Tuesday, February 12, 2008

Rebates, Pronto; Now What About Social Security Fairness?

By Manifesto Joe

When it came to those federal income tax rebates, everybody on Capitol Hill has moved pretty quickly. I'm sure it has nothing to do with this being an election year. But what does one make of a situation in which a bill has 334 co-sponsors in the U.S. House, but after years of introductions and reintroductions, it's never gone to the floor for a vote?

In July I posted about the proposed Social Security Fairness Act of 2007. For those unfamiliar -- well, you're lucky, for one thing. My wife, and my mother, both former civil servants, aren't so fortunate. But you'll need the background. This is from the July post:

Two of the most insidious things ever done to large numbers of Americans were done way back in 1977 and 1983. In '77, Congress passed the Government Pension Offset, which slashed the amount of Social Security benefits people receive when their spouses are on the Civil Service Retirement System. The cut was two-thirds of the amount of the government pension.

Then, in '83, there was the Windfall Elimination Provision. This directly cut Social Security benefits for CSRS retirees who mostly worked for government entities but also spent part of their working lives in the private sector, covered by Social Security.

And, this doesn't just affect those who worked for the federal government. These reductions also apply to those who worked for state and local governments, by formula.

"You will get something," one reads upon investigation of the Social Security Web site. Yep, we know how that is. It hurts worst the first time.

Not much has happened since July. Or since the year before that, and the year before that. ...

A hearing on the Senate version, S. 206, was held Nov. 6 by the Senate Finance Subcommittee on Social Security, Pensions and Family Policy, chaired by Sen. John Kerry, D-Mass. Kerry is one of 35 co-sponsors in the Senate -- it's strange how much smaller the proportion of co-sponsors is in that body.

Texas AFT (American Federation of Teachers) reported on the hearing:

Witnesses at today's hearing did a good job of stressing that these offsets cut fully EARNED benefits--either earned by an employee's own work in other jobs covered by Social Security or earned by a spouse who was in covered employment. Sen. Susan Collins, a Maine Republican who is a principal coauthor of the Fairness Act (S. 206), told the story of teacher Julie Worcester, who worked in jobs covered by Social Security for 20 years, then at age 49 went to college to become a teacher and taught for 15 years, until age 68. Mrs. Worcester was subject to the Windfall Elimination Provision, depriving her of much of her earned Social Security pension because she also gets a public pension for serving as a teacher in Maine. The bottom line is that she receives less than $160 from Social Security each month, her total retirement income is $800 a month--and she can't live on that, so at age 78 she is still working part-time as a substitute teacher.

Expert witnesses from the U.S. Government Accountability Office and a Washington think tank gave the usual justifications for the two offsets, essentially boiling down to the claim that they are designed to keep higher-wage employees from reaping a "windfall" when they retire. But Sen. Kerry and other witnesses noted that the offsets in practice are indiscriminate, doing particular harm to employees with low incomes.

Sen. Kerry also made another point that deserves more attention. Kerry said these offsets "penalize people who are making a good choice about how to retire decently in this country, and that's getting harder to do." Members of Congress are "pretty good at taking care of our own health care, pensions, and benefits," he continued, and they "ought to be bending over backward to empower people" to secure a decent retirement income, through a combination of Social Security and a pension from public employment, instead of punishing them for doing so.

What has happened since? More from Texas AFT:

The Fairness Act until now has been blocked session after session by House leaders adamantly opposed to its passage. But those leaders were swept out of office in 2006, and now both the House and Senate are headed by past co-sponsors of the Fairness Act, Rep. Nancy Pelosi of California and Sen. Harry Reid of Nevada--both hailing from states with large populations of public employees adversely affected by the two unfair offsets. So the outlook for action on the fairness agenda looks brighter in the current Congress. A hearing has already been held in the U.S. Senate on repeal of the GPO and WEP, and a hearing has been promised in the U.S. House Social Security Subcommittee as well for early 2008

We're still waiting to "hear" something about that hearing. Rep. Charlie Rangel, D-N.Y, the ever-mercurial chairman of House Ways and Means, has promised it will be held and issued a verbose statement of support, of which I will spare you. That's where we are now.

On washingtonwatch.com, there have been 162 comments on the Senate version alone. Here are just a few off the top:

Joan Sullivent
I am 66 y/o retired Civil Servant with both WEP offset and full GPO offset. My own Social Security benefit is just barely more than my Medicare premium. I have to work part time job just to survive. The passing of this bill would allow me to actually retire!

Diane Cordell
I am soon to retire and subject to the GPO and WEP. Having spent 15 years as a homemaker, now divorced, my spousal benefits are not available to me. I entered the workforce in my 40s with a high school education. Needless to say my403b will provide a minimal retirement income. the passage of this bill would give me the SS benefits I have earned.

Barbara Smith
Please support the Social Security Fairness Act H. R 82.

I am an older teacher who returned to the classroom 10 years ago. I now get Social Security of about $800 per month. If I retire from teaching I will loose my SS and get only CA teacher's retirement of around $1000 per month I do not think it is fair to eliminate my SS.

I am penalized by returning to teaching. If my husband should die, I will no longer be eligible for his larger amount of SS. I know of several other teachers with the same problem.

William Reid
I am a recently-retired postal worker with over 30 years of service. I paid enough into social security (40 quarters) to qualify for benefits. However, because I retired under the old CSRS system, I will be robbed of over 60 percent of my SS benefits under the windfall offset law. Now, there is talk on Capitol Hill of providing SS benefits to illegal aliens. Can any of you congressmen imagine how disenfranchising it is to hear of such propals when we older American citizens cannot collect the SS benefits that we rightfully earned? Don't we American workers deserve the same consideration as the immigrants who enter our country illegally?

It was interesting to watch how quickly Congress has been moving on a tax rebate plan that will cost $145 billion. But then, some are worried about paying retired civil servants all that they have earned, so they can actually retire, and still buy groceries and clothes, gas, and so forth?

I suppose that's why they call it politics. To sort of paraphrase Clemenceau, that's all the more reason why it's too important to be left to the politicians.

Manifesto Joe Is An Underground Writer Living In Texas.


Randy said...

Don't forget that those who for one reason or another switched from CSRS to FERS are also affected by WEP.
Is the government broke or isn't it?--so many contradictions.
It brings to mind the congresswoman who on her way home for a family visit begged us not tell her family that she was in Congress as they were under the impression she was a prostitute.

Cranky Daze said...

I don't see how the government can legally refuse to pay social security benefits to workers who paid into the system. FICA is withheld from every paycheck, and it matched by the employer. What the government has done isn't much different than a bank refusing to let you withdraw funds you have deposited in the bank.

I know a couple of people who are receiving less than $500 a month in SS benefits, and who have no other income. The Social Security increase for 2008 was 2.3% so persons with $500 monthly benefits realized about a $11.50 increase. Yet Congress voted itself a 2.5% increase which, based on their salaries, amounted to about $4,100 annually...total monthly salary for Congress is $169,300. Salaries for Supremes increased even more.

The cost of living is spiraling out of control. I read recently that the cost of food has increased an average of 40% in the past year, and we all know the cost of gasoline. Home utilities have increased to the point that even the middle class is struggling to pay their bills. Something needs to be done about this mess.

Anonymous said...

Read my blog entry on the subject at:

Marc McDonald said...

The Social Security tax is nothing more than an accounting gimmick that is used to allow the rich to avoid paying taxes.
It's one of the reasons Warren Buffett recently testified that he pays less of his income into taxes than does his secretary, who makes $60,000 a year.
Note that Buffett is a mega-billionaire who is the world's second richest man.
Most Americans are in the dark about Social Security. For example, most Americans believe that the money they pay in is waiting for them in a Social Security trust fund account.
In fact, the money they pay in has already been spent (and often on things that have nothing to do with Social Security, from paying for corporate welfare to buying military hardware).
The only thing waiting for Americans is a worthless IOU. There IS no trust fund.
Given that our government is on the verge of fiscal collapse, this means that the vast majority of Americans will never get a penny from Social Security.
Americans can protest all they want when this happens, but the fact is if the money isn't there, there's nothing that they're going to be able to do about it. And it ain't there.
As far as the Social Security swindle goes, if you don't believe me, then read Bartlett and Steele's "America: Who Really Pays the Taxes?"

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