helping our neighbors and families, sending our kids to school, and taking care of our veterans.
Finally, the Social Security Fairness Act aims to get rid of differences in benefits caused by the Windfall Elimination Provision (WEP) and the Government Pension Offset (GPO).
This will improve benefits for millions of Americans, especially retirees from the public sector, and get rid of penalties that affect spousal and surviving payments.
There is support for the bill from both parties, but it is unlikely to pass in the Senate because of concerns about a $195 billion increase in the deficit over ten years.
Now, what happens with this groundbreaking bill will depend on what the Senate does and bigger issues of budgetary responsibility.
