In the midst of the ongoing debate over how to reform Social Security, Congress could take a rare step on the issue by removing provisions that reduce benefits for tens of thousands of people in Connecticut who worked in public service like teachers, police officers, firefighters and government employees.
The bipartisan bill from U.S. Rep. Garret Graves, R-La., and U.S. Rep. Abigail Spanberger, D-Va., would eliminate a pair of provisions that reduce payments to certain beneficiaries as well as their spouses and surviving family members who also collect a pension from jobs that were not covered by Social Security.
The Windfall Elimination Provision can lower how much beneficiaries receive from Social Security if they also get pensions or disability benefits from uncovered work. It applies to those who paid Social Security taxes on less than 30 years of substantial earnings, which is currently set at $31,275 in 2024.
WEP affects more than 22,000 beneficiaries in Connecticut, with the vast majority of them retired workers, according to December 2023 estimates from the Congressional Research Service. The Connecticut Education Association have argued those reductions hurt teachers who worked a second job where those taxes were collected but could see half of their Social Security benefits deducted. Connecticut is one of 15 states where WEP applies to teachers.
The Government Pension Offset, meanwhile, cuts Social Security spousal or survivor benefits by two thirds if they receive a pension from local, state or federal government employment that is not covered.
The “Social Security Fairness Act” has secured more than 300 co-sponsors, which is enough support to clear the House. But with GOP leadership looking unlikely to bring it up through regular order, the co-sponsors of the bill used a procedural tool called a discharge petition that can force a floor vote if they collect signatures from a majority of members. They are a couple of dozen signatures short of that threshold.
“For more than 40 years, millions of Americans who paid into Social Security during their careers have been stripped of their retirement benefits — retired police officers who began second careers after retiring from the force, retired teachers who took a summer job, retired federal employees who spent a portion of their careers in the private sector, retired firefighters who worked a second job, or other retired public servants who contributed to Social Security during their careers. We cannot drag our feet on addressing this basic issue of fairness,” Graves and Spanberger said in a joint statement.
The legislation and the vehicle to get a vote on it have widespread support from Connecticut’s congressional delegation, with the notable exception of U.S. Rep. John Larson, D-1st District. He has made Social Security his primary issue in Congress but wants any changes to be paid for and not come at the expense of other beneficiaries, especially those who rely on the program as their sole source of income. He serves as ranking member of the House Ways and Means Social Security Subcommittee.
Larson also supports the elimination of WEP and GPO, which is included in his own legislation, “Social Security 2100 Act.” But he cautioned against supporting a bill that does not pay for those changes. He noted that his own bill would fund the repeal of those provisions through raising the income cap on taxable earnings for Social Security.
“If an item is not paid for, that impacts the Trust Fund directly, and that’s my concern,” Larson said in an interview. “We’re on the same page in terms of our goal and in terms of recognizing that [WEP and GPO] is bad policy that needs to be corrected.”
“I don’t fault them for wanting to push this forward. [These workers] have been harmed over time. It appears this could be an avenue for them,” he continued, referring to lawmakers’ discharge petition to trigger a House vote. “At its core, the issue here is teachers, firefighters, police and municipal workers have been hurt by this.”
After the introduction of the discharge petition last week, Larson said he sent around a letter to colleagues about the bill. He acknowledged that each member needs to make the best decision for its constituents but detailed the “short- and long-term ramifications” of the legislation.
Current estimates show the Trust Fund for old age and survivors insurance will be able to pay 100% of benefits through 2033. After that, it could result in people receiving reduced benefits amounting to about a 20% cut.
But the rest of the delegation supports the latest effort to force a vote on the issue to restore benefit payments for public servants and their families.
They argue it unfairly affects many who have worked in public service, like teachers, police officers and firefighters, as well as survivor benefits for those who served in local or federal government.
Three members of Connecticut’s delegation have already signed onto the discharge petition: Joe Courtney, D-2nd District; Rosa DeLauro, D-3rd District; and Jahana Hayes, D-5th District. The office of U.S. Rep. Jim Himes, D-4th District, said he plans to add his name.
“Those who dedicate their lives to public service deserve to retire with dignity and their hard-earned benefits,” Hayes said in a statement. “I have long supported efforts to repeal these harmful provisions and advocated for key reforms to strengthen Social Security so retiring seniors and young people can continue to count on this bedrock insurance program for generations to come.”
There’s a Senate version of the bill that has bipartisan support and enough co-sponsors that it would overcome a filibuster. Connecticut’s U.S. senators, Richard Blumenthal and Chris Murphy, have both signed onto the bill as co-sponsors.
About 708,000 people in Connecticut — about 20% of the state’s population — receive benefits, according to December 2022 data from the U.S. Social Security Administration. More than three quarters are retired workers, while about 10% are receiving disability income. And some of those recipients are children and people receiving survivor benefits from deceased spouses or family members.
Larson said he prefers broader legislation to tackle the long-term financial health of Social Security. His legislation, along with Blumenthal’s companion bill, has support from Connecticut’s delegation, but it has no Republican co-sponsors, which would be necessary for it to pass through both chambers of Congress and become law.
Those bills would implement an across-the-board hike in benefits by 2%, the first increase in 53 years. It would also bolster the program’s solvency by requiring higher earners to contribute more to payroll taxes and boost the cost of living adjustment to better reflect current inflation.
Social Security is funded through a payroll tax that is split between employers and employees, but there is a cap on taxable income, with this year’s set at $168,600. If the bill were to pass, it would also apply payroll taxes to wages over $400,000, while adding an additional net investment income tax for those earning more than $400,000. That proposal is in line with President Joe Biden’s own guidelines on tax increases.
With no tax hikes or spending cuts included in the current bill before Congress, Larson and others who are wary of the approach warn what it could do to the solvency of the Trust Fund.
The Congressional Budget Office projects that if the bipartisan legislation was enacted and repealed both provisions, it would cost nearly $196 billion over the next decade.
Others warn against repealing WEP and GPO, especially without an offset, and suggest changing the formula to calculate benefits.
“There is a case for updating the rules for workers with earnings not covered by Social Security, using data that are available today but were not at the time of WEP and GPO’s creation,” Kathleen Romig, director of Social Security and Disability Policy for the Center on Budget and Policy Priorities, wrote when the bill was introduced in the last session of Congress. “But repealing them altogether would be costly and inequitable.”
The Connecticut Mirror/Connecticut Public Radio federal policy reporter position is made possible, in part, by funding from the Robert and Margaret Patricelli Family Foundation.
This story was originally published in the Connecticut Mirror Sept. 18, 2024.
