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REPEAL GPO – IT STARTED HERE IN OHIO
Government Pension Offset
Congresswoman Mary Rose Oakar, (D-Ohio 20th District), was the first Member of Congress to propose legislation to repeal the Government Pension Offset. During her tenure in Congress in the 1980’s and early 1990’s she was able to obtain a majority of Congress as cosponsors to her bill. However, she was unable to get her bill to the floor of the House for a vote. Congressman Brian Donnelly (D-MA) introduced bill HR 3755 to change the GPO during the 101st Congress and reintroduced it in the 102nd Congress. That proposal was intended to eliminate the GPO for retirees with combined monthly public pension and spousal Social Security benefits of less than $300. Congressman William Jefferson (D-LA) and Congresswoman Elizabeth Furse (D-OR) introduced a bill to repeal the GPO in the 103rd Congress. Congressman Jefferson introduced a bill in the 104th Congress to exempt the first $1200 per month from GPO reductions. He has since reintroduced that bill in the 105th, 106th, and 107th Congresses. Congressman Jefferson’s bill in the 107th Congress is HR 664 and has 298 cosponsors.
Windfall Elimination Provision
Congressman Max Sandlin (D-TX) introduced a bill in the 106th Congress to repeal the WEP. His bill in the 107th Congress is HR 848 and has 149 cosponsors. Congressman Barney Frank (D-MA) introduced a bill to eliminate the WEP for anyone with combined public pension and unreduced Social Security benefit of $2000 per month or less. His bill in the 107th Congress is HR 1073 and has 232 cosponsors.
On July 25, 2001 Congressman McKeon (R-CA) and Congressman Berman (D-CA) introduced HR 2638, a bill to repeal both the GPO and WEP. HR 2638 has received considerable success in gathering 184 cosponsors in the fifteen months since introduction.
Social Security recently announced a 1.4% COLA for 2003. That amounts to over $6 billion dollars for 2003. The 2002 Federal Old-age and Survivors Insurance and Disability Insurance Trust Funds (OASDI) Trustees Report calculated that it would cost $1.3 billion to repeal WEP and $1.6 billion to repeal GPO, or a total of $2.9 billion – less than half of the $6 billion 2003 COLA. If our Members of Congress think $2.9 billion is too costly, how can they support a $6 billion COLA? Or is it that our Members of Congress just don’t care about police officers, firefighters, bus drivers, and other public service retirees?
IT IS NOW TIME TO REPEAL THE GPO AND WEP
According to Social Security actuarial projections made in 2000 the total number of persons affected by the Government Pension Offset (GPO) in 1999 were 305,707 and that total was projected to increase by approximately 15,000 for each subsequent year. By 2003 that total will be 365,707 retirees affected by GPO. The same totals and projections made for the Windfall Elimination Provision (WEP) in 1999 indicated that 423,527 persons are affected and that total would increase by an estimated 60,000 for each subsequent year. By 2003 that total will be 663,527 retirees affected by WEP. The total number of retired public service retirees affected by either the GPO or the WEP will be over one million persons on January 1, 2003, 1,029,234 to be exact.
In our efforts to gain support for legislation to either change or repeal the GPO and WEP the ONLY reason ever given by our Members of Congress to defend or sustain the GPO and WEP is the cost to the Social Security Trust Fund. The Congressional Budget Office reported on June 27, 2000 in testimony before the Subcommittee on Social Security of the House Committee on Ways and Means that the average per person offset under GPO was $348.00 per month. Increases due in part to annual COLA’s, the monthly average individual offset in 2002 we estimate at between $375.00 and $400.00 per month.
Using figures from the 2002 Federal Old-age and Survivors Insurance and Disability Insurance Trust Funds (OASDI) Trustees Report, we estimate that the average loss per person under WEP is $189.00 per month. Increases due in part to annual COLA’s the monthly average individual loss under WEP in 2002 we estimate at or near $200.00 per month. If our Members of Congress think that stealing $146,282,000 through GPO and $132,705,000 through WEP per month from public service retirees will somehow save the Social Security Trust Fund that had $1.21 trillion at the end of 2001, they are wrong. As more public service retirees become victims of GPO and WEP, at a rate of at least 75,000 per year, it is inevitable that it will continue to cost more each year, and continue to be a headache for SSA and Members of Congress. The only sensible conclusion is to repeal both GPO and WEP now; any delay will only cause more public service retirees to suffer economic hardship. This is our money that was deposited with the Social Security Administration and it should be returned immediately, if not sooner.
NOW HERE IS THE CLINCHER ---If you take the number of Ohio public service retirees affected by GPO and WEP and multiply that by the annual Social Security reductions due to the GPO and WEP the total loss to Ohio public service retirees is over $340 million per year. That is an economic package for the state of Ohio that should not and cannot be overlooked by our Senators and Congresspersons.
Here are the facts and figures - there are at least 41,000 victims of the Offset (GPO) in Ohio, that is 13.4% of the total U.S. GPO number. Using the same 13.4% for Windfall (WEP) in Ohio, there would be approximately 57,000 WEP victims in Ohio. Now for the shocking math;
| 41,000 under GPO times $4,800 equals $205 million lost to Ohio public service retirees each year. |
| 57,000 under WEP times $2,400 equals $136.8 million lost to Ohio public service retirees each year. |
That amounts to a total of $341.8 million that is being withheld from Ohio public service retirees each year. The vast majority of this money would be spent in Ohio by retirees on rent, food, medicine, utilities, and other essential needs. Now that is an economic incentive program that every one of our Members of Congress can understand and support. Bring Ohio money back to Ohio public service retirees.
(idea from Cathy Burner – ORTA)
(Disclaimer – Offset/Windfall estimates numbers of persons and dollar amounts from published material. Even if the numbers may not be exact, they are presented to identify an approximate total number of persons or an approximate amount of money that has significant interest or impact on the issue of GPO and WEP. All of the information is deemed reliable but is not guaranteed.)
MORE REASONS TO REPEAL GPO AND WEP
When the Social Security Act was passed in August 1935 the United States Government entered into an agreement with employees. Contributions from the worker and the employer would be made and at the time of retirement, a reimbursement would be made to the worker. That concept changed when the Social Security Financing Act, HR 9346 was passed in October 1977 because it contained the Government Pension Offset and Windfall Elimination Provision. When the GPO and WEP were activated in 1983 the Social Security Administration failed to explain that public service employees and spouses of qualified Social Security beneficiaries would receive a smaller Social Security retirement benefit. This reduction in benefits is, in most instances, unknown until reaching retirement age. Conversely, expanded benefits are ALWAYS well publicized by the Social Security Administration and made for the benefit of the worker.
Second Ohio District Congressman William Gradison wrote on October 17, 1977, “No benefits or rights earned under your pension plans will be reduced. No merger of Social Security and your existing pension plan will take place. Your retirement system will remain large and independent and continue to operate under its own rules and regulations. WHEN YOU RETIRE YOU WILL RECEIVE BOTH BENEFITS: YOUR PENSION AND SOCIAL SECURITY. In addition, your Social Security benefits are non-taxable.” (emphasis added). He was asked, “ Will funds from the civil service retirement fund be used to shore up SS? “ABSOLUETLY NOT. Moreover, it does not change any rights or benefits earned by employees under federal, state, local or private retirement plans.” (emphasis added).
More recently, on December 6, 2001 Senator Voinovich, along with 19 other Senators, wrote to the President’s Commission to Strengthen Social Security asking that mandatory Social Security not be included in their final report. His letter said, “Since 1935, state and local government employees have been deliberately excluded by Congress from mandatory participation in Social Security for two reasons; a Constitutional concern over whether the federal government could impose a tax on state governments; and because many state and local employees already were protected by public pension plans. Today there are about six and a half million such employees in the state and local workforce-representing 76 percent of public safety officers and 49 percent of teachers.” (emphasis added).
Our Constitution is very specific about the role of the federal and state governments. In the Federalist Paper No.45 James Madison, the acknowledge father of the Constitution, described the document thusly. “The powers delegated by the proposed Constitution to the federal government are few and defined. Those which are to remain in the State government are numerous and indefinite. The powers reserved to the State will extend to all the objects which in the ordinary course of affairs concern the lives and liberties and properties of the people and the internal order improvement and prosperity of the State.” (emphasis added). When Congress passed the Government Pension Offset and Windfall Elimination Provision, did they cross the line affecting the pensions earned by public employees? The state legislature sets the rules for the state pension systems that includes, but is not limited to PERS, STRS and SERS. The state legislature sets the amount of retirement and the yearly cost of living. It would appear that legislators in Washington, D.C. should not be allowed to implement laws to curtail the benefits earned by all public service retirees through our the country
HIGHLIGHTS of the SOCIAL SECURITY TRUSTEES REPORT 2002
. --The Old-Age and Survivors and Disability Insurance Trust Funds paid benefits of approximately $432 billion in calendar year 2001.
--There were 46 million beneficiaries on the rolls at the end of 2001.
--Income to the combined Trust Funds amounted to $602 billion in 2001 and expenditures were $439 billion increasing the assets of the combined funds by $163 billion to $1.21 trillion at the end of 2001.
--Interest earned on the invested assets of the combined Trust Funds was $72.9 billion in 2001.
Members of Congress do not even think of including the above mentioned dollar amounts in any of your budgets or programs. In fact, Congress for years has “borrowed” from Social Security leaving an IOU. Has anything ever been repaid?
When the military retirees were exempted from the GPO on January 1, 1995 that section of the law was hidden within other legislation. The military exemption was not supported on a basis of budget considerations; it was passed because it was the right thing to do. If it was the right thing to do for the military why isn’t it the right thing to do for police officers, firefighters, letter carriers, teachers, and all public service retirees?
The legislation that reduces Social Security benefits by 2/3’s also effectively reduces the cost-of-living (COLA) granted by state pension systems. Since the retiree never receives their entitled amount IT IS HYPOCRITICAL TO CALL IT A COST-OF-LIVING. The reporting of a COLA each year presents further problems, overpayments. Read what Diana B. Garro, Deputy Commissioner with SS states. “A beneficiary is required to report to Social Security the yearly cost of living they receive. Social Security must then subtract 2/3s of the COLA from the Social Security benefit check. A delay by Social Security can mean receiving a letter from Social Security months later advising the senior they have been overpaid and are expected to repay the amount stated.”
The School Employees Retirement System of Ohio (SERS) reported the following. “Our average retiree receives an annual COLA increase of about $16.41 per month. Two-thirds offset of that is $10.93. If it costs SS more than that to administer it what are they gaining? Mrs. R states this year she earned a $4.00 cola, of that she received $1.00 and Social Security received $3.00 due to rounding up. Mr. Ned Morrell, Social Security manager estimates it costs his office $50.00 per year, per beneficiary, to process each COLA. Ohio has 40,474 retirees subject to GPO. The cost amounts to well over $2,000,000 per year. Considering the comments of SERS and SSA, is it cost effective to administer a COLA for the victims of GPO regardless of whatever amount a retiree receives?
Consider also the unconstitutional double taxation. A senior receives a public pension subject to either the “offset or windfall” - first taxation. When they file with the IRS they must report their pension as income - second taxation.
“Social Security has always been part of a “three legged stool” that could support a comfortable retirement. The other two legs are, pension income and savings investments. SSA #05-10080 Jan.01.” GPO and WEP have effectively eliminated that third leg for retirees with public service pensions. The cost in human devastation living with this law is unbelievable. How would you like to decide each month where to allocate your fixed income - food, medicine, or rent?
PETITION AT 13,870
A thank you to Laura Reed, Canfield, Ohio for collecting 1,878 signatures in the past four months.
SPECIAL THANKS
Neal Ryan and Mark Ryan are two of Eileen’s three sons, her third son, Keith is a ParaMedic, and they have single-handedly set up and maintained the web page and e-mail account. Without their help on the web page and e-mail, Offset/Windfall would have closed shop a long time ago. Thank you Neal and Mark !