The Social Security Subcommittee of the House Ways and Means Committee held a hearing Tuesday, March 22, 2016, in Washington, D.C., to discuss the adverse effects of federal law on more than a million public employees, including Texas school employees, who are eligible for a government pension such as TRS through a job in which they do not pay into Social Security. (Read an explanation of current federal provisions here.) No action was taken, but the committee was receptive to a proposal that would change how benefits are calculated for employees who have previous Social Security participation.

Ways and Means Chair Kevin Brady (R-Texas) and Massachusetts Congressman Richard Neal have authored HR 711, which would provide a more fair, less arbitrary calculation of benefits for employees currently subject to the Windfall Elimination Provision (WEP), and that bill was the main topic of conversation. Though most affected employees would prefer to see a full repeal of both the WEP (which penalizes employees who have earned Social Security benefits through other employment) and the Government Pension Offset (GPO, which affects spousal benefits), repeal would be expensive to the Social Security plan; repealing the WEP alone is estimated to cost $40 billion over a 10-year period.

HR 711 would be funded through the recalculation of benefits. While 84 percent of current retirees for whom benefits would be recalculated would see an increase by an average of $77 per month, some would instead see a reduction. Social Security Administration staff estimated that around 15 million employees who should be subject to the WEP are instead receiving full benefits and approximately 14 million of them would see a reduction in their current monthly Social Security check (by an average of $27; some as little as $3) if the bill were to pass. Around 16 percent of the 1.5 million workers currently subject to the WEP would actually be penalized more under HR 711, seeing a reduction in their monthly check averaging $13. (For those who like to dig into the numbers, the testimony of the Social Security Administration’s Chief Actuary is available here.)

Staff witnesses and legislators noted that President Barack Obama included a similar provision in his recent budget proposal but that his would not go into effect until 2027; Brady’s HR 711 would begin in 2017.

TCTA continues to express our members’ support for full repeal, but we believe that HR 711 is a reasonable and beneficial way to address current inequities. The public comment period for this hearing is open through April 5, and interested members can express your opinions by following the committee guidelines here.

A timeline for future action is not yet available, but TCTA will keep our members informed on this important legislation.