My parents "sold" AmWay and Sasco Aloe Vera products for awhile when I was a kid. At one point they were sitting on piles of Sasco merchandise they couldn't sell, cuz everyone they knew in our small town was also a "distributor". In the end it was what they gave their family for Christmas and birthdays for years just to get rid of it. I think a bunch of it went in a dumpster when we cleared their house out when they retired and moved to an apartment. I member coming home from college to find a bedroom had been turned into an Aloe Vera showroom. Oddly enough the couple who sat at the top of the pyramid in our area were charismatic Christians who spoke in tongues and my catholic parents were bedazzled by this phenomenon/parlor trick. At one point in this endeavor I member them borrowing money from my sister and I who were in college and working on the side, to pay their taxes and my almost missing my tuition payment cuz my student loan didn't come through in time. My sister and I would work like hell during the summers and stockpile cash to pay for the next year's school expenses and took out student loans, so my parents knew we had cash. Looking back it was weird, I have always connected the three things. Even at 19 years old I felt the whole thing was predatory.
Sooooo, there is a bipartisan movement to "fix" one part of the SS mess. But it is taking some wrangling and in the end will just increase the shortfall. But it does seem like it corrects an inequity in the system. And it may mean that my postal worker brother won't end up living in my basement or my sister's, he can stay in his girlfriend's basement cuz she will find him a more useful source of revenue in a few years.
Eileen Kleinman always thought it was unfair her working as a Cincinnati, Ohio school teacher meant her Social Security would be reduced when she retired. However, that might be changing.
Last week, the bipartisan Social Security Fairness Act secured enough support to force a House vote. The Act would repeal the Windfall Elimination Provision (WEP) and Government Pension Offset (GPO) that reduce Social Security benefits for certain retirees who also receive pension income. If the bill passes, it will go to the Senate for a chance to become law.
Together, WEP and GPO affect nearly three million Americans including police officers, firefighters, postal workers and public-school teachers.
Windfall is definitely a misnomer,” said Kleinman, 73, who still works as a substitute teacher and in retail. “There is no windfall.”
How do WEP and GPO affect Social Security?
The Windfall Elimination Provision (WEP) reduces Social Security for those who receive so-called “non-covered” pension income from jobs, typically public sector roles, that didn’t contribute Social Security payroll taxes. The reduction can be significant - up to half the pension amount.
The Government Pension Offset (GPO) reduces survivor or spousal benefits if a person’s pension is non-covered. GPO affects fewer people, but it cuts the Social Security benefit by two-thirds of the pension amount.
For example, if you receive $1,200 a month from the pension, your spousal or survivor benefit would be reduced by $800. If the benefit is $800 or less, the GPO would reduce it to zero.
The rules were intended to prevent Social Security from overpaying people who worked in non-covered pension jobs, policy experts said. People with earnings outside the Social Security system can look like low earners.
Since Social Security replaces a higher percentage of prior earnings for low-paid workers than for higher-paid workers, those who received healthy government salaries for decades would receive the same advantage in Social Security calculations as longtime low-income workers, they argued.
Why do some Americans think WEP and GPO are unfair?
Some analysts note that people who earn a non-covered pension may have worked other jobs that paid into Social Security. Not getting the money back that they paid toward retirement isn’t fair, they said.
“These are people who earned credits toward Social Security benefits from second jobs outside of their career in government paid jobs,” said Mary Johnson, independent Social Security and Medicare policy analyst. “They should not be penalized for having worked as firefighters, teachers, or any other government job. Hard working people deserve to receive the full amount of their Social Security benefits.”
How is retirement affected by reduced Social Security?
For divorced, retired police officer Mike Barker, 67, the reduction in Social Security means he’s still working a $15-an-hour job in Brimfield, Ohio.
Since Barker worked other jobs, he said he accumulated enough credits for $700 per month in Social Security that would be reduced because of his government pension. After WEP, he would receive $168 every month in Social Security, but that was just shy of his Medicare Part B payment that’s deducted from Social Security.
“They kept sending me bills every month,” he said. “The frosting on the cake is that I’m still working four days a week. They take Medicare and Social Security out of what I make now, even though I’m collecting. I went to payroll, and they said they have to.”
Every week, $23.72 is withheld for Social Security and $5.44 for Medicare, Barker said.
“If I had that $600 to $700 more a month in Social Security, I would give this up,” he said about his current job.
Is repealing WEP and GPO the right move?
Eliminating WEP and GPO would cost about $196 billion over 10 years, the Congressional Budget Office estimates.
With Social Security already facing cuts in 2033, according to the Social Security and Medicare Boards of Trustees, a repeal would make things worse, some economists said. Social Security cuts could come a year or more sooner, the nonpartisan Committee for a Responsible Federal Budget estimates.
The Center on Budget and Policy Priorities, seen as center-left, suggested updating WEP and GPO instead, possibly using a proportional formula that would calculate Social Security benefits based on income earned from jobs that paid into Social Security. For example, if 75% of a person’s earnings come from these jobs, then the person would receive Social Security equal to 75% of what they would have gotten if all their earnings had come from those positions.
A proportional formula wouldn’t have a great effect on Social Security’s solvency, it said.
What are the odds the Social Security Fairness Act will pass?
No one knows for certain if the bill will become law, but a guaranteed vote in the House is “as close as we ever got,” said Barker, who's still not convinced a gridlocked Congress can push it through.
According to Rep. Garret Graves (R-LA), one of the bill’s sponsors, the petition should get a vote in the House in the coming weeks.
“I am still working and paying into both systems,” Kleinman said. “I hope this gets favorably resolved before I retire.”
As I see it there really is only one logical solution to this problem. Vote Rubepublican and give me more tax cuts.
I am a job creator for fucks sake, you know I will do good things for you with the money.
Free beer and band performances at Solstice 5!
