WASHINGTON, D.C. — On Sunday, President Joe Biden is set to sign a new measure to increase Social Security payments for current and former public employees, including teachers, police officers, firefighters, and other public servants. The legislation is expected to impact nearly 3 million people who receive pensions from their work in state or local government positions.
The legislation, known as the Social Security Fairness Act, seeks to address a longstanding disparity in Social Security benefits for these workers. The bill’s advocates argue that it corrects an unfair practice that has long penalized public employees relying on state or local pensions. However, critics warn that the changes could strain the already fragile Social Security Trust Funds, which are projected to face insolvency in the coming decades.
At the heart of the bill is the elimination of two provisions — the Windfall Elimination Provision (WEP) and the Government Pension Offset (GPO) — which currently reduce Social Security benefits for individuals who receive retirement payments from other sources, such as public retirement programs.
According to the Associated Press, estimates from the Congressional Research Service, as of December 2023, approximately 745,679 Social Security beneficiaries (roughly 1% of all recipients) had their benefits reduced by the Government Pension Offset. Additionally, about 2.1 million people (around 3% of all beneficiaries) were impacted by the Windfall Elimination Provision.
The Congressional Budget Office (CBO) has projected that eliminating the Windfall Elimination Provision will increase monthly payments for affected beneficiaries by an average of $360 by December 2025. For those impacted by the Government Pension Offset, the CBO estimates monthly benefits will rise by an average of $700 for 380,000 recipients based on living spouses. According to the CBO, surviving spouses who receive widow or widower benefits will see an average increase of $1,190 per month.
While the law is celebrated by those who believe it addresses an inequity for public sector workers, its passage raises concerns about the long-term financial health of Social Security.
