Public workers may receive reduced Social Security benefits. There’s growing support in Congress to change that

When
Dave
Bernstein,
87,
started
working
at
the

U.S.
Postal
Service
in
February
1970,
he
was
making
$2.35
an
hour.

To

supplement
his
income,
he
also
took
on
other
work.
Years
later,
Bernstein
decided
in
1992
to
take
a
voluntary
retirement.

“We
knew
there
was
going
to
be
a
reduced
pension
because
of
the
early
out,”
said
Phyllis
Bernstein,
Dave’s
wife,
who
is
84.

But
what
came
next
was
something
the
couple
did
not
expect.

While
Dave
was
expecting
a
monthly
Social
Security
check
of
around
$800,
it
ended
up
being
just
about
half
that
amount
–
around
$415
–
even
though
he
had
earned
the
required
40
credits
to
be
fully
insured
by
the
program.
The
benefits
were
adjusted
based
on
rules
for
workers
who
earn
both
pension
and
Social
Security
benefits.

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The
couple,
who
reside
in
Tampa,
Florida,
have
had
a
different
retirement
than
they
envisioned
due
to
the
lower
income.

Phyllis
kept
working
until
she
was
82.
They
have
also
turned
to
family
for
financial
support.

Their
lifestyle
is
frugal,
with
home-cooked
meals
and
cars
they
kept
for
20
years,
or
“until
the
wheels
were
falling
off,”
the
couple
jokes.

But
their
limited
resources
have
made
traveling
to
Australia
and
New
Zealand
–
Phyllis’
dream
–
out
of
reach.

“When
he
retired,
I
was
working,”
Phyllis
said.
“We
just
couldn’t
do
the
travel.”

Today,
Dave
is
pushing
for
the
Social
Security
rules
that
reduced
his
benefits
to
be
changed.

His
union,
the
American
Postal
Workers
Union,
has
endorsed
the

Social
Security
Fairness
Act,
a
bill
proposed
in
Congress
that
would
repeal
Social
Security
rules
known
as
the
Windfall
Elimination
Provision,
or
WEP,
and
Government
Pension
Offset,
or
GPO,
that
reduce
benefits
for
workers
had
positions
where
they
did
not
pay
Social
Security
taxes,
also
called
non-covered
earnings.

The
legislation
has
support
from
other
organizations
that
represent
public
workers,
including
teachers,
firefighters
and
police.

The
bill
has
overwhelming
bipartisan
support
in
the
House
of
Representatives
–

300
co-sponsors
–
at
a
time
when
that
chamber
has
been
politically
divided.
That
support
recently
prompted
House
lawmakers
to
send
a
letter
to
leaders
of
the
Ways
and
Means
Committee
to
request
a
hearing.

The
Social
Security
Fairness
Act
has
also
been

introduced
in
the
Senate,
with
support
from

49
leaders
from
both
sides
of
the
aisle.

Yet
some
experts
say
just
getting
rid
of
the
rules
may
not
be
the
most
effective
way
of
making
the
system
fairer.

The

WEP
applies
to
how
retirement
or
disability
benefits
are
calculated
if
a
worker
earned
a
retirement
or
disability
pension
from
an
employer
who
did
not
withhold
Social
Security
taxes
and
qualifies
for
Social
Security
from
work
in
other
jobs
where
they
did
pay
taxes
into
the
program.

Social
Security
benefits
are
calculated
using
a
worker’s
average
indexed
monthly
earnings,
and
then
using
a
formula
to
calculate
a
worker’s
basic
benefit
amount.
For
workers
affected
by
the
WEP,
part
of
the
replacement
rate
for
the
average
indexed
monthly
earnings
is
brought
down
to
40%
from
90%.

The

GPO,
meanwhile,
reduces
benefits
for
spouses
and
widows
or
widowers
of
recipients
of
retirement
or
disability
pensions
from
local,
state
or
federal
governments.

Under
the
GPO,
Social
Security
benefits
are
reduced
by
two-thirds
of
the
government
pension.
If
two-thirds
of
the
government
pension
is
more
than
the
Social
Security
benefit,
the
Social
Security
benefit
may
be
zero.

The
impact
of
the
rules
is
far
reaching,
according
to
Edward
Kelly,
general
president
of
the
International
Association
of
Fire
Fighters.
Many
firefighters
work
in
second
jobs
in
the
private
sector
as
cab
drivers,
bar
tenders
or
truck
drivers,
where
they
earn
credits
toward
Social
Security.

“They
steal
their
money,
because
they’re
also
public
employees,”
said
Kelly,
who
describes
his
union
members
as
“passionately
angry”
about
the
issue.

“It
affects
hundreds
of
thousands,
if
not
millions
of
public
employees
that
paid
into
Social
Security
and
essentially
are
being
penalized
because
they
also
happen
to
be
public
servants,
whether
they
are
teachers,
cops
and,
obviously,
firefighters,”
Kelly
said.

The
WEP
and
GPO
rules
were
intended
to
make
it
so
workers
who
pay
Social
Security
taxes
for
their
entire
careers
are
treated
the
same
as
those
who
do
not.

But
under
those
current
rules,
some
beneficiaries
receive
lower
benefits
than
they
would
have
if
they
paid
into
Social
Security
for
all
of
their
careers,
while
others
receive
higher
benefits,
according
to
the

Bipartisan
Policy
Center.

Yet
repealing
the
WEP
and
GPO
rules
would
result
in
Social
Security
benefits
that
are
“overly
generous”
for
non-covered
workers,

research
has
found.

Part
of
what
may
create
that
advantage
is
that
Social
Security
benefits
are
progressive,
and
therefore
replace
a
larger
share
of
income
for
lower
earners.
So
someone
who
only
has
part
of
their
salary
history
in
Social
Security
may
get
a
higher
replacement
rate
without
considering
their
pension
income.

Fully
repealing
the
WEP
and
GPO
rules
may
also
come
with
higher
costs
at
a
time
when
the
program
facing
a
funding
shortfall.
The
change
would
add
an
estimated
$150
billion
to
the
program’s
costs
in
the
next
10
years,
according
to
the

Center
on
Budget
and
Policy
Priorities.

Another
way
of
handling
the
disparity
may
be
to
create
a
proportional
approach
to
income
replacement.
Instead
of
the
WEP,
workers’
benefits
would
be
calculated
based
on
all
of
their
earnings
and
then
adjusted
to
reflect
the
share
of
their
careers
that
were
in
jobs
covered
by
Social
Security.
A
similar
approach
may
be
taken
with
the
GPO.

Certain

bills
on
Capitol
Hill
propose
a
proportional
approach.

However,
a
proportional
formula
may
not
solve
all
the
inequities
in
the
current
system,
according
to
Emerson
Sprick,
senior
economic
analyst
at
the
Bipartisan
Policy
Center,
which
has
prompted
to
think
tank
to
work
on
refining
its
proposal.

An
important
advantage
to
reforming
the
current
formulas
would
be
making
it
easier
for
workers
to
understand
and
plan
for
their
retirements.

“It
is
definitely
extremely
complex,
and
very
hard
for
folks
preparing
for
retirement
or
in
retirement,
to
understand
what
it
means
for
their
benefits,”
Sprick
said.

Social
Security
statements
that
provide
retirement
benefit
estimates
do
not
take
these
rules
into
account.

Consequently,
many
workers
find
out
their
benefits
are
adjusted
when
they
are
about
to
retire.

“The
young
guys
don’t
pay
attention
to
it
because
it’s
too
far
out;
they’re
not
worried
about
it,”
Kelly
said
of
the
firefighters.

“It’s
not
until
you’re
ready
to
go
out
the
door
that
you
actually
start
paying
attention
to
what
you’re
going
to
have
to
live
off
when
you
actually
retire,”
he
added.

The
reductions
to
their
Social
Security
benefits
can
be
a
shock.

For
beneficiaries
like
the
Bernsteins
who
start
out
with
lower
benefits,
it
can
be
difficult
to
catch
up,
even
after
a
record

8.7%
Social
Security
cost-of-living
adjustmentw
went
into
effect
this
year.

“Gas
this
summer
and
in
the
spring
at
$4
a
gallon
ate
that
money
up
like
it
wasn’t
even
there,”
Dave
Bernstein
said.