President Joe Biden is set to sign the Social Security Fairness Act into law, a measure providing a significant boost to Social Security payments for nearly 3 million current and former public employees. This includes retirees from various public service sectors, such as teaching, firefighting, and law enforcement. Advocates hail the act as a correction of a long-standing inequity, addressing the Windfall Elimination Provision (WEP) and the Government Pension Offset (GPO), which limited Social Security benefits for those receiving other retirement payments.
The WEP and GPO disproportionately affected public sector retirees, reducing their Social Security benefits based on their receipt of state or local government pensions. The Congressional Research Service reported that in December 2023, approximately 745,679 beneficiaries (1% of all recipients) were impacted by the GPO, while 2.1 million (3%) were affected by the WEP. The Congressional Budget Office projected that eliminating the WEP would increase average monthly payments by $360 by December 2025, while ending the GPO would raise monthly benefits by an average of $700 for 380,000 spousal beneficiaries and $1,190 for 390,000 surviving spouses by the same date. These increases would continue to grow annually with cost-of-living adjustments. Backdated payments from January 2024 will be made, although the specifics of the implementation and any required beneficiary action remain unclear.
The impact of this change is widely celebrated by public sector unions and advocates. Edward Kelly, president of the International Association of Fire Fighters, expressed excitement over correcting a “40-year wrong,” particularly highlighting the impact on surviving spouses. Lee Saunders, president of the American Federation of State, County and Municipal Employees, thanked Senator Sherrod Brown for his years of advocacy, emphasizing that millions of public service workers will finally receive the full Social Security benefits they earned. Similar sentiments of victory were expressed by Becky Pringle, president of the National Education Association.
However, the act’s passage wasn’t unanimous. While some Republicans supported the bill, citing the need to address an unfair aspect of federal law, others, including Senators John Thune, Rand Paul, and Thom Tillis, voiced opposition, expressing concerns about the long-term financial sustainability of Social Security. Senator Tillis criticized the decision as a short-sighted response to pressure, rather than a sustainable solution. Representatives from Alabama also voted against the bill.
The Social Security Fairness Act, while addressing a significant injustice, adds to the challenges facing the Social Security Administration. The agency, already operating with the lowest staffing levels in decades, will face increased administrative burdens. This comes at a time when the Social Security and Medicare trustees’ report projected the program’s inability to pay full benefits beginning in 2035, a date the new law is projected to accelerate by approximately six months. The future of Social Security remains a critical political issue, with the recent election highlighting its importance in the national discourse.