WASHINGTON (AP) — President Joe Biden signed into law a measure Sunday that increases Social Security payments for current and former officials. This affects almost three million people who receive pensions from their time as teachers, firefighters, police officers and in other public service jobs.
Advocates say the Social Security Fairness Act eliminates decades-old inequality, although it will also strain Social Security trust funds that are facing a looming bankruptcy crisis.
The bill repeals two provisions – the Windfall Elimination Provision and the Government Pension Offset – that limit Social Security benefits to recipients if they receive pension payments from other sources, including public pension programs of a state or local government.
“The bill I’m signing today is about a simple proposal: Americans who have worked hard throughout their lives to earn an honest living should be able to retire with economic security and dignity “Go — that’s the entire purpose of the Social Security system,” Biden said during a signing ceremony in the East Room of the White House.
“This is a big deal,” he said.
Biden was joined by labor leaders, pension advocates and Democratic and Republican lawmakers, including the bill’s lead sponsors, Maine Republican Sen. Susan Collins and retiring Ohio Democratic Sen. Sherrod Brown, who received a standing ovation from ceremony attendees.
The Congressional Research Service estimates that as of December 2023, there were 745,679 people, about 1% of all Social Security recipients, whose benefits were reduced by the federal pension adjustment. About 2.1 million people, or about 3% of all benefit recipients, were affected by the Windfall Elimination Provision.
The Congressional Budget Office estimated in September that eliminating the Windfall Elimination Provision would enhance monthly payments to affected beneficiaries by an average of $360 through December 2025. Eliminating state pension equalization would enhance monthly benefits by an average of $700 for 380,000 recipients in December 2025. According to CBO, you receive benefits on a living-spouse basis. The enhance would average $1,190 for 390,000 or surviving spouses receiving a widow’s or widower’s pension.
These amounts would enhance over time with regular Social Security cost-of-living adjustments.
The change affects payments beginning in January 2024, meaning the Social Security Administration would owe retroactive payments. The measure passed by Congress states that the Social Security commissioner “shall adjust primary insurance amounts to the extent necessary to reflect changes in law.” It is not immediately clear how this will happen or whether those affected will need to take action.
Edward Kelly, president of the International Association of Fire Fighters, said firefighters across the country were “excited to see the change – we’ve righted a 40-year mistake.” Kelly said the policy was “far more egregious for the surviving spouses of Firefighters who paid their own quotas into Social Security but were victims of the state pension system.”
The IAFF has around 320,000 members, not counting the hundreds of thousands of pensioners who will benefit from the change.
“Today, firefighters who make very little can actually afford to retire,” Kelly said.
Brown, who championed the proposal for years as an Ohio senator, lost his re-election bid in November. Lee Saunders, president of the American Federation of State, County and Municipal Employees, thanked Brown for his commitment.
“Over two million public workers will finally have access to the Social Security benefits they have paid into throughout their careers,” Saunders said in a statement. “Many will finally be able to retire after a life of service.”
Becky Pringle, president of the National Education Association, said the legislation is “a historic victory that will improve the lives of educators, first responders, postal workers and others who dedicate their lives to public service in their communities.”
And while some Republicans like Collins supported the bill, others, including Sens. John Thune of South Dakota, Rand Paul of Kentucky and Thom Tillis of North Carolina, voted against it. “We have succumbed to the pressures of the moment rather than doing this on a sustained basis,” Tillis told The Associated Press last month.
Still, Republican supporters of the bill said it presents a occasional opportunity to address what they say is an unfair section of federal law that hurts public sector retirees.
The future of Social Security has become a top political issue and was a key point of contention in the 2024 election. About 72.5 million people, including retirees, disabled people and children, receive Social Security benefits.
The up-to-date law’s policy changes will add even more administrative workload to the Social Security Administration, which already has its lowest staffing levels in decades. The agency, which is currently under a hiring freeze, employs about 56,645 people – its lowest level in more than 50 years, despite serving more people than ever before.
The Social Security and Medicare Trustees’ annual report released last May said the program’s trust fund will no longer be able to pay full benefits starting in 2035. The up-to-date law will shorten the program’s bankruptcy date by about half a year.
In addition to ratifying the Social Security Fairness Act, Biden signed the Butch Lewis Act early in his presidency, saving the pensions of two million union members. ___
Associated Press writer Stephen Groves contributed to this report.
