Biden signs Social Security Fairness Act

In one of his final acts from the Oval Office, President Joe Biden signed the Social Security Fairness Act into law on Sunday, delivering an increase in Social Security benefits to millions of public sector workers and their families.

According to advocates of the act, those two provisions have reduced Social Security benefits for teachers, firefighters, policemen, and other public-sector workers, as well as their spouses and survivors in retirement for decades.

The bipartisan legislation, which passed with a majority vote through the Senate in December after winning majority approval in the House the previous month, eliminates the Windfall Elimination Provision and the Government Pension Offset.

“These changes mean an estimated average of $360 per month in additional income for millions of teachers, nurses, and other public employees,” Biden said in a statement Sunday, as reported by CNBC and other news outlets. He added that more than 2.5 million Americans would also receive lump-sum payments for benefits they missed in 2024.

The WEP previously reduced Social Security benefits for individuals receiving pensions from non-Social Security-covered employment, such as certain state and local government jobs. As of late 2023, it affected approximately 2 million beneficiaries. Meanwhile, the GPO, which reduced spousal and survivor benefits for public workers with government pensions, impacted about 750,000 people.

“With the repeal of WEP and GPO, federal retirees, along with so many others, will finally receive the full Social Security benefits they’ve earned,” William Shackelford, president of the National Active and Retired Federal Employees Association, said in a statement reported by CNBC.

While hailed as a victory by advocacy groups, critics have raised concerns about the act's financial implications. According to one estimate by the Congressional Budget Office, the law will accelerate the long-feared depletion of the Social Security trust fund by about six months. Unless legislators and policymakers act, the fund is projected to run out in 2033, triggering automatic benefit reductions.

“They’re not making the pot bigger,” Richard Johnson, director of the program on retirement policy at the Urban Institute, said in a statement to Barron's. “They’re just taking some soup out of the pot and giving it to one group, leaving less for the others.”

Advocacy groups that pushed for the bill expressed gratitude for the long-awaited reform. “Our organization has spent decades lobbying for the repeal of the WEP and GPO,” said Max Richtman, president of the National Committee to Preserve Social Security and Medicare.

Only time will reveal the act's ultimate impact. For now, the Social Security Administration is wrestling with the qusetion of how to implement the law.

"The Social Security Administration is evaluating how to implement the Act," it said in a statement Monday. "We will provide more information as soon as available."