Striking a deal on WEP reform

Striking a deal on WEP reform

Weekly Update 3/18/2022: Well over half of our membership are impacted by the Social Security WEP law. This means that they have had their personal Social Security benefit unfairly reduced.

While not a day goes by where I do not hear from one or more members asking about the status of our efforts in Washington, D.C. to reform the WEP, I am aware that we also have thousands of members who are not involved with the WEP. Many were career public employees, never paying into Social Security, and not qualifying for a federal benefit. For these members, it is our work on the pension COLA and retiree health insurance that they are most interested.

Well, I believe that our team here at Mass Retirees, myself included, can chew gum and walk at the same time – meaning that we are fully capable of working on more than one important issue at a time. It is also never a choice between WEP or one of our state proposals, as our advocacy on Capitol Hill has absolutely nothing to do with our advocacy on Beacon Hill. There is not even the slightest relation between the two levels of government when it comes to our day-to-day work. The common ground comes from the fact that all these issues are important to public retirees.

Watch today's video report here!

It has now been a couple of months since I last updated you on what is currently happening to pass WEP reform in 2022. While we have provided very detailed updates in the January and March editions of The Voice, those articles focused on the details of the bills pending before Congress and the behind-the-scenes work taking place to keep WEP reform on the front burner for consideration.

Those efforts heated up in late February and early March as an attempt was made to strike a bipartisan deal to include WEP reform within the omnibus Appropriations Act of 2022, which was signed into law by President Biden early this week. Unfortunately, a compromise could not be reached, and the bill moved through the House and Senate without WEP reform attached. We are very disappointed by this missed opportunity.

While we do applaud Congressmen Richard Neal and Kevin Brady for attempting to find common ground, we share our members’ frustration that a deal remains seemingly out of reach.

What we have come to understand is that a difference of opinion remains between Democrats and Republicans on two key factors of WEP reform: The size of the monthly rebate to current WEP’d retirees and the length of the hold harmless clause that protects future retirees from any reduction of Social Security benefits resulting from the new benefit formula.

For instance, the Republican proposal backed by Mr. Brady sets the monthly rebate at $100 with a 40-year hold harmless clause for future retirees (applying to anyone retired prior to 2062).

Mr. Neal’s proposal sets the rebate at $150 a month, with the hold harmless clause set in perpetuity for all future retirees. It goes without saying that we prefer Mr. Neal’s proposal. However, without significant Republican support it cannot pass the US Senate where a 60-vote super majority is required on Social Security legislation.

The impasse appears to be centered on the Republican desire that the bill be “revenue neutral” and limit the length of the hold harmless clause. Democrats prefer to maximize the monthly rebate for current retirees, while remaining reluctant to alter future benefits in any way that could be viewed as a cut.

To help break the impasse, Mass Retirees has joined with our coalition partners the Texas Retired Teachers Association (TRTA) and the Association of Texas Professional Educators (ATPE) in proposing the framework of what we believe to be a reasonable compromise that will bring meaningful relief to both current and future public retirees.

Under our proposal, retirees now subject to the WEP would receive a monthly rebate of up-to $150 (some retirees have a WEP reduction of less than $150 and would not receive a rebate beyond the WEP’d amount). We have also proposed that future retirees age 16 or older at the time of the bill’s passage be held harmless from any potential benefit reductions. This means that the hold harmless clause would remain in effect until 2072.

To put that in prospective – I will turn 102 in 2072, if I am so lucky! A fifty-year hold harmless is both fair and reasonable.

The 2 million public retirees now impacted by the WEP cannot afford anymore missed opportunities. This is especially true at a time when inflation continues to rise! We are now at a 40-year high, the worse in two generations. Reasonable people should be able to come together and compromise. Otherwise, retirees will continue to suffer needlessly.

While we continue to do all we can to bring our members of Congress together, I feel compelled to address those among us who continue to insist in an all or nothing approach when it comes to WEP and its related issue the GPO.

Mass Retirees supports and has worked hard to achieve full repeal of WEP and GPO since the laws were created in 1983. However, the goal of full repeal does not have the national support, nor the votes required in the US Senate to pass. This is a fact.

As I mentioned above, legislation impacting Social Security requires a 60-vote super majority in the Senate. At best, full repeal now has 38 Senate supporters – 22 fewer than required. Full repeal is not supported by the Republican leadership in the Senate. Which means that even if a bill were to pass the House, it is dead in the Senate in 2022.

This is the harsh political reality that we face. It is why our Association, like our coalition partners, has focused our efforts on engineering a WEP reform compromise. This is our best hope of bringing needed relief to our members anytime in the foreseeable future.

In the coming weeks we will suggest specific steps our members can take to help support a reasonable WEP reform compromise. Meanwhile, we will simultaneously work on COLA improvements and will continue to keep a close watch on the GIC’s pending health insurance procurement – among other important issues pending on Beacon Hill.

WEP continues to be a long and frustrating road. But as they say, nothing worth doing is ever easy. Keep the faith.

Watch the video report by clicking the play button below.

With great appreciation,

Shawn

Shawn Duhamel
Chief Executive Officer
Mass Retirees Association

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