SSFA VANovember 12th, 2024
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NTU urges all Representatives to vote "NO" on H.R. 82, the Social Security Fairness Act. NTU historically supported the taxpayer-friendly Windfall Elimination Provision (WEP) and Government Pension Offset (GPO) at the time of their enactment. Eliminating these provisions would increase deficits by close to $200 billion over the budget window according to the Congressional Budget Office (CBO).
The Windfall Elimination Provision was enacted in 1983 and the Government Pension Offset was enacted in 1977. Both provisions seek to limit Social Security benefits from unfairly going to workers that receive pensions based on employment that did not pay into Social Security. Some examples include teachers, government employees, firefighters, and police officers. The WEP alters the benefit formula for the approximately three percent of retirees who receive a pension benefit from non-Social Security sources. The GPO reduces the spousal and survivor benefits for spouses who themselves receive their own non-Social Security pension.
These types of workers create a distortion because the Social Security benefit is calculated based on covered years, meaning the working years where they paid into the system via Social Security taxes. For the WEP, if a worker spends a significant amount of time working as a teacher, but also worked as a lower-wage earner in the private sector, their benefits will be calculated in accordance with the private sector position and ignoring the higher wage in a pension-benefits accruing position. Similarly for the GPO, if a worker’s spouse works in a government position, their average earnings look much lower than they were in reality because those years spent with the government working towards their separate pension aren’t taken into consideration. Eliminating WEP/GPO would effectively inequitably transfer trust funds from less wealthy private sector workers to well-paid government workers who already receive pensions.
Finally, while the GPO and WEP may have a clumsy and complex system for their calculations of benefit reduction, any modifications should be budget-conscious and offset. CBO scoring is imperfect, so the $200 billion price tag could wind up being even more costly than anticipated. Social Security is already projected to reach insolvency by 2033 and this could move up the timeline for that by six months to a year.
Roll call votes on these amendments will be included in NTU’s annual Rating of Congress and “NO” votes will be considered the pro-taxpayer position.
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