Social Security and Economically Vulnerable Beneficiaries

1/16/2008

House Ways and Means Committee, Social Security Subcommittee

Mr. Chairman and Ranking Member Johnson, thank you for the opportunity to submit a statement for the record for your hearing on Social Security and Economically Vulnerable Beneficiaries. The National Treasury Employees Union, representing more than 150,000 federal employees and retirees, including 900 at the Social Security Administration (SSA) Office of Disability Adjudication and Review, would like to address both the backlog at SSA, and two Social Security provisions, the Government Pension Offset (GPO) and the Windfall Elimination Provision (WEP). We will address each issue separately.

SOCIAL SECURITY OFFSET PROVISIONS:

Many NTEU members have already felt the unfair effects of these provisions. Others are not yet aware of the impact these provisions will have on their retirement income. Federal retirees often first become aware of the existence of these provisions at the time they apply for Social Security benefits.

With record numbers of retirements from federal employment expected, continuation of such policies will make many people feel as if they are being penalized for having chosen to enter public service. There is no penalty like this that applies to individuals who collect private pension benefits and who are also eligible for spousal Social Security. Recent figures from the Congressional Research Service indicate that there are over 400,000 Social Security beneficiaries affected by the GPO. Of those affected, 42 percent were widows or widowers. About 75 percent were women. Many women suffer the effects of this provision because of career interruptions that arose from raising their children or due to the fact that many worked in lower-paid positions in the federal government. Approximately 85 percent of those affected lost their entire spousal Social Security benefits.

The Windfall Elimination Provision’s impact is harsh as well, causing the Social Security benefits of more than 970,000 federal retirees to be reduced by nearly 50 percent. Under current law, employees eligible both for their own earned Social Security benefit and a public pension, such as those under the federal Civil Service Retirement System (CSRS), find that the proportion of their earnings in the first bracket of the formula that is converted to benefits is lowered substantially.

We are very happy that there is now renewed interest in changing these provisions. In the House, several bills have been introduced that would amend the Social Security Act to repeal or reduce the impact of the WEP and GPO provisions. Rep. Howard Berman (D-CA) has introduced HR 82, and has been a tireless advocate of repeal. In addition, Rep. Barney Frank (D-MA) has introduced HR 726, and Rep. Albert Wynn (D-MD) has introduced HR 2988. Elimination or repeal of these provisions has garnered bi-partisan support. In the House, Rep. Ron Lewis (R-KY) has introduced HR 1090, and Rep. Kevin Brady (R-TX) has introduced HR 2772. This hearing is the next step toward providing relief to federal retirees from the financial devastation of these two provisions.

SOCIAL SECURITY BACKLOG:

The NTEU- represented employees at SSA’s Office of Disability Adjudication and Review continue to perform their duties at exemplary standards yet suffer from a needed lack of resources. It is imperative that the President’s FY2009 budget provide sufficient resources to enable this Office to properly serve the public.

Currently there is an unacceptable backlog of Americans waiting for resolution of their disability benefits applications. Just yesterday, there was a news report of a woman in North Dakota who had to wait four years before she saw her first benefit check. She has a spinal condition that left her unable to work and her doctors have told her she will likely become a quadriplegic. She has had two surgeries, but was told a third operation will not work because her bones are not strong enough. This situation is not atypical. This was not an excessively complex case. It was not a matter of SSA employee non-performance. It is a simple matter that SSA is woefully underfunded and without the staff it needs. Disabled American citizens have been left with no income as their applications wait to be reviewed. Some applicants have had their homes foreclosed on by lenders as they wait while others have died before they have seen their first disability insurance check.

Anything less than $11 billion in funding for FY2009 will result in the backlog becoming worse. For the Administration or Congress to propose less than $11 billion is to be morally complicit with the tragedies I have just described. Funding substantially above $11 billion should be provided so that the backlog can be decreased and disabled Americans can receive the insurance benefits they are entitled to in a more timely manner.

Thank you for allowing us to share our views on these important topics. NTEU hopes that the outcome of this hearing will be legislation headed to the House floor to correct both the GPO and WEP provisions of Social Security law and the shortfalls in funding at SSA. We appreciate your attention to these issues.