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Public servants like teachers and police often get reduced Social Security. Congress is weighing a bill that could change that

INDONESIAKININEWS.COM -  Millions of Americans may receive reduced Social Security benefits if they worked in public roles as teachers, fire...



INDONESIAKININEWS.COM - 
Millions of Americans may receive reduced Social Security benefits if they worked in public roles as teachers, firefighters, police or government workers.

Now a proposal in Congress to eliminate the rules that cause those benefit reductions is moving forward. But experts say it’s still unclear whether the bill will pass.

“There just aren’t that many legislative days left,” said Maria Freese, senior legislative representative at the National Committee to Preserve Social Security and Medicare.

“It makes it very, very challenging for them to even get to the House floor,” she said.

The House Ways and Means Committee on Tuesday voted to send the bill, called the Social Security Fairness Act, to the House of Representatives with no changes.

The markup included a vigorous debate over whether the proposal is the best approach to address the issue, as well as how to best approach Social Security’s solvency woes.

“We are faced with very challenging questions — how to address the legitimate concerns of hardworking public servants while also safeguarding Social Security for all, and indeed for generations to come,” House Ways and Means Committee Chair Richard Neal, D-Mass., said at the hearing.

The bill was introduced by Rep. Rodney Davis, R-Illinois. The proposal has bipartisan support, with 300 co-sponsors out of 435 voting representatives.

Why public servants encounter reduced Social Security

The Social Security Fairness Act calls for repealing two titles of the Social Security Act that reduce or eliminate benefits for Americans who work in public service — the Windfall Elimination Provision and the Government Pension Offset.

The Windfall Elimination Provision, or WEP, reduces Social Security checks for workers who qualify for benefits based on work where they paid into the program, but who also receive a public pension from employment not covered by Social Security.

The Government Pension Offset, or GPO, reduces spousal benefits for surviving spouses who collect government pensions.

The Social Security Fairness Act would fully repeal both rules, thus making benefits more generous for those affected.

While the bill may now proceed through the normal legislative process, Tuesday’s proceedings blocked efforts to expedite the bill.

In a statement, Davis expressed his disappointment that the proposal would not be fast tracked in what is known as a consensus calendar process.

“I’ll continue to push for a vote on this common-sense bill and remind the public that the Democrat leadership of the House has it in their power to allow a vote at any time,” Davis said.

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Proposal could affect Social Security solvency

One key downside to the bill is that it does not include any changes to help pay for its benefit increases, according to Emerson Sprick, policy analyst at the Bipartisan Policy Center.

“The issue is that H.R. 82 would need offsets not to have a huge financial impact on the Social Security trust funds, and it doesn’t provide that,” Sprick said.

The bill would cost about $150 billion over 10 years, he said.

It would also likely speed up the timeline under which the Social Security trust funds would be depleted by over a year, Sprick said. Social Security’s trust funds are projected to be depleted in 2035, at which point 80% of benefits will be payable.

“Eliminating the WEP and GPO would be suboptimal from a policy perspective,” Sprick said.

A better approach may be to use the more advanced administrative data available today to more precisely calculate the benefits people who are also covered by pensions deserve, he said. That data was not available when the rules were created in the 1980s.

Proposals previously put forward by Neal and Rep. Kevin Brady, R-Texas, aim to provide an improved formula based on individuals’ work records.

“The solutions should seek equal treatment for public servants in a Social Security substitute without creating worse treatment for the 96% of American workers who only paid into Social Security,” Brady said at Tuesday’s hearing.

Some lawmakers also called for a more comprehensive proposal — Social Security 2100: A Sacred Trust — that would similarly repeal the WEP and GPO rules while also enacting other changes. One key change in the bill that would generate additional funding for the program would be reapplying the Social Security payroll tax for wages over $400,000, Freese noted. Currently, those taxes only apply to earnings up to $147,000.

Rep. John Larson, D-Conn., offered the Social Security 2100 bill as an amendment at Tuesday’s hearing, but then withdrew it. The amendment would likely have been ineligible for inclusion since it would have been non-germane to the underlying bill, Freese said.

“The best way to get any of these provisions done, including the GPO/WEP fix, would be to do comprehensive reform like the Larson bill,” Freese said.

To date, a markup for Social Security 2100 has not been scheduled. Without a markup, that bill is also unlikely to get to the House floor in the near term, Freese said.

Source: cnbc


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IndonesiaKiniNews.com: Public servants like teachers and police often get reduced Social Security. Congress is weighing a bill that could change that
Public servants like teachers and police often get reduced Social Security. Congress is weighing a bill that could change that
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