Bill to Increase Social Security Benefits for Some Retired Federal Workers Nears Approval

Key Takeaways

• The Social Security Fairness Act, passed Saturday by the Senate, would end rules that reduce benefits for retired federal workers who get other benefits, such as a pension from a state or local government or disability, if signed into law.
• The act is set to eliminate two provisions that lower Social Security benefits for specific retirees.
• The provision now advances to President Joe Biden for approval to become law.

The Senate has passed a bill that would provide certain retired public-sector workers with better Social Security benefits.

The Social Security Fairness Act was passed by the Senate on Saturday by a vote of 76 to 20. Its next stop is President Joe Biden's desk, though it was unclear Monday whether he intended to sign it into law. Critics say the bill could shorten Social Security's lifespan and increase the federal deficit.

Initially introduced in 2023, the bill received bipartisan support when it passed through the House of Representatives. It aims to eliminate the windfall elimination provision (WEP) and the government pension offset (GPO).

The WEP reduces payments to Social Security beneficiaries who already receive retirement or disability pensions from a federal, state, or local government.

The GPO lowers payments to beneficiaries who worked part of their career in the public sector and part of their career in a company that taxed toward Social Security. The GPO similarly adjusts benefits for spouses and survivors whose partners worked in jobs that were not subject to Social Security taxes.

Supporters Say Bill Would Give Affected Retirees Fair Benefits

Supporters of the bill say it would help some retired Americans—more than 2 million, according to 2022 Social Security estimates—whose benefits are limited due to the WEP and GPO.

Randy Erwin, president of the National Federation of Federal Employees, in November applauded the House for its decision, stating that it would help public-sector workers who “deserve the retirement security they have earned.”

“The WEP and GPO are nonsensical provisions within Social Security law that have punished public servants for almost four decades,” Erwin said in a statement. 

Proponents of the bill also say the WEP and GPO unfairly cut the retirement and disability benefits of Americans who both paid into Social Security and worked in the public sector.

“These public servants—retired firefighters who worked a second job, retired police officers who began a second career after leaving the force, retired teachers who took a summer job to pay the bills, retired federal employees who first worked in the private sector—are receiving a fraction of their earned retirement benefits,” U.S. Reps. Abigail Spanberger, D-Virginia, and Garret Graves, R-Louisiana, and U.S. Sens. Sherrod Brown, D-Ohio, and Susan Collins, R-Maine, said in a statement last month.

Critics Say Bill Would Burden Deficit, Unfairly Benefit Some

The Social Security Fairness Act didn't advance without resistance, with opposition coming mostly from Republican senators. Critics argue that it would harm taxpayers and the Social Security program while providing some high earners with even larger benefits.

The Congressional Budget Office (CBO) estimated that the bill would increase the deficit by almost $196 million over the next 10 years. It was also accused of increasing taxpayer costs and “unfairly [benefiting] public sector workers” by the Cato Institute, a think tank that promotes libertarian ideas.

Social Security’s trust fund for retirement benefits is expected to run out in 2033, but the Committee for a Responsible Federal Budget (CRFB) said this bill will hasten that shortfall by six months.

“Social Security is just nine years away from insolvency, and our seniors need a fix fast,” Maya MacGuineas, president of the CRFB, said in a statement. “For those who say they want to protect Social Security this bill goes in the absolute wrong direction.”

The bill could also allow high earners to receive benefits in disproportion to their income, according to Henry J. Aaron, senior fellow, emeritus, at the Brookings Institution. Without WEP or GPO, retirees who spent part of their careers in public service and another part in jobs taxed for Social Security could appear to have lower earnings than they did, Aaron said. The WEP and GPO formulas used by the Social Security Administration to calculate benefits are imperfect, he said, but there are ways to improve them without completely repealing the provisions.

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