Millions of Americans could see their Social Security benefits boosted under a bill led by President Joe Biden — though critics warn the measure comes at the cost of pushing the fund toward bankruptcy.
If signed by the President before the new Congress convenes on January 3, the legislation would boost Social Security payments to more than 2 million beneficiaries, according to the Congressional Research Service. The increase – up to $550 per month for some retirees – will be retroactive to December 2023.
Those beneficiaries are mostly those who received foreign pensions or government employees such as police officers, firefighters and teachers who have contributed to a federal or state pension plan but have not paid Social Security taxes.
The law, called the Social Security Fairness Act, eliminates two formulas that reduce benefits for these workers who receive foreign and government pensions in addition to Social Security. Those provisions, known as the windfall elimination provision and the government pension offset, were enacted more than 40 years ago in response to the increase in the number of retirees who did not fully pay into Social Security. And more dual-income couples were retiring.
Sponsors of the legislation say the outgoing Congress overreacted and unfairly withheld benefits from retirees and their spouses.
Although the White House has not said whether Biden will sign the bill, it passed both chambers with bipartisan majorities: 327-75 in the House last month and 76-20 in the Senate on Saturday morning.
The Congressional Budget Office estimates that the bill would extend Social Security’s bankruptcy — now projected to occur by 2034 — over the next six months and add $196 billion to the budget deficit over the next 10 years. As a result, a typical couple retiring in 2033 could face a $25,000 cut in lifetime benefits, according to the Committee for a Responsible Federal Budget.
The Senate rejected an amendment from Republican Senator Rand Paul of Kentucky that would have raised the retirement age to 70. Only three senators supported the amendment.
With assistance from Liliana Byington and Steven T. Dennis.
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