Update on Social Security Fairness Act of 2013

As the U.S. Congress prepares to return from an August/September recess next week, it is time for an update on the status of the Social Security Fairness Act of 2013. This legislation addresses an important Texas AFT and national AFT priority:  the repeal of two unfair federal Social Security offsets that harm Texas school employees and more than a million public workers in more than a dozen other states.

The Social Security Fairness Act of 2013, repealing the Government Pension Offset and Windfall Elimination Provision, takes the form of two identical Senate and House companion bills. The Senate version is S. 896 by Sens. Mark Begich (D-Alaska) and Susan Collins (R-Maine), introduced on May 8.  The House companion bill is H.R. 1795, filed by Reps. Rodney Davis (R-Illinois) and Adam Schiff (D-California) on April 26.

By early August, when the congressional recess began, the companion bills had earned the cosponsorship of 11 more senators and 87 more House members. Neither Republican Sen. John Cornyn nor Republican Sen. Ted Cruz of Texas has signed on in support of S. 896. In the House, thus far only five of the 36 members from Texas have cosponsored H.R. 1795. The five are: Democrats Gene Green and Sheila Jackson Lee of Houston and Republicans Michael Burgess of Flower Mound, Ted Poe of Humble, and Randy Neugebauer of Lubbock.

Here’s why this bipartisan legislation is so necessary. The two Social Security offsets unfairly reduce or eliminate earned Social Security benefits for many Americans who have devoted much of their careers to public service, such as teachers and police officers. These public employees lose out on federal benefits earned by their own contributions or their spouses’ contributions, through employment covered by Social Security, because they also happen to draw a public pension from a state or local employer that chose many years ago not to pay into Social Security or to collect Social Security contributions from its employees.

The Windfall Elimination Provision (WEP) thus reduces the earned Social Security benefits of an individual who also receives a public pension from a job not covered by Social Security. For example, educators who do not earn Social Security in the public schools but who work part-time or during the summer in jobs covered by Social Security see their benefits reduced even though they pay into the system just like others. The WEP also affects people who move from a job in which they earn Social Security to a job, such as teaching, in which they do not.

The Government Pension Offset (GPO) affects the spousal benefits of people who work as state or local government employees—including educators, police officers, and firefighters—if the job is not covered by Social Security. The GPO reduces by two-thirds the Social Security benefit received by surviving spouses who also collect a government pension. According to the authors of H.R. 1795, nine out of 10 public employees affected by the GPO lose their entire spousal benefit, even though their spouse paid Social Security taxes for many years.

Reps. Davis and Schiff also cite other negative effects of the federal offsets:  “The WEP substantially reduces benefits workers included and counted on when planning their retirement and it substantially penalizes lower-paid public employees. These provisions also discourage qualified, talented individuals from entering into public service professions, hindering efforts to attract new math and science teachers from the private sector unwilling to sacrifice earned Social Security from prior careers. The WEP and GPO provisions do not eliminate a windfall for workers, they penalize public service employees by taking away benefits they earned throughout their careers.”

Congress has had multiple hearings over the years on prior versions of the Fairness Act, but legislative action has been stymied. Chronic, pervasive gridlock in Congress is partly to blame; specific resistance to the price tag of righting this particular wrong is another factor. Hopes of progress likely will hinge on whether the Social Security Fairness Act can be rolled into some broader legislation that covers the cost via overdue elimination of tax loopholes or that bolsters overall funding of Social Security for the future.

If opportunity knocks, we need to be ready to move the issue of Social Security fairness forward quickly. To help prepare for that moment and hasten its arrival, next week Texas AFT will provide updated background information on a Web page devoted to Social Security fairness, and we also will provide an e-letter you can send directly to our state’s two senators and your member of the U.S. House urging support for the Social Security Fairness Act of 2013.

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