Social Security Administration announces cost-of-living increase for 2025
The Social Security Administration just announced how much more recipients will get in 2025 following its cost-of-living adjustment.
Scripps News
Public sector workers are heartened after Senate Majority Leader Chuck Schumer (D-NY) said he would bring a bill that could boost their Social Security benefits to a vote.
The bill to eliminate the Windfall Elimination Provision (WEP) and the Government Pension Offset (GPO) which reduce Social Security benefits for certain retirees who also receive pension income was passed last month by the House. The bill, or Social Security Fairness Act, has 62 co-sponsors, suggesting it has filibuster-proof support to also be approved by the Senate. Instead, it has languished there to the frustration of public sector workers, who rallied on Wednesday at the Capitol in the rain to demand Schumer bring the bill to a vote. If the bill doesn’t pass by yearend, it dies.
Together, WEP and GPO affect nearly 3 million Americans including police officers, firefighters, postal workers and public-school teachers.
Schumer briefly addressed the rally, telling them “I am here to tell you, we are going to call the vote.”
On Thursday morning, Schumer followed through, filing to close discussion on the Act to push it forward. He also told Senators they would vote next week.
How do WEP and GPO lower Social Security benefits?
- The Windfall Elimination Provision (WEP) reduces Social Security for those who receive so-called “non-covered” pension income from jobs, typically public sector roles, that didn’t contribute Social Security payroll taxes. The reduction can be significant – up to half the pension amount.
- The Government Pension Offset (GPO) reduces survivor or spousal benefits if a person’s pension is non-covered. GPO affects fewer people, but it cuts the Social Security benefit by two-thirds of the pension amount. If two-thirds of your government pension is more than your Social Security benefit, your benefit could be reduced to zero.
Schumer says Democrats are in. What about Republicans?
Schumer guaranteed that Democratic senators would keep their word and vote yes on the bill but told the crowd “We need 15 Republicans — let’s get them — and we’re going to have the vote.”
Senator Angus King (I-ME) echoed that sentiment last week to USA Today. He said he heard the bill doesn’t have enough votes to pass because Republican senators may have backed away.
The handful of Republican senators who responded last week to USA TODAY’s queries said they remained committed to the bill.
Hopeful but not taking any chances
Schumer’s comments give public sector retirees hope, but they’re not taking the bill’s passage for granted.
“I will be sending another request to all hundred senators to vote yes…when it comes to the floor vote,” said Susan Dixon, 68, a retired schoolteacher in San Clemente, California, and president of the California Retired Teachers Association. She traveled with a group to attend the rally in Washington D.C.
“I also am working with the National WEP GPO Task Force, and we are doing a constituent legislative alert,” she said after the rally.
Before the rally, a group of voters traveled from Massachusetts and distributed information on the GPO to every Senator’s office.
“They are getting a lot of information about WEP, which affects firefighters, police officers and teachers,” said Nadia Milleron, who was among the voters from Massachusetts. “But they are not getting very much information about GPO that affects very low-income public workers, mostly women. When their husband dies, they do not get any of his Social Security because they worked in the public sector. This is so, so sad and is putting people in desperate poverty.”
Is the Social Security Fairness Act fair?
The rules were intended to prevent Social Security from overpaying people who worked in non-covered pension jobs, policy experts said. People with earnings outside the Social Security system can look like low earners.
Since Social Security replaces a higher percentage of prior earnings for low-paid workers than for higher-paid workers, those who received healthy government salaries for decades would receive the same advantage in Social Security calculations as longtime low-income workers, proponents of the rules argued.
Many public sector retirees argue that in addition to their pension jobs, they worked private sector jobs. Social Security taxes were automatically subtracted from their private job paycheck, so they paid into the system and are entitled to receive their full Social Security benefits at retirement.
“I am not receiving the amount I earned from paying into Social Security,” said Barbara Mahaffey, 70, who lives in Chillicothe, Ohio. “I am not double dipping. This is a common misconception. Most public service (workers) needed to work two jobs to make ends meet over the past 50 years. Many of us worked in public service to help others…The WEP unfairly reduced my Social Security income.”
Most policy analysts agree something can be done to bolster Social Security for these workers, but the Social Security Fairness Act isn’t the answer.
Without offsets, the bipartisan nonprofit Committee for a Responsible Federal Budget said repealing WEP and GPO would cost $196 billion over the next decade, hasten Social Security’s insolvency by about six months and increase the automatic benefit cuts when they occur.
In November, the U.S. budget deficit swelled 17% to $366.8 billion from a year ago, taking the total for the first two months of the fiscal year more than 64% higher than the same period a year ago on an unadjusted basis, Treasury said.
Many research groups, including the Bipartisan Policy Center, which aims to represent ideas from both Republicans and Democrats, support replacing WEP with a “proportional formula” for Social Security, instead. This would allow retirees to receive Social Security benefits based on the fraction of earnings covered by Social Security, they said.
Bill “proponents make it seem that they’re trying to help struggling seniors, but the targeted beneficiaries are a broad group of mostly highly paid government retirees,” said Gary Brewer, 67, a retired accountant from Sacramento, California, who isn’t affected by WEP or GPO. “The reasoning behind them is fair and undeniable…If this largess simply came out of thin air, it would be less objectionable, but it will come out of the rapidly depleting Social Security Trust Fund.”
Medora Lee is a money, markets and personal finance reporter at USA TODAY. You can reach her at mjlee@usatoday.com and subscribe to our free Daily Money newsletter for personal finance tips and business news every Monday through Friday morning.
