Written by Bo Erickson
WASHINGTON (Reuters) – The U.S. Congress early on Saturday approved a measure to boost Social Security retirement payments for some retirees who receive public pensions – such as former police and firefighters – which critics warned would further weaken the program’s finances.
The Senate on a bipartisan vote of 76-20 shortly after midnight approved the Social Security Fairness Act, which would repeal two decades-old provisions that could reduce benefits for people who also receive a pension.
Trusted news and daily delights, straight to your inbox
See for yourself – The Yodel is your go-to source for daily news, entertainment, and feel-good stories.
Last month, the House of Representatives approved the bill by a vote of 327 to 75, meaning that Senate approval sends it to Democratic President Joe Biden to sign it into law. The White House did not immediately respond to a question about whether Biden intends to do so.
The bill would repeal a decades-old change in the program that was made to limit federal benefits for some higher-income workers who have pensions. Over time, increasing numbers of municipal employees such as firefighters and postal workers also saw their payments capped.
Most Americans do not participate in retirement plans, which pay defined benefits, relying instead on money they can save and Social Security. Only one in ten private-sector workers in the United States has pension plans, according to Labor Department data.
The new provisions affect about 3% of Social Security beneficiaries — just over 2.5 million Americans — and the workers and retirees affected by these provisions constitute key constituencies for lawmakers and their powerful advocacy groups have pushed for legislative reform.
Some of them could receive hundreds of additional dollars a month in federal benefits as a result of the bill, retirement experts said.
Some federal budget experts have warned that the change could hurt the program’s already fragile finances, with the bill costing about $196 billion over the next decade, according to an analysis by the nonpartisan Congressional Budget Office.
“The fact that there is such overwhelming support in Congress for reversing what policy scholars agree is very disappointing,” Emerson Sprick, associate director for economic policy at the Bipartisan Policy Center, said in an interview.
Instead of eliminating existing formulas for determining retirement benefits for these workers, the revisions were introduced, as well as more precise communication from the Social Security Administration about how much money public sector employees should expect.
The Committee for a Responsible Federal Budget, a nonpartisan financial think tank, also warns that the additional cost will impact the future of the program.
“We are racing toward our financial demise,” the group’s president, Maya McGuinius, said in a statement.
“It is truly astonishing that at a time when we are only nine years away from completely exhausting the trust fund for the nation’s largest program, lawmakers are on the verge of considering accelerating that by six months.”
Republican Senator Ted Cruz said on the Senate floor on Wednesday that the bill as written would “throw Grandma into the abyss.”
“Every senator who votes to impose a $200 billion cost on Social Security, you are choosing to sacrifice the interests of seniors who paid into Social Security and who received those benefits,” he said.
Supporters of the bill said the future of Social Security could be addressed at a later date.
In response to a question about the repercussions of this legislation on financial solvency, Senator Michael Bennet, one of the bill’s supporters, told Reuters: “These are much longer-term issues and we have to find a way to address them together.”
(Editing by Stephen Coates)
