Pending Legislation to Eliminate the WEP and GPO
Many people follow the Social Security Fairness Act (H.R. 82) in the federal community. If this becomes a law, it would repeal the Windfall Elimination Provision (WEP) and the Government Pension Offset (GPO). That would be in the economic interests of those who are negatively impacted by the current system.
Similar bills have been introduced over a number of years. The current effort may result in a vote on the bill going to the House floor. The House bill now has 304 co-sponsors. This means the bill is likely to pass in the House if it comes up for a floor vote.
Lobbying in Support of Legislation to Abolish WEP and GPO
In some articles on this topic, the WEP and GPO are called “evil twins.” That is a catchy title, and the moniker supports legislative efforts to eliminate the restrictions imposed by the laws at issue.
The issue has created confusion, consternation, and even anger among some federal employees and retirees. Here is what NARFE wrote about these bills and what they would accomplish:
There is overwhelming, bipartisan support to tackle these issues. There are now 303
House cosponsors for H.R. 82, the Social Security Fairness Act – the second most of any
bill in Congress – and another 50 cosponsors in the Senate. President Biden supported
elimination of these penalties on the 2020 campaign trail, and H.R. 82 has counted
Speaker Johnson among its supporters as well. For a policy with such wide-ranging and
broad support across the political spectrum to continually fail to be passed into law, or
even to receive a House floor vote, undermines trust in the claims of our representatives, and faith that our democracy truly works.
What Was the Purpose of the WEP and GPO?
Rather than just looking at one side of the issue, it is more helpful to understand the original rationale for the legislation and the arguments against it. This is why the two bills (GPO and WEP) were initially passed into law.
Government Pension Offset (GPO)
The GPO was passed in 1983 and designed to ensure individuals receiving government pensions from work not covered by Social Security (such as federal workers under the CSRS) did not receive spousal or survivor benefits exceeding what they would receive if they had earned a Social Security benefit through covered employment.
The GPO reduces spousal or survivor benefits by two-thirds of the government pension amount. The effect of this on the Social Security benefit to which you would be entitled on the earnings record of another person may be substantial.
Windfall Elimination Provision (WEP)
The WEP was also enacted in 1983 as part of the significant amendments for shoring up financing for the Social Security program. The purpose was to remove an unintended advantage or “windfall” that the regular Social Security benefit formula provided to workers who also had pensions from non-covered employment.
In other words, WEP was enacted to address situations where individuals receive both a pension from non-Social Security covered employment and Social Security benefits from covered employment. This can result in a person receiving larger benefits than what a worker with similar total lifetime earnings solely from covered employment would receive.
WEP adjusts the Social Security benefit formula for individuals with pensions from non-covered employment, resulting in a lower, sometimes a much lower, Social Security benefit than they would receive without the pension.
This Social Security calculator may help some readers determine the WEP’s financial impact on retirement income.
Effects of the WEP and GPO
The WEP and GPO are two provisions of the Social Security law affecting Social Security benefits for some CSRS retirees. The WEP can apply to CSRS Offset and FERS Transferee retirees as well.
These two provisions were introduced in the 1980s to strengthen the Social Security system. Unions and public employee advocates in Congress have worked to repeal or revise them since the bills were passed.
The GPO does not apply to CSRS Offset and FERS Transferees once they have worked under CSRS Offset or FERS for five years.
Like many other retirement rules and regulations, the Windfall Elimination Provision and the Government Pension Offset are confusing. Consider the titles of these programs:
- The Windfall Elimination does not eliminate a Social Security benefit to which you are entitled on your own earnings record. It will usually drastically reduce the benefit.
- The Government Pension Offset’s offset of any Social Security benefit to which you would be entitled on the earnings record of another may eliminate this benefit.
These provisions can impact FERS and CSRS employees to some extent. They apply to anyone who has earned pension benefits based on work not covered by Social Security. This includes CSRS Offset employees and FERS employees who transferred from CSRS after having five years of civilian service (enough to entitle them to a CSRS retirement benefit).
Arguments Against Repeal
While arguments against the repeal of the GPO and WEP are often lost in lobbying efforts, there are several arguments against repeal.
The first concern is the cost. Critics contend that eliminating the GPO and WEP increases the financial burden on the Social Security system, potentially damaging its long-term strength.
Estimating the cost of eliminating complex government programs is difficult and subject to manipulation to accomplish a political goal. Nevertheless, one estimate of the cost of repealing this legislation is $8 to $10 billion per year or $100 billion over ten years. The Committee for Social Security Fairness, an organization of “active and retired public servants of all professions, working to repeal the GPO and WEP” estimates that eliminating these existing programs would cost $8 to $10 billion per year.
The second concern is expressed as issues of equity and fairness. Opponents argue that GPO and WEP were implemented to ensure fairness in benefit distribution, including those at lower income levels. Eliminating these provisions could result in a less equitable distribution of benefits for those with lower income levels.
Third is the potential impact on other social programs by putting a financial burden on the Social Security System. These are concerns about the broader impact of H.R. 82 on other social programs, as changes to Social Security policies can have cascading effects on related programs and government finances.
What Will Happen to the Social Security Fairness Act?
Predicting what will happen to a bill in Congress is often as futile as predicting future stock market moves. While optimistic predictions may lead readers to think there is an excellent chance of repeal, that may not be the case.
While the number of co-sponsors for passage in the House is significant, GovTrack does not give the bill a big chance for success. It estimates an 8% chance of the bill being voted out of committee and a 4% chance of being passed into law. Part of the negativity in the potential for success is that “Only 11% of bills made it past committee, and only about 2% were enacted in 2021–2023.”
FedSmith looks forward to keeping readers up-to-date with significant events on this issue as they occur.