The Social Security Fairness Act is a bill that wants to change Social Security. It is becoming more popular in Congress. The plan aims to get rid of some parts that have been criticized for lowering benefits for people who work for the government.
Many people support the bill because they think it could fix what they see as unfair situations, but it has also caused worry because of how much it is expected to cost and what it could mean.
Who Would Be Affected by the Social Security Fairness Act?
The bill wants to change two parts of Social Security: the Government Pension Offset (GPO) and the Windfall Elimination Provision (WEP).
People who have worked in jobs that are covered by Social Security as well as jobs that are not covered by it will be affected by these rules. This is especially true for state and local government jobs that pay pensions instead of Social Security payments.
Social Security is meant to give relatively higher payments to people who have made less over their lifetime, but this system can be confusing for people who have also earned pensions from jobs that are not covered by Social Security.
Rich Johnson, who runs the Urban Institute’s program on retirement policy, said that some workers may not have made much over their lifetimes because they only had a few jobs that were covered by Social Security.
Most of the time, these people get more in Social Security payments than they would have gotten if they had worked all their lives in covered jobs.
Johnson said, “Social Security gives them more benefits based on their earnings than they would have gotten if they had worked their whole lives in jobs that paid into Social Security.”
For public service workers like teachers, police officers, and firefighters who spent a lot of their careers in jobs that were not covered by Social Security but also worked in jobs that were, this situation is especially important.
People can not get both pensions and inflated Social Security benefits, which is why the WEP was made. The GPO, on the other hand, lowers spouse benefits for people who get government pensions.
But sometimes the rules have caused problems that were not meant to happen, which is why some people want to change them or get rid of them completely.
Spanberger (D-Va.) and Graves (R-La.) said in a joint statement that “millions of retired public servants have waited more than 40 years for their elected officials to tackle this fundamental issue of fairness.”
They also said that these retirees deserve the benefits they earned at work.
Concerns About Fairness and the Potential Impact of Repeal
Many experts agree that WEP and GPO need to be changed, but they are also wary of getting rid of these rules completely.
A senior fellow at the American Enterprise Institute named Andrew Biggs pointed out that the rules were made when there was not a lot of data available.
However, he said, “On average, it is about correct,” which means that people are being treated more or less fairly. That being said, it does not always work fairly.
Biggs said that instead of getting rid of the provisions, fixing the problems would be better fixed by updating the formula with more correct data.
It was his suggestion that the method should be changed because, by law of averages, if some people are being treated unfairly, other people are getting a better deal than they should be.
In 2020, the Urban Institute released a study that showed getting rid of WEP and GPO could lead to 4.5% more benefits for beneficiaries by 2025.
In 2018 dollars, the average annual raise for those affected would be about $7,300. The bottom fifth of lifetime earners would get an extra $3,600 a year, and the top fifth would get $8,900 a year.
Cost of the Legislation
A new report from the Congressional Budget Office (CBO) says that the Social Security Fairness Act will cost more than $190 billion over ten years.
Some people, like Marc Goldwein, senior vice president at the Committee for a Responsible Federal Budget, say that the move is bad for the economy.
Goldwein was worried about how the bill might affect Social Security’s ability to pay its bills, saying that it would “worsen its long-term outlook.” It was “hard to think of a worse policy, dollar for dollar,” he said. He called the bill the “Social Security Unfairness Act.”
Some conservative politicians, like Representative Chip Roy (R-Texas), have also spoken out against the plan. Roy called the bill “irresponsible” because it would cost a lot of money.
House Consideration of the Bill
Even though the bill has been criticized, the leadership of the House GOP has said that it will be voted on in November.
This decision was made after a group of politicians from both parties successfully used the rules to get 218 signatures on a petition for discharge, which allowed them to force a vote.
Getting 218 signatures is a big deal because it means members of the majority party have to go against their leaders, which is not something they usually do, even when they back a bill.
The petition for discharge had the backing of a Republican leader and several dozen other people, so it could move forward. People who support the bill say that the fact that it has over 300 co-sponsors in the House shows that a lot of people want change.
Even though the bill has strong support from both parties in the House, its future is still unclear. Congress has a lot to do before the current session ends in January, and they need to get a lot of important things done.
The Social Security Fairness Act might not make it through both houses of Congress in time.
“In the past, there were kind of gatekeepers to stop it,” Goldwein said. “That could have been leadership or Ways and Means.” “Those who mean business have found ways to stop it.
The problems with moving the bill forward show how complicated the relationship is between concerns about money, the way politics work, and long-standing calls for change.
