On November 12, the US House of Representatives passed the Social Justice ActThe bipartisan bill is set in motion to eliminate two long-standing provisions that currently reduce Social Security benefits for public sector employees.
The legislation was first introduced in 2023 and now heads to the Senate, where it has strong bipartisan support. If passed, it is estimated to cost $196 billion over the next decade. Critics worry that passing this bill could exacerbate Social Security’s funding challenges.
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The bill addresses two key provisions – added to Social Security Law in 1983 – which affects public sector workers:
The Windfall Elimination Provision (WEP): This rule reduces Social Security benefits for individuals who receive pensions from jobs that do not pay Social Security taxes, such as certain state and local government positions. According to the Congressional Research Service, about 2.1 million people are affected by this provision.
Government Pension Offset (GPO): GPO reduces Social Security benefits for spouses, widows and widowers who receive government pensions. About 745,000 people currently receive reduced benefits under this provision.
Those who support repealing the rule say it unfairly punishes retired teachers, police, firefighters and other public employees, many of whom rely heavily on Social Security and pension benefits for income.
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Supporters of the bill see it as a victory for equity. Representative Garret Graves (R-La.), Coleader of the bill, said on the floor of the House, “This has been 40 years of treating people differently, discriminating against a certain set of workers.”
The National Committee to Protect Social Security and Medicare called the House vote a “bipartisan victory” for public employees and their families.
While the bill aims to address disparities among demographics that have been affected for more than 40 years, critics worry that implementing it could further reduce Social Security’s already shrinking finances.
The Congressional Budget Office estimates that the bill would add $196 billion to the deficit over the next 10 years and bring the trust fund depletion date up to six months. Social Security funds are expected to run out at current levels in 2033, meaning beneficiaries will receive about 79% of their benefits.
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Some lawmakers, like Rep. John Larson (D-Conn.), argued that, while reform is necessary, it should be handled differently. “I can’t vote for a bill on the floor tonight because it’s not being paid and therefore putting American profits at risk,” Larson said. “It will do the greatest harm to the five million Americans who receive poverty checks and the nearly half of all Social Security recipients who rely on the benefits they receive for the majority of their income.”
However, Larson proposed an alternative proposal: the Social Security Act of 2100. It would also repeal the WEP and GPO and include additional measures to increase revenues, such as raising payroll taxes for higher earners.
Policy experts also expressed concern. Romina Boccia, director of budget and rights policy at the Cato Institute, criticized the bill, saying the policy is flawed and requires more sweeping changes.
“We must reform Social Security so that it provides basic income security to the most vulnerable Americans in old age without increasing the debt or tax burdens facing young workers,” Boccia said.
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The Social Security Fairness Act already has enough Senate sponsors to pass if brought to the floor for a vote. If signed into law, repealing the WEP and GPO would apply to benefits starting in 2024, significantly changing benefits for affected retirees and leaving unresolved questions about the program’s long-term solvency.
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This article House Passes $196 Billion Social Security Bill: Will Pension Cuts Shorten Program Life? Originally appeared on Benzinga.com
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