Congress Approves Social Security Fairness Act Amid Government Shutdown Concerns

Dec 20

In a significant legislative move, Congress has passed the Social Security Fairness Act, aiming to enhance benefits for millions of public-sector retirees. This development comes as lawmakers race against the clock to prevent a government shutdown at midnight.

Key Provisions of the Act

The Social Security Fairness Act seeks to repeal two provisions that have long affected public-sector workers:

Windfall Elimination Provision (WEP): This rule reduces Social Security benefits for individuals who also receive pensions from employment not covered by Social Security, such as certain state and local government jobs.
Government Pension Offset (GPO): This provision decreases Social Security spousal or survivor benefits for those who receive a government pension not covered by Social Security.

By eliminating these provisions, the Act is set to increase benefits for approximately 2.8 million retirees, including teachers, firefighters, and police officers, who have been subject to reduced Social Security payments due to their public-sector pensions.

Legislative Journey

The House of Representatives approved the bill on November 12, 2024, with a bipartisan vote of 327 to 75. The Senate advanced the legislation earlier this week, with 73 senators voting in favor during a procedural vote, indicating broad bipartisan support.

Financial Implications

While the Act addresses long-standing concerns among public-sector retirees, it has faced criticism over its fiscal impact. The Congressional Budget Office estimates that repealing the WEP and GPO could cost approximately $196 billion over the next decade, potentially accelerating the insolvency of the Social Security Trust Funds, currently projected to be unable to pay full benefits by 2035.

Government Shutdown Averted

In related news, Congress has been working diligently to pass a spending bill to prevent a government shutdown. The House recently approved revised legislation to extend government funding until March 14, including over $100 billion in disaster and farm aid. The bill now awaits Senate approval and President Biden's signature to avert a partial shutdown that could disrupt federal services and affect federal workers during the holiday season.

Looking Ahead

With the passage of the Social Security Fairness Act, eligible retirees can anticipate increased benefits starting in January 2025. However, the broader implications for Social Security's financial health remain a topic of debate among policymakers and stakeholders.