Democrats in Congress don’t want Republicans to be able to take credit or hogtie Social Security reforms that address inequities felt by some public employee pensioners. Thus Senate Majority Leader Chuck Schumer is saying there may be a vote as early as this week on the Social Security Fairness Act. The vote would take place before the Senate goes into Republican control in January, and the Senate will recess soon for the holidays, which gets them out of Washington Dec. 21-31.
The legislation would repeal two Social Security provisions: the Windfall Elimination Provision and the Government Pension Offset, which reduce Social Security benefits for millions of individuals who earned defined benefits pensions through public service jobs, particularly those in systems in which they did not pay directly into Social Security, such as many in Alaska who worked for the state or for school districts.
The cost to taxpayers is not insignificant. The Congressional Budget Office estimated the bill would cost nearly $190 billion over a decade. It also projected in a letter to Sen. Chuck Grassley last month that Social Security’s trust funds could “be exhausted roughly half a year earlier than it would be under current law” if the bill is passed into law.
Both Rep. Mary Peltola and Sen. Lisa Murkowski are co-sponsors of the legislation in their respective legislative bodies. If passed, it will bring hundreds of millions of dollars to the Alaska economy and encourage Alaska seniors to stay in state, as their benefits will somewhat offset higher costs of living. But the entire program is unfunded and adds to the $36 trillion national debt.
The bill is especially relevant for Alaska retirees who were part of the state’s old Public Employees’ Retirement System (PERS) and Teachers’ Retirement System (TRS).
Many of these retirees have seen their Social Security benefits significantly reduced due to current structure of Social Security. Under the WEP, individuals who worked in both Social Security-covered and non-covered employment often receive less than their full Social Security benefits. Similarly, the GPO affects survivors’ benefits, reducing spousal or widow’s benefits for retirees with a government pension.
Due to such a large state government workforce, Alaska has the highest percentage of WEP-affected beneficiaries of any state. Nearly 12% of all beneficiaries and 15% of all retired workers are impacted by the WEP.
If passed, the Social Security Fairness Act would eliminate these reductions, allowing public servants to collect both their earned pensions and full Social Security benefits.
Lawmakers supporting the bill say the existing provisions as punitive and outdated, penalizing workers who have contributed significantly to their communities.
If the Senate approves the bill, it will head to President Joe Biden for his signature.
