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Repeal of WEP-GPO: What Public Sector Workers Should Know About the Social Security Fairness Act
The U.S. Congress has taken historic action to repeal the Windfall Elimination Provision (WEP) and Government Pension Offset (GPO), providing a long-awaited victory for public sector workers. The Social Security Fairness Act, now awaiting President Biden's signature, addresses decades of advocacy by unions, retirees, and public pension plans to eliminate these offsets, which affected millions of workers' retirement security.
By: Tony Roda, Williams & JensenThe U.S. Congress just delivered a holiday gift for many public sector workers.
In the early morning hours of December 21, the U.S. Senate took an historic vote to approve House-passed legislation to repeal the Windfall Elimination Provision (WEP) and the Government Pension Offset (GPO). The Social Security Fairness Act, H.R. 82, will now be presented to President Joe Biden for his signature.
These Social Security offsets affect public sector workers who earn both a pension from employment that is not covered by Social Security and also earn a Social Security benefit. As many as 28 percent of state and local government employees, some 6.5 million workers, are not covered by Social Security. Public sector unions, retirees, and a number of public pension plans led a multi-decade effort to repeal WEP-GPO.
The Social Security Fairness Act was approved in the Senate by a 76 to 20 margin. This followed House approval on November 12 by an equally strong vote of 327 to 75. During the House debate, Ways and Means Committee Chairman Jason Smith (R-MO) stated that repeal was far from a perfect solution. Repeal would cost the Social Security trust fund almost $200 billion over 10 years and accelerate by six months the insolvency of the trust fund. These same arguments were raised in the Senate debate, but House Members and then Senators turned them aside in their desire to keep a political promise to millions of affected workers, including firefighters, police officers, teachers, and other public sector workers.
Over the many years of this legislative battle, the WEP-GPO repeal bills attracted hundreds of cosponsors in the House and always had a strong showing in the Senate as well. But the cost of repeal was always a chief impediment. Many said that WEP-GPO could not be repealed unless it was part of a comprehensive restructuring of Social Security, in which the cost of repeal could be offset elsewhere in the Social Security program. However, that view was always countered by the belief that, if only the repeal bill could be brought to a vote, the many cosponsors would have to vote for the bills they had signed on to support. In the end, the latter view ruled the day.
Tired of inaction on the repeal legislation, the bill's chief House sponsors, Reps. Garret Graves (R-LA) and Abigail Spanberger (D-VA), led the charge to use the House rules to discharge the bill from the Ways and Means Committee and bring it to the full House for an up or down vote. On September 19, the cosigners of the discharge petition reached the magic number of 218, a simple majority in the House, which discharged the Committee and ultimately paved the way for House passage in November.
Following House passage, attention turned to the Senate. A companion Senate bill, S. 597, had 62 cosponsors. Sixty votes are needed to break a threatened filibuster on legislation, so there was little room for error if the bill was brought to the Senate floor as standalone legislation. In early December, Senate Majority Leader Chuck Schumer (D-NY) gave his word that a vote would absolutely be taken on the House-passed bill, and all Senators would be forced to publicly take a position. Schumer's commitment would test the belief that, if a vote was taken, the popular measure would have enough votes to be approved.
Senate consideration of any legislation is fraught with procedural and substantive hurdles. In each instance, repeal advocates prevailed. Clearly, the appetite of Congress was for full repeal, and nothing short of that would suffice.
The Senate considered three amendments to H.R. 82. Each was defeated soundly. An amendment offered by Sen. Rand Paul (R-KY), which would have offset the costs of repeal by gradually raising the eligibility age for Social Security to 70, was defeated 93 to 3. Sen. Mike Crapo (R-ID) offered an amendment to delay the effective date of repeal until a cost offset could be put in place. The Crapo amendment was defeated 62-34. Finally, an amendment offered by Sen. Ted Cruz (R-TX) to substitute a WEP-only formula change for repeal was defeated by a vote of 64 to 32. The WEP-only formula approach also was defeated in the House by a vote of 225 to 175.
It's unclear how quickly the Social Security Administration (SSA) will be able to recalculate the benefit amounts and begin making payments that reflect the WEP-GPO repeal. Another challenge facing SSA will be how to handle the fact that the legislation is effective for all monthly insurance payments made after December 2023. SSA will have determine how to most efficiently make these retroactive payments.
Please join us at the NCPERS Legislative Conference & Policy Day held January 27 – 29, 2025 to get the latest information on SSA's implementation of the WEP-GPO repeal. It also presents a perfect opportunity to visit your members of Congress to thank them for this major win.
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, Nebraska, 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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