WEP/GPO Repeal Gains Ground

MAY 2005
- Now Supported By Majority In House - Legislation that would repeal both the Windfall Elimination Provision
(WEP) and the Government Pension Offset (GPO) has quickly gained the
support of a majority of members of the US House of Representatives.

With
220 cosponsors, H.R. 147, filed by California Congressman Howard “Buck”
McKeon, has surpassed the “magic number” of 218 and now has enough
support to be passed by a vote of the House. The bill is currently
before the House Subcommittee on Social Security.

As
we have previously reported, the Subcommittee is chaired by Congressman
James McCrey (R-LA). While the Subcommittee is busy analyzing the
various bills under its purview, no specific date has been set for H.R.
147 to receive a public hearing.

Association
officials are thankful that all ten Massachusetts congressmen have
signed onto the bill. Rep. Richard Neal (D-Springfield), who is a
member of the Ways and Means Committee and a member of the Social
Security Subcommittee, has been a key supporter of the repeal from
within the Committee.

“A lot of
work is being put forth to advance this bill beyond the Subcommittee
this year,” said Association General Counsel Bill Rehrey. “Receiving
such a large outpouring of support, this early in the Congressional
session, is a big step forward. Whether through passage of H.R. 147 or
as part of a larger Social Security reform law, we are cautiously
optimistic that this issue will finally be addressed.”

Members
may recall that the Association belongs to several national coalitions,
which have been organized with the common goal of WEP/GPO repeal.
Following a series of meetings in Washington over the winter, in which
the Association met with representatives from other affected states,
along with Congressional leaders, the general consensus is that WEP/GPO
will likely be addressed as part of the larger “reform” legislation.

Skepticism Over Privatization

Over
the past months, members have expressed increased frustration at the
lack of national attention being paid to the WEP/GPO issues. Most
national news programs and publications, while recently having devoted
much time to the issue of Social Security, are focused on the larger
issues facing the country as a whole.

The
WEP/GPO laws impact those public retirees who did not contribute
towards Social Security as public employees. As members know, the
majority of public employees in seven states (CA, CO, IL, LA, OH, TX,
MA) do not participate in Social Security, and are therefore subject to
the offsets upon retirement.

This
year, President George W. Bush has brought attention to the overall
issue of Social Security with his proposal to both “reform” and
privatize a portion of the program. With Bush's proposal centering on
controversial changes that would impact nearly all Americans, it is
understandable that most of the media attention is focused on the
larger issue.

Not that the big
picture is lost on Association members. In a recent informal poll, an
overwhelming majority said that while they feel some change is needed
to ensure Social Security's future, they are highly skeptical of the
President's proposal. The concern hinges upon the issue of
privatization, whereby a portion of one's Social Security contribution
would be shifted into a private investment account similar to a 401(k).

While
the details of any such plan have yet to surface, it is known that upon
the creation of the so-called private accounts, the basic Social
Security benefit would be reduced. The concept is that retirees would
make up the reduction in Social Security with the earnings from their
private account. However, unlike Social Security, the benefits paid
through the private accounts are not guaranteed and are subject to
trends of the financial markets.

“Even
though the President has made it clear that current retirees are not
impacted by his plan, our members are still concerned about the future
of Social Security. Retirees are thinking about their children and
grandchildren and do not want the guarantee of a retirement benefit
taken away from them,” explained Association President Ralph White. “In
practice, Social Security is the largest defined benefit plan in the
country. Similar to our pension system, those benefits are guaranteed.”
Political observers have pointed to late fall as a deadline of sorts
for Congressional action on Social Security reform, prior to the
beginning of the 2006 election cycle. “The President has put his
reputation on the line to move a bill this year. We will keep the
pressure on and remain vigilant to ensure the WEP/GPO are also
addressed,” continued White.

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