The future of Social Security is on the minds of many this week, and that was made clear as Sen. Bill Cassidy held his weekly call with reporters across our state.
KATC was on that Zoom call as Cassidy addressed the topic of the Social Security Fairness Act — something he is known to be in favor of — and something opponents fear could speed up the insolvency of Social Security as a whole.
According to the senator, the Social Security Trust Fund will be broke in nine years, leading to a 23 percent cut in benefits for every current and future retiree. Not only that, but Cassidy argues that a need for reform is great, since around 10,000 Baby Boomers become SSI eligible every day and when Social Security started, the average lifespan was 62 — a number that has now increased to almost 80.
When asked about the fairness act and his views on the need for reformation, the senator specifically referenced the era of Former President Bill Clinton and Former Speaker Newt Gingrich.
"They balanced the federal budget, but they did it creating unfair penalties for those who worked in state and local government participating in those pension plans but did not pay into Social Security," he said. "There should be a little bit of a ding, an appropriate ding on how much you get if half your work life you didn't pay into Social, but the ding they're getting, the penalty they're getting, is far in excess of what they should be getting."
Cassidy mentioned the need to eliminate measures like the Windfall Elimination Provision (WEP) and the Government Pension Offset (GPO), which he considers outdated and unfair to thousands of Americans who are penalized for having jobs exempt from Social Security, such as government workers or teachers in Louisiana and 14 other states across our country:
- Alaska
- California
- Colorado
- Connecticut
- Georgia
- Illinois
- Kentucky
- Maine
- Massachusetts
- Missouri
- Nevada
- Ohio
- Rhode Island
- Texas
Both the WEP and GPO could negatively affect how much money you'll receive in retirement and your Social Security checks may be a lot less than you expect because of this.
According to Forbes, those who worked in a government job before 1983 and did not pay FICA taxes were originally undetected by the Social Security Administration as working such a job, meaning that many received benefits that were not aligned with what they were working, leading to what some may call "double-dipping."
The WEP and GPO were meant to help fix this problem and increase fairness, but overall, these measures are found to be confusing and often breezed past by most, even financial experts.
The WEP offset can be an issue for those who have a career path spanning both the public and private sectors, or for those who have a job history involving work at a state or government agency that is pension-eligible and a non-state or government agency that requires employees to make SSI payments.
For more information on the WEP and GPO offsets, the Social Security Administration has fact sheets you can refer to. Here is the WEP fact sheet and here is the GPO fact sheet.
Forbes reports that the GPO specifically is of greatest concern when it comes to government offsets, as it will affect Social Security recipients and their spouses if someone became eligible for a government pension at a certain point in their work life and didn't contribute to Social Security.
Sen. Cassidy said the question at hand when it comes to the Social Security Fairness Act is less about policy and more about paying for it. He told reporters that the bill has a greater chance of passing Congress if a way to offset the spending is found, as it is expensive.
"I don't think you have to pay for an unfairness to be corrected," Cassidy remarked.
If that is the case, however, the senator says they will repeal and find a way to pay for that correction to be made. According to Cassidy, the SSI reform bill he and his colleagues are working on doesn't raise taxes or increase retirement age, but has an investment fund separate from benefits to pay for all reforms as an overall package, rescuing the average American from insolvency.
To detect whether your benefits could currently be impacted by these offsets, you can visit the Social Security Administration's website for WEP and GPO calculators and more.
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