Schatz: Social Security change to boost benefits for 100K in Hawaii

Congress gave over 100,000 public-sector workers in Hawaii an early Christmas gift by repealing provisions in federal law that reduced Social Security benefits for people who also receive a pension.

U.S. Sen. Brian Schatz, D-Hawaii, said Tuesday in a news release that the Social Security Fairness Act, which he co-sponsored, repeals the Windfall Elimination Provision and the Government Pension Offset from the Social Security Act, which have significantly reduced benefits for public workers.

The Windfall Elimination Provision reduces the Social Security benefits of workers who receive pensions from a federal, state or local government for employment not covered by Social Security, while the Government Pension Offset reduces Social Security spousal or widow’s benefits by two-thirds of the pension that the person would receive from noncovered government employment, according to the news release.

“There’s no reason teachers, firefighters, and government workers should get anything less than the full Social Security benefits they’ve earned, and this bill finally ensures that,” Schatz said. “We should be rewarding public servants — not penalizing them — and I thank Senators Sherrod Brown and Susan Collins for their leadership to get these workers the benefits they deserve.”

The bill passed in a bipartisan, 76-20 vote early Saturday with all Democrats including Schatz and Sen. Mazie Hirono of Hawaii supporting the measure. The House of Representatives approved the bill in a 327-75 vote in November.

The bill now goes to President Joe Biden’s desk to sign the bill into law.

The bill will overturn a decades-old change to the program that had been made to limit federal benefits to some higher-earning workers with pensions. Over time, growing numbers of municipal employees such as firefighters and postal workers also saw their payments capped.

Most Americans do not participate in pension plans, which pay a defined benefit, and instead are dependent on what money they can save and Social Security.

Just 1 in 10 U.S. private-sector workers have pension plans, according to Labor Department data.

The new provisions affect about 3% of Social Security beneficiaries — totaling a little more than 2.5 million Americans. The workers and retirees affected by these provisions are key constituencies for lawmakers, and their powerful advocacy groups have pushed for a legislative fix.

Some of them could receive hundreds of dollars more a month in federal benefits as a result of the bill, retirement experts said.

While the support in Congress for the Social Security Fairness Act was overwhelming, critics warned that it will further weaken the Social Security program’s already shaky finances as the bill’s price tag is about $196 billion over the next decade, according to an analysis by the nonpartisan Congressional Budget Office.

Emerson Sprick, associate director of economic policy at the Bipartisan Policy Center, said in an interview with Reuters, “The fact that there is such overwhelming support in Congress for exactly the opposite of what policy researchers agree on is pretty frustrating.”

The Committee for a Responsible Federal Budget, a nonpartisan fiscal think tank, also warns that the extra cost will affect the program’s future.

“We are racing to our own fiscal demise,” the group’s president, Maya MacGuineas, said in a statement. “It is truly astonishing that at a time when we are just nine years away from the trust fund for the nation’s largest program being completely exhausted, lawmakers are about to consider speeding that up by six months.”

Republican Sen. Ted Cruz said last week on the Senate floor that the bill as written will “throw Granny over the cliff.”

“Every senator who votes to impose $200 billion of cost on the Social Security Trust Fund, you are choosing to sacrifice the interest of seniors who paid into Social Security and who earned those benefits,” he said.

Bill supporters said Social Security’s future can be addressed at a later time.

Asked about the solvency implications of this legislation, Democratic Sen. Michael Bennet told Reuters, “Those are much longer-­term issues that we have to find a way to address together.”