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U.S. News
24 December 2024

Senate Passes Legislation To Boost Social Security Benefits

The bipartisan Social Security Fairness Act eliminates long-standing reductions for public service retirees, now awaiting the President's signature.

On the heels of bipartisan cooperation, the U.S. Senate has passed the Social Security Fairness Act, a significant legislative effort aimed at increasing Social Security benefits for millions of public service retirees. This historic bill, which awaits President Joe Biden's signature, seeks to eliminate harmful provisions like the Windfall Elimination Provision (WEP) and the Government Pension Offset (GPO) affecting those who have dedicated their careers to public service.

The legislation garnered overwhelming support, with 76 Senators—including 46 Democrats, 27 Republicans, and 3 Independents—voting favorably. It now heads to the President, who is expected to approve it. Advocates have hailed this measure as long overdue, asserting it rights decades of disparity faced by educators, firefighters, police officers, and other public-sector workers.

“Millions of retired teachers, firefighters, and local government workers have waited decades for this moment,” said Senate Majority Leader Chuck Schumer, D-N.Y. He added, “No longer will public retirees see their hard-earned Social Security benefits robbed from them.”

Under the current system, employees who receive pensions from federal, state, or local agencies face reductions to their Social Security benefits, even if they had previously paid taxes toward Social Security via other employment. The passage of the Social Security Fairness Act aims to rectify this by allowing these workers to collect full Social Security benefits based on their entire earnings record.

For example, teachers and public workers who have spent substantial time working outside public sector jobs will not have their Social Security benefits reduced due to the pension they earn from their public roles. Advocates explain this change will significantly benefit retired educators, particularly those from states where many or all public school employees were excluded from Social Security.

States like Alaska, California, and Texas have been at the heart of this discussion, as there are educators who worked primarily in the public sector yet have earned little to no Social Security benefits. The bill provides these individuals the ability to receive the benefits they rightfully earned, which is particularly pivotal as they enter retirement.

While the act resonates positively with supporters, opponents express concerns over its long-term sustainability. According to the Congressional Budget Office, these changes could add approximately $195 billion to federal deficits over the next decade, raising questions about the viability of Social Security funding as the program is already projected to face insolvency by 2035. Concerns also arise around the burden the increase will place on the already strained Social Security Administration, which is operating at its lowest staffing levels since 1972.

Critics, like Senator Thom Tillis, a Republican from North Carolina, acknowledged the unfairness of the existing provisions but cautioned against passing the bill without sustainable solutions. He stated, “We caved to the pressure of the moment instead of doing this on a sustainable basis.”

Importantly, the legislation’s proponents argue it is necessary to correct historical inequities. Senator Susan Collins, R-Maine, emphasized the significance of passing the act, stating, “These aren’t some sort of giveaway; these are earned benefits.”

The passage of the Social Security Fairness Act follows numerous testimonies from former public service workers who have faced severely reduced benefits. For example, one middle-aged retired firefighter shared with the Associated Press how she and her husband have been adversely affected by the reduction provisions, losing up to $1,200 monthly combined due to the WEP and GPO.

Historically, the Social Security Act of 1935 introduced measures ensuring private-sector workers received benefits, but excluded public employees. Over the decades, reforms have allowed individual states to decide whether to extend benefits to their public employees. Yet many states have opted to exclude or inadequately provide these benefits, resulting in inequitable financial outcomes for various educators across the country.

Research indicates upwards of 1 million teachers may lack adequate Social Security coverage. With public pension plans often varying widely, those who work only part of their careers within public schools find themselves at disadvantages—particularly as pension systems do not always increase based on the cost of living.

The recent legislative push is viewed as only the beginning. Education and labor advocates are rallying for broader reforms to secure comprehensive coverage for all educators nationwide. Some, like the National Education Association, have described the law as unprecedented progress for public service workers.

“This is just giving out more benefits without taking in more revenue,” noted Cory Koedel, professor of public policy and economics at the University of Missouri. He added concerns about future retirees seeing diminished benefits as costs continue to grow.

Going forward, it remains to be seen how the Social Security Fairness Act will reshape the financial futures of countless public service retirees. Stronger support for the public sector and discussions about the overall sustainability of Social Security will be pivotal as the country approaches its next fiscal challenges.

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