Every so often something unexpected happens in life that has the potential to become truly beneficial. In this case, I am referring to a new federal bill that proposes the biggest overhaul of Social Security since 1983.
What makes this notable, beyond the improvements to Social Security that would result, is that for the first time ever, the bill contains a provision fully repealing both the Windfall Elimination Provision (WEP) and Government Pension Offset (GPO). The bill’s sponsor, Congressman John Larson (D-CT), is the Chairman of the Social Security Subcommittee.
Watch today’s video report here!
A former public-school teacher in Hartford, CT, Larson has filed similar bills in previous sessions – all with one glaring omission, no prior mention of WEP or GPO!
The fact that Larson chose to include WEP and GPO within his proposal for a major reform of Social Security proves that our national advocacy is working. The calls, letters and emails from you and other impacted retirees from across the country are all working. WEP and GPO are now front burner issues when it comes to Social Security policy.
A major factor that makes this WEP and GPO repeal proposal different than those filed in the past, such as the current H.R. 82, is the fact that this new bill (H.R. 5723) contains a way to pay for the repeal. As we have been saying for several years, without a means to pay for a repeal the reality is that a proposal is very unlikely to pass.
Remember that Social Security works strictly on a pay-as-you-go basis, meaning that the money paid into the system at any given time is used to pay for retiree benefits at that time. The money you would have paid into the system when you were working was used to pay for the benefits of retirees at that time. Social Security does not set contributions aside or hold funds within investment trusts like our public retirement systems or your personal retirement account. The system was not designed or originally intended to function beyond pay-as-you-go.
This explains why it has been impossible for the past 38 years to repeal WEP and GPO. It also explains why Mass Retirees has placed our focus and support behind the recent push to pass a WEP reform law designed to bring immediate relief for today’s retirees.
However, Chairman Larson’s proposal opens the door for the long sought full repeal of both the WEP and the GPO. Mass Retirees has gone on record and joined with the dozens of national organizations supporting H.R. 5723. This proposal is good for Social Security and great for public retirees subject to the WEP and/or GPO, now and in the future.
Click here for a full summary of H.R. 5723.
That said, we remain in full support of Richie Neal’s proposal H.R. 2337. While this bill serves to enact a modest reform of the WEP only, it continues to be the most viable path toward providing immediate relief to our members who are now harmed by the WEP.
Larson’s bill, while highly desirable for public retirees, faces a very long and hard-fought battle to becoming law. The improvements contained within the bill, including WEP and GPO repeal, are paid for by a payroll tax increase on individuals with income exceeding $400,000 a year. As it now stands, Social Security payroll taxes are capped at the first $142,800. Income above that amount is not subject to the payroll tax. Republicans are already on record opposing all potential tax increases. This means that the bill is highly unlikely to pass the US Senate under its current makeup.
This brings us back to H.R. 2337, which is widely viewed as the compromise to full repeal. As we report again in the November edition of The Voice, we do believe there to be a viable path toward passage for WEP reform in the current Congressional session.
The fact that this issue has now become part of the mainstream conversation on the future of Social Security is a significant and positive step forward. Our members have played a key role in helping to make this happen. Thank you for the support you continue to provide.
Watch the video report by clicking the play button here.
October 29, 2021: Weekly Report
By Shawn Duhamel