Full Social Security benefits for government employees unlikely
August 21, 2022
A crusade that has been simmering for 50 years is finally coming to an end, and it is likely to affect many older people on Cape Cod.
I get a magazine called The Voice, a publication for federal, state, and local government retirees. In the current issue, they admit that the decades-long struggle to end the provision for eliminating windfall benefits in Social Security can be reformed, but not eliminated. And then is the WEP exactly?
Let’s go back to 1982 for an answer.
Social Security was in danger of failing. It urgently and quickly needed more money. This was perhaps the first warning that modern medicine and increased longevity were making the program unsustainable — many beneficiaries used to live not much past 65, but as longevity grew, the system had to pay out more and more. It therefore became necessary to raise more money to meet that obligation (the deficit expenditure was viewed differently at the time).
But a big pot of money was immediately available – federal, state and local government employees. U.S. Representative Dan Rostenkowski, D-Chicago, chaired the powerful House Ways and Means Committee, and he realized that none of these systems contributed to Social Security. In 1983, he was the architect of the laws that made government employees part of the social security system.
You would think they were led to the stake and burned. I was working in a federal agency when the law was passed. Managers offered wage loans to those who were weighed down by the sudden extra payment of the employee’s share of Social Security. But we have all muddled through and there have been no bankruptcies.
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But the federal government couldn’t force states to participate, let alone municipalities, so Rostenkowski found himself a stick. If your government job didn’t pay for Social Security, the amount of Social Security you received is reduced by compensation. It didn’t matter at all for millions of government retirees who received their pensions, but for those who worked in the public and private sectors and cashed both, it was different. You were and are disadvantaged with regard to your social security by having your pension set off against a deduction. Eventually, states gave in and started collecting Social Security from their employees, and the addition of millions of contributors did much to save the system from potential bankruptcy.
Right now there are only about half a dozen holdouts. Guess who one of them is.
Massachusetts Still Doesn’t Collect Social Security Taxes of state and local government employees, so all government retirees here are subject to the compensation. This has been called evil for decades, to have the money you made on which you paid Social Security taxesreduced because you also have a pension from a non-participating state. I’ve always wondered if the problem is Massachusetts doesn’t want to pay the employer’s share. But whatever the reason, Massachusetts retirees have lowered their checks.
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This has been a holy grail for the Massachusetts Retirees Association for all these decades. Every year we heard the good news that the WEP would be revoked. This time Senator Ted Kennedy filed the repeal bill, they would say. Okay, so nothing happened, but now that Senator John Kerry was personally involved, well… nothing happened.
In recent years, there may have been another unholy alliance. One of the other states holding out is Texas, and there isn’t much legislation that has been jointly introduced by U.S. Senators Ed Markey and Elizabeth Warren and their Texas counterparts. But regardless of the prestige of the submitting senators, there was one inescapable fact: You had to convince more than 40 other senators that we were special enough not to be penalized for failing to fund an obligation their voters did. There was a brief opening when the Texas teachers’ union got actively involved during the Obama years, but again it came to nothing.
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And now the Massachusetts Retirees magazine has said in an editorial: The bill is a dead end. As the editors say, “Will we continue to chase rainbows in support of full repeal of legislation that has no viable path to become law or will we choose to focus on passing WEP reform legislation, which does have a realistic path to law? to be in 2022?”
A full withdrawal would allow a retiree to collect both their government benefits and the full Social Security benefits they have paid. Reform legislation could or could allow a comparable retiree to receive a larger Social Security benefit than is currently the case.
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Significantly, the organization representing these retirees is now saying that the repeal will never happen, so let’s reform it.
So a “hackarama” dream has died and will be replaced by a possible compromise. Of course we could join the other 40-plus states that: to do collect social security from employees’ wages, but that could mean that the state would have to pay an employer’s share. But for all my fellow retirees, we get that half a loaf of bread and that’s always better than none.
Cynthia Stead is a columnist for the Cape Cod Times and can be reached at [email protected]