COMMENTARY: Protecting Social Security from Congress

In a world where the phrase “protecting Social Security” is little more than an election-year slogan, two members of Congress deserve recognition for their efforts to keep their word. On election night, Republicans Andy Harris of Maryland and Robert Good of Virginia moved to table the Social Security Fairness Act of 2023, which will at least postpone its consideration by Congress.

Hooray for any member of Congress willing to keep their promise.

The legislation in question would repeal the Windfall Elimination Provision and the Government Pension Offset provisions of Social Security. These rules date back more than 40 years and exist to protect the program’s ability to pay future retirees’ full benefit checks.

These rules reflect societal valuations incorporated into Social Security over decades. In 1977, Congress engrafted a societal obligation upon Social Security to provide a helping hand in preparing for retirement to some members of society. By design, the program allows workers who worked long careers at low wages, and those who could not establish a long-term career, to shop for benefits in the low-cost line.

As an example, the housewife who dedicated a chunk of her career to raising a family gets a break on the cost of benefits.

These subsidies within the system have existed long enough and received sufficient visibility to qualify as societal judgments. People with high-wage jobs subsidize those with low-wage jobs, and those with long careers subsidize those with shorter careers. Indeed, members of Congress are aware of these transfers.

The co-sponsors of the Social Security Fairness Act would like to extend this privilege to civil servants who opted out of Social Security for a part of their career. In other words, the legislation under consideration is a societal valuation that hardworking taxpayers should provide a helping hand to those who opted out of Social Security regardless of how much they were paid or how long their career lasted.

As a result of this legislation, the diligent teacher who contributes to Social Security for a lifetime would get less in the way of benefits than the same teacher who hasn’t contributed a penny to the program.

As a bit of background, about 4 percent of the workforce does not participate in Social Security. These workers pay into and receive old-age coverage from employer-sponsored plans that, in effect, serve the same purpose as Social Security. Two million workers have qualified for a pension from their employer and Social Security.

Once retired, these beneficiaries present a problem to Social Security because their earnings history creates the illusion of a worker who struggled to find long-term employment. Without the Windfall Elimination Provision and the Government Pension Offset, the system would steer overly generous benefit checks to people who chose to opt out of Social Security.

According to the Congressional Budget Office, the cost of the proposal is $200 billion over 10 years. This cost comes at the expense of future retirees when the program is already threatening these hard-working Americans with benefit cuts.

The cost of the changes has served as an impetus to build consensus across a broad spectrum of think tanks in opposition to the legislation. There is no way to justify the expense, which rewards people who work outside of Social Security.

In other words, this legislation would create a financial incentive for mid-career workers to opt out of Social Security. This is a profoundly bad idea and comes when too many Americans wonder whether the program will be there for them.

In the best of all worlds, Congress would recognize the need to fix Social Security to serve those who choose to work outside the program and the rest of us. Instead, Congress wants to dip into the dwindling trust funds to appease a vocal minority with lobbying resources.

If “protecting Social Security” means anything, it starts with protecting the program from more misguided meddling by members of Congress.

Brenton Smith is a policy adviser with The Heartland Institute. He wrote this for InsideSources.com.