Senators vow to overturn laws that reduce federal retirees’ benefits

An old fight resumed Wednesday when Senate Governmental Affairs Chairwoman Susan Collins, R-Maine, set her sights on changing two 20-year-old laws that reduce-and sometimes eliminate-Social Security benefits for federal retirees.

The Government Pension Offset and the Windfall Elimination Provision, part of Social Security law, can affect the amount of Social Security benefits a person or a spouse receive if one of the spouses is also receiving a civil service pension. In 1977, Congress passed the Government Pension Offset, which reduces the amount of Social Security spousal benefits Civil Service Retirement System (CSRS) retirees receive by two-thirds of the amount of their government pension. Spousal benefits are intended for people who are financially dependent on their husbands or wives. Prior to the pension offset law, people who received CSRS pensions were eligible to receive full spousal benefits.

The Windfall Elimination Provision, passed by Congress in 1983, reduces Social Security benefits for CSRS retirees who spent most of their careers working for the government and part of their careers working in a job covered by Social Security. Under the windfall provision, a modified formula is used to calculate CSRS retirees' Social Security benefits.

Over the years, various legislators have introduced bills to repeal or modify the two laws with little success. However, on Wednesday, Collins and Sens. Dianne Feinstein, D-Calif., and Barbara Mikulski, D-Md., committed themselves to fighting the fight once again. Collins is co-sponsoring two bills that address the measure-the Social Security Fairness Act of 2003 (S. 349), which would repeal the two laws, and the Government Pension Offset Reform Act (S. 363), which exempts employees with total pension benefits of $1,200 a month or less from the government pension offset provision.

According to Collins, penalizing public servants whose salaries are often lower than those of their private sector counterparts is unfair. Witnesses testified that low-income women are harmed the most by the laws.

"Individuals who have devoted their lives to public service should not have the added burden of worrying about their retirement," Collins said at a hearing to examine the measures.

Charles Fallis, president of the National Association of Retired Federal Employees, told lawmakers his organization has spent decades trying to get the laws overturned.

"The harshness of the GPO and WEP, as they exist today, cause both fears and tears among hundreds of older retirees," Fallis testified. "Fears for their financial futures and tears of frustration that Congress-despite widespread congressional support to do so-has not acted sooner to reform this provision."

Fallis recounted the struggles of a 79-year-old retiree of the Veterans Affairs Department. Though she was subject to the pension offset provision, the Social Security Administration incorrectly paid the retiree her full benefits and in 1997, when the error was discovered, the government demanded she return the $20,737 overpayment. After spending years in the appeals process, a recent ruling by an administrative law judge favored the government, Fallis said. The retiree's monthly VA pension payment is $752.

Social Security Administrator Jo Anne Barnhart testified that repealing the two laws would be costly-$62.2 billion over the next 10 years-and while increasing the benefit to low-income pensioners, eliminating the two provisions would provide an unfair advantage to retirees who earned large incomes while employed.

"To modify the effects of the GPO or WEP, or to eliminate them entirely, would treat government workers more favorably than comparable workers in the private sector," Barnhart said.

Barnhart recommended that any modification of the two laws might be better considered when lawmakers take on comprehensive reform of the Social Security system.

For more information about the Windfall Elimination Provision, go to http://www.ssa.gov/pubs/10045.html. For more information about the Government Pension Offset, go to http://www.ssa.gov/pubs/10007.html.