US Senate Has 6 Weeks To Pass Social Security Bill That Would Increase Benefits For 3M Americans

The Social Security Fairness Act, designed to expand benefits for millions of beneficiaries by repealing certain provisions that curtail their monthly checks, was passed by the House last week as efforts intensify to get it passed by the Senate before the December 31 deadline. "Workers should be able to count on the retirement benefits they've earned," Senator Elizabeth Warren, D-MA, recently told CBS News. "It's time to pass the Social Security Fairness Act so government workers and their families and people with disabilities are not punished for earning multiple sources of retirement income."

What Does The Social Security Fairness Act Do?

The bill would eliminate the Windfall Elimination Provision (WEP), which trim Social Security benefits for 2 million people receiving disability or retirement pension from public employers that don't withhold Social Security taxes from their income. These beneficiaries include teachers, police officers, firefighters, and US postal workers. The proposed Act will also repeal the Government Pension Offset (GPO) rule, which impacts nearly 800,000 retirees. It offsets Social Security spousal benefits against pension income they receive from a federal, state, or local government body for which they didn't pay Social Security taxes.

While the GPO trims Social Security benefits for spouses and surviving spouses collecting government pensions by two-thirds, the benefits could fall to zero. Let's take an example. Suppose you receive $3,000 monthly as pension income and become eligible to receive $2,100 from Social Security as a surviving spouse. In that case, the GPO rule will deduct two-thirds or $2,000 of your government pension from your spouse's Social Security benefit to offer you only $100 monthly. The benefit could drop to zero if the amount deducted from your pension exceeds the Social Security benefit you are eligible to receive. However, the Social Security Fairness Act would ensure you receive the entire $2,100 in Social Security spousal benefit if passed.

Bill Passes House Despite Resistance

The proposed Social Security bill was introduced by Democrat Representative Abigail Spanberger of Virginia and Republican Representative Garrett Graves of Louisiana with the support of the National Association of Counties and people representing educators, government workers, and police departments. In a major push, the representatives recently garnered the minimum required 218 signatures from House lawmakers on a discharge petition to send it to the floor and force a vote on removing WEP and GPO rules.

Although the Social Security Fairness Act enjoys bipartisan support, Shannon Benton of The Senior Citizens League said they are "guardedly optimistic," adding that many people could lose hope if the bill doesn't get passed now. The bill passed the House with a 327-75 vote last week despite the conservative House Freedom Caucus attempting to block it as they often tend to resist new spending. The bill is expected to pass the Senate with 62 cosponsors, which exceeds the majority mark needed before it is sent to President Joe Biden for final approval. If passed, the expanded benefits would apply to payables starting January 2024.

Monthly Benefits Could Increase By Over $1,000 For Some But Could Come At A Big Cost

While the Social Security trust funds are expected to be depleted by 2035, when they would cover only 76% of the scheduled benefits, the Congressional Budget Office estimated that eliminating benefits reduction rules proposed by the Social Security Fairness Act would cost the program a further $195.65 billion in the next ten years. However, the proposed law would increase monthly Social Security benefits by an average of $360 in December 2025 for more than two million people. Once GPO rules are dislodged, 380,000 spouses could see their monthly checks grow by an average of $700, while 390,000 surviving spouses could witness a $1,190 hike on average. "It would hasten the combined trust funds shortfall by six months to a year when it's already in trouble," said Benton.

More importantly, the Social Security program could be facing bigger risks as President-elect Donald Trump's plans to cut taxes on Social Security benefits could drain the trust funds by $1.5 trillion over the coming decade, likely reducing the program's insolvency timeline to just six years from previous estimates of a decade. "The long-term solvency of Social Security is an issue that Congress must address — but an issue that is wholly separate from allowing Virginians, Louisianans, and Americans across our country who did their part and contributed their earnings to retire with dignity," Graves and Spanberger had said in a recent joint statement.