US President Joe Biden signed into law a measure on Sunday that increases Social Security payments for current and retired public employees, affecting nearly three million people who receive pensions for time they worked as teachers, firefighters, police officers and other public jobs. public service.
Advocates say the Social Security Fairness Act corrects a decades-old disparity, although it will also put pressure on Social Security Trust Funds, which face a looming insolvency crisis.
The bill rescinds two provisions — the Surplus Elimination Clause and the Government Pension Offset — that limit Social Security benefits for beneficiaries if they receive retirement payments from other sources, including a government’s public retirement programs. state or local.
“The bill I am signing today is about a simple proposition: Americans who have worked hard all their lives to earn an honest living should be able to retire with financial security and dignity; That is the entire purpose of the Social Security system,” Biden said during a signing ceremony in the East Room of the White House.
“This is something very important,” he added.
Biden was joined by union leaders, retirement advocates, and Democratic and Republican lawmakers, including the bill’s primary sponsors — Republican Sen. Susan Collins and outgoing Democratic Sen. Sherrod Brown — for whom attendees gave a standing ovation.
The Congressional Research Service estimated that, as of December 2023, there were 745,679 people—approximately 1% of all Social Security beneficiaries—who had their benefits reduced due to Government Pension Offset. About 2.1 million people, or about 3% of all beneficiaries, were affected by the Surplus Disposal Clause.
The Congressional Budget Office (CBO) estimated in September that removing the Surplus Disposal Clause would increase monthly payments to affected beneficiaries by an average of $360 by December 2025. Ending Government Pension Compensation would increase monthly benefits by December 2025 by an average of $700 for 380,000 beneficiaries who receive benefits based on living spouses, according to the CBO. The increase would average $1,190 for 390,000 surviving spouses who receive a widow or widower’s benefit.
Over time, those amounts would increase with regular Social Security adjustments to offset rising costs of living.
The change is for payments from January 2024 onward, which means the Social Security Administration will have to make retroactive payments. The measure, as approved by Congress, says the Social Security commissioner “shall adjust primary insurance amounts to the extent necessary to take into account” the changes in the law. It is not immediately clear how this will happen or whether affected people will have to take any action.
Edward Kelly, president of the International Association of Firefighters (IAFF), said firefighters across the country are “excited to see the change; “We have corrected a 40-year injustice.” Kelly said the policy was “much more egregious for surviving spouses of firefighters who paid their own Social Security contributions but were victims of the government pension system.”
The IAFF has approximately 320,000 members, which does not include hundreds of thousands of retirees who will benefit from the change.
“Now low-earning firefighters can actually afford to retire,” Kelly said.
Brown, who pushed the proposal for years in the upper chamber, lost his re-election bid in November. Lee Saunders, president of the American Federation of State, County and Municipal Employees union, thanked him for his activism.
“More than two million public service workers will finally be able to access the Social Security benefits they invested in throughout their careers,” Saunders said in a statement. “Many will finally be able to enjoy retirement after a lifetime of service.”
Becky Pringle, president of the National Education Association, called the law “a historic victory that will improve the lives of educators, first responders, postal workers and others who dedicate their lives to public service in their communities.”
And while some Republicans like Collins supported the legislation, others, including Sens. John Thune, Rand Paul and Thom Tillis, voted against it. “We bowed to the pressure of the moment instead of doing this sustainably,” Tillis told The Associated Press last month.
Still, Republican supporters of the bill indicated there was a rare opportunity to address what they said was an unfair section of federal law that hurts public service retirees.
The future of Social Security has become a major political issue and was a prominent point of contention in the 2024 election. About 72.5 million people — including retirees, people with disabilities and children — receive Social Security benefits.
The new law’s policy changes will pile more administrative work on the Social Security Administration, which is already at its lowest staffing level in decades. The agency, which is currently under a hiring freeze, has a staff of about 56,645, the lowest level in more than 50 years, although it serves more people than ever.
The annual report of the trustees of Social Security and Medicare — the government’s senior health program — released last May warned that the program’s trust fund will not be able to pay full benefits starting in 2035. The new law will advance the insolvency date of the program in about half a year.
Along with ratifying the Social Security Fairness Act, early in his presidency Biden signed the Butch Lewis Act into law, which saved the retirement pensions of two million union workers.
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