Repeal or reform? House lawmakers weigh responses to WEP, GPO

Many lawmakers are pushing for a full repeal of WEP and GPO, but others are instead looking to reform the benefit calculations for affected federal annuitants.

The House is once again nearing a finish line to address two provisions limiting Social Security benefits for some federal annuitants.

But it’s still up in the air what direction Congress will take. Many lawmakers are pushing for a full repeal of the Windfall Elimination Provision (WEP) and the Government Pension Offset (GPO). Others are instead looking to keep the provisions, but reform their calculations.

The Social Security Fairness Act, a bill that would eliminate WEP and GPO, has broad bipartisan support, gaining 316 House co-sponsors and 53 in the Senate. But during a House Ways and Means Committee hearing, some Republicans and other stakeholders called for different answers.

“Fully repealing the WEP and GPO would violate the principles of fairness and equity that these provisions were intended to protect,” Bipartisan Policy Center Chief Economist Jason Fichtner told lawmakers on the committee’s Social Security subcommittee Tuesday. “[But] given data limitations at the time the WEP and GPO provisions were first established in law, these provisions create an overly complex structure.”

In response to Tuesday’s hearing, Reps. Abigail Spanberger (D-Va.) and Garret Graves (R-La.) are doubling down in their push for the passage of the Social Security Fairness Act, reintroduced in January 2023.

“Throughout our time in Congress, we have heard from tens of thousands of Americans who have been adversely impacted and impoverished by these harmful policies,” the representatives wrote to committee members in a letter shared exclusively with Federal News Network. “With the Ways and Means Committee so focused on ensuring retirement security for all Americans, there is no time like the present for Congress to act … We believe that full repeal is the best solution.”

The WEP and GPO reduce — and in some cases eliminate — Social Security benefits for some federal retirees and other public sector workers, as well as their spouses, widows and widowers. For years, some members of Congress have been urging a full repeal of the two provisions to give affected annuitants a full Social Security benefit amount. Advocates have said WEP and GPO are unfair to those who work in the public sector.

The Windfall Elimination Provision (WEP) originated in 1983, and it reduces Social Security benefits for anyone who receives an annuity from their time in government, but who also worked in a Social Security-covered job, typically a private sector position. WEP impacts roughly two million individuals, including employees in the Civil Service Retirement System (CSRS) who were hired to the federal government prior to 1984.

The Government Pension Offset (GPO) dates back to 1977, and impacts the Social Security benefits of the spouses, widows or widowers of any individual with a government pension. If two-thirds of a government pension is more than the value of the Social Security benefit, then the GPO can entirely eliminate a Social Security benefit.

Despite agreeing that the WEP and GPO formulas are outdated, a few witnesses at the subcommittee hearing said they still wanted to maintain what they said was equity between public and private sector workers.

“The WEP and GPO are necessary features in a system with Social Security’s basic design, but their current forms failed to achieve their intended purposes in large part because there are simplified approximations reflecting previous data limitations,” said Charles Blahous, a senior research strategist at George Mason University. “Appropriate reforms could result in greater parity.”

Bills such as the Equal Treatment of Public Servants Act and the Public Servants Protection and Fairness Act may provide the framework for reforming rather than repealing WEP and GPO. The two bills operate slightly differently, but either one would provide at least some relief to CSRS annuitants.

One option on the table to address WEP and GPO would adjust the current Social Security benefit formula. Specifically, it would change the formula to make proportional calculations based on workers’ earnings in Social Security-covered jobs, versus their total earnings in both covered and non-covered jobs. Current annuitants would also have their penalties reduced and receive rebates.

“Much good can come from a relatively straightforward change that would make the Social Security benefit proportional or prorated for workers with non-covered earnings,” Fichtner said.

For now, it’s unclear what exact language lawmakers will choose, should they decide to move forward with a reform rather than a full repeal of WEP and GPO.

And while expressing appreciation for the subcommittee hearing, Spanberger and Graves still said a full repeal of WEP and GPO will bring the most relief to those negatively affected.

“We have heard from tens of thousands of Americans who have been adversely impacted and impoverished by these harmful policies,” the lawmakers said in their letter to the committee. “These WEP [and] GPO victims have had their Social Security benefits unfairly reduced — and in some cases altogether eliminated — because they chose a life of public service. It is time to offer them a remedy.”

One main concern from opponents of a full repeal of WEP and GPO is the cost of the change. Some raised concerns that giving full Social Security benefits to CSRS annuitants and other public sector retirees would negatively impact the solvency of Social Security overall — or in other words, the ability to continue paying out benefits on time and in full to beneficiaries.

“There’s some back and forth on what the solution for Social Security going forward is, and what we need to do about that. That general debate is going to continue to be in the background and you can’t really separate a repeal of WEP and GPO from that,” NARFE Staff Vice President John Hatton said in an interview. “A lot of Congress members agree these are unfair provisions. But they probably don’t want to do this without some type of cost offset, because they don’t want to hurt the solvency of Social Security more. That’s going to be the challenge for us.”

NARFE, or the National Active and Retired Federal Employees Association, has been a long-time advocate of a full repeal of both WEP and GPO. Despite maintaining that stance, Hatton said in the short-term, any type of reform to the system would still be a step in the right direction.

“If we can get some progress, actually made and passed into law, we’ll take that as a win and keep on working on this issue going forward,” Hatton said. “We’ll continue to work towards repeal, but we will certainly take what we can get if there is a consensus that finds a compromise.”

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