Hearing of the Senate Committee on Finance's Subcommittee on Social Security, Pensions, and Family Policy- Pension Offset and Windfall Elimination...

Interview

Hearing of the Senate Committee on Finance's Subcommittee on Social Security, Pensions, and Family Policy- Pension Offset and Windfall Elimination...

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SEN. COLLINS: Thank you.

Thank you, Mr. Chairman, for the opportunity to appear before your subcommittee to discuss the Social Security Fairness Act, which our colleague from California, Senator Feinstein, and I have introduced.

I do want to point out that this has been a completely bipartisan effort. I know that Senator Feinstein very much wanted to be here today. We've talked about this. We wrote together to you to ask you to hold this hearing. And I commend you for seizing hold of this important issue and for your leadership.

Our bill repeals both the windfall elimination provision and the government pension offset. I believe that these two provisions unfairly penalize individuals for holding jobs in public service when the time comes for them to retire. Indeed, as we discussed earlier today, it's a powerful disincentive for people to work for a while in the private sector and then come into the public sector.

These two provisions have enormous financial consequences for many of our teachers, police officers, firefighters, postal workers and other public employees. Given their important responsibilities, it's simply not right to penalize them when it comes to their earned Social Security benefits.

And I emphasize that word earned, Mr. Chairman. These public servants or their spouses have all paid taxes into the Social Security system on their private sector wages. So have their employers. They've also worked long enough to earn their Social Security benefits.

So in a normal situation -- since they paid in their taxes, their employer's paid in their share of the tax, and they've worked long enough to qualify -- one would think that they would be able to collect the benefit for which they are eligible. Yet because of the way the provisions of these offsets work, they are unable to receive all of the Social Security benefits to which they otherwise would be entitled. What a disincentive to come into critical professions like teaching, like police work, like being a firefighter or a federal employee.

As you mentioned, Mr. Chairman, the impact of these two provisions is most acute in 15 states, including yours and my home state of Maine, which have state retirement plans that lack a Social Security component. But I think it's important for our colleagues to realize that these two provisions affect public employees and retirees in every state. The effect is more profound in our states, but there are individuals in every single state who are adversely affected.

In particular, many of our emergency responders, our postal workers and other federal employees -- people whom we count upon each and every day -- are harmed by these provisions. Nationwide, more than one-third of teachers and education employees and more than one- fifth of other public employees are affected by these offsets. Almost 1 million retired public employees across the country have already been harmed by these provisions, and many more stand to be harmed in the future.

At a time when we should be doing all that we can to attract qualified individuals to public service, this reduction in retirement benefits makes it even more difficult for our federal, state and local governments to recruit and retain the public servants who are so critical to the safety, well-being and education of our families.

What is most troubling to me, Mr. Chairman, and I know that it is to you as well, is that this offset is most harsh for those who can least afford the loss and that is lower-income women. In fact, of those affected by the GPO, more than 70 percent are women. According to the Congressional Budget Office, the GPO reduces benefits by more than $3,600 a year and that's an amount that can make the difference between a comfortable retirement and being on the edge of poverty for far too many retirees.

Many Maine teachers in particular have talked to me about the impact of these provisions on their retirement security. They love their jobs. They're so devoted to the children whose lives they have such an impact on. But they can't help but be worried about their future and their financial security.

Mr. Chairman, in September of 2003 -- four years ago -- I chaired what I believe was the first oversight hearing in the Senate to examine the affect of these offsets on our public employees and retirees. I shared with you this morning the compelling testimony that we heard from a teacher in Maine. For the record, I hope you'll allow me to repeat it one more time because I think it's important that we put a human face on exactly the people who are affected by these unjust provisions.

Julia Wooster (sp) of Columbia, Maine was 73 at the time when she testified before me. She had worked for more than 20 years, first as a waitress and a variety of factory jobs, and then at age 49 -- 49 -- she decided to go to college to pursue her dream, her life-long dream of becoming a teacher. She began teaching at age 52. She taught full-time for 15 years before retiring at the age of 68. But because she had only taught for 15 years, she doesn't receive a full state pension. Yet she's still subject to the full penalties under the GPO and the WEP. That's despite having worked for 20 years in low-paying jobs in the private sector.

As a consequence, she receives just $156 a month in Social Security benefits, even though she paid into the system and worked so hard for 20 years. And as a consequence, Mr. Chairman, her monthly pension income is under $800. That is just not fair for someone who's worked an entire lifetime.

After a lifetime of hard work, Mrs. Wooster (sp) is still substitute teaching just to make ends meet. At age 77, she simply cannot afford to fully retire and that is the impact of these two provisions and that is simply not right.

Mr. Chairman, I so appreciate your holding this hearing and moving this bill along. I urge the subcommittee to take action. I am so willing to help in any way that I can. I know that fixing this problem will cost some substantial sums over time, but surely we can start right now by taking the incremental steps toward full repeal to modify the affect of these two unfair provisions.

Finally, Mr. Chairman, I hope we can structure this bill so that it's helping people who are retired now. I don't think anyone's seeking a retroactive payment, but if we could help those like Mrs. Wooster (sp), who simply are being so unfairly penalized by these provisions on a prospective basis as well as those who retire later, I think we will be performing a great service.

Again, thank you, Mr. Chairman, for your leadership on this issue. I hope you'll count on me as your partner as we continue to work together to correct this terrible inequity.

Thank you.

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