By Bo Erickson
WASHINGTON (Reuters) – The U.S. Congress passed a measure early on Saturday to boost Social Security retirement benefits to some retirees who receive government pensions – such as former police and firefighters – which critics warned would further strain the program's finances weaken.
The Senate passed the Social Security Fairness Act shortly after midnight on a 76-20 vote, which would repeal 20-year-old provisions that could reduce benefits for people who also receive pensions.
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The House of Representatives passed the bill last month on a 327-75 vote, meaning Senate approval sends it to Democratic President Joe Biden to sign into law. The White House did not immediately respond to questions about whether Biden planned to do so.
The bill would undo a decades-old change to the program that was implemented to limit federal benefits to some higher-earning workers with pensions. Over time, more and more municipal employees, such as firefighters and postal workers, also saw their payments limited.
Most Americans do not participate in retirement plans, which pay a fixed benefit, and instead rely on the money they can save and Social Security. According to Labor Department data, only one in 10 U.S. private sector workers has a retirement plan.
The new provisions affect about 3% of Social Security beneficiaries – a total of just over 2.5 million Americans – and the workers and retirees affected by these provisions are key constituencies for lawmakers and their powerful interest groups. pressed for a legislative solution.
Some of them could receive hundreds of dollars more per month in federal benefits as a result of the bill, retirement experts said.
Some federal budget experts warned that the change could hurt the program's already shaky finances, as the bill's price tag is about $196 billion over the next decade, according to an analysis by the nonpartisan Congressional Budget Office.
Emerson Sprick, deputy director of economic policy at the Bipartisan Policy Center, said in an interview, “The fact that there is such overwhelming support in Congress for the exact opposite of what policy researchers agree on is quite frustrating.”
Rather than scrapping the current formulas for determining retirement benefits for these workers, revisions have been made, as well as more precise communication from the Social Security Administration about how much money these public sector workers can expect to make.
The Committee for a Responsible Federal Budget, a nonpartisan budget think tank, also warns that the additional costs will affect the future of the program.
“We are racing toward our own fiscal ruin,” the group's president, Maya MacGuineas, said in a statement.
“It's truly astonishing that at a time when we are just nine years away from completely depleting the trust fund for the nation's largest program, lawmakers are about to consider accelerating that by six months. ”
Republican Sen. Ted Cruz said on the Senate floor Wednesday that the bill, as written, will “throw grandma over the cliff.”
“Any senator who votes to impose $200 billion in costs on the Social Security Trust Fund is choosing to sacrifice the interests of seniors who have paid into Social Security and who have earned those benefits,” he said.
Supporters of the bill said the future of Social Security could be addressed at a later date.
Asked about the solvency implications of this legislation, Senator Michael Bennet, a supporter of the bill, told Reuters: “These are longer-term issues that we need to come together to address.”
(Editing by Stephen Coates)
