TCTA participates in national summit examining the chances of Social Security Reform for Texas School Employees

The issue of reform or repeal of the Government Pension Offset (GPO) and the Windfall Elimination Provision (WEP) has been a hot topic for affected educators for years. A national summit on the two federal laws that reduce Social Security benefits for most Texas teachers took place in Washington, D.C., in March 2010. TCTA attended the meeting, which brought together advocates from all over the country, and participated in a panel discussing statewide association efforts to address the problem.

While in the nation’s capital, TCTA visited the offices of several members of the Texas congressional delegation, reinforcing our message that the GPO and WEP continue to cause serious problems for Texas school employees.

Presenters at the two-day summit, held in a meeting room at the U.S. Capitol, included national and state associations advocating for GPO/WEP reform, as well as three members of Congress (Sen. Kay Bailey Hutchison of Texas, Rep. Kevin Brady of Texas, and Rep. Aaron Schock of Illinois) and a staffer for Rep. Howard Berman of California. Hutchison and Brady have filed bills  to revise the calculation of the WEP, and Berman has filed legislation to completely repeal both the GPO and WEP. Staff from the Social Security Administration and the Government Accountability Office were also on hand to provide background information and statistics on the entitlement program and the impact of the two offsets.

Interestingly, Texas has an advantage over other states in mobilizing employees to advocate for reform in that, for the most part, our active teachers seem to be more educated about the effects of the GPO and WEP than those in other states. TCTA was surprised to learn from retiree associations in other states that the impetus for change comes almost exclusively from the retiree groups. The furor in Texas over the last-day exemption from the GPO, leading to the exemption’s repeal in 2004, contributed to informing and motivating Texas teachers on this issue.

Nearly all the presenters agreed on one point – while full repeal is a desirable goal, it simply is not going to happen in the near term. The cost of repeal and the focus of national leaders on other issues, such as the economy and health care reform, are enormous obstacles to the current legislation. The question is whether advocates should take an all-or-nothing approach, realizing that full repeal would come years from now (if ever), or be willing to look at lower-cost proposals such as the Hutchison/Brady bill that introduce more fairness into the current laws and provide a measure of relief, though benefits would still be reduced at a lesser level.

Summit takeaways

  • Millions of individuals across the country are affected by the WEP and GPO, particularly those public employees in the 15 states that did not make Social Security participation mandatory at all levels of government.
  • The cost of total repeal of the two provisions is estimated at between $60 and $100 billion over a 10-year period.
  • That high cost, and lawmakers’ focus on other crucial issues, makes progress on GPO/WEP repeal very unlikely in the near term.
  • Though the bills to repeal the GPO/WEP have numerous co-sponsors, some insiders believe that a significant number are “cosmetic” supporters who feel comfortable signing on to the bill because they know it won’t pass.
  • There is far more optimism for repeal or reform as part of a larger effort to reform the entire Social Security system, rather than as separate legislation. While this may not be on the immediate agenda of Congress, a commission charged with recommending strategies for reducing the national debt could bring attention to the GPO/WEP. The National Commission on Fiscal Responsibility and Reform, established by President Obama, will likely focus on growing debt caused by entitlement programs, including Social Security.
  • Legislation that proposes relief short of full repeal could have a greater chance of success in the near term. Summit participants were favorably impressed with Brady’s explanation of his legislation, and there was additional discussion about how the concept of using employees’ actual wages to calculate appropriate reductions might be used in place of the GPO as well. The cost of such legislation would be significantly lower.
  • Some lawmakers might propose mandatory Social Security participation for all employees as part of a solution, but most groups represented at the summit would oppose such a measure. Groups such as the Coalition to Preserve Retirement Security maintain that mandatory coverage would harm efforts to improve salaries and other benefits because of the additional costs for employers. (Both individuals and their employers would be required to contribute 6.2% of salary.)
  • Regardless of whether Congress is likely to address this issue soon, it is imperative that affected employees maintain contact with their congressional representatives to remind them that change is needed. (TCTA was reminded of the Texas state representative who once argued on the House floor that teachers must not need a salary increase, because he hadn’t heard from any teachers asking for one.)

The summit participants did not discuss strategy or detailed plans for a coordinated effort, although attendees expressed hope that additional meetings will be held to consider such issues. We would like to thank the Texas Retired Teachers Association for hosting the summit and inviting TCTA to participate, and also to express our appreciation to the other participants and attendees, especially the elected leaders and their staff who took time out of very busy schedules to meet with us.

TCTA looks forward to continuing to work with these advocates to find workable solutions to the problems that affect so many Texas educators.

The effects of the GPO and WEP

The Government Pension Offset (GPO) and the Windfall Elimination Provision (WEP) are federal laws that revise the payment of Social Security benefits to employees in a government position in which they do not participate in Social Security.

Because most Texas school districts do not participate in Social Security, hundreds of thousands of school employees are affected, with benefits sharply reduced or even eliminated. The laws also apply to other employees, including some police, firefighters and local government workers; and affect public employees in 14 other states as well (states that did not require mandatory participation in Social Security for government employees).

The GPO reduces or eliminates spousal benefits for Texas school employees who retire from a non-Social Security school district. The WEP reduces (never eliminates) benefits for a person who earned a pension in any job where he/she did not pay Social Security taxes and also worked in other jobs long enough to qualify for Social Security.