Might the Social Security Fairness Act still pass this year?

Like many Americans, Congress has a habit of not thinking about retirement until the last minute. This year, in the final days of 2024, the Senate is weighing whether to pass the Social Security Fairness Act.

The bill has been around a long time. In its current form, the SSFA was introduced in January 2023. But even before that, versions of the legislation have been proposed since the early 1980s — the last time Congress enacted major reforms to Social Security. In November 2024, the bill finally passed the House of Representatives, leaving its fate up to the Senate.

What's in the bill? The SSFA would repeal two pieces of the Reagan-era reforms: the Windfall Elimination Provision (WEP) and the Government Pension Offset (GPO). Designed to shore up Social Security's finances, both measures cut benefits for certain retirees — without justification, according to critics.

"Ever since it was first passed, it was considered one of the most unfair provisions of the 1983 reforms," said Mary Johnson, a Social Security analyst formerly at The Senior Citizens League. "I have been writing about it for 30 years, and there was legislation all the way along that would repeal this."

Specifically, the WEP and GPO rules affect public-sector workers. Many government employees have access to generous pensions and don't pay Social Security payroll taxes. WEP reduces the benefits for such workers, on the grounds that they have less need for Social Security — and they didn't pay for it.

Similarly, the GPO rule affects such workers' spouses. Social Security typically pays out a percentage of a retiree's benefits to their spouse — but under GPO, that benefit is reduced if the spouse has a government pension.

What makes this complicated is that in today's economy, Americans change jobs all the time. Public-sector workers may work part-time in the private sector — for example, a public school teacher may take a summer job — or even change careers entirely and spend years working for a private company. 

At these private-sector jobs, such workers pay Social Security taxes just like anyone else — but whether they know it or not, WEP and GPO will one day reduce or even eliminate their benefits.

"This problem is affecting people like teachers, firefighters, police, anybody who has worked in government," Johnson said. "Their benefits should not be cut. It penalizes people for hard work."

As the SSFA winds its way through the Senate, this is the argument made by its supporters — who, unusually, belong to both parties. Though the bill promotes additional spending on Social Security — not usually a GOP priority — it also benefits firefighters and police, who often vote Republican.

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"Across the United States, millions of public servants find that their Social Security benefits are cut through no fault of their own," wrote senators Sherrod Brown, Democrat of Ohio, and Susan Collins, Republican of Maine. "These workers have dedicated their lives to serving our communities, and this small fix can help give them the peace of mind that the Social Security benefits they earned through covered employment will be there for them and their families when they retire."

The bill's critics, meanwhile, say the WEP and GPO rules are important cost cutters — after all, Social Security's finances are in precarious shape — and those who feel cheated by them could just be misunderstanding the program. 

One of those critics is Andrew Biggs, a senior fellow at the conservative think tank American Enterprise Institute. To him, claiming both Social Security and a government pension is a form of "double dipping."

"Of course, nobody likes the idea that their Social Security benefits can be cut," said Biggs. "I don't blame them for wanting more money, but where they're incorrect is this idea that they are being treated unfairly — and they're not."

The problem, Biggs said, is Social Security's benefit formula. To determine a person's income, the program takes the yearly average of their highest 35 years of earnings. But if that person has worked in the private sector — and, therefore, paid Social Security taxes — for only 10 years, the program takes that decade of earnings and divides it by 35.

As a result, as Biggs wrote in one of his columns, certain public sector workers "look poor even though they're not." And Social Security pays disproportionately generous benefits to those who live in poverty.

"Social Security is a mix of a welfare program for the poor and a forced savings program for everybody else," Biggs said. "These public-sector employees are benefiting from that welfare component, even though they are not poor themselves."

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In Biggs' view, the Social Security "Fairness" Act (he adds the quotes) is "a $200 billion giveaway to people who neither paid for these benefits nor need them." Such public-and private-sector workers may feel mistreated, he said — but they're wrong.

"They legitimately feel that they're being cheated because they don't understand what's happening," Biggs said. "At the same time, though, policymakers shouldn't give in to that."

The Congressional Budget Office has estimated that simply eliminating the WEP and GPO rules, as the SSFA would do, would raise the federal deficit by about $196 billion over the next 10 years. Instead, Biggs hopes Congress will consider other bills that close the same loopholes at less expense to the public.

Johnson, meanwhile, hopes the Senate will pass the SSFA. 

"I'm very much in favor of it," she said. "If you pay into Social Security … why shouldn't you receive your full benefit?"