Former NAPS President Keating testimony on Social Security Benefits- 01.24.08

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Chairman McNulty, Ranking Member Johnson and Members of the
Subcommittee:

 

Thank you for holding this hearing and your attention to this
important issue.

I am Ted Keating, National President of the National Association of
Postal Supervisors. I am pleased to present this statement on behalf of the
35,000 active and retired members of our association. I ask that this
statement be included in the record of your Subcommittee’s hearing.

I also want to express our gratitude to the members of the
Subcommittee and others in the House of Representatives who have
introduced legislative proposals to repeal or modify the harmful impact of
the Government Pension Offset and the Windfall Elimination Provision.

The National Association of Postal Supervisors has maintained a
long-standing opposition to the Government Pension Offset and the Windfall
Elimination Provision, both of which have a highly negative impact on the
retirement security of people who have dedicated their lives to public
service, including employees of the United States Postal Service – our
members.

We are concerned by the blunt and unfair application of these
provisions to 7.3 million employees at the federal, state and local levels. At
the same time, we are appreciative of the fiscal challenges that underlie the
repeal and modification of these provisions. As the Government
Accountability Office has noted, “… there are no easy answers to the
difficulties of equalizing Social Security’s treatment of covered and
noncovered workers.” Nonetheless, in the absence of Congressional action,
the unfairness of the GPO and WEP will continue to bear their onerous mark
and inflict unwarranted misery upon countless public servants.

The Government Offset Provision reduces benefits for the spouse of a
person receiving a government pension. It was enacted to mirror the dual-
entitlement rule of Social Security to reduce spousal benefits for those who,
in theory, don’t need it because they receive their own benefit. The GPO
reduces public employees’ Social Security spousal or survivor benefits by an
amount equal to two-thirds of their public pensions. Estimates indicate that
nine out of 10 public employees affected by the GPO lose their entire
spousal benefit, even though their deceased spouses paid Social Security
taxes for many years. What is most troubling is that this offset is most harsh
for those who can least afford the loss -- lower-income women. In fact, of
those affected by the GPO, over 70 percent are women. According to the
Congressional Budget Office, the GPO reduces benefits for more than
200,000 individuals by more than $3,600 a year – an amount that can make
the difference between a comfortable retirement and poverty.

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 it causes hard-working people to lose a
significant portion of the benefits they earned in return for a lifetime of hard
work and public service. The WEP affects people who have worked in jobs
not covered by Social Security and in jobs in which they earned Social Security benefits.
Public servants at the federal, state and local levels are commonly hurt by this provision
when they have paid toward a public pension but not toward Social Security, and previously
worked in jobs covered by Social Security. The result is that public employee retirees often
receive a much smaller Social Security benefit.

These provisions together often leave individuals with less of a benefit than they had counted
on for retirement and treat public sector employers worse than private sector employees. And
most troubling of all, at a time when we need their service the most, they discourage people
from staying in public service.

Finally, we are conscious of the cost of repeal of these provisions in an environment where
the long-term solvency of the Social Security trust funds is a troubling concern. Therefore,
balanced against the above manifest unfairness of the GPO and the WEP, we urge you to take
action to eliminate or, at the very least, take incremental steps toward full repeal of these
two unfair provisions.

Thank you for your leadership on this issue and the opportunity to offer these comments.