The little-known Social Security provision impacting public workers
by Gabe Fleisher
Good morning! It’s Thursday, September 29, 2022. Election Day 2022 is 40 days away. Election Day 2024 is 768 days away.
Every once in a while, I like to crack open my inbox to answer reader questions. Today, I’m addressing a topic I’ve been asked about by a few different readers, so I figured it could be helpful to write about it for everybody.
As always, my hope is that it will make the policy at hand interesting and understandable — while also elucidating why it matters and what’s being done to fix it.
Ask Gabe: What’s this about a Social Security provision hurting teachers and firefighters?
When I try to explain it to people, they shake their heads and say that I must be misrepresenting something--you know, because the government just wouldn't do that.
Any education/enlightenment/help your column might offer would be great. I know there's so much of importance, and that $400/month just doesn't seem like that much money. However, I'm 75 and still working--that $360 each month would go a long way to helping me retire.
Time to dive into some Social Security policy! This may seem like a minute issue, but it’s one that has very real consequences for many people (as Christina wrote) and that is likely to see action in Congress soon (as Cory wrote), so it’s the perfect topic for us to jump into.
Let’s start with the basics: The Windfall Elimination Provision, also known as WEP, was created by a bipartisan Reagan-era bill, the Social Security Amendments of 1983.
The provision applies to people who are receiving both of two types of retirement benefits: 1) a pension from a job that didn’t have employees pay into Social Security and 2) Social Security benefits from a job that did have its employees pay into the program.
The idea was to prevent these individuals from “double dipping” and receiving both Social Security benefits and the pension they were already receiving.
Therefore, under the WEP, their Social Security benefits are reduced by a certain amount. That amount is determined by a calculation I won’t get into (you can read about it here if you’d like), but the average amount in Social Security benefits people lose out on due to the provision is $330 a month, so use that as your ballpark.
Who’s impacted by this? Although the vast majority of government workers are not impacted, it’s almost exclusively government workers who are.
The main groups here are city and state employees who receive pensions instead of Social Security benefits — think teachers, police officers, firefighters, etc. — and federal employees hired before 1984, who also have a distinct pension system. (Of course, for the WEP to impact them, all of these people would have also had to work a different job at some point that guaranteed them Social Security benefits.)
I also want to briefly mention a separate but related provision, the Government Pension Offset, or GPO. This provision affects government workers who receive a public sector pension and also receive Social Security benefits through their spouse’s private sector job. For people in this category, their Social Security spousal (or survivor, in the case of a widow/widower) benefits are reduced by two-thirds of their monthly pension amount. (For example: if your monthly pension is $600, then your monthly Social Security benefits through your spouse are reduced by $400.)
In total, according to the Congressional Research Service, about 2 million people (approximately 3% of all Social Security beneficiaries) are impacted by the WEP. Another 723,000 or so people (or approximately 1% of all Social Security beneficiaries) are impacted by the GPO.
What are the arguments for and against? A key issue is the Social Security formula, which only takes into account someone’s earnings from a job covered by Social Security; that means it might see someone who worked a non-covered job (even a high-paying one) as lower-income, which could then give them more generous benefits under the program’s progressive formula.
Therefore, there is a case that eliminating the WEP would be unfair to people who actually did work lower-paying jobs (since the formula just doesn’t know how to handle non-covered income), and would cost money at a time when Social Security is already running out of funds. According to the Congressional Budget Office, eliminating the WEP could cost about $88 billion over the next 10 years.
The case for getting rid of the WEP is that it penalizes former public servants who paid full Social Security taxes for their other job, but now aren’t receiving the full benefits they worked for (often without realizing in advance that it would happen). While it’s true that some of these government workers had high-paying jobs, others didn’t — and they get hurt by the provision just like their higher-income colleagues.
Congress is expected to act soon to implement a middle ground that addresses both these arguments. A bill that would flat-out eliminate the WEP and GPO (without changing the formula at all) currently has 303 co-sponsors — across partisan lines — and advanced out of the House Ways and Means Committee last week.
However, the measure is expected to be amended before it reaches the House floor to address the formula concerns. Lawmakers are currently working on a deal to ensure people impacted by the WEP and GPO receive the Social Security benefits they earned — while also rejiggering the formula so their government income is taken into account when considering how much they made in their career (so the program doesn’t automatically see them as lower or higher-income than they are, but simply treats them like any other worker).
Lawmakers expect a vote on the compromise bill during the lame-duck session (between November and January), most likely as part of the omnibus spending package that will be going through Congress at that time.
What else you’re writing in
Since it’s mailbag day, I wanted to share two other messages I’ve received recently.
One was in response to another “Ask Gabe” column, on Kamala Harris’ vice presidency. In the column, I mentioned Joel Goldstein, an author and professor who’s known as one of the foremost experts on the American vice presidency.
Well, Joel is a Wake Up To Politics reader and he saw my column and had some thoughts — including about things he felt I didn’t get quite right, or just places where he was able to add more detail based on his vast scholarship on the subject.
Since there’s been so much interest from readers about Harris’ role as VP (it’s been my most-asked question for months), I asked Joel if I could share his message with all of you, and he generously agreed. Here is what he wrote, for anyone who is curious to see a true expert’s take on the question.
The second message is about an event you’ll notice below, a statue dedication for President Harry Truman at the Capitol. For context, every state is able to donate two statues of its finest citizens to the Capitol; Missouri is switching out one of its current ones for Truman.
Former Missouri State Rep. Ted Farnen, also a WUTP reader, wrote in to share some background about how the statue came together. I thought it was a cool story showing how the legislative process can start — and how long the resulting change can take — so I wanted to share it with all of you as well:
The resolution passed 150-0 in the Missouri House and 29-0 in the Senate. In the resulting 20 years, the money was raised, and the statue was commissioned and finished.
In my original resolution, Truman's statue was meant to replace the statue of Francis Blair. At a later time, the Missouri Legislature amended my original resolution so that the statue of Sen. Thomas Hart Benton would be the one to come back to Missouri. But the original resolution that started the process was approved in 2002.
Thanks to Joel and Ted, and to everyone who always writes in with such interesting notes and questions.
Today at a glance
All times Eastern. Click on an event’s time to watch it.
AT THE WHITE HOUSE: President Biden will receive his daily intelligence briefing (8:30 am), receive a briefing on Hurricane Ian at FEMA headquarters (12 pm), host the first-ever U.S.-Pacific Island Country Summit at the State Department (3 pm), and then host a dinner at the White House for the Pacific Island leaders attending the summit (6:45 pm).
- Vice President Harris is currently on a plane back to Washington. Late last night and early this morning, she traveled from Japan to South Korea, met with South Korean president Yoon Suk-yeol, met with female South Korean leaders, visited the Demilitarized Zone between North and South Korea, and then departed for D.C.
- White House press secretary Karine Jean-Pierre does not have a press briefing scheduled.
- Second Gentleman Emhoff will meet with state and local leaders from Pennsylvania (10:40 am) and travel to Baltimore to host a roundtable on youth mental health (4 pm).
ON THE HILL:The Senate will convene (10 am) and is expected to vote on passage of the continuing resolution extending government funding through December 16 and on confirmation of Arianna Freeman’s nomination to be a U.S. Circuit Judge for the Third Circuit.
- The House will convene (10 am) and vote on a Senate-passed bill to improve voting assistance for Native Americans, a bill on school-based mental health care, and a bill updating the schedule for merger filing fees for companies.
- Congressional leaders will host a ceremony adding a statue of President Harry Truman to the National Statuary Hall collection at the Capitol, representing Missouri (3 pm).
IN THE COURTS: The Supreme Court will not meet.
Before I go...
Here’s something fun: You may know the famous story of Dolley Madison fleeing the White House with a portrait of George Washington as the British burned the White House in 1814.
But the portrait wasn’t the only thing she saved: it’s also believed that she was able to rescue a crystal flute that was gifted to her husband, President James Madison, from France.
That flute now sits in the Library of Congress collection; it has likely not been played for 200+ years.
Until now. Last week, Carla Hayden — the first African-American and first woman to lead the Library of Congress — tweeted at the mega-star singer Lizzo, offering for her to play the flute when she came to D.C. for a concert.
Earlier this week, Lizzo played James Madison’s 200-year-old crystal flute on stage, as thousands of fans roared with applause.
“Thank you to the Library of Congress for preserving our history and making history freaking cool,” Lizzo said afterwards. “History is freaking cool, you guys!”
Yes, yes it is.
>> Watch Lizzo play Madison’s flute on stage.
>> Read more about how it came together from the Washington Post.
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If you have any questions or feedback, feel free to email me: my inbox is always open.
Thanks for waking up to politics! Have a great day.