The Social Security Fairness Act promises to be a game-changer in the realm of retirement benefits for millions of Americans. If this act does not get approved, then thousands of public service workers and their families stand to lose upwards of $1,000 a month in Social Security benefits. It is important to understand what this act has done, especially because it looks to eliminate two provisions that reduce benefits for certain groups.
The cost of inaction
If the Social Security Fairness Act does not pass, the financial consequences to affected individuals could be devastating. Many retirees claim to be losing more than $1,000 a month because of these provisions. For example, one retired firefighter, Terry Hoover, has commented that his family’s income has been drastically reduced because he cannot receive benefits based on his wife’s earnings into Social Security because of his pension.
The financial effects go beyond the personal impacts. According to estimates by the Congressional Budget Office, failing to repeal WEP and GPO could continue to put financial pressure on retirees who have contributed to the system during their working years. These lost benefits translate into increased poverty rates among retirees who cannot fully access their earned Social Security.
The larger effects on retirees
The potential loss of more than $1,000 monthly in benefits is not an individual problem but also one that indicates greater systemic injustices thrown up by the Social Security system. Many public service workers feel penalized for the career choices they have made, usually involving lower salaries compared with private sector employment but involving very valuable work in community safety and education.
In addition to the direct impact on individuals’ finances, the inability to receive full benefits can reach into family dynamics. A surviving spouse often faces financial uncertainty when they lose a partner who has been paying into both a pension and Social Security. GPO could dramatically cut or eliminate spousal benefits, leaving them vulnerable during an already critical time.
Legislative momentum and future prospects
There is cautious optimism by advocates and lawmakers alike as the Senate prepares to vote on the Social Security Fairness Act. With bipartisan support in the House and growing momentum in the Senate, this legislation actually has the prospect of passing and will bring much-needed relief to millions of Americans.
Yet, however commendable, there are several irrefutable financial quandaries with the implications of this bill. According to the CBO, enactment of the act would increase federal deficits by about $195 billion over the next decade. Critics have said such an uptick would speed up insolvency for the Social Security Trust Funds, which were already looking to face challenges around 2035.
Even though Senate Majority Leader Chuck Schumer has promised to get the bill approved before the arrival of the Trump administration yet, a host of proponents say these inequities need to be sorted through to restore fairness to the system. They insist that people should not be punished because of their career choices, and all contributions into Social Security should be respected.
