The Congressional Research Service recently summarized bills targeting the windfall elimination provision and government pension offset provisions at a recent House hearing on Social Security.

 Proposals to Repeal or Alter the WEP or GPO

Eight bills have been introduced in the 110th Congress that would repeal or alter the WEP or GPO. Of these, two bills (H.R. 82 and S. 206) would eliminate both the WEP and GPO. H.R. 82 was introduced by Representative Howard Berman and S. 206, the companion bill, was introduced by Senator Dianne Feinstein. Under these bills, no Social Security benefits paid after December 2007 would be reduced by the WEP. The Social Security Administration (SSA) estimates that full repeal of the WEP would increase benefit payments by $40.1 billion between 2008 and 2017, or 0.05% of taxable payroll over 75 years (causing an increase in Social Security’s long-range deficit of about 2.5%). These bills would also eliminate the GPO for Social Security benefits payable after December 2007. According to estimates provided by SSA, elimination of the GPO would increase benefit payments by $41.7 billion between 2008 and 2017, and in the long run would cost 0.06% of taxable payroll, which would increase Social Security’s long-range deficit by about 3%.

The combined effect of eliminating both the WEP and the GPO would cost approximately $80 billion over a 10-year period, cost 0.11% of taxable payroll over 75 years and increase Social Security’s long-range deficit by about 5.6%. These estimates and those that follow for each bill are based on the intermediate assumptions of the 2007 Social Security Trustees Report and assume each bill is effective for benefits after December 31, 2007.

WEP Only.

SSA estimates that this bill would increase benefit payments by $19 billion between 2008 and 2017, or 0.02% of taxable payroll over 75 years (causing an increase in Social Security’s long-range deficit of about 1%).

Representative Kevin Brady and Senator Kay Bailey Hutchison introduced H.R. 2772 and S. 1674, the Public Servant Retirement Protection Act of 2007 (PSRPA). These identical bills would alter the current-law WEP formula for those who first enter non-Social Security-covered employment one year after the bill’s enactment. The PSRPA would maintain the current-law WEP for workers who have worked in non-covered employment prior to this date except in cases where the PSRPA WEP provides them with a higher benefit. The bills would replace the current-law WEP formula with a new WEP formula that provides a benefit in rough proportion to the percentage of earnings worked in Social Security-covered employment. SSA estimates that this bill would increase benefit payments by $4.6 billion between 2008 and 2017, or 0.01% of taxable payroll over 75 years (causing an increase in Social Security’s long-range deficit of about 0.5%).

GPO Only.

Representative Albert Wynn and Senator Barbara Mikulski introduced H.R. 2988 and S.1254. These bills would limit the GPO reduction to the lesser of current law or two-thirds of the amount by which the combined non-covered pension and Social Security benefit exceeds $1,200, indexed for inflation after 2008. These bills would increase benefit payments by $6.1 billion between 2008 and 2017 and would have a negligible effect on the long-range actuarial balance.
In the 110th Congress, three bills have been introduced that would alter only the GPO. H.R. 1090, introduced by Representative Ron Lewis, would, among other things, reduce the offset to one-third of the government pension. SSA estimates that reducing the offset from twothirds to one-third of the government pension would cost approximately $11 billion between 2008 and 2017, or 0.02% of taxable payroll over 75 years (causing an increase in Social Security’s longrange deficit of about 1%).In the 110th Congress, three bills have been introduced to repeal or alter only the WEP. H.R. 726, introduced by Representative Barney Frank, would eliminate the WEP for those whose combined monthly income from Social Security and the non-covered pension was less than $2,500 in 2007 and indexed annually to the national average wage. The bill would gradually phase in the provision for those who have a combined monthly income between $2,500 and $3,335. For those with combined monthly incomes exceeding $3,335, the WEP would remain fully applicable.