Public employees soon to receive full Social Security benefits after Biden signs bill
WASHINGTON — Thousands of Louisiana public servants and millions around the country will start getting their full Social Security benefits now that President Joe Biden signed into law Sunday the repeal of two provisions that had reduced the amounts many could receive in retirement.
In the East Room of the White House, Biden approved the Social Security Fairness Act ending the Windfall Elimination Program, called WEP, and the Government Pension Offset, known as GPO, that reduced Social Security benefits to many teachers, police, firefighters and other public servants whose state and local employers had not contributed to Social Security.
The Social Security Administration is working out the regulations and calculations to start including the amounts removed from the benefits of those affected, a procedure that could take more than a month. “The recomputation process involves substituting the years with higher earnings for the years with lower earnings that were used in previous calculations,” according to the Social Security Administration.
Biden said public servants will receive an average $360 more per month. Those impacted also will receive a lump sum for the missing payments of 2024.
The agency will provide more information on its website at ssa.gov.
If a person is entitled to the benefit, no action is necessary other than to ensure the agency has the correct address and direct deposit information on file, according to the Social Security Administration.
Former Reps. Garret Graves, R-Baton Rouge, and Abigail Spanberger, D-Va., were the lead sponsors of the bill that removed the 40-year-old provisions. Both Graves and Spanberger’s House terms expired Friday.
“For 40 years the federal government has stolen from the police and firefighters who keep our homes and communities safe,” Graves said Sunday. He was unable to attend the signing ceremony.
“It has stolen from the teachers who nurture our kids and the public servants who sacrifice so much for the greater good,” Graves added. “For 40 years, many have tried and failed to correct this injustice. I introduced H.R. 82 just two years ago determined to lead the fight and build the coalition to repeal the WEP and GPO if it was the last thing I did. Turns out, it was.”
Biden was escorted into the East Room by Bette Marafino, president of the Connecticut Chapter of the Alliance for Retired Americans and head of a national task force to repeal WEP and GPO.
“The bill I’m signing today is about a simple proposition. Americans who have worked hard all their lives to earn an honest living should be able to retire with economic security and dignity,” Biden said. “I’m proud to have played a small part in this fight.”
WEP and GPO were added to the law to equalize the Social Security benefit formulas for workers with similar earnings histories, whether those earnings were inside or outside of the Social Security system.
At least some public workers in 26 states are affected by either or both WEP and GPO. Teachers in 15 states were impacted by the provisions.
Louisiana is among the half dozen states whose public employees, including teachers, saw the deepest reductions in Social Security benefits due to WEP and GPO.
State, parish and municipal governments in Louisiana decided that the pensions for their public service employees were good enough and did not remove taxes from their employees’ paychecks and did not pay the employers’ share into Social Security.
Many of those employees, however, held jobs before or after their public service, or worked second jobs — such as teachers often take at night and during the summer — that contributed to Social Security.
As these employees approached retirement, they learned their Social Security benefits would be reduced because they also would receive pensions that had not paid into the system.
The Windfall Elimination Provision reduces Social Security benefits by up to half the pension amount for people receiving pension income from jobs that didn’t contribute Social Security payroll taxes.
The Government Pension Offset reduces benefits for survivors if the spouse had a pension that wasn’t taxed for Social Security. The Social Security benefits can be cut by up to two-thirds of the public employee’s pension.
About 94,000 Louisiana employees and retirees from public service jobs — 2.1 million nationwide — lost part or all of their Social Security benefits because of WEP and GPO. The U.S. annually pays about $1.5 trillion in benefits to 68 million people, including more than 900,000 Louisiana residents.
“Today marks a historic victory for our teachers, firefighters, police officers, and countless other public servants in Louisiana and around the country,” said Rep. Troy Carter, D-New Orleans, who attended the signing ceremony. “The Social Security Fairness Act will ensure that these hardworking individuals will no longer face unfair penalties to their earned benefits.”
“After a decades-long fight, I’m glad to see our bill to fix this problem finally signed into law,” House Majority Leader Steve Scalise, R-Jefferson, said after the signing ceremony.
Almost immediately after the provisions were added to the law in the 1980s, public service employees and their unions said they were unfairly receiving less in Social Security benefits than they had paid into the system.
The American Federation of State, County and Municipal Employees was just one of the organizations that spent years organizing petitions, letter-writing campaigns and lobbying Congress. “Thousands of AFSCME members can now retire with peace of mind, and passionate jobseekers will be inspired to pursue these critical careers knowing their futures will be secure,” AFSCME President Lee Saunders said in a statement after the signing.
One reason why addressing the issue took so long is because it requires a more extensive repair of Social Security. But just how to handle that fix and other problems with Social Security has been tied up in political bickering for four decades.
Graves and Spanberger tried to institute a sweeping repair but found more support for simply removing the two provisions. Still, they needed to employ a sheaf of little-used parliamentary procedures to get around the opposition and secure passage in both chambers of Congress.
Opponents argue that simply removing the two provisions, as this legislation does, will cost $196 billion, which could hasten insolvency of the fund that pays Social Security. If the fund goes insolvent in nine years, which is predicted if nothing is done to prevent it, then everyone will see a reduction of about $4,000 out of the average $22,000 paid in benefits annually.
Plus, opponents say, the bill’s solution doesn’t address the underlying problem of public retirees receiving more than their fair share of benefits.
Social Security pays benefits based on a formula that involves salaries and contributions over time and is not a dollar-for-dollar return on taxes paid.
Generally, the formula that calculates how much a person receives involves the amount earned and how much was paid into Social Security. The formula does not include any employment with nonpaying employers.
The formula pays a higher rate for lower income retirees. Since these were second jobs or careers, the amounts paid into the system indicated a lower income and the formula determined a higher benefit rate for public employees than for workers whose total compensation was comparable but whose employers paid into the Social Security system.
U.S. Sen. Bill Cassidy, R-Baton Rouge, has been working on an overhaul of the Social Security system that would fix issues such as shortchanging public service employees because of flaws in the regulations and formulas, as well as shoring up the entitlement’s finances.
“We must save Social Security from insolvency in nine years for every American,” Cassidy said, but in the meantime public service workers shouldn’t have to suffer.
“Today is a day to celebrate! State and local workers in Louisiana deserve the full Social Security benefits they’ve earned. Now, they will get it,” said Cassidy, who attended the signing ceremony and chairs the Senate Committee on Health, Education, Labor and Pensions.