National Conference on Public Employee Retirement Systems

The Voice for Public Pensions


What to Know About the Latest House WEP-GPO Hearing

On April 16, the House Ways and Means Subcommittee on Social Security held a hearing to examine the Social Security penalties known as the Windfall Elimination Provision (WEP) and the Government Pension Offset (GPO).
What to Know About the Latest House WEP-GPO Hearing
By: Tony Roda, Partner, Williams & Jensen

On April 16, the House Ways and Means Subcommittee on Social Security held a hearing to examine the Social Security penalties known as the Windfall Elimination Provision (WEP) and the Government Pension Offset (GPO).

This second hearing by the Ways and Means Committee marks the most attention WEP and GPO have received in Congress in decades. Yet, many questions remain, including the two most on our minds today: Will this attention translate into action in the current Congress or the next Congress? And, if so, what will comprise the substantive components of WEP-GPO legislation?

As a quick refresher, WEP reduces your Social Security benefit if you also earn a retirement benefit from non-Social Security employment. Roughly 25 percent of state and local government employees across the U.S. are not covered by Social Security. Many of these workers also will separately earn a Social Security-covered benefit, particularly those in public safety and education, whose work schedules often allow them to hold a second job that is covered by Social Security. GPO reduces Social Security spousal or widow(er) benefits for those who receive a non-covered pension.
Following the April 16th hearing the Committee's majority Republicans released a press statement emphasizing three key points:
  • Social Security has the data to improve WEP and GPO for retirees.
  • Social Security is currently facing fiscal challenges. 
  • Solutions impacting four percent of beneficiaries will affect 100 percent of beneficiaries.
Digging deeper into these key points provides some insight into the two questions raised above, namely the timing and substance of WEP-GPO relief legislation.

The first bullet bears most on substance, and it coupled with statements made by Members and witnesses throughout the hearing lead me to conclude that the most viable path forward is not full repeal, which would cost approximately $180 billion over 10 years and accelerate the insolvency of the Social Security trust fund by one year, but formulaic changes to both WEP and GPO. By stressing the point that the Social Security Administration (SSA) now has the data necessary to implement a fairer formula for retirees, the Committee Republicans appear to be laying the groundwork for this type of policy change.

To further illustrate this point the press statement said, “WEP and GPO are both based on outdated and complicated formulas that act like a blunt instrument in adjusting Social Security benefits for retirees with non-covered employment. As Congress examines potential solutions, Social Security Subcommittee Chairman Drew Ferguson (R-GA) noted that the SSA now has data required for fairer solutions. These solutions also have the potential to reduce improper payments by the Social Security Administration, which totaled $16 billion over the last five years.
Chairman Ferguson: “As we've heard, the alternatives to WEP and GPO have been considered in the past, but some of these solutions relied on data that the Social Security Administration just didn't have. As a former Deputy Commissioner of SSA, does SSA have the data now that it needs to implement a better version of WEP and GPO?”
Dr. Jason Fichtner, former Deputy Social Security Commissioner (Witness): “The answer in part is yes. We now have at least 35 years of history for everyone's earnings data, so they can do a better job if we implemented a proportional formula…"
In my view, the second two points in the press statement bear more on the timing of any legislative relief. Taken together they lead me to conclude that tackling WEP and GPO in the context of a comprehensive overhaul of the Social Security program is more likely than addressing the two penalties in standalone legislation.

Keep in mind that there is a significant cost to changing the WEP and GPO formulas that will need to be offset. For instance, the cost range on a WEP-only formula change is approximately $23-29 billion over 10 years. Comprehensive Social Security legislation will be needed to absorb the costs associated with WEP and GPO formula changes. Also, be aware that for some there is a simple solution to offsetting the cost of WEP and GPO relief, namely mandatory Social Security coverage of all new state and local government hires. NCPERS is strongly opposed to mandatory coverage.

The remarks by Rep. Greg Steube (R-FL), which were highlighted in the press statement, tie WEP-GPO changes to the broader Social Security discussion:
“We recognize that all beneficiaries deserve fair treatment. The Windfall Elimination Provision and the Government Pension Offset were put in place over forty years ago with the intention to prevent preferential treatment for workers with employment exempt from Social Security. This policy impacts about 4 percent of Social Security beneficiaries, but any changes made by Congress to the Social Security Trust Fund affects 100 percent of Social Security beneficiaries.”
Admittedly, this article is devoted to the views of the Republicans on the House Ways and Means Committee. Whether the Republicans will be in the majority in either chamber of Congress next year or in the White House are open questions. However, whichever party controls the majority, we expect the margins in the House and Senate to be narrow, thereby necessitating a bipartisan agreement on any major legislation, including on WEP, GPO, and Social Security, in general. Therefore, the viewpoints expressed at the hearing by the Republicans on the Committee of jurisdiction are important guideposts as we attempt to forecast the timing and substance of any WEP and GPO legislation.

Please be assured that NCPERS will pay close attention to future developments in this area and will keep its members apprised of potential legislation.

Tony Roda is a partner at the Washington, D.C. law and lobbying firm Williams & Jensen, where he specializes in legislative, regulatory, and fiduciary matters affecting state and local pension plans. He represents the National Conference on Public Employee Retirement Systems and state-wide, county, and municipal pension plans in California, Colorado, Georgia, Kentucky, Ohio, Tennessee, and Texas. Tony has an undergraduate degree in government and politics from the University of Maryland, J.D. from the Catholic University of America, and LL.M (tax law) from the Georgetown University Law Center.


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