President Joe Biden is set to sign a bill into law on Sunday that will increase Social Security payments for around 3 million current and former public employees who receive pensions from their time in public service roles like teaching, firefighting, and law enforcement. Advocates of the Social Security Fairness Act claim that it corrects a long-standing imbalance, but it will also place pressure on the Social Security Trust Funds, which are facing potential insolvency issues.
The legislation will eliminate two provisions – the Windfall Elimination Provision and the Government Pension Offset – that currently reduce Social Security benefits for individuals who also receive retirement payments from public pension programs. According to the Congressional Research Service, around 745,679 people had their benefits reduced by the Government Pension Offset as of December 2023, affecting 1% of all Social Security beneficiaries. The Windfall Elimination Provision impacted about 2.1 million recipients, or 3% of all beneficiaries.
Projections from the Congressional Budget Office suggest that scrapping the Windfall Elimination Provision could raise monthly payments by an average of $360 for affected individuals by December 2025. Eliminating the Government Pension Offset could increase monthly benefits by an average of $700 for 380,000 recipients with benefits based on living spouses, and by an average of $1,190 for 390,000 surviving spouses receiving widow or widower benefits.
These payment adjustments will begin in January 2024, with backdated payments owed by the Social Security Administration. The legislation mandates that the Social Security commissioner make necessary adjustments to account for these changes in the law. The specific process for implementing these adjustments and whether affected individuals need to take any action is not yet clear.
Edward Kelly, president of the International Association of Fire Fighters, expressed satisfaction with the change, describing it as rectifying a 40-year-old injustice. He emphasized the positive impact on firefighters and their spouses, who had contributed to Social Security but were adversely affected by the pension system. The American Federation of State, County and Municipal Employees union and the National Education Association also welcomed the law, highlighting the benefits for public service workers, retirees, and educators.
Some senators, such as Sens. John Thune of South Dakota, Rand Paul of Kentucky, and Thom Tillis of North Carolina, opposed the recent legislation while others supported it. Senator Tillis expressed his reservations, stating, “We caved to the pressure of the moment instead of doing this on a sustainable basis,” in an interview with The Associated Press last month.
Nevertheless, Republican proponents of the bill argued that it presented a unique opportunity to address what they perceive as an unjust aspect of federal law that negatively impacts public service retirees. The future of Social Security has emerged as a prominent political issue, featuring prominently in the 2024 election, with approximately 72.5 million individuals – including retirees, disabled persons, and children – currently benefiting from the program.
Changes introduced by the new legislation are expected to increase the administrative burden on the Social Security Administration, which is operating with significantly reduced staffing levels. Despite serving a larger number of individuals than ever before, the agency, currently subject to a hiring freeze, has a staff of around 56,645 – the lowest it has been in over 50 years.
In the annual Social Security and Medicare trustees report released in May, it was projected that the program’s trust fund will not be able to sustain full benefit payments starting in 2035. The enactment of the new law is anticipated to bring forward the program’s insolvency date by approximately six months.
Associated Press writer Stephen Groves contributed to this report.
