Social Security Reform Bill: What to Know

A bill that could increase Social Security benefits for millions is being considered by lawmakers.

The Social Security Fairness Act, which would eliminate loopholes that deny payments being made to retirees who receive certain government pensions or other types of benefits, is gaining traction after lawmakers successfully used a discharge petition—a method of taking a bill to the House of Representatives floor for consideration without a report from the relevant committee—to advance it earlier this month.

Any changes brought in by the bill’s potential passage could impact millions of Social Security recipients. The bill has enjoyed bipartisan support, having been introduced by Republican Garret Graves and cosponsored by more than 300 other lawmakers from both sides of the House.

What Is The Social Security Fairness Act About?

The Social Security Fairness Act would repeal rules known as the Windfall Elimination Provision (WEP) and the Government Pension Offset (GPO).

The Windfall Elimination Provision (WEP) reduces Social Security benefits for individuals who receive pension income from public roles in which they did not contribute to Social Security payroll taxes, despite having paid into the program through other work and qualifying for benefits. The WEP currently impacts around two million Social Security beneficiaries.

The GPO is a provision that reduces spousal benefits for retired federal, state, and local government employees who did not pay into Social Security through payroll taxes and affects nearly 800,000 retirees.

To summarize, the bill would:

• Repeal provisions that reduce Social Security benefits for individuals who receive other benefits, such as a pension from a state or local government.
• Eliminates the government pension offset, which can reduce Social Security benefits for spouses, widows, and widowers who also receive government pensions of their own.
• Eliminates the windfall elimination provision, which in some instances reduces Social Security benefits for individuals who also receive a pension or disability benefit from an employer that did not withhold Social Security taxes.

If it makes it through the legislative process, it will apply to all SSA-administered retirement benefits from December 2023 onward.

The Impact

Benefits would rise for all those to whom the bill applies. Research conducted by the Urban Institute in 2020 found that getting rid of the WEP and GPO could lead to an increase in benefits for 4.5 percent of beneficiaries in 2025, and the “annual increase for those affected would average about $7,300” at the time.

The Cost

With higher benefit payments comes a higher cost for the federal government. The Congressional Budget Office has estimated that by 2034 the bill would add $195 billion to the national deficit.

The Views

The bill has benefitted from bipartisan support, with the discharge petition having been filed by Democrat Abigail Spanberger and Republican Graves, and voted through with 218 signatures—47 Republicans and 171 Democrats.

“From Virginia to Louisiana to everywhere else in America, millions of retired public servants have waited more than 40 years for their elected officials to tackle this fundamental issue of fairness,” a joint statement from the lawmakers reads. “These retirees deserve the benefits they earned through their hard work—and they deserve to see the WEP and GPO eliminated.”

“We will be dogged in making sure the Social Security Fairness Act passes in the U.S. House, passes in the U.S. Senate, and finally gets signed into law. We must get it done.”

Analysts have observed that individuals who receive a pension from an employer not covered by Social Security may have contributed to the program through previous employment, making it unfair for these individuals to not receive their contributions back later in life.

“These are people who earned credits toward Social Security benefits from second jobs outside of their career in government paid jobs,” Mary Johnson, independent Social Security and Medicare policy analyst, said of the bill. “They should not be penalized for having worked as firefighters, teachers, or any other government job. Hard working people deserve to receive the full amount of their Social Security benefits.”

What Happens Now?

A vote on the bill has not been scheduled yet. It is most likely to take place when Congress returns following the November 5 presidential election.