Panel Hears Complaints About Laws That Cut Retirement Checks

[MORTARDUDE]

FEDERAL DIARY: Panel Hears Complaints About Laws That Cut Retirement Checks

The Washington Post

September 25, 2003

Stephen Barr


Julia Worcester worked nights as a waitress when her children were young. When they got into their teens, she worked days at a herring canning factory and at a string bean factory. At 49, she decided to go to college and become a teacher, like her mother.

Worcester is 73 now -- and still working. Last year, she worked 125 out of 175 school days as a substitute teacher. She has put off full retirement because she learned -- when she was nearly 60 -- that her Social Security benefits, earned over 20 years, would be sharply reduced because of the annuity she would receive for working 15 years as a full-time public school teacher in Maine.

"I should have what I have rightfully earned," Worcester said at a Senate hearing yesterday. "My family is a family that has accepted life as it has been handed it. You do what you have to with what you have. I am not bitter about the situation, I just believe I have earned this benefit through years of honest work. And I should be able to receive it."

Worcester, of Columbia, Maine, testified at the first Senate hearing on two Social Security laws that government retirees contend unfairly penalize them for entering public service. The hearing was held by Sen. Susan Collins (R-Maine), chairman of the Senate Governmental Affairs Committee, who is a co-sponsor of legislation that would roll back the laws.

The laws are the government pension offset, which reduces an individual's survivor benefit under Social Security by two-thirds of the amount of the public pension, and the windfall elimination provision, which reduces Social Security for retirees who also receive a government pension.

The two laws apply to about 6 million government workers, including 1 million federal employees hired before 1984. Many of the non-federal workers are in 16 systems, including state retirement programs in Maine and California, that operate outside Social Security.

By most accounts, the offset and windfall laws are difficult to administer. Complaints from retirees have prompted several members of Congress to sponsor bills that would repeal or modify the laws. The sponsors include Sen. Barbara A. Mikulski (D-Md.) and Sen. Dianne Feinstein (D-Calif.). Feinstein testified at the hearing.

Feinstein and Collins said the laws, which were enacted two decades ago, have not worked as Congress intended and put low-income retirees, such as schoolteachers, at risk of financial hardship. Of those affected by the government pension offset, they said, 73 percent are women. The offset reduces benefits for more than 200,000 retirees by more than $ 3,600 a year, which Collins said "is the difference between poverty and a comfortable retirement."

In addition to Worcester and Feinstein, Collins heard criticism about the two laws from Charles L. Fallis, president of the National Association of Retired Federal Employees, and Kenneth Rocks, national vice president of the Fraternal Order of Police. Both groups urged an overhaul of the laws.

But Jo Anne B. Barnhart, the Social Security commissioner, told Collins that proposed remedies would be costly and add to the financial stress facing the Social Security system. Feinstein's bill, which would repeal the laws, would cost nearly $ 62 billion over 10 years, and Mikulski's bill, which would modify the offset law, would cost about $ 10 billion over 10 years, Barnhart said.

Barnhart stressed that Congress created the laws to prevent government workers from receiving more favorable treatment under Social Security than comparable private-sector workers who spent a lifetime paying into the system. Any changes should be made as part of larger legislative efforts to strengthen the Social Security system, she said.

Collins, however, said Congress should not delay in finding a fix. "Every day, it creates a hardship. . . . I hope we can come up with a creative approach."

For her part, Worcester suggested that abolishing the two laws would help her family finances. She and her 87-year-old husband, Oswald, live on about $ 1,200 a month, she testified.

"I have to face facts -- I will not be able to teach forever, and Oswald is getting on in years."