WASHINGTON – Margaret Cagle,52,spent 15 years practicing and teaching architecture before becoming a math teacher in the Los Angeles public schools. When she made the change,the possibility of the government reducing her Social Security benefits did not enter her mind.
When she retires,Cagle said she will lose a significant portion of the retirement that she paid into Social Security because California is one of 14 states that has what is called the “windfall” offset.
“Had I been fully informed at the time,I seriously doubt that I would have chosen to embark on a career in public service,” she told a House committee Wednesday.
During the Ways and Means subcommittee hearing,representatives from the Social Security Administration and the Congressional Research Service discussed what happens to people like Cagle and ways to change or eliminate what is known as the government pension offset and the windfall elimination provision.
The two provisions are meant to prevent people from collecting more Social Security benefits than they are owed. The pension offset deals with people getting benefits the first time from a government job and a second time from the Social Security benefits of their spouse. The windfall reduces benefits of retired or disabled workers who are also covered by another government annuity.
The committed heard from speakers representing public employees and economically vulnerable beneficiaries,including veterans and those who are disabled.
Cagle knew she would take an immediate pay cut when she decided to teach but did not realize her pension would also suffer. She said she received great personal rewards but had no idea she was throwing away years of contributing toward her retirement.
She spoke in favor of H.R. 82,which would eliminate the provisions.
“Tragically,the GPO and the WEP are requiring individuals to suffer and to sacrifice under a system which is also penalizing society,” Cagle said.
Of the 96 percent of all U.S. workers who make payments and are covered by Social Security,two-thirds are women,said Joan Entmacher,vice president for family economics security at the National Women's Law Center.
“Despite Social Security,2.4 million women and 1 million men 65 and older are still living in poverty,” Entmacher said in a written statement. For many single women 65 and older,Social Security is virtually their only income.
Current benefits for low-lifetime earners leave many women in poverty,she said. Women make up the bulk of this group because they are more likely to take jobs in child care,retail or cleaning buildings.
Committee members said people should not be surprised at retirement,and both Republicans and Democrats are interested in fixing the problem. Several members of the committee brought up specific instances of people in their offices who were affected by one or both provisions,and are now receiving as little as $161 a month in Social Security benefits. They also stressed the importance of equal treatment.
Members also said educators do not typically choose their profession for the money,and their state legislatures play a role in their retirement.
Rep. Sam Johnson,R-Texas,a cosponsor of fellow Texas Republican Rep. Kevin Brady's proposed H.R. 2772 – which would repeal the windfall – said it would cost an estimated $4.6 billion over 10 years,compared to the $80 billion to repeal both provisions.
While still not inexpensive,Johnson said it reflects fair treatment of those who paid into two retirement systems.
“To repeal those two provisions of law would be to give an unfair bonus to individuals who work in jobs not covered by Social Security,” he said.
The other states affected are Alaska,Connecticut,Illinois,Kentucky,Louisiana,Maine,Massachusetts,Missouri,Nevada,Ohio and some local governments in Georgia,Rhode Island and Texas.