A New Era for Public Workers: Social Security Fairness Act Signed into Law
A Victory for Public Servants, but a Disappointment for Policy Experts
On January 5, President Joe Biden signed the Social Security Fairness Act, a move hailed as a triumph for public workers with pensions. However, the policy community is less enthusiastic, with many experts labeling the change as poorly developed and targeted.
The Elimination of WEP and GPO: A Complex Issue
The new law abolishes two provisions that adjusted Social Security benefits for individuals receiving pension income from work in the public sector where payroll taxes to Social Security were not paid. The Windfall Elimination Provision (WEP) and Government Pension Offset (GPO) were enacted in 1983 and 1977, respectively, to ensure all Social Security beneficiaries receive a comparable payout.
A Long-Fought Battle
Organizations like the National Committee to Preserve Social Security and Medicare have been fighting for decades to modify or repeal these rules. Maria Freese, senior legislative representative, argues that public workers were unfairly penalized for their service, receiving lower benefits than those who didn’t enter public service.
Increased Benefits and Lump-Sum Payments
As the law takes effect, Social Security beneficiaries can expect monthly benefit increases ranging from $360 to $1,190, according to the Congressional Budget Office. Affected beneficiaries will also receive lump-sum payments for the extra benefits they would have received throughout 2024.
Criticisms and Concerns
Many policy experts, including Andrew Biggs of the American Enterprise Institute, believe the changes are a mistake. They argue that the elimination of WEP and GPO will create windfalls for some recipients, costing nearly $200 billion over 10 years, and exacerbating Social Security’s funding shortfall.
The Bigger Picture: Social Security’s Solvency
Experts agree that Congress must address the program’s funding shortfall, which is expected to deplete the trust funds by 2035. Restoring solvency may require benefit cuts, tax increases, or a combination of both. However, with President-elect Donald Trump promising not to touch Social Security, finding a solution will be challenging.
A Call to Action
The Social Security Fairness Act may have been passed, but the real work is just beginning. Lawmakers must now confront the program’s long-term fiscal issues and find a way to ensure its solvency. As Maya MacGuineas, president of the Committee for a Responsible Federal Budget, notes, “We know that we need to be addressing Social Security and Medicare because of the insolvency that they both face within roughly a decade.”
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