December 21st 2024.
On an early Saturday, the Senate came together to pass a bill that would bring much-needed relief to millions of people who rely on Social Security payments. This was a significant moment as it was one of the last acts of Congress for the year. The bipartisan bill, which will now make its way to President Joe Biden, aims to address a long-standing issue for former public employees.
The bill, known as the Social Security Fairness Act, will finally eliminate the reductions in Social Security benefits for nearly 3 million people who receive pensions from their work in federal, state, and local government, or public service jobs such as teachers, firefighters, and police officers. This is a major win for advocates who have been fighting for this change for decades. However, it is not without its consequences, as it will also put a strain on the Social Security Trust Funds.
The journey to pass this legislation has been a long one, but it all came together in the final weeks, and even the final minutes, of Congress being in session. It was a momentous occasion as all Senate Democrats, along with 27 Republicans, voted in favor of the bill, giving it a final tally of 76-20. Senate Majority Leader Chuck Schumer, D-N.Y., expressed his satisfaction with the passing of the bill, stating, "Millions of retired teachers, firefighters, and letter carriers, and state and local workers have waited decades for this moment. No longer will public retirees see their hard-earned Social Security benefits robbed from them."
The bill will repeal two provisions, the Windfall Elimination Provision and the Government Pension Offset, which have been limiting Social Security benefits for certain recipients. These limitations apply to those who receive retirement payments from other sources, such as a public retirement program for a state or local government. As Sen. Sherrod Brown, an Ohio Democrat who has been advocating for this change for years, puts it, "Social Security is a bedrock of our middle class. It's retirement security that Americans pay into and earn over a lifetime." He also highlighted the absurdity of the current restrictions, saying, "These workers serve the public. They protect our communities. They teach our kids. They pay into Social Security just like everyone else."
For those who currently have reductions in their Social Security benefits, this bill will bring much-needed relief as they will see a boost in their monthly payments. However, this will also add an estimated $195 billion to federal deficits over the next 10 years, according to the Congressional Budget Office. This will also hasten the program's insolvency date by about half a year, adding to the existing challenges it faces. The nonpartisan Committee for a Responsible Federal Budget estimates that a typical dual-income couple retiring in 2033 would see an additional $25,000 lifetime reduction in their benefits.
Some opponents of the bill acknowledge that the current restrictions are unfair to public service retirees, but they could not support the bill when the entire program is facing financial challenges. Sen. Thom Tillis, a North Carolina Republican who opposed the bill, stated, "We caved to the pressure of the moment instead of doing this on a sustainable basis." The changes brought about by the bill will also mean more work for the Social Security Administration, which is already operating at its lowest staffing level in 50 years. Despite serving more people than ever before, the agency's current staff of about 56,400 is the lowest it has been since 1972. The stopgap government funding bill that also passed on Saturday did not include any additional funding for the agency, which is currently under a hiring freeze.
However, there were still some Republican supporters of the bill who saw this as an opportunity to address what they believe is an unfair section of federal law that harms public service retirees. Sen. Susan Collins, a Maine Republican, stated, "They have earned these benefits. This is an unfair, inequitable penalty." She also mentioned that they would continue to work on larger fixes for Social Security, but President-elect Donald Trump has made it clear that he will not touch the benefits, despite his administration's efforts to make deep budget cuts elsewhere.
Nonetheless, Senate Republicans are working on proposals that would put the program on better financial footing, which may also mean scaling back benefits. One such proposal, put forth by Sen. Rand Paul, is to gradually raise the Social Security retirement age to 70. However, this proposal only received three votes in favor of it, making it clear that there is still a lot of work to be done. As Sen. Tillis puts it, "There's so much riding on us getting this right and having the courage to fix Social Security over the next few years. We will rue the day that we failed to do it."
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