Social Security Fairness Act faces resistance ahead of landmark vote

A bill aimed at repealing contentious provisions around Social Security benefits for public sector workers is facing criticism as it gets put to a critical vote in Congress.

The Social Security Fairness Act, which passed the House in November by a 327-75 vote, aims to repeal the Windfall Elimination Provision (WEP) and the Government Pension Offset (GPO). Those provisions, according to supporters from the public sector and on Capitol Hill, unfairly punish a large contingent of civil servants during their retirement.

The bill is up for a vote at the Senate this week, with Senate Majority Leader Chuck Schumer pledging a decision would be made before time runs out in this session of Congress.

“I am here to tell you the Senate is going to take action,” Schumer told a contingent of fire fighters, police, and other public servants at a Wednesday rally, according to a report by CNBC. "I got all my Democrats lined up to support it."

As explained by CNBC, the WEP impacts about 2.1 million Social Security beneficiaries by reducing retirement or disability benefits for those enjoying pensions from non-Social Security-covered jobs. Similarly, the GPO affects approximately 746,000 individuals by cutting survivor or spousal Social Security benefits due to pensions earned through public employment.

Proponents for the Social Security Fairness Act argue the bill would address longstanding inequities for public sector employees. As one example, Edward Kelly, general president of the International Association of Fire Fighters, noted how professional firefighters in Louisiana are given a starting salary of $40,000, which forces them to take on second or third jobs where their salaries are taxed for Social Security purposes. But when they become eligible to collect those benefits, their income from that side is reduced by $500 to $600 due to the WEP and GPO provisions.

“You’re basically being discriminated against for your public service,” Kelly told CNBC, calling the cuts "devastating" and "patently unfair."

But according to the Concord Coalition, a nonpartisan fiscal advocacy group, the Social Security Fairness Act would give a minority of workers "an unearned windfall" from a repeal of the GPO and WEP.

"Most police, firefighters, teachers, and other government employees receive Social Security in addition to their public pension because they contribute to both systems throughout their entire career," the coalition said in a statement Monday.

Pointing to a report from the Congressional Research Service, it said less than 30 percent of employees in state and local governments do not get Social Security benefits because they opted not to participate in Social Security. And while some workers may qualify for Social Security by working in another job that it covers or as the spouse or survivor of a worker who's covered, the coalition said the benefit reductions that the GPO and WEP prescribe for them are just aimed at duplicating similar rules that apply to everyone else.

"Non-covered workers are not being singled out for unfair treatment," the coalition said, arguing that scrapping the GPO and WEP under the Social Security Fairness Act would lead to "an unearned windfall" for workers who would end up getting more and paying less than others.

Rather than passing the measure to undo those two provisions – which would cost the government around $196 billion and pile an additional $37 billion on top of the national debt, according to the Congressional Budget Office – the Concord Coalition called for a rethink of IRS regulations, blaming those rules for allowing pensions that are less generous than Social Security, particularly for workers with lower wages and shorter careers.

"[T]he real injustice that's being ignored in the debate so far is what happens to the majority of non-covered workers who never qualify for a pension," it said. "If proponents are really concerned about the financial well-being of non-covered workers, they would expand Social Security coverage to include them, rather than provide an unearned windfall to the lucky few who ultimately receive a non-covered pension."