Local union leaders are commending the recent enactment of a law that enhances social security payments for certain public employees.
According to supporters, the Social Security Fairness Act puts an end to a long-standing inequality that Senator Ruben Gallego deemed unfair.
Gallego expressed his outrage at the situation, stating that those who have contributed for many years are not receiving the full benefits they deserve. He described this as a gross injustice.
In the past, public employees who received retirement benefits from state or local governments were unable to receive full Social Security benefits, even though they had made full contributions.
President Joe Biden recently signed a new law that effectively put an end to the previously imposed limits.
“We have a significant number of retirees who have been eagerly anticipating this groundbreaking legislation. It’s heartening to witness the unity of Congress and all parties involved in enacting such a commendable measure for our society,” expressed Bryan Willingham, President of the Phoenix firefighter union.
Critics argue that the change will impose additional pressure on the Social Security system. According to estimates from Congressman Greg Stanton’s office, nearly 45,000 individuals in Arizona are expected to benefit from this modification.
The new measure will increase Social Security payments for almost 3 million individuals who currently or previously worked as public employees, including teachers, firefighters, police officers, and others in public service roles.
The bill eliminates two provisions that restrict the amount of Social Security benefits received by individuals who also receive retirement payments from other sources, such as state or local government pension programs. These provisions, namely the Windfall Elimination Provision and the Government Pension Offset, will no longer apply.
According to the Congressional Research Service, in December 2023, approximately 745,679 individuals, accounting for about 1% of all Social Security beneficiaries, experienced a reduction in their benefits due to the Government Pension Offset. Moreover, the Windfall Elimination Provision impacted around 2.1 million individuals, comprising approximately 3% of all beneficiaries.
According to the Congressional Budget Office (CBO), the Windfall Elimination Provision (WEP) elimination is projected to raise monthly payments for affected beneficiaries by an average of $360 by December 2025. Additionally, ending the Government Pension Offset (GPO) is expected to increase monthly benefits for 380,000 recipients who receive benefits based on living spouses by an average of $700 by December 2025. Furthermore, the CBO estimates that 390,000 surviving spouses receiving a widow or widower benefit would see an average increase of $1,190.
The amounts would gradually increase over time due to Social Security’s regular cost-of-living adjustments.
Starting from January 2024, the Social Security Administration will implement a change in payments, resulting in back-dated payments. According to the passed measure by Congress, the Social Security commissioner is mandated to make necessary adjustments to primary insurance amounts to accommodate the changes in the law. The exact process and whether individuals affected will need to take any action remains uncertain.
Social Security’s future has emerged as a prominent political concern, sparking heated debates during the 2024 election. Currently, Social Security benefits are being received by a staggering 72.5 million individuals, encompassing retirees, disabled individuals, and children alike.
The Social Security Administration, which is already facing a shortage of staff, will face additional administrative burdens due to the policy changes brought about by the new law. Currently, the agency has a workforce of approximately 56,645 employees, the lowest it has been in over 50 years. Despite this, the agency continues to serve an ever-increasing number of people. Furthermore, the agency is currently under a hiring freeze, exacerbating the strain on its limited resources.
According to last year’s annual Social Security and Medicare trustees report, the program’s trust fund will not be able to provide full benefits from 2035 onwards. The implementation of the new law will accelerate the program’s insolvency by approximately six months.
During his presidency, Biden has not only ratified the Social Security Fairness Act but also signed the Butch Lewis Act into law, effectively rescuing the retirement pensions of 2 million union workers.
Reference Article