Senators urged to overturn Social Security provisions affecting federal retirees

Several witnesses once again made the trek to Capitol Hill Tuesday to make the case that two provisions of Social Security law treat federal employees unfairly and should be repealed. At a hearing before the Senate Finance Social Security, Pensions and Family Policy subcommittee, witnesses called attention to the impact of two provisions in Social Security law -- the Government Pension Offset and the Windfall Elimination Provision -- on the retirement incomes of many public employees. "These two provisions have enormous financial implications for many of our teachers, police officers, firefighters and other public employees," said Sen. Susan Collins, R-Maine. "Given their important responsibilities, it is simply unfair to penalize them when it comes to their Social Security benefits." Both provisions affect federal employees who entered the government before 1984 and are covered by the Civil Service Retirement System. Employees in CSRS do not pay into Social Security, receiving a government pension instead. The Government Pension Offset law cuts Social Security benefits that some employees, including widows or widowers, would have received from their spouses. The Windfall Elimination Provision reduces Social Security benefits for public employees who also worked in private sector jobs where they paid into the Social Security system. The GPO is "most harsh for those who can least afford the loss -- lower-income women," Collins testified, adding that more than 70 percent of the 1 million employees affected by the offset are women. The offset reduces benefits for more than 200,000 individuals by more than $3,600 a year, she added. Collins, along with Sen. Diane Feinstein, D-Calif., introduced a bill in January that would repeal the two provisions. Other bills introduced this year, including one sponsored by Sen. Barbara Mikulski, D-Md., would scale back the government pension offset to help lower-income retirees. At a press conference Tuesday morning, subcommittee Chairman John Kerry, D-Mass., said the Collins-Feinstein repeal legislation likely will be marked up in committee in early 2008. But, he added, the true test will involve finding an overall solution to offsetting the bill's $81 billion price tag. Collins noted that Congress may have to make incremental steps toward full repeal. "I don't underestimate the battle before us…" she said. "My goal is full repeal because of the inequity of these two provisions." Still, Barbara Bovbjerg, director of education, workforce and income security at the Government Accountability Office, noted that a full repeal of the two provisions would distribute income from those who have invested in Social Security during their careers to those who have not, introducing new concerns. Additionally, Bovbjerg noted, a majority of the fairness problems associated with the two provisions result from a lack of complete and accurate reporting of government pension income, much of which is not currently available. Such information was made available for federal retirees in 1999, Bovbjerg noted, when SSA obtained pension data electronically from the Office of Personnel Management and generated hundreds of millions in dollars in savings. "However, SSA still lacks the information it needs for state and local governments, and therefore, it cannot apply the GPO and the WEP for state and local government employees to the same extent it can for federal employees," Bovbjerg said. "The resulting disparity is yet another source of unfairness in the calculation of Social Security benefits for public employees." At Tuesday's press conference, Kerry pointed to stacks of petitions with more than 200,000 individuals voicing support for full repeal of the provisions. "Every one of these names represents a life that has been affected adversely by this situation," Kerry said. "Sometimes the best intentions go awry, and this is one of those situations where an effort to try to create a fair playing field has, in effect, created an unfair playing field. It's up to us to try to rectify it." 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.