Higher Social Security payments coming for millions of people from bill that Biden is signing

Article content

WASHINGTON (AP) — President Joe Biden on Sunday plans to sign a law that boosts Social Security payments to current and former government employees, affecting nearly 3 million people who receive pensions from their time as teachers, firefighters, police officers and others. Public service jobs.

Article content

Article content

Advocates say the Social Security Fairness Act corrects decades-long disparities, though it will put a strain on Social Security trust funds, which face a looming bankruptcy crisis.

Article content

The bill eliminates two provisions — the windfall elimination provision and the state pension offset — that limit beneficiaries’ Social Security benefits if they receive retirement payments from other sources, including public retirement programs from state or local government.

The Congressional Research Service estimated that in December 2023, there were 745,679 people, about 1% of all Social Security beneficiaries, who had their benefits reduced by the government pension offset. About 2.1 million people, or about 3% of all beneficiaries, were affected by the requirement to eliminate windfalls.

The Congressional Budget Office estimated in September that eliminating the windfall elimination provision would boost monthly payments to affected beneficiaries by an average of $360 by December 2025. Ending the government pension offset would increase monthly benefits in December 2025, with an average of $700 for 380,000 beneficiaries. Benefits are received based on surviving spouses, according to the Congressional Budget Office. The increase would average $1,190 for the 390,000 surviving spouses receiving the widow or widower’s benefit.

Article content

Article content

These amounts will increase over time with regular cost of living adjustments made by Social Security.

The change concerns payments from January 2024 onward, meaning the Social Security Administration will owe back payments. The measure passed by Congress states that the Social Security Commissioner “shall adjust basic insurance amounts to the extent necessary to account for” changes in the law. It’s not immediately clear how this will happen or whether affected people will have to take any action.

Edward Kelly, president of the International Association of Fire Fighters, said firefighters across the country were “excited to see change – we have righted a 40-year-old wrong.” The policy was “far more egregious for the surviving spouses of firefighters who paid their own shares into Social Security but were victimized by the state retirement system,” Kelly said.

FIFA has approximately 320,000 members, which does not include hundreds of thousands of retirees who will benefit from the change.

“Now firefighters who are paid very little can actually retire,” Kelly said.

Article content

Sherrod Brown, an Ohio senator who pushed for this proposal for years, lost his re-election bid in November. Lee Saunders, president of the American Federation of State, County and Municipal Labor, thanked Brown for the invitation.

“More than two million public service workers will finally have access to the Social Security benefits they have spent their careers paying for,” Saunders said in a statement. “Many will finally be able to enjoy retirement after a lifetime of service.”

National Education Association President Becky Pringle said the law is “a historic victory that will improve the lives of teachers, first responders, postal workers and others who dedicate their lives to public service in their communities.”

While some Republicans, such as Maine Sen. Susan Collins, supported the legislation, others, including Sens. John Thune of South Dakota, Rand Paul of Kentucky, and Thom Tillis of North Carolina, voted against it. “We caved to the pressures of the moment rather than doing this on a sustainable basis,” Tillis told The Associated Press last month.

Article content

However, Republican supporters of the bill said there was a rare opportunity to address what they called an unfair section of federal law that hurts public service retirees.

The future of Social Security has become a major political issue and was a major point of contention in the 2024 election. About 72.5 million people, including retirees, the disabled and children, receive Social Security benefits.

Policy changes from the new law will increase administrative work for the Social Security Administration, which is already at its lowest staffing level in decades. The agency, which is currently under a hiring freeze, has about 56,645 employees — its lowest level in more than 50 years even as it serves more people than ever before.

The Social Security and Medicare trustees’ annual report released last May said the program’s trust fund would not be able to pay full benefits starting in 2035. The new law would speed up the program’s insolvency date by about half a year. ___

Associated Press writer Stephen Groves contributed to this report.

Article content