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Hearing of the Senate Committee on Finance's Subcommittee on Social Security, Pensions, and Family Policy- Pension Offset and Windfall Elimination...


Location: Washington, DC

Hearing of the Senate Committee on Finance's Subcommittee on Social Security, Pensions, and Family Policy- Pension Offset and Windfall Elimination...

SEN. KERRY: (Sounds gavel.) This hearing will come to order, though I've never seen such an orderly group without being asked to be orderly. (Laughter.) So thank you; you make my job useless -- almost.

Senator Collins, thanks for being here. We really appreciate it. I'm going to get to your testimony very quickly here. Let me just make a couple of opening comments if I may.

This morning earlier Senator Collins and I joined together with a number of folks to underscore the importance of this hearing and this issue, more importantly, and now we are formally at this hearing going to have an opportunity to hear from workers who are not covered by the Social Security system.

That probably comes as a surprise to some people in America. I think some of our colleagues even are not completely aware of the anomaly and how it works. But for many of my constituents and those in at least 15 other states -- and in every state; every state has employees who are in one way or the other affected, but not everybody's focused on it. Now, I've personally heard from SEIU workers, from the firefighters, police officers, teachers, different chapters of AFSCME, Mass Retirees, others, and we keep hearing these stories, very personal stories of individuals, of families of public servants who are being unfairly penalized and don't receive the benefits that they believe that they have earned and that they know they have well earned over the course of a lifetime of hard work in public service.

The windfall elimination provision and the government pensions offset affects a small percentage of retired workers who are drawing benefits, but it's in the millions and all you need to do is be one of those millions to have a situation that is frankly intolerable.

Let me give a little bit of background to this if I can so the record is clear here. And let me just say a word about the record. There are a lot of folks who wanted to testify, and we are limited both by the rules as well as by the time frame in how many people are able to do so. But I want to invite groups that have an interest in this, one way or the other, to make their comments and observations part of the record, and we will leave the record open for two weeks in order that people may be able to submit that testimony in full.

But around 96 percent of all the workers in America are covered by Social Security. Every state in the union is home to some public employees who are not covered by Social Security, mostly government employees at the state, local and federal levels.

The details of their relationships to the pension system and Social Security vary from state to state, but nationwide, 29 percent of state and local workers are not covered. That's a pretty hefty percentage of our state and local workers, and most federal workers who were hired before 1984. Overall there are about 6.8 million state and local workers participating in public pension plans who are not covered by Social Security. In my home state of Massachusetts, for instance, we have more non-covered workers than most: 97 percent of state and local workers are not covered.

However, these public employees aren't totally outside of the system. There are provisions of Social Security that affect them, because they have a spouse contributing to the Social Security system or because they've worked in a position covered by Social Security at some point in their careers.

The government offset provision reduces benefits for the spouse of a person receiving a government pension, and it was enacted to mirror the dual-entitlement rules of the Social Security system. In order to reduce a spousal benefit for those who in theory -- I underscore in theory -- don't need it because they receive their own benefit.

The windfall elimination provision was designed to remove an unintended advantage in the Social Security benefit formula for some people receiving a government pension. But the reality is it causes hardworking people to lose a significant portion of the benefits that they earned in return for a lifetime of hard work in public service, and that's not fair.

These provisions often leave individuals with less of a benefit than they have counted on for retirement. Now, I agree with House Ways and Means Chairman Rangel that the windfall elimination provision and the government pension offsets are, what he termed, blunt instruments. These provisions often treat public-sector employees worse than private-sector employees. And most troubling of all, at a time when we need the service of people in the public sector the most, it frankly discourages teachers and firemen and others from staying in public service.

So I'm pleased that we have a compelling panel of witnesses to discuss these provisions and their impact. We will hear, as we did earlier this morning, from my constituent Peggy Kane, who taught English for 35 years at Medford High School, and she'll discuss how the government pension offset has affected and impacts her retirement, which is a very similar experience to many other retired public service employees and not just teachers but also police and firefighters and state and local government employees.

Another group heavily impacted by these provisions are the postal employees. The former postmaster of Framingham, Massachusetts is not allowed to receive a Social Security survivor benefit because of the benefits she gets from the Postal Service, but in the result, her ability to take care of her ill husband, who is a Social Security beneficiary, is impacted. She's the primary caretaker, and her spousal benefits are unfairly reduced by that government offset provision. That's one of many of 1.6 million federal retirees who are impacted by those provisions.

We're also going to hear from Priya Mathur, an elected member of the Board of Administration of the California Public Employees Retirement System and a member of AFSCME, which is the largest union for workers in public service. And as I mentioned earlier, I wish we could have all of those service industries represented here, but I think they will be well represented by the folks who are testifying.

And we're going to start this afternoon with testimony from Senator Collins, who, together with Senator Feinstein -- who could not be here, but whose statement will be placed in the record as if delivered in full -- they have together developed legislation which I'm pleased to be a co-sponsor of to repeal these two provisions.

So I hope we can use this hearing to lay the groundwork of understanding for our colleagues and the record that is appropriate to the Congress to be able to understand why it's imperative for us to move forward with this. Those who are affected by these provisions that have unintended consequences are people that frankly we need to value the most in our society. None of our communities can work without them. We won't have community without them. The word community without teachers and police officers and firefighters just doesn't work.

So it's important to guarantee that we attract people to a career that, from the moment you make the choice to enter it, you know you're not going to be hitting the jackpots that are hit on Wall Street and a lot of other places, but you know you've chosen a different path to contribute, and that needs to be valued and honored appropriately by the laws that we put in place. And that's what this hearing is really all about.

Senator Collins, thanks for being here.


SEN. KERRY: Well, thank you, Mr. Thompson. That's a helpful way to lead into the question period here.

Ms. Mathur, I saw you writing some notes down while he was talking, so I think you want to comment.

MS. MATHUR: I was seriously writing down notes. And I think a couple of things that Mr. Thompson mentioned that I would like to respond to: one is that benefits end up being larger than intended for public employees under -- if there isn't an adjustment. I think that again assumes that public employees are high-wage workers. We have a lot of workers who are actually low-wage workers; people who work in school districts often are very low-wage workers, and so I think that's one issue that --

SEN. KERRY: But don't you think that the way he framed it in terms of either the credits or accountability, you'd look at the overall package and then measure the redistribution issue?

MS. MATHUR: The other point I wanted to bring up, actually, is about -- that it's not just about the benefits, it's also about what the employees are contributing. Public sector workers contribute much more into their public sector pensions -- their public pensions -- than private sector workers. In fact, private sector workers generally don't contribute anything at all to their private defined benefit pensions. You have to account for the contributions as well.

SEN. KERRY: Mr. Thompson, what about this question of -- let me come back to -- you talked about the redistribution issue, which is an important component of Social Security. I mean, we've attempted to try to make it progressive. How do you -- Ms. Mathur or Ms. Bovbjerg, how do you gain that in melding these two without actually requiring people that say you leave out the choice of going into Social Security system but you want to try to get credit and have a fair balance here? How do you deal with the redistribution issue? Any ideas?

Ms. Bovbjerg, do you want to tackle that or not?

MS. BOVBJERG: Well, I think that --

SEN. KERRY: In other words, what Mr. Thompson is saying: Look, we've got 30 percent of our employees who are not, around the country, paying into the Social Security system. The Social Security system is attempting to adjust for levels of income, and if they're not taken into account, they're not part of that redistribution at all.

So I think he's trying to get at, you know, if you're going to have part of the balance, you've got to have the whole balance. Am I correct, Mr. Thompson?


SEN. KERRY: So how do you do that, in your judgment? What do you think about this idea of the credits or measuring the whole thing as a first step towards moving towards an integration, if you will?

MS. BOVBJERG: I think it's an interesting idea. I mean, I think that the GPO and the WEP, as Larry says, is really rough justice. And, you know, as a recent report in the Congressional Research Service points out, sometimes the WEP disadvantages higher-income workers and advantages lower income, and it's not exactly accurate.

There are ways to think about --

SEN. KERRY: Is there a way to make it accurate? Could we get a better reflection of what the reality of income levels and contributions are?

MS. BOVBJERG: Hypothetically, yes. Could you administer it? That's the question. And I think that's the question I would ask about the credits. I think it's a really interesting idea that there's examination.

SEN. KERRY: Mr. Thompson, I assume you'd agree that if somebody's working in the family job for a lifetime and they're paying X amount of dollars into Social Security system and their partner, husband, wife, spouse is, you know, a local employee, then, you know, is retiring, then they'd die ahead of them, there ought to be some way of having that fair expectation about the transfer of that fruits of that labor over that period of time. It shouldn't be this rough justice of sort of an automatic two-thirds arbitrary cutoff and boom, off you go, which has no relationship to what their need may be or their real-life situation, as we've heard from Ms. Kane and others.

MR. THOMPSON: Yeah, let's be careful using the word fair in this conversation.

What these provisions are trying to do is make the -- is reproduce the result that would occur if they were covered by Social Security. And that means they're trying to reproduce the current rules about dual entitlement, which a lot of people don't think are fair in and of themselves. So because in the example you gave, the worker wouldn't get any benefit from the record of his deceased spouse if her earnings were not higher than his and they're both covered by Social Security.

SEN. KERRY: Under the dual-entitlement rule.

MR. THOMPSON: Yeah, which is an injustice that many wouldn't want to deal with, which would also then affect how these offsets work.

But the two -- you're absolutely right: The two-thirds are totally arbitrary. It was 100 percent when we first enacted it. We realized then that that was too much; now it's two-thirds. What's the right number? There is no right number. There's no single right number because the right number would depend upon knowing the generosity of the particular pension and the actual earnings of the particular worker.

SEN. KERRY: Do you accept the idea that this provision could actually discourage individuals from taking a public service position if they're covered by Social Security, it would discourage them from taking a position that is not covered by it?

MS. MATHUR: I think it could.

If I could, I'd like to share an example that actually compares a public sector worker with a private sector worker to really illustrate this point.

Sarah is a public-sector retiree with a pension from work not covered by Social Security. Her pension is $1,200 a month based on an average income of 35(,000) to 40,000 dollars a year. Her husband, John's, Social Security benefit is $1,055 a month, the average benefit in 2007.

The GPO requires Sarah to offset two thirds of her monthly pension -- $900 -- against her Social Security spouse benefit of $528. That completely eliminates the spouse benefit for Sarah, leaving her with a total retirement benefit of $1,200 a month, which is just her pension.

Sarah pays federal income tax on the full amount of her income, which reduces it by 15 percent.

SEN. KERRY: Which she wouldn't do under Social Security.

MS. MATHUR: Which she wouldn't do under Social Security -- or $180, leaving her with a net income of $1,020.

Now Ruth is a private sector retiree with an average income similar to Sarah's. She, too, receives a pension of $1,200 a month of private pension. Based on her own work record, Ruth receives a monthly Social Security benefit of $1,055, and Ruth's husband, Dave, also receives Social Security. His benefit is the same as Ruth's: $1,055 a month.

Under Social Security's dual-entitlement rule, Ruth can receive her benefit or 50 percent of Dave's, whichever is higher. So of course, she chooses her benefit, which is higher than half of his. So Ruth's total benefit is a combination of her $1,200 a month pension and her $1,055-a-month Social Security benefit, for total retirement income of $2,255 a month.

Ruth pays taxes on a pension benefit but not on her Social Security benefit because her income, including 50 percent of her Social Security benefit, is less than $25,000 a year. So her federal taxes reduce her total monthly income by $180, leaving Ruth with $2,075 a month. Now that is nearly twice what -- that is twice, rather, of what Sarah gets as a public sector retiree.

SEN. KERRY: What was the income differential?

MS. MATHUR: Income was the same.

SEN. KERRY: Same income.

MS. MATHUR: The retirement pension was the same.

SEN. KERRY: Understood. It's just the private/public component that's different.

MS. MATHUR: Exactly.

SEN. KERRY: Well, let me ask you this: What do you say to people -- and some people throw this out there and they say, well, why don't they all join Social Security? You hear that. And then you have an even playing field and even treatment, because what's happening now is you're trying to take separate approaches and create equal treatment, which means you've got to somehow mesh rules in a more complicated way. What's the response to that when people do say that? Anybody?

MS. MATHUR: I know we're not here -- the subject of this hearing is not really mandatory Social Security, but I can answer that question.

If mandatory Social Security were implemented --

SEN. KERRY: It's what some people who sort of look at the $80 billion dollars and they balk and they say, how are we going to do this? You hear this, so it's important to try to just --

MS. MATHUR: Sure. So then public employers would either have to reduce their contribution to their employees' public pension or they'd have to pay whatever that additional increment is, which otherwise would also be lost at the bargaining table for wages for those employees as well.

But let's just say that they offset the public pension. What happens then -- at least in CalPERS -- for every dollar of benefit that we pay out, about 12, 13 cents comes from the employer, about 13 cents comes from the employee, and a full 75 cents comes from investment earnings.

So if you reduce the contributions on the front end that employer is making, that significantly reduces -- that leverage of the investment is lost, so it significantly reduces the benefit that can be paid on the back end when the individual retires.

SEN. KERRY: Ms. Bovbjerg, the original rationale for the enactment of the GPO provision in 1977 was?

MS. BOVBJERG: It was a reaction to a Supreme Court decision.

SEN. KERRY: And that was the Califano-Goldfarb?


SEN. KERRY: And what role did the decision of the Supreme Court have in the enactment of the provision, in your judgment?

MS. BOVBJERG: Well, that provision eliminated this thing called the dependency test. We were treating -- we the government were treating women and men differently for spousal benefits, and the Supreme Court decision said that you can't do this anymore. And so suddenly, men who were in non-covered employment were going to receive spousal benefits. This had a financial issue -- created a financial issue, created an equity issue, and this resulted in '77 in the GPO.

At that time, as Mr. Thompson says, it was a one-to-one offset, which is like spousal benefits in covered employment.

SEN. KERRY: And why was the provision modified in '83?

MS. BOVBJERG: Honestly, I think it was a compromise. I think it was a concern that it was too much, and there had been a proposal to make it one-third instead of one-for-one, so they went for two-thirds.

SEN. KERRY: Just a compromised settlement, in other words? No fundamental equity or rationale as to the measurements that Mr. Thompson's talking about?

MS. BOVBJERG: I don't want to say that no one knew what might happen. I'm sure there was some analysis behind it, but I think it's a relatively arbitrary amount.

SEN. KERRY: And the legislative history and rationale for the WEP?

MS. BOVBJERG: Well, the WEP was in 1983, the same time that GPO came down to two-thirds. And it was an issue of equity, it was an issue of finances. That was a time when they were looking to strengthen Social Security finances as well.

SEN. KERRY: How difficult is it to administer these?


SEN. KERRY: Mr. Thompson?

Ms. Bovbjerg, go ahead.

MS. BOVBJERG: Oh, please let me talk about this. (Laughter.) We did a report on this in '98. We found that it wasn't going very well, that it was -- SSA gets much better information on federal employees than it does on state and local retirees as to who is "offset-able."

SEN. KERRY: If that information, which in the age of -- or the virtual world we live in ought to be more achievable, if that were more accessible, could it be administered with better simplicity and fairness just the way it is?

MS. BOVBJERG: I think that the current law could be administered better. I don't think that the people sitting here would think it was more fair. It would be the same law.

SEN. KERRY: Would there not be a better way to get the measurements that then could apply to some of what Mr. Thompson was talking about so that you're getting a better balance of somebody's overall situation and, therefore, creating equity in the income distributed to somebody rather than having this disparity of taxation between Social Security versus the public and so forth so that the income differential on $40,000 of income is in retirement two to one?

MS. BOVBJERG: Better information always improves administration, but really I think that one of the things that's the most important to do if the GPO and WEP are to continue is for people to know that these things apply because so many of the stories we've heard today are from people who had no idea that these things would apply to them, and --

SEN. KERRY: Well, even if they knew it was going to apply to them, would it be right?

MS. BOVBJERG: It depends on who you're thinking about. Everyone here is thinking about the nonworking spouse and how they compare to the nonworking spouse. What about the covered spouse?

MS. MATHUR: These were working -- my examples, anyway, were working women.

MS. BOVBJERG: But when you compare to how the covered spouse is addressed, the covered spouse is offset one to one, and so when Larry talks about there's sort of different forms of equity, if you were to repeal the GPO/WEP, it would be important to think about how we treat spousal benefits generally.

Now, GAO has called for a reexamination of spousal benefits because when Social Security was created in 1935, we were a nation of stay-at-home moms, single-earner households. It's different today, and perhaps there are other ways to approach the spousal benefit issue.

SEN. KERRY: What do you think about that, Mr. Thompson?

MR. THOMPSON: I want to throw something out which my friends in Social Security will not be happy with me for saying, but there is one thing that is different today than in 1977 and 1983. Since 1978, if I'm not mistaken, Social Security has been collecting information on wages and uncovered employment because they process all of the W-2s for the income tax. I think they save that data.

So there actually is a potential to think of constructing these offsets in a way that was more tailored to the individual worker, but it might be complicated. I mean, I haven't thought through how you might do that, but there is information which exists today that didn't exist when they constructed these things. So there are potential options that could be constructed today that couldn't have been examined in years past.

MS. BOVBJERG: But again, there would only be information about the benefits paid out, not the contributions paid in by the individual employee.

MR. THOMPSON: Well, you'd know the earnings of the individual employee and you could then construct more -- you could construct a more accurate representation of what would the situation be had those earnings been under Social Security. Then you can sort of work with that principle to say, we know how much of this pension that they're getting actually is replacing Social Security and how much of it is in addition to Social Security, and we can calibrate our offset accordingly.

SEN. KERRY: Well, do you -- both of you, MS. Bovbjerg and Mr. Thompson, do you believe that the government pension offset actually replicates the dual-entitlement rule?

MR. THOMPSON: Well, it replicates the principle, but it doesn't replicate -- mathematically, it doesn't produce the same result because this sort of arbitrary number that's --

SEN. KERRY: Right. So therefore, it begs to be adjusted, doesn't it?

MR. THOMPSON: If possible and practical.

SEN. KERRY: Ms. Bovbjerg?

MS. BOVBJERG: We have suggested that both the GPO and the WEP, and particularly the WEP, be examined for greater accuracy, but it would be hard for SSA to do those things if they don't have the right information. So we're concerned about "administerability."

SEN. KERRY: Why should we not be able to make that administration adjustment? I don't understand that. Why is it not administrable?

MR. THOMPSON: Well, I think you need to look at that. As I say, I think it may be possible today to do things that couldn't have been done in 1977, when Social Security had no records of the earnings and non-covered employment.

SEN. KERRY: It would seem to me more than it may be possible that it's sort of staring in the face that it ought to be pretty feasible to be able to work those kinds of adjustments.

MR. THOMPSON: We need to talk to the agency. I mean, it may be that they've got doubts about how accurate those are. I know that they collect the information because they process it for the Internal Revenue Service for the income tax. But beyond that, exactly what they do with it and how well they store it, I don't know.

SEN. KERRY: Ms. Mathur, in your testimony you talked about the difference between Social Security and the government pension that you've worked under. Do you believe that the higher contributions that you've referred to and talk about, that that, in effect, eliminates the need for a pension offset?

MS. MATHUR: I can't speak to every single case, but I do think, in general, that public employees contribute much more significantly to their own public pension than private sector employees -- I think that's borne out by the evidence -- and that as a result, they are contributing to their ultimate retirement, and yet they're also getting penalized on the other end by this offset. So I think --

SEN. KERRY: Right. So they put in more, but in effect, they're being penalized for putting in more and they take it away at the back end --

MS. MATHUR: They pay more, they get a smaller benefit.

SEN. KERRY: Right.

MS. MATHUR: It just seems arbitrary and unfair.

MS. BOVBJERG: If I can jump in here. I know I risk being booed again, but I just -- that public --

SEN. KERRY: That's all right. Mr. Thompson -- (inaudible) -- back. It's okay. (Laughter.)

MS. BOVBJERG: Public pensions were designed in particular governments to replace Social Security, to be more than Social Security -- their pension and Social Security. That's why they don't participate in Social Security. So as a general rule, they are more --

SEN. KERRY: Right, but they're designed to be better than, which is a right that some people ought to have. But if they've also, one spouse or the other, paid into the Social Security, they shouldn't be penalized because they're making a choice to be better off.

MS. BOVBJERG: They shouldn't be worse off. (Applause.)

Senator, I don't want to leave this group with the impression that people with private pensions are --

SEN. KERRY: That's what's happening. The current system is taking it backwards for all of your effort to go forwards. It's, in effect, penalizing good savings and good investment policy.

I mean, we save precious little in America. We have one of the lowest savings rates of anywhere in the world. We should be encouraging people to be able to save and put away, and not then penalizing and turning around then they pay a higher price for having done so -- twice, incidentally: once in the system they chose to be part of, and the other in the one they're automatically part of because of somewhere they work.

I sort of find that government kind of, you know, doing what it does to give itself a bad reputation.

MS. BOVBJERG: Well, we absolutely agree that people should be saving more and that people should be able to --

SEN. KERRY: But the system currently penalizes people for doing that, which doesn't make a whole lot of sense.

So the big issue is where you find the money. How do you fix this? Is that part of this? Is there a sliding scale adjustment or do you just eliminate it fell swoop?

MS. MATHUR: I would advocate for eliminating it. Right now, it's just not a rational -- it's jut not rational law. And so, there might be some other solution I don't know, but I think that these particular laws -- GPO and WEP -- need to be repealed.

SEN. KERRY: Mr. Thompson, is a public employee who is not covered by Social Security but receives a government pension disadvantaged compared to a worker who does receive Social Security?

MR. THOMPSON: Is a government employee that receives a non- covered pension disadvantaged?

SEN. KERRY: Are they disadvantaged? If you receive -- you're not covered by Social Security, you get a government pension, are they disadvantaged compared to the person who retires on Social Security?

MR. THOMPSON: In what sense? I don't --

SEN. KERRY: In terms of the rules that would be applied to them, i.e., taxation; that's one.

MR. THOMPSON: Taxation is one.

SEN. KERRY: So there are disadvantages.

MR. THOMPSON: In that respect there are, yeah.

SEN. KERRY: And they're also done for, you know, whatever that other pension is. In other words, the --

MR. THOMPSON: Well, they're not --

SEN. KERRY: The two-thirds rule applies to them to try to work the equity of the dual-entitlement.

MR. THOMPSON: Their spouse is covered.

SEN. KERRY: But in very arbitrary way.


SEN. KERRY: So there's an arbitrariness that disadvantages, correct?

MR. THOMPSON: I think we all have to agree it's arbitrary. Whether the zero is the right offset I would question, but I wouldn't defend two-thirds as the right amount.

SEN. KERRY: Are you arguing, sir, that you believe that -- in your testimony you talk about how people who support national coverage do so to improve the condition of Social Security itself.

MR. THOMPSON: I said that I feared that was their primary motive.

SEN. KERRY: You fear it's their primary motive.

MR. THOMPSON: Well, it appears that way from the way they describe it. It's all part of a financing package, so the attraction seems to be that there's money in it for Social Security, at least over a 50-year-period.

SEN. KERRY: Help me to understand this duality that you think might work, the better coordination between the two. Would that be easier to administer than the GPO and the WEP?

MR. THOMPSON: Probably. It wouldn't be any more difficult. You could probably do it more effectively.

I mean, let's face it: What Barbara's trying to tell you is that the GPO is, in effect, zero for a lot of people whom it shouldn't be zero because Social Security doesn't know you have a non-covered pension. And so, we're getting cases here of, you know, people who are unjustly -- or feel unjustly affected by this, but there's another set of cases of people who are benefiting that shouldn't be because they -- and probably through a little fault of their own because probably they should have -- they were really under an obligation to inform Social Security that they were getting this pension.

SEN. KERRY: Peggy, I think you had your hand up; am I right?

MS. KANE: I did.

SEN. KERRY: I'm sorry. Yes?

MS. KANE: I'm getting the impression here that some people at our table and our panel feel that that old adage that they talk about -- double-dipping -- that some of us are double-dipping. And I'm getting that impression, and I just think as far as the educational part of this is, we are not asking for anything that we haven't earned. (Applause.) We have put the money in --

SEN. KERRY: Let me -- I have to enforce the rules of the Senate, which are not to have public demonstrations at the hearings of one kind or another, so I hope everybody will just respect that.

MS. KANE: Thank you.

We have put the money in. My husband put money in to Social Security for 30 years. My friend, Lola, whose husband put money into Social Security, this is another little twist of the Social Security, which is we can't understand.

While she was still teaching -- she stayed teaching until she was 65, so from 62 to 65, she did get her husband's Social Security. She received that. The day she stopped teaching, she was not supposed to receive it. However, they kept sending it to her. So she knew enough to put that money into a side account and sent letters to them -- the Social Security people -- telling them, "I'm not supposed to be getting this money." And they sent letters back telling her that, "Yes, you are." And then one Friday, she receives a bill from Social Security saying that, "By Monday, we need a check for $8,000 because you were overpaid your Social Security."

So I do agree with you, the administration -- there are problems there with the administration. But why is it that she's allowed to have her Social Security when she's still working, but when she's not working and needs it, she's not allowed to have it anymore? And her husband paid into the Social Security system.

Then, when I work an outside job and I am paying Social Security -- every time I pay Social Security now for work that I do teaching or consulting, I know that I am never, ever going to see a penny of that money. So I am contributing to a system that's not allowing me to get back what I put in, which is okay because the rule is your 40 quarters, and I'm never going to have that, but also is not allowing me to have the money that my husband put into it. And it's totally unfair.

And I think that educational component still needs to be gone. We still need to work on getting that message out there. We are not double-dipping. We paid that money in and we earned it, and we deserve to have it.

Thank you.

SEN. KERRY: Anybody want to add anything to that? It's probably a very good note on which to bring this to a conclusion.

I want to emphasize, as I said earlier, that there were a number of folks here who had testimony. And I particularly want to thank Ralph White, the retired State, County and Municipal Employees Association of Massachusetts -- he's president of that -- and his testimony and the testimony of Terri Bierdeman, the director of the Coalition to Preserve Retirement Security will be submitted into the record.

And as I said earlier, statements for the record can be submitted to the Finance Committee within two weeks from today. The instructions for doing so are on the Finance Committee's website. We invite you to look at that.

One thing I might say is you've heard the questions, and many of you know the arguments that are raised, so if you do want to submit some of that testimony, you certainly are free to address some of those kinds of questions as you do so. Or if you've been sitting there burning up saying, boy, I'd like to let them know this or that, this is your opportunity to let them know this or that.

I think clearly the system -- this is not fair what's happening today. It doesn't make sense. It's penalizing, as I said, people who are making a good choice about how to retire decently in this country, and that's getting harder and harder to do, folks. With the costs of everything, from energy to health care, tuitions, you know, trying to live the so-called golden years has become a tougher task than it was, and a lot of people are opting not to retire.

I think that the presumption of the Congress and those of us in public life, particularly in a Congress that seems to be pretty good at taking care of our own health care and pensions and matching funds and other kinds of things, ought to be pretty much bending over backwards to find a way to empower people, not to punish them or create hurdles and stand in their way.

So we need to find a way to rectify these two diverging systems. It just seems it shouldn't be that difficult to have a kind of income- based capacity with all the redistribution elements we try to do in a fair-minded way that doesn't penalize people, which is what's happening in the arbitrariness of the system that's applied today.

So we've got to work to find that, and I think Senator Collins and Senator Feinstein are, you know, helping to set us on the right track, and I hope this committee can do further diligence to pull together the ability of the committee itself to try to move as we grapple with some very big tax issues in the next months. There's a lot on the table, but this ought to be part of it; no question about it.

So I thank you for coming today. As I say, the record remains open.

And we stand adjourned for this hearing. Thank you.

MS. MATHUR: Thank you, Mr. Chairman.

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