Time running out for Senate to pass Social Security Fairness Act

(NewsNation) — The House recently passed a Social Security bill that would expand benefits for public-sector workers and their families but the Senate is running out of time to get it over the finish line.

The Social Security Fairness Act — which won bipartisan support — would revoke two federal policies that limit retirement payments for certain retirees who also receive government pensions.

If passed, the change would impact nearly 2.5 million retirees, increasing Social Security payments for many, including firefighters, police officers, and teachers.

"For more than 40 years, the Social Security trust funds have been artificially propped up by stolen benefits that millions of Americans paid for and that their families deserve," the bill's sponsors, Republican Rep. Garrett Graves of Louisiana and Democratic Rep. Abigail Spanberger of Virginia said in a statement.

The legislation has strong support in the Senate but the upper chamber has to vote on the bill before the end of the year otherwise it expires. That could be a tall order with a jam-packed schedule and just weeks before a new Congress begins.

Here's what to know about the Social Security Fairness Act and what could happen next.

What is the Social Security Fairness Act?

The bill would eliminate two policies: the Windfall Elimination Provision and the Government Pension Offset.

Those two provisions reduce Social Security benefits for workers and their family members if the worker receives a pension based on employment not covered by Social Security.

For example: teachers who do not earn Social Security in public schools but work part-time during the summer at another job covered by Social Security have reduced benefits. That's true even if they pay into the system long enough to receive benefits. 

One study found that households affected by either provision take a 20% hit in the present value of their lifetime Social Security benefits, reducing their total wealth by around 5 to 6%.

"Social Security’s short-term solvency should not be propped up by the stolen benefits of these retirees — benefits they have long been owed and will never get back," Spanberger and Graves wrote in a letter to Senate leaders, urging them to pass the bill.

Ohio Senator Sherrod Brown, a Democrat, and Maine Senator Susan Collins, a Republican, also signed onto the letter, calling for a vote "as swiftly as possible."

The bill passed the House with an overwhelming majority: 327-75.

How much would it cost?

The biggest downside to the bill is the cost.

According to the Congressional Budget Office, the changes would add an estimated $196 billion to the federal deficit over ten years. The bill would also bump up Social Security’s looming insolvency by about six months, according to the Committee for a Responsible Federal Budget, which opposes the legislation.

"They should call this bill the Social Security UnFairness Act; it creates a Windfall Expansion Provision for a small number of beneficiaries who would get to double-dip their retirement benefits," Maya MacGuineas, the committee's president, said in a statement.

In roughly a decade, retirees could see their Social Security benefits slashed by hundreds of dollars a month if Congress doesn't shore up the program's finances.

MacGuineas said repealing the two provisions in the bill would increase the size of the benefit cut and make Social Security's financial problem worse.

A recent Urban Institute report echoed those concerns and found that eliminating the two policies would disproportionately benefit people with higher incomes.

"Ultimately, getting rid of pension offsets for teachers and other government employees would do more harm than good, favoring people with the most resources and pushing the burden of fixing Social Security’s long-term financing onto everyone else," the report said.

What happens next?

The bill has 63 sponsors in the Senate which is important because 60 votes are needed to pass most legislation in the chamber.

If the Social Security Fairness Act does get over the finish line in the Senate, it would head to President Joe Biden's desk. The changes would be effective for benefits payable after December 2023.

Brown and Collins are pushing their colleagues to take up the bill but other legislation could take priority before the balance of power changes in the new year.

Government funding, disaster relief, and an annual must-pass defense bill are all likely to take up considerable floor time.

The act could still be passed another way, by linking it to a larger legislative package but it remains to be seen whether that will happen. Graves and Spanberger ultimately had to force a vote to get the House to vote on the bill.

If the bill doesn't get passed before the end of the year, it would expire and lawmakers would have to start over.

The Associated Press contributed to this report.