Posted on 12/21/2024 6:50:38 PM PST by SeekAndFind
H.R. 82, the "Social Security Fairness Act" was one of the last gasp endeavors of 118th Congress to get bills passed and off to President Joe Biden for signature before leaving for Christmas vacation. Because, priorities. With the passage of this bill, Congress succeeded in repealing established laws from 1977 (the Government Pension Offset or GPO) and 1983 (the Windfall Elimination Provision or WEP), which prevented certain public pension earners from double-dipping into the Social Security coffers.
H.R. 82, passed the Senate 76 to 20, with four senators not voting. Those four included Sen. Marco Rubio (R-FL) because, confirmation hearings. Sen. JD Vance (R-OH), because hey, inauguration preparations. The other two were Joe Manchin (D-WV) because he has ended his Senate career and does not really care at this point, and surprisingly, Sen. Adam Schiff (D-CA) who has no good excuse, especially since he needs to, maybe, start earning his keep.
The bill had previously cleared the House in November, 327 to 75, with one congressperson voting present. The WEP reduced Social Security benefits for individuals who receive other retirement benefits through state or local government pension programs: like teachers, firefighters, first responders, police officers, and postal workers. The GPO eliminated the government pension offset for surviving spouses and their children who inherited their deceased spouses said government pensions. In the past, they would have had the full Social Security pension amount. I know because my father was a postal worker when he died, and my mother and my siblings received his pension benefits in full. When the GPO was signed into law in 1977, those benefits were reduced by two-thirds.
Finally, the bill eliminated the reduction of Social Security benefits for individuals who may have spent part of their employment life working for an employer who did not pay into the Social Security fund (government, state, etc.) The changes will be retroactive to December 2023.
Today is a day to celebrate! State and local workers in Louisiana will finally get the full Social Security benefits they have earned and deserve! WEP & GPO has been repealed!
pic.twitter.com/RU32nZLhdd— U.S. Senator Bill Cassidy, M.D. (@SenBillCassidy) December 21, 2024
While touted as "bipartisan," I would bill it more of a mixed bag of representatives championing its passage, the majority Democrats. Notable on the Republican side: Sen. Bill Cassidy (R-LA) and Sen. Tim Scott (R-SC), both whose record is not stellar in voting to reduce government coffers. Most of the labor unions are cheering this on, and if the unions are considering this a win, then it's probably does not portend well for the American people.
Despite this repeal and relief for three million pensioners struggling in the age of Biden-Harris, none of this theater addresses Social Security's insolvency issues--issues that have spanned decades and that each Congress kicks into the next session. As our senior editor Joe Cunningham wrote:
The Congressional Budget Office estimates that the repeal will add $195 billion to federal deficits over the next decade. Some lawmakers voiced concerns over this fiscal impact, highlighting the need for broader discussions about Social Security's solvency.
How about actual decision-making, because this has been discussed to the eye-teeth, and the conclusions remain the same. Where exactly will the federal government get this money to cover pensioners who had their benefits reduced and still cover those retirees who were not in this position? As government spending has increased, and individuals with taxable wages have decreased, so the Social Security coffers continue to be reduced. The projections by the Congressional Budget Office, according to Merrill: In 10 years, the ability to pay out full benefits will cease.
ELEVEN YEARS — THAT’S ALL THE TIME Congress has left to come up with a solution to continue funding Social Security at current spending levels. That’s the conclusion the Congressional Budget Office drew in its 2024 report — and their deadline is a year later than the drop-dead date previously projected by the Social Security trust fund's board of trustees in their prior report.
As more American’s reach retirement age, concerns about the program’s future solvency have risen. Various methods of shoring it up have been debated by politicians and policy experts, and the debate will undoubtedly heat up as the deadline grows closer.
My take: this bill, and the CR, are an ignominious end for the 118th Congress. Both will be barnacles on the backs of the incoming 119th, and may be what tanks both Republican majority leaders. More indications that DOGE has its work cut out for it.
I can assure you Jen, this was not, “under the radar”.
The deal is that 62 is the retirement age right now. What the scam artist ambulance chasers in congress have done is cut that a little bit at a time by ‘raising the retirement age’ but what really has happened is a thirty percent reduction in benefits for people that retire at 62. Crazy huh?
The Social Security benefit formula is progressive,
replacing a greater share of career-average earnings for low-paid workers than for high-paid workers.
[Progressive = Marxist ($: affluent->poor)]
The regular benefit formula applies three factors—
90%, 32%, and 15%—
to three different brackets of a worker’s average indexed monthly earnings (AIME), which is a measure of career-average earnings in covered employment or self-employment.
The result is the primary insurance amount(PIA), which is the worker’s basic benefit before any adjustments are made for factors such as COLAs, early retirement, or delayed retirement.
For workers who become eligible for benefits in 2024, the PIA is determined based on the formula in Table 1.
The dollar amounts in the table, known as bend points, are adjusted annually for average earnings growth.
Table 1. Social Security Benefit Formula for Workers Who Attain Age 62, Become Disabled, or Die in 2024
Factor Average Indexed Monthly Earnings (AIME)
90% of the first $1,174 of AIME, plus
32% of AIME over $1,174 and through $7,078, plus
15% of AIME over $7,078
Source: CRS, based on Social Security Administration, Benefit Formula Bend Points.
In 2024, the amount of substantial earnings in covered employment or self-employment needed for a year of coverage (YOC) is $31,275. This amount is adjusted annually by the growth in average wages in the economy, provided a cost-of-living adjustment (COLA) is payable.
For people with 20 or fewer YOCs who become eligible for benefits in 2024,
the [Windfall Elimination Provision] WEP reduces the first factor from 90% to 40%,
resulting in a maximum reduction of $587 (90% of $1,174 minus 40% of $1,174).
For each year of substantial earnings in covered employment or self-employment in excess of 20, the first factor increases by 5%.
For example, the first factor is 45% for those with 21 YOCs.
The WEP factor reaches 90% for those with 30 or more YOCs and at that point is phased out.
The WEP includes a guarantee that the reduction in the benefit amount caused by the WEP formula can never exceed more than one-half of the noncovered pension.
In addition, because the WEP reduces the initial benefit amount before it is reduced or increased due to early retirement, delayed retirement credits, COLAs, or other factors, the difference between the final benefit with the WEP and the final benefit without the WEP may be less than or greater than $587. However, the maximum WEP reduction is still limited to 50% of the noncovered pension.
As of December 2023, about 2.1 million people (or about 3% of all Social Security beneficiaries) were affected by the WEP.
The WEP was enacted in 1983 as part of major amendments designed to shore up the financing of Social Security.
Its purpose was to remove an unintended advantage or “windfall” that the regular Social Security benefit formula provided to workers who also had pensions from noncovered employment.
The regular formula was intended to help workers who spent their careers in low-paying jobs, by providing them with a benefit that is relatively higher in relation to their career-average earnings in covered employment than the benefit that is provided for workers with high career average earnings.
However, the formula could not differentiate between those who worked in low-paid jobs throughout their careers and other workers who appeared to have been low paid because they worked many years in jobs not covered by Social Security (these years are shown as zeros for Social Security
benefit purposes).
Thus, under the old law, workers who were employed for only a portion of their careers in jobs covered by Social Security—even highly paid ones—also received the advantage of the weighted formula, because their few years of covered earnings were averaged over their entire working career to determine the average covered earnings on which their Social Security benefits were based. The WEP is intended to remove this advantage.
https://crsreports.congress.gov/product/pdf/IF/IF10203
“(the Windfall Elimination Provision or WEP), which prevented certain public pension earners from double-dipping into the Social Security coffers.”
No, it reduced Social Security payouts to people who paid into Social Security who did not accumulate 30 years.
“Where will that $195 billion over the next decade come from?”
How about taking that entire amount from just one year of taxpayer contributions to illegal aliens. Just one year will pay for that bill.
How can writers of articles have their heads so far up their asses?
I don’t understand why this took a Federal Bill to put this in place. New York State dealt with Social Security offset for its employees many years ago.
AGAIN and AGAIN we are told Social Security is “going broke” and “running out of money”. Why isn’t WELFARE, Billions to foreign countries, Department of Education spending , and so many other giveaways NEVER spoken of in same way?
What is important is to study is Table 1.
Table 1. Social Security Benefit Formula for Workers Who Attain Age 62, Become Disabled, or Die in 2024
Factor Average Indexed Monthly Earnings (AIME)
90% of the first $1,174 of AIME, plus
32% of AIME over $1,174 and through $7,078, plus
15% of AIME over $7,078
The first $12,000 of averaged FICA income is given an almost three-fold (90/32) advantage. It’s a sort of welfare benefit for people that have not earned a lot over their lifetime.
The public employees that typically make far more than $12,000/year just got thrown most of that welfare benefit too.
The second thing to study is the YOC stuff:
In 2024, the amount of substantial earnings in covered employment or self-employment needed for a year of coverage (YOC) is $31,275. This amount is adjusted annually by the growth in average wages in the economy, provided a cost-of-living adjustment (COLA) is payable.
For people with 20 or fewer YOCs who become eligible for benefits in 2024,
the [Windfall Elimination Provision] WEP reduces the first factor from 90% to 40%,
resulting in a maximum reduction of $587 (90% of $1,174 minus 40% of $1,174).
For each year of substantial earnings in covered employment or self-employment in excess of 20, the first factor increases by 5%.
For example, the first factor is 45% for those with 21 YOCs.
The WEP factor reaches 90% for those with 30 or more YOCs and at that point is phased out.
I suspect this can short-change women who don’t work a dozen of more years because they are raising children.
Perhaps the 32% should be used as the base down to $0 AIME and up to 58% should be added based on total public & private employer inflation adjusted W-2 & SE taxed earnings.
The “Triple Dipper Act”
“The Congressional Budget Office estimates that the repeal will add $195 billion to federal deficits over the next decade. Some lawmakers voiced concerns over this fiscal impact,”
That never seems to matter when it’s 200 billion for Ukraine…
After deducting for higher Medicare costs, my so called COLA in rease is a whopping $19 a month.
Not for government retireds. In all the debate over "fairness" for government pensioners who allege they were short-changed by WEP/GPO, there has been no discussion at all about their early retirement age.
They all get to quit work as early as 50 or 55, and some only after a mere 20 years of employment. Why don't they have to work to 62 like the rest of us wage slaves?
“The regular formula was intended to help workers who spent their careers in low-paying jobs, by providing them with a benefit that is relatively higher in relation to their career-average earnings in covered employment than the benefit that is provided for workers with high career average earnings.
However, the formula could not differentiate between those who worked in low-paid jobs throughout their careers and other workers who appeared to have been low paid because they worked many years in jobs not covered by Social Security (these years are shown as zeros for Social Security
benefit purposes).
Thus, under the old law, workers who were employed for only a portion of their careers in jobs covered by Social Security—even highly paid ones—also received the advantage of the weighted formula, because their few years of covered earnings were averaged over their entire working career to determine the average covered earnings on which their Social Security benefits were based. The WEP is intended to remove this advantage.”
“The first $12,000 of averaged FICA income is given an almost three-fold (90/32) advantage. It’s a sort of welfare benefit for people that have not earned a lot over their lifetime.
The public employees that typically make far more than $12,000/year just got thrown most of that welfare benefit too.”
Better be careful what you post Brian. Facts like these upset some dishonest people!
Social Security = Social(ism)
Whether you want it, or not.
They didn’t pay in.
They shouldn’t get it.
If they had done that the entire time we wouldn’t be talking about SS solvency.
Will this override any State laws that forbid collecting a state pension and SS?
TX for example?
my age group has to work until we are 67 to get our full social security
I am glad that I like my job
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