April 16, 2024: Official testimony submitted to the House Committee on Ways and Means
Chairman Jason Smith, Ranking Member Richard Neal, Subcommittee Chairman Drew Ferguson, Ranking Member John Larson:
Thank you for the opportunity to be heard. On behalf of our 52,000 members, please accept the following testimony relative to the April 16, 2024, Subcommittee Hearing on the Windfall Elimination Provision and Government Pension Offset.
We are thankful to the Committee for furthering the national conversation surrounding the Windfall Elimination Provision (WEP) and the Government Pension Offset (GPO) by holding the second public hearing on these issues in the past five months. These hearings have served to build public awareness of the unfairness of WEP/GPO, as well as grant public retirees the ability to have their voices heard and personal stories entered into the official Congressional Record.
This is particularly true of the November 2024 Committee Field Hearing held in Baton Rouge, LA, where the negative and highly unfair impact of WEP/GPO on public retirees was finally brought to light. The official testimony offered by the hearing’s witnesses, combined with the more than 800 written submissions received by the Committee, serve as proof of the harsh effect of WEP/GPO.
While at times going off track from what should have been the primary focus, April’s hearing in Washington, DC did serve to bring to light the overall issues surrounding both full repeal and reform of WEP/GPO.
About Mass Retirees
Founded in 1968, the Retired State, County and Municipal Employees Association of Massachusetts is the only state-wide organization in Massachusetts exclusively advocating on behalf of all retired Massachusetts public employees. As an independent non-profit, the Association is not a union or affiliated with any other entity.
Commonly known as Mass Retirees, our Association, together with our close allies the Texas Retired Teachers Association (TRTA) and others, has a long history of working with Congress in a bipartisan manner to develop a viable solution to either repeal or reform these laws. We appreciate the opportunity for our members’ voices to be heard, as well as to provide the Committee with our input as you examine and consider legislative options.
Mass Retirees has been at the forefront of national advocacy efforts to fully repeal or reform the WEP and GPO laws since the passage of the Social Security Reform Act in 1983. Over the past 41 years, no other federal laws have proven to be more detrimental to public retirees than the WEP and GPO.
Why WEP/GPO Must End
While we do not wish to repeat the testimony submitted by Mass Retirees to the Committee in November 2023, which focused on the impact and hardship placed upon our members by the WEP and GPO, there are key points that deserve repeating and updating.
According to the February 28, 2024, report by the Congressional Research Service (CRS), some 92,934 Massachusetts residents are currently impacted by the WEP. CRS reports that another 42,624 MA residents are victims of the GPO. The number of retirees harmed by these laws continues to grow each year as effected public employees retire.
Massachusetts is somewhat unique in that the Commonwealth’s entire public workforce operates outside of the Social Security System. This is because the Massachusetts public pension systems predate the creation of Social Security.
However, most Massachusetts public retirees qualify for Social Security through a combination of covered employment in the private sector, military, or government work outside of the Commonwealth. Those public retirees impacted by the WEP earned and paid for a Social Security benefit that has been unfairly reduced by the WEP, wrongly depriving our members of critical retirement income.
As is the case with the 2.1 million retirees now impacted by WEP, our members worked and paid their taxes into the Social Security system with the implied promise of receiving the Social Security retirement benefit which they earned. In addition to serving the public, our members dutifully played by the rules and did their part – only to learn that the retirement benefit they were promised will not materialize due to an arbitrary and deeply flawed federal law.
This breach of public trust not only places impacted retirees in a financial disadvantage in their so-called “golden years”, but also serves to significantly undermine their faith in our federal elected officials. For the better part of the past two decades, a super majority of the House of Representatives has routinely cosponsored legislation fully repealing WEP and GPO or reforming the WEP. A general bipartisan consensus appears to exist that these laws are broken, unfair, and should change.
Yet, much to the disappointment and frustration of our members, session after session Congress fails to act. In recent sessions, there has also been a failure to compromise.
Solutions
Shortly after the passage of the Social Security Reform Act of 1983, Mass Retirees was among the first public retiree organizations in the country to call the inclusion of WEP/GPO a mistake. In the fall of 1983, our Association joined what has become a 41-year odyssey to repeal or reform the two unfair laws.
Our longstanding goal is to bring an end to both the WEP and GPO.
When it comes to the WEP, this means changing the Social Security formula to accurately calculate the retirement benefits earned and paid for by our members. All American workers should retire with the knowledge that they will receive the Social Security benefit which they earned.
At the April 16, 2024, hearing the Committee heard from four expert witnesses. While differing in their outlook on solvency, Social Security reform, and potential solutions to WEP/GPO, all four appeared in agreement that the current WEP/GPO laws are unfair and should change. Again, where they differ is how to best approach changing the laws without creating an unfair outcome for other retirees or adversely impacting Social Security’s solvency.
Regarding solvency, we are deeply concerned by and reject any suggestion that WEP/GPO remain unchanged to bolster Social Security’s finances. To do so would be tantamount to balancing the well-being of Social Security on the backs of public retirees. Not only do we believe this to be wrong but would serve as an insult to those public retirees who have already suffered an unjust reduction in their Social Security benefits – a reduction, one can argue, that has already served to wrongly bolster the system’s finances over the past four decades. Benefits that were unfairly withheld from our members have served to prop up the Social Security system as a whole. We believe that these facts should be considered as Congress addresses viable solutions for change.
Further, if ending WEP/GPO in their entirety cannot be achieved without a broader reform of Social Security, we urge the Committee to take the interim step of passing reform legislation that will bring immediate relief to those current retirees suffering the financial hardship brought about by WEP/GPO.
While we believe that both the WEP and GPO laws should be fully repealed, we cannot allow another generation of public retirees to suffer while a perfect solution is sought. We have already lost far too many members who hoped for a repeal that has yet to come.
We believe that, with some revisions, legislation filed this session by Massachusetts Congressman Richard Neal (HR 4260, Public Servants Protection Act) and Texas Congressman Jodey Arrington (HR 5342, Equal Treatment of Public Servants Act) are viable proposals that can be enacted by Congress and become law in 2024. Further, these proposals can be enacted without endangering Social Security’s solvency or inadvertently creating an unfair outcome for other beneficiaries.
However, for reform legislation to successfully advance it must address both the WEP and GPO laws. Currently, neither HR4260 nor HR5342 address the GPO.
Short of full repeal of the GPO, the law must change in two important ways:
- End the ongoing offset of public pension COLAs. Applying the GPO to future cost-of-living adjustments in a retiree’s pension not only creates an expensive administrative burden for SSA, but worsens the financial hardship already endured by those public retirees to whom the GPO applies. A new “One and Done” approach would only apply the GPO calculation on the original spousal benefit and not COLA payments.
- Alter the GPO calculation as to not adversely impact lower wage retirees. The current arbitrary formula applied by the GPO adversely impacts lower wage retirees, leaving many unable to sustain themselves following the death of a spouse. The impact creates the exact situation that the spousal Social Security was created to alleviate.
In the past two Congressional sessions, the Committee came close to striking a bipartisan deal that would have advanced a WEP reform proposal. Progress appears to have been thwarted by what, in our view, are minor differences regarding funding the reforms and the impact the reforms may have on future generations of retirees.
To be clear, we agree that it is inherently unfair and improper to reduce Social Security benefits on those currently employed and in the system. Replacing one problem with another is not a solution we can endorse.
However, small benefit changes that would not take effect for some 45+ years, combined with minor alterations in Social Security’s accounting methodology, do not seem unreasonable.
What is wholly unreasonable is to allow today’s generation of retirees to continue to suffer due to laws that most agree to be unfair, unjust, and resulting in an inaccurate calculation of Social Security benefits. Inaction should not be an acceptable option.
With all respect, we urge Congress to act in 2024 to bring long overdue relief to the millions of Americans now harmed by the WEP law, as well as the nearly 750,000 retirees impacted by the GPO. Our members cannot afford to wait for a perfect remedy. They need relief and they need it now.
On behalf of our 52,000 members, we appreciate the opportunity to be heard. We also pledge to continue working with the committee, in good faith and in a bipartisan manner, to help facilitate the passage of this important legislation.
Most sincerely,
Frank Valeri Shawn Duhamel
President Chief Executive Officer
Mass Retirees Association