On November 12, 2024, the U.S. House of Representatives passed the Social Security Fairness Act, a bipartisan bill aimed at eliminating two provisions that have long reduced Social Security benefits for public sector employees. The legislation now moves to the Senate, where it enjoys substantial bipartisan support.
However, concerns have been raised about its potential impact on Social Security’s financial health, given its estimated cost of $196 billion over the next decade.
Understanding the Social Security Fairness Act
The Social Security Fairness Act seeks to repeal two specific provisions added to the Social Security Act in 1983:
- Windfall Elimination Provision (WEP): This provision reduces SSA benefits for individuals who receive pensions from employment not covered by Social Security taxes, such as certain state and local government positions. Approximately 2.1 million people are affected by the WEP.
- Government Pension Offset (GPO): The GPO reduces SSA benefits for spouses, widows, and widowers who also receive government pensions. Currently, about 745,000 individuals experience reduced benefits due to the GPO.
Supporters argue that these provisions unfairly penalize public servants, including teachers, police officers, and firefighters, who rely on both their pensions and Social Security benefits for financial stability in retirement.
Support and Opposition
Proponents of the bill view its passage as a step toward equity for public employees. Representative Garret Graves (R-La.), a co-leader of the bill, stated, “This has been 40 years of treating people differently, discriminating against a certain set of workers.” The National Committee to Preserve Social Security and Medicare hailed the House vote as a “bipartisan victory” for public employees and their families.
However, critics express concerns about the financial implications of the bill. The Congressional Budget Office estimates that repealing the WEP and GPO would add $196 billion to federal deficits over the next 10 years and accelerate the depletion of Social Security trust funds by six months. Currently, SSA funds are projected to run out by 2033, potentially reducing benefits to about 79% of their current levels.
Representative John Larson (D-Conn.) voiced his opposition, stating, “I could not vote for the bills on the floor tonight because they are not paid for and therefore put Americans’ hard-earned benefits at risk.”
He advocates for the SSa 2100 Act, which proposes repealing the WEP and GPO while implementing measures to increase revenues, such as raising payroll taxes for higher earners.
Financial Implications
The table below outlines the estimated financial impact of the Social Security Fairness Act:
| Provision | Affected Individuals | Estimated Cost Over 10 Years | Impact on Trust Fund Depletion Date | Projected Benefit Reduction Post-Depletion |
|---|---|---|---|---|
| WEP Repeal | 2.1 million | $196 billion | Accelerated by 6 months | Benefits reduced to ~79% |
| GPO Repeal | 745,000 | Included in above estimate | Same as above | Same as above |
With the House’s approval, the Social Security Fairness Act advances to the Senate, where it has garnered significant bipartisan support. If enacted, the repeal of the WEP and GPO would take effect for benefits starting in 2024, substantially altering the financial landscape for affected retirees.
However, the broader implications for SSA’s long-term solvency remain a critical concern, necessitating further legislative action to ensure the program’s sustainability.
What is the Windfall Elimination Provision (WEP)?
The WEP is a rule that reduces SSA benefits for individuals who receive pensions from employment not covered by Social Security taxes, such as certain state and local government jobs.
What is the Government Pension Offset (GPO)?
The GPO reduces SSA benefits for spouses, widows, and widowers who also receive government pensions, affecting their financial support in retirement.
How many people are affected by the WEP and GPO?
Approximately 2.1 million individuals are impacted by the WEP, and about 745,000 are affected by the GPO.
