WASHINGTON — On Sunday, President Joe Biden enacted legislation that enhances Social Security benefits for both current and former employees in the public sector. This change will impact nearly 3 million individuals collecting pensions from careers as educators, firefighters, police officers, and various other public service roles.
Supporters of the Social Security Fairness Act argue that it addresses a long-standing issue regarding fairness in Social Security benefits. However, there are concerns that the adjustments could exacerbate the financial strain on the Social Security Trust Funds, which are already facing a potential insolvency crisis.
The new law eliminates two provisions: the Windfall Elimination Provision, and the Government Pension Offset. Both of these regulations had restricted benefits for individuals who also received pensions from other sources, including state and local government retirement plans.
During the signing ceremony held in the East Room of the White House, President Biden emphasized the fundamental principle behind the legislation. He stated, “Americans who have worked hard all their life to earn an honest living should be able to retire with economic security and dignity — that’s the entire purpose of the Social Security system.” He described the bill as a significant advancement for millions.
Various labor leaders, retirement advocates, and bipartisan lawmakers attended the event, including Senators Susan Collins, a Republican from Maine, and Sherrod Brown, a Democratic senator from Ohio, the primary sponsors of the bill. Brown received a warm standing ovation from those present.
According to estimates from the Congressional Research Service, over 745,000 people, making up about 1% of all Social Security beneficiaries, had their benefits reduced due to the Government Pension Offset as of December 2023. Approximately 2.1 million individuals, representing around 3% of beneficiaries, experienced reductions because of the Windfall Elimination Provision.
The Congressional Budget Office projected that the repeal of the Windfall Elimination Provision would lead to an average increase of $360 in monthly payments by December 2025 for those affected. Additionally, ending the Government Pension Offset is expected to provide an average benefit increase of $700 per month for 380,000 recipients, as well as $1,190 for 390,000 surviving spouses receiving widow or widower benefits.
These financial adjustments will be retroactive from January 2024, meaning beneficiaries can expect back-dated payments. The legislation mandates that the Social Security commissioner make necessary adjustments to accommodate these changes, although the exact process for how this will be implemented remains unclear.
Edward Kelly, president of the International Association of Fire Fighters, expressed optimism about the bill, stating that it addresses a “40-year wrong.” He highlighted that many surviving spouses of firefighters who contributed to Social Security were adversely affected by the previous governmental pension policies.
The International Association of Fire Fighters has approximately 320,000 active members, not including many retirees who will also benefit from these changes. Kelly remarked, “Now firefighters who get paid very little can now afford to actually retire.”
Though Brown, who championed this cause during his tenure, recently lost his reelection bid, he was commended for his efforts. Lee Saunders, president of the American Federation of State, County and Municipal Employees, highlighted the positive implications of the new law, stating, “Over two million public service workers will finally be able to access the Social Security benefits they spent their careers paying into.”
President Becky Pringle of the National Education Association referred to the law as a “historic victory” for educators, first responders, postal workers, and other public service workers.
Some Republicans, including Collins, supported the legislation, while others, such as Senators John Thune, Rand Paul, and Thom Tillis, opposed it. Tillis articulated concerns regarding the sustainability of the legislation, claiming that the decision was made under pressure instead of pursuing a more stable solution. Nevertheless, proponents from within the Republican Party recognized this moment as an important opportunity to rectify perceived inequities impacting public service retirees.
The future of Social Security remains a pressing issue in political discussions and was particularly contentious during the 2024 election season. Currently, approximately 72.5 million individuals, including retirees, people with disabilities, and children, rely on Social Security benefits.
Implementing the new policy will add further administrative tasks for the Social Security Administration, which is already operating at its lowest staffing capacity in decades. Presently, the agency’s workforce consists of about 56,645 employees, the lowest level in more than 50 years, despite an increasing number of beneficiaries.
The annual report from the Social Security and Medicare trustees published in May indicated that the trust fund risks being unable to pay full benefits by 2035, with the newer legislation anticipated to bring this insolvency date closer by approximately six months.
In addition to signing the Social Security Fairness Act, President Biden previously endorsed the Butch Lewis Act, which is designed to preserve the retirement pensions of two million union workers.
