Alarm Is Being Sounded Over a Social Security Fairness Act That Critics Call Anything but ‘Fair’

Social Security analysts are sounding the alarm bells that a bill to expand social security for government employees, the so-called “Social Security Fairness Act,” is anything but “fair.”Though the sweeping legislation is garnering support across the political aisle, it is poised to create an unequal structure for Social Security benefits and lead to dramatic across-the-board cuts in less than a decade. The Senate voted 73 to 27 to advance the measure on Wednesday, clearing its first procedural hurdle in the upper chamber. If it passes before Congress breaks for the holidays on Friday, President Biden is likely to sign it into law. Supporters say the Social Security Fairness Act would prevent unfair reductions in Social Security benefits for millions of people who have worked in public service by eradicating policies that limit payout. Yet on social media and in conversation with the Sun, analysts are deriding the legislation as “Orwellian,” “dystopian,” and “insane.” “The bill is not fiscally responsible. It’s not fair,” a senior fellow at the American Enterprise Institute focusing on Social Security reform, Andrew Biggs, tells the Sun. “It’s not helping a group that’s in any need. Public employees have the most generous pensions in America. They’re a predominantly high-income group.”In New York, The Empire Center for Public Policy found in 2019 that former Long Island Rail Road Chief Measurement Operator Thomas Caputo had received more than $344,000 in overtime payments the prior year, bringing his total salary to more than $460,000. That sum would lead his pension payment to exceed $162,000 a year, earning him the nickname “Overtime King” of the MTA.Twenty-seven percent of state and local government employees in the United States, like teachers and firefighters, are not covered by Social Security and instead receive a possibly more generous state or local government pension, according to the Congressional Research Service in 2021. Many public employees who retire as early as 50 and then work in the private sector can claim their government pension and also become entitled to Social Security benefits.The Windfall Elimination Provision serves to limit benefits for these employees, or else they would get a larger benefit than similar-earning workers who spend their entire careers in private industry. The Social Security Fairness Act wants to undo this provision, which would effectively overpay a subset of government employees. “They would be getting the high return on their taxes that low income people usually do, even though they’re not low-income,” Mr. Biggs says. The act also seeks to repeal the Government Pension Offset, which currently reduces Social Security benefits to spouses or widows who also receive a pension from government employment based on work not covered by Social Security. Removing this rule would allow public sector employees who did not participate in Social Security to receive substantial benefits from the program.“In the case of spousal and survivor’s benefits, it would be possible for a state or local government employee who never paid any taxes to receive the Social Security benefit in addition to their own government pension benefit,” Mr. Biggs says. “That’s that’s the sort of double dipping that you can’t do if both spouses participate in Social Security.”The senate majority leader, Chuck Schumer, says that the bill will “repeal flawed policies that eat away at the benefits of those who’ve worked as teachers, firefighters, postal workers, or public sector workers. Retirees deprived of their hard-earned benefits will be watching closely.” Critics agree on the need to reform standard Social Security benefit formulas to address individuals who spent only part of their career in covered employment. Yet this legislation “misdiagnoses how Social Security works,” the director of a center on the federal budget at the conservative think tank, the Heritage Foundation, Richard Stern, tells the Sun. “It would have a $200 billion windfall to mostly government union employees.”The bill has been estimated by the Congressional Budget Office to cost $196 billion over the next 10 years alone. It will hasten by half a year the insolvency of the Social Security trust fund — which is on track to go bankrupt in 2033 — and cut lifetime benefits by $25,000 for a typical couple retiring in 2033, according to the Committee for a Responsible Federal Budget.“I think it’s very disrespectful to the people who are on Social Security to expand Social Security when Social Security is already in the process of going bankrupt,” Senator Paul told the Hill on Wednesday.The bill’s sponsors are eschewing budgetary concerns. “If you’re concerned about the price tag,” Senator Cassidy, a Republican from Louisiana, told his Senate colleagues, “please talk to me about how we can afford to do right by the public servants who are being penalized” by the Government Pension Offset, “but also help our nation financially. We can do both if we have the courage to do both.”The Social Security Fairness Act passed the House last month by a vote of 327 to 75. When it was voted on by the Senate this week, it earned the support of 27 Republican senators. While Democratic support for the bill makes sense, as public sector unions are a key part of the Democratic coalition, critics wonder why Republicans advocates are supporting it in a betrayal of their traditional concerns for fiscal spending.“They didn’t understand it, they didn’t think it would pass, and they were getting some pressure from Republican-friendly public employee groups,” says Mr. Biggs. The editorial board of the Wall Street Journal says that perhaps House Republicans passed the bill after the election as a payoff to the International Association of Fire Fighters, which has led the lobbying campaign on Capitol Hill.Perhaps only Elon Musk, who will co-lead a Department of Government Efficiency under the incoming Trump administration, could try to stop the ball rolling now. That was the plea of a senior fellow at the Hoover Institution, Joshua Rauh, who asked Mr. Musk on X to explain to the bill’s 27 Republican supporters that “$200B in additional Social Security benefits to gov’t employees isn’t the way to go.”

Alarm Is Being Sounded Over a Social Security Fairness Act That Critics Call Anything but ‘Fair’

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