Statements On Introduced Bills And Joint Resolutions

Floor Speech

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By Mrs. FEINSTEIN (for herself, Ms. Collins, Mr. Durbin, Mr. Kerry, Mr. Brown, Mr. Cardin, Mrs. Boxer, Mrs. Lincoln, Mr. Whitehouse, Mr. Nelson of Florida, and Mr. Menendez):

S. 484. A bill to amend title II of the Social Security Act to repeal the Government pension offset and windfall elimination provisions; to the Committee on Finance.

Mrs. FEINSTEIN. Mr. President, I rise today to introduce legislation that will help protect the retirement benefits earned by our Nation's public service workers.

I am pleased to be joined by my colleague from Maine, Senator Collins, as well as Senators Durbin, Kerry, Brown, Cardin, Boxer, Lincoln, Whitehouse, Nelson of Florida, and Menendez.

This bill will repeal two provisions of the Social Security Act--the Government pension offset and the windfall elimination provision--that unfairly reduce retirement benefits for teachers, police officers, and firefighters.

These two provisions were originally designed--the Government pension offset in 1977 and the windfall elimiantion provision in 1983--to prevent public employees from being unduly enriched.

But, the practical effect is that those providing critical public services are unjustly penalized.

Approximately 1 1/2 million Federal, State, and municipal workers, as well as teachers and other school district employees, are held to a different standard when it comes to retirement benefits.

In California, the problem affects about 200,000 workers.

The Government pension offset reduces a public employee's Social Security spousal or survivor benefits by an amount equal to two-thirds of the individual's public pension.

In most cases, the Government pension offset eliminates the spousal benefit for which an individual qualifies. Three quarters of employees affected by the Government pension offset lose their entire spousal benefit, even though their spouse paid Social Security taxes for many years.

According to the Congressional Research Service, the Government pension offset provision alone reduces the retirement benefits earned by nearly 500,000 Americans each year by an average of $500 per month.

The windfall elimination provision reduces Social Security benefits by up to 50 percent for retirees who have paid into Social Security and also receive a public pension, such as from a State teacher retirement fund.

Private-sector retirees receive monthly Social Security checks equal to 90 percent of their first $744 in average monthly career earnings, plus 32 percent of monthly earnings up to $4,483 and 15 percent of earnings above $4,483.

Under the windfall elimination provision, retired public employees, however, are only allowed to receive 40 percent of the first $744 in career monthly earnings, a penalty of over $350 per month.

Our legislation will allow government pensioners the chance to earn the same 90 percent to which nongovernment pension recipients are entitled.

For those living on fixed incomes, in some cases this represents the difference between a comfortable retirement and poverty.

Americans are hurting as our economy continues to contract.

More than $4 trillion in retirement savings were lost last year as markets destabilized and investments soured.

Retirees on fixed incomes have been especially impacted by this recession. Every dollar matters to a retiree struggling to pay bills and meet mortgage obligations.

In California, more than 837,000 foreclosures were filed last year. The roughly $500 lost by beneficiaries to the Government pension offset each month may mean the difference between foreclosure and keeping one's home.

This is also critical for seniors residing in assisted living facilities or retirement communities concerned about paying the increasingly high cost of care.

Our Nation's unemployment rate stands at 7.6 percent. And, in my State, over 1.7 million people are out of work. For those close to retirement who have lost their jobs, reductions in Social Security benefits compound an already challenging situation.

We must also eliminate the barriers which discourage many Americans from pursuing careers in public service.

This is more difficult now than ever, as states face mounting deficits and painful budget cuts. Communities must be able to retain their most qualified teachers, police officers, and firefighters.

Unfortunately, the Government pension offset and windfall elimination provision only contribute to this problem at a time when we should be doing everything we possibly can to bring the best and brightest to these careers.

It is estimated that schools will need to hire between 1.7 million and 2.7 million new teachers nationwide by the end of this year because of record enrollments in public schools.

The projected retirements of thousands of veteran teachers and critical efforts to reduce class sizes also necessitate hiring additional teachers.

California currently has roughly 310,000 teachers but will need to double this number over the next decade, to 600,000 teachers, in order to keep up with student enrollment levels.

It is counterintuitive that on the one-hand, policymakers seek to encourage people to change careers and enter the teaching profession, while on the other hand, those wishing to do so are told that their retirement benefits will be significantly reduced.

I certainly recognize that our Federal budget deficit and national debt make repealing the Government pension offset and windfall elimination provision difficult.

And, I remain open to considering any alternatives that will allow hard working employees to keep the Social Security benefits to which they are entitled.

But the bottom line is that we should respect, not penalize, our public service employees.

In the 110th Congress, 38 Senators joined me in cosponsoring this legislation. In the House of Representatives, 351 Members of Congress supported Representative Howard Berman's companion bill. Our bill enjoys the support of more than three quarters of the entire House of Representatives.

The reason for this support is because public servants across the country are calling on Congress to act.

It is long overdue that we resolve this inequity, and it is time that this body protects retirement benefits for public employees and formulates a more cohesive approach to promoting public sector employment.

So I hope that my colleagues will join me in protecting the retirement benefits of our Nation's hard working public servants. We value their contributions and must ensure that all Americans receive the retirement benefits they have earned and deserve.

I ask unanimous consent that a copy of the text of the legislation be printed in the RECORD.

There being no objection, the text of the bill was ordered to be printed in the RECORD

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