- SOCIAL SECURITY PROVISIONS AFFECTING PUBLIC EMPLOYEES

[House Hearing, 108 Congress]
[From the U.S. Government Publishing Office]

SOCIAL SECURITY PROVISIONS AFFECTING
PUBLIC EMPLOYEES

=======================================================================

HEARING

before the

SUBCOMMITTEE ON SOCIAL SECURITY

of the

COMMITTEE ON WAYS AND MEANS
U.S. HOUSE OF REPRESENTATIVES

ONE HUNDRED EIGHTH CONGRESS

FIRST SESSION

__________

MAY 1, 2003

__________

Serial No. 108-36

__________

Printed for the use of the Committee on Ways and Means

U.S. GOVERNMENT PRINTING OFFICE

93-600 WASHINGTON : 2004
_________________________________________________________________
For sale by the Superintendent of Documents, U.S. Government
Printing Office Internet: bookstore.gpo.gov Phone: toll free
(866) 512-1800; DC area (202) 512-1800 Fax: (202) 512-2250 Mail:
Stop SSOP, Washington, DC 20402-0001

COMMITTEE ON WAYS AND MEANS

BILL THOMAS, California, Chairman

PHILIP M. CRANE, Illinois CHARLES B. RANGEL, New York
E. CLAY SHAW, JR., Florida FORTNEY PETE STARK, California
NANCY L. JOHNSON, Connecticut ROBERT T. MATSUI, California
AMO HOUGHTON, New York SANDER M. LEVIN, Michigan
WALLY HERGER, California BENJAMIN L. CARDIN, Maryland
JIM MCCRERY, Louisiana JIM MCDERMOTT, Washington
DAVE CAMP, Michigan GERALD D. KLECZKA, Wisconsin
JIM RAMSTAD, Minnesota JOHN LEWIS, Georgia
JIM NUSSLE, Iowa RICHARD E. NEAL, Massachusetts
SAM JOHNSON, Texas MICHAEL R. MCNULTY, New York
JENNIFER DUNN, Washington WILLIAM J. JEFFERSON, Louisiana
MAC COLLINS, Georgia JOHN S. TANNER, Tennessee
ROB PORTMAN, Ohio XAVIER BECERRA, California
PHIL ENGLISH, Pennsylvania LLOYD DOGGETT, Texas
J.D. HAYWORTH, Arizona EARL POMEROY, North Dakota
JERRY WELLER, Illinois MAX SANDLIN, Texas
KENNY C. HULSHOF, Missouri STEPHANIE TUBBS JONES, Ohio
SCOTT MCINNIS, Colorado
RON LEWIS, Kentucky
MARK FOLEY, Florida
KEVIN BRADY, Texas
PAUL RYAN, Wisconsin
ERIC CANTOR, Virginia

Allison H. Giles, Chief of Staff
Janice Mays, Minority Chief Counsel

______

SUBCOMMITTEE ON SOCIAL SECURITY

E. CLAY SHAW, JR., Florida, Chairman

SAM JOHNSON, Texas ROBERT T. MATSUI, California
MAC COLLINS, Georgia BENJAMIN L. CARDIN, Maryland
J.D. HAYWORTH, Arizona EARL POMEROY, North Dakota
KENNY C. HULSHOF, Missouri XAVIER BECERRA, California
RON LEWIS, Kentucky STEPHANIE TUBBS JONES, Ohio
KEVIN BRADY, Texas
PAUL RYAN, Wisconsin

Pursuant to clause 2(e)(4) of Rule XI of the Rules of the House, public
hearing records of the Committee on Ways and Means are also published
in electronic form. The printed hearing record remains the official
version. Because electronic submissions are used to prepare both
printed and electronic versions of the hearing record, the process of
converting between various electronic formats may introduce
unintentional errors or omissions. Such occurrences are inherent in the
current publication process and should diminish as the process is
further refined.

C O N T E N T S

__________

Page

Advisory of April 23, 2003, announcing the hearing............... 2

WITNESSES

Social Security Administration, Robert M. Wilson, Deputy
Commissioner, Legislation and Congressional Affairs;
accompanied by Timothy J. Kelley, Director of Benefits Staff... 15
U.S. General Accounting Office, Barbara D. Bovbjerg, Director,
Education, Workforce, and Income Security Issues............... 21

______

American Federation of State, County and Municipal Employees,
American Federation of Labor-Congress of Industrial
Organizations, Annette Williams................................ 51
Berman, Hon. Howard L., a Representative in Congress from the
State of California............................................ 12
Coalition to Preserve Retirement Security, and State Teachers
Retirement System of Ohio, Teresa Harrison..................... 68
Frank, Hon. Barney, a Representative in Congress from the State
of Massachusetts............................................... 8
Jefferson, Hon. William J., a Representative in Congress from the
State of Louisiana............................................. 43
McKeon, Hon. Howard P. ``Buck,'' a Representative in Congress
from the State of California................................... 14
Fraternal Order of Police, Chuck Canterbury...................... 63
National Association of Police Organizations, William J. Johnson. 59
National Association of Retired Federal Employees, Charles L.
Fallis......................................................... 48
National Education Association, and Texas State Teachers
Association, Donna Haschke..................................... 54

SUBMISSIONS FOR THE RECORD

Adams, Paula, The Woodlands, TX, statement....................... 82
Allebach, Anna, Houston, TX, statement........................... 82
Almond, Judith Faith, Spring, TX, statement...................... 82
Anderson, Thomas R., School Employees Retirement System of Ohio,
Columbus, OH, statement........................................ 145
Andrews, Andrea, Houston, TX, statement.......................... 82
Apsey, Diana, Houston, TX, statement............................. 83
Arduini, Karen, Rock Falls, IL, statement........................ 84
Arvey, Harriet, Houston, TX, statement........................... 84
Association of California School Administrators, Sacramento, CA,
Karen Stapf Walters, letter and attachment..................... 85
Association of Texas Professional Educators, Austin, TX, Sheila
Fields, statement.............................................. 87
Aupperle, Eldon R., Toulon, IL, statement........................ 88
Baiardi, Liz, Trumbull, CT, statement............................ 88
Balzer, James P., Quincy, IL, statement.......................... 89
Bauman, Patricia, Sun City Center, FL, statement................. 89
Beckner, Azel Hill, Bowling Green, KY, statement................. 89
Benore, Mary Kathleen, Sylvania, OH, statement................... 89
Bertolini, Mary, Sebring, OH, letter............................. 90
Bird, Patricia L., Johnston City, IL, letter..................... 90
Blackburn, Mary, Houston, TX, statement.......................... 91
Boatwright, Kandice, Sour Lake, TX, statement.................... 91
Bond, Carolyn, Mendota, IL, statement............................ 92
Bowen, Charlotte F., Houston, TX, statement...................... 92
Bruner, Janice, Cambridge, OH, statement......................... 92
Bunger, Patricia H., Prosper, TX, statement...................... 93
Burns, Hon. Max, a Representative in Congress from the State of
Georgia, statement............................................. 93
Bush, Mary Ann, Cincinnati, OH, letter........................... 95
California Federation of Teachers, Sacramento, CA, Judith
Michaels, statement............................................ 95
California State Teachers' Retirement System, Sacramento, CA,
Gary Lynes, statement.......................................... 96
Cantara, Virginia, Cape Elizabeth, ME, statement................. 98
Chen, Wai-Kai, Chicago, IL, statement............................ 98
Chisum, Martha, Beaumont, TX, statement.......................... 99
Christophersen, Irene, Rockton, IL, letter....................... 99
Clark, Judith M., Huntington Beach, CA, letter................... 100
Colorado Public Employees' Retirement Association, Denver, CO,
Robert Gray, statement......................................... 101
Conkrite, Jan, Woosung, IL, statement............................ 102
Corradetti, John, Joliet, IL, statement.......................... 103
Cotten, Ellen, Carbondale, IL, statement......................... 103
David, Janice A., Washington, IL, statement...................... 103
Davis, Catherine, San Anselmo, CA, statement..................... 103
Doose, Paul R., Santa Monica, CA, statement...................... 104
Doutt, Johnine, Houston, TX, statement........................... 104
Drisko, Hugh E., Orrington, ME, statement........................ 105
Emery, David C., York, ME, statement............................. 105
Empen, Ferol, Polo, IL, statement................................ 106
Engers, Carolyn T., Joliet, IL, letter........................... 106
Evans, Diane C., Katy, TX, statement............................. 107
Ferguson, Mike, Carrollton, TX, statement........................ 108
Fields, Sheila, Association of Texas Professional Educators,
Austin, TX, statement.......................................... 87
Fink, Rodney J., Macomb, IL, statement........................... 108
Fitzgerald, Christine, Houston, TX, statement.................... 108
Folkerth, Mary Jane, Springfield, OH, statement.................. 109
Foster, Donald J., Ironwood, MI, statement....................... 109
Fox, Hollis K., Pagosa Springs, CO, statement.................... 111
Fuchs, Jeanne, Houston, TX, statement............................ 112
Gallagher, Barb, Elmhurst, IL, statement......................... 112
Gardner, Keren Eula, Murrieta, CA, statement..................... 112
Gebhardt, John H., John Wood Community College Annuitants
Association, Quincy, IL, statement............................. 115
Gordon, Betty, Skokie, IL, statement............................. 112
Gray, Robert, Colorado Public Employees' Retirement Association,
Denver, CO, statement.......................................... 101
Hacking, Laurie Fiori, Ohio Public Employee's Retirement System,
Columbus, OH, statement........................................ 133
Hammond, Helene, Harrington, ME, statement....................... 113
Harper, Robert A., State University Annuitants Association,
Chicago, IL, joint letter...................................... 150
Hari, Carol J., Roberts, IL, letter.............................. 113
Hendersen, Arlene, Roseville, CA, statement...................... 114
Hoffman, Roslyn, State University Annuitants Association,
Chicago, IL, joint letter...................................... 150
Hopper, Sandra, Joliet, IL, statement............................ 114
Ichniowski, Thaddeus C., Normal, IL, letter and attachment....... 114
John Wood Community College Annuitants Association, Quincy, IL,
John H. Gebhardt, statement.................................... 115
Johnson, Virginia B., Hawthorn Woods, IL, statement.............. 116
Jones, Cathey, Houston, TX, statement............................ 116
Kahn, Ellen, Homewood, IL, statement............................. 117
Karlovetz, Martha, Lake Sherwood, MO, statement.................. 118
Kazmerski, Stanley M., Dixon, IL, statement...................... 119
Keene, Hugh, Auburn, ME, statement............................... 119
Kelly, William J., Visalia, CA, statement........................ 119
Kirkpatrick, Wanda, Flower Mound, TX, statement.................. 120
Knepp, Mary, Moline, IL, statement............................... 120
Koesler, Don, Mount Morris, IL, statement........................ 120
Kopel, James, Moline, IL, statement.............................. 121
Kratzer, Dorothea H., Midland, OH, statement..................... 121
Ladwig, Larry, Moline, IL, statement............................. 121
Lattz, Myril, New Lenox, IL, letter.............................. 122
Layton, Gary C., Quartz Hill, CA, letter and attachment.......... 122
Lewis, Carol, Salem, OH, statement............................... 123
Lewisville Area Retired School Personnel Association, Lewisville,
TX, Sharron Pearson, statement................................. 123
Linz, Mary, Bangor, ME, statement................................ 123
Lundstedt, Joanne, Brecksville, OH, letter....................... 124
Lynch, Jacalyn J., South Paris, ME, statement.................... 124
Lynch, Judy, Roseville, CA, statement............................ 125
Lynes, Gary, California State Teachers' Retirement System,
Sacramento, CA, statement...................................... 96
Mathis, Darlene, DeLeon, TX, letter.............................. 126
Mayhew, Loretta and Carl, Cherryfield, ME, statement............. 126
McCall, Perry, Houston, TX, statement............................ 127
McCormick, Carolyn, Beaumont, TX, statement...................... 128
Means, Melissa, Nome, TX, statement.............................. 128
Meyerson, Jonathan P., Chevy Chase, MD, statement................ 129
Michaels, Judith, California Federation of Teachers, Sacramento,
CA, statement.................................................. 95
Montague, Sally, Bridge City, TX, letter......................... 130
Monto, Gary L., Police and Fire Retirees of Ohio, Columbus, OH,
joint letter (see listing under Public Employee Retirees
Incorporated).................................................. 136
National Association of Postmasters of the United States,
Alexandria, VA, Walter Olihovik, statement..................... 130
National Conference of Public Employee Retirement Systems,
Frederic H. Nesbitt, statement................................. 131
National Conference of State Legislatures, Hon. Felix Ortiz,
letter......................................................... 132
Nesbitt, Frederick H., National Conference on Public Employee
Retirement Systems, statement.................................. 131
Ohio Public Employee's Retirement System, Columbus, OH, Laurie
Fiori Hacking, statement....................................... 133
Ohio Retired Teachers Association, Columbus, OH, David Travis,
joint letter (see listing under Public Employee Retirees
Incorporated).................................................. 136
Oakes, Rodney, San Pedro, CA, statement.......................... 134
Olihovik, Walter, National Association of Postmasters of the
United States, Alexandria, VA, statement....................... 130
Ortiz, Hon. Felix, National Conference of State Legislatures,
letter......................................................... 132
Parker, S., Nuiqsut, AK, statement............................... 135
Patterson, Bill, Roseville, CA, statement........................ 135
Pearson, Sharron, Lewisville Area Retired School Personnel
Association, Lewisville, TX, statement......................... 123
Petta, Norma, Sacramento, CA, statement.......................... 136
Pincson, Stephanie, San Francisco, CA, statement................. 136
Police and Fire Retirees of Ohio, Columbus, OH, Gary L. Monto,
joint letter (see listing under Public Employee Retirees
Incorporated).................................................. 136
Pritchard, Tom, Texas Retired Teachers Association, Austin, TX,
statement...................................................... 153
Public Employee Retirees Incorporated, Columbus, OH, William I.
Winegarner; Police and Fire Retirees of Ohio, Columbus, OH,
Gary L. Monto; Ohio Retired Teachers Association, Columbus, OH,
David Travis; and School Employee Retirees of Ohio, Columbus,
OH, Valerie Rodgers; joint letter.............................. 136
Reddington, John, Bright, IN, statement.......................... 137
Reed, Laura J., Canfield, OH, statement.......................... 137
Resnick, Zwi, Fresno, CA, statement.............................. 138
Retired, County, and Municipal Employees Association of
Massachusetts, Boston, MA, Ralph White, letter and attachment.. 138
Rice, Daniel, Pewee Valley, KY, statement........................ 141
Richard, Sharon, Sour Lake, TX, statement........................ 141
Rodgers, Valerie, School Employee Retirees of Ohio, Columbus, OH,
joint letter, (see listing under Public Employee Retirees
Incorporated).................................................. 136
Root, Thomas W., Moline, IL, statement........................... 142
Rothschild, Paula, Marion, IL, letter............................ 142
Ryan, Mary A. Gazda, Charlestown, RI, statement.................. 143
Sandlin, Hon. Max, a Representative in Congress from the State of
Texas, statement............................................... 143
Sanford, Karen, Bartlesville, OK, statement...................... 144
Schiermeyer, Barton, Orion, IL, statement........................ 145
School Employee Retirees of Ohio, Columbus, OH, Valerie Rodgers,
joint letter (see listing under Public Employee Retirees
Incorporated).................................................. 136
School Employees Retirement System of Ohio, Columbus, OH, Thomas
R. Anderson, statement......................................... 145
Schwab, Joyce, Cincinnati, OH, statement......................... 146
Shaw, Suzanne, Penobscot, ME, statement.......................... 146
Sillings, Don, Huntington Beach, CA, statement................... 149
Smith, June Burlingame, San Pedro, CA, statement................. 149
State University Annuitants Association, Chicago, IL, Robert A.
Harper and Roslyn Hoffman, joint letter........................ 150
Sullivan, Denise, West Frankfort, IL, statement.................. 151
Sutera, James, Chicago, IL, statement............................ 151
Szakatits, Dana, Sterling, IL, statement......................... 152
Taniashvili, Patricia Hall, Surry, ME, statement................. 152
Taylor, Larry, Dixon, IL, statement.............................. 153
Texas Retired Teachers Association, Austin, TX, Tom Pritchard,
statement...................................................... 153
Thompson, Bettye D., Macomb, IL, statement....................... 154
Travis, David, Ohio Retired Teachers Association, Columbus, OH,
joint letter (see listing under Public Employee Retirees
Incorporated).................................................. 136
Tucker, Deborah, Boynton Beach, FL, letter....................... 154
Tully, Roy, Twin County Retired School Personnel Association,
Winnie, TX, statement.......................................... 156
Turco, Nancy M., Westerly, RI, statement......................... 156
Twin County Retired School Personnel Association, Winnie, TX, Roy
Tully, statement............................................... 156
Urbanski, Theresa ``Bianca,'' Crest Hill, IL, statement.......... 157
Vincent, Margaret Ann, Santa Ana, CA, statement.................. 157
Walters, Karen Stapf, Association of California School
Administrators, Sacramento, CA, letter and attachment.......... 85
Walters, Lynne, Auburn, ME, statement............................ 158
Ward, Crystal, Lewiston, ME, statement........................... 159
Wasneski, Donna, Grand Junction, CO, statement................... 159
Weidkamp, Keith L., Granite Bay, CA, statement................... 159
Whitcomb, Helga N. and Richard O., South Burlington, VT, letter.. 160
White, Ralph, Retired, County, and Municipal Employees
Association of Massachusetts, Boston, MA, letter and attachment 138
Williamson, Emma J., Joliet, IL, letter.......................... 161
Willis, Beatrice D., Winnie, TX, statement....................... 161
Winegarner, William I., Public Employee Retirees Incorporated,
Columbus, OH, joint letter (see listing under Public Employee
Retirees Incorporated)......................................... 136
Wolf, Martin C., Bishop, CA, statement........................... 162
Wright, Ralph E., Rocklin, CA, letter............................ 162
Wyatt, Claude M., Santa Anna, TX, statement...................... 163

SOCIAL SECURITY PROVISIONS AFFECTING PUBLIC EMPLOYEES

----------

THURSDAY, MAY 1, 2003

U.S. House of Representatives,
Committee on Ways and Means,
Subcommittee on Social Security,
Washington, DC.

The Subcommittee met, pursuant to notice,
at 10:05 a.m., in room B-318 Rayburn House Office Building,
Hon. E. Clay Shaw, Jr. (Chairman of the Subcommittee)
presiding.
[The advisory announcing the hearing follows:]

ADVISORY

FROM THE
COMMITTEE
ON WAYS
AND
MEANS

SUBCOMMITTEE ON SOCIAL SECURITY

CONTACT: (202) 225-1721
FOR IMMEDIATE RELEASE
April 23, 2003
SS-2

Shaw Announces Hearing on Social Security

Provisions Affecting Public Employees

Congressman E. Clay Shaw, Jr. (R-FL), Chairman, Subcommittee on
Social Security of the Committee on Ways and Means, today announced
that the Subcommittee will hold a hearing on Social Security provisions
affecting public employees. The hearing will take place on Thursday,
May 1, 2003, in room B-318 Rayburn House Office Building, beginning at
10:00 a.m.

In view of the limited time available to hear witnesses, oral
testimony at this hearing will be from invited witnesses only. However,
any individual or organization not scheduled for an oral appearance may
submit a written statement for consideration by the Committee and for
inclusion in the printed record of the hearing.

BACKGROUND:

Two Social Security provisions, the Government Pension Offset (GPO)
and the Windfall Elimination Provision (WEP), affect potentially about
6 million Federal, State, and local government employees. While these
provisions were intended to help equalize, not penalize, the treatment
of workers, many of those affected believe the provisions are unfair.
Alternatively, some have suggested that requiring all government
employees to pay Social Security taxes would ensure equal treatment of
both government and private-sector employees, and would eventually
eliminate the need for the GPO and WEP. Legislative proposals have been
introduced in the 108th Congress and previous Congresses to modify or
repeal the GPO and WEP.

Government Pension Offset

Social Security pays retirement and disability benefits to workers
who worked long enough in jobs subject to Social Security taxes. It
also pays spouse or widow(er) benefits to their wives and husbands.
Thus, married workers potentially qualify for two types of benefits:
(1) a benefit based on their own work, and (2) a spouse/widow(er)
benefit based on their spouse's work.

Spouse/widow(er) benefits were intended to help ensure that spouses
who earned a relatively small amount have a floor of income. Therefore,
spouse/widow(er) benefits are reduced dollar-for-dollar by any Social
Security benefit a person receives based on his or her own work under
what is called the ``dual-entitlement rule.''

Prior to the GPO's enactment in 1977, government workers who paid
into a public pension instead of Social Security could receive a full
public pension plus a full spouse/widow(er) benefit from Social
Security. In contrast, government and private sector workers who paid
Social Security taxes their whole careers had their spouse/widow(er)
benefits reduced or eliminated under the dual-entitlement rule. The GPO
was created to address this situation. Under the GPO, a worker's
spouse/widow(er) benefit is reduced by $2 for every $3 of public
pension resulting from a government job not subject to Social Security
taxes.

Windfall Elimination Provision

Social Security's benefit formula is designed to help keep people
out of poverty by replacing more of a low-wage worker's pre-retirement
wages than a high-wage worker's. However, the benefit formula only uses
wages subject to Social Security taxes and records ``zero'' earnings
for time spent in government employment not subject to Social Security
taxes. If a person has many years of ``zero'' earnings, he or she may
appear to have low wages on average over his or her career when that
was not the case.

Before the WEP was created, workers who spent some of their careers
in government jobs not subject to Social Security taxes benefited from
the ``weighting'' of Social Security's benefit formula toward lower-
wage workers, and received a ``windfall'' relative to workers who paid
Social Security taxes on their total earnings. Many people felt that
middle and high-income workers should not be given a benefit intended
for low-wage earners. The WEP was created in 1983 to address this
situation.

Mandatory Social Security Coverage of State and Local Government

Employees

Some research has suggested that requiring all newly hired
government employees to pay Social Security taxes would ultimately
eliminate the need for the GPO and WEP, simplify program administration
and modestly improve Social Security's long-term financial outlook.
Already, Federal employees hired after 1983 are required to pay into
Social Security. However, as was reported in a 1998 General Accounting
Office study (GAO-HEHS-98-196), States and localities with non-covered
workers would likely face higher costs to provide pension benefits
that, when combined with Social Security benefits, approximate benefits
provided to their current workers. At the same time, the Social
Security-covered workers would also receive additional benefits through
Social Security that are not part of the existing public pension plan.

In announcing the hearing, Chairman Shaw stated, ``The hard work
and dedication of teachers, police officers, firefighters, other public
employees, and all workers is deeply appreciated by our nation.
Everyone, public and private sector workers alike, deserves fair
treatment under Social Security. This hearing provides an opportunity
to get the facts straight and carefully examine all options in
addressing how Social Security's provisions affect public workers.''

FOCUS OF THE HEARING:

The Subcommittee will examine why the GPO and the WEP were enacted,
how they work and options for their modification or repeal.
Implications of mandatory coverage of such employees will also be
examined. Finally, the Subcommittee will determine how modifications to
current law would affect beneficiaries, the budget and solvency of the
Social Security Trust Funds.

DETAILS FOR SUBMISSION OF WRITTEN COMMENTS:

Please Note: Due to the change in House mail policy, any person or
organization wishing to submit a written statement for the printed
record of the hearing should send it electronically to
[email protected], along with a fax copy to
(202) 225-2610, by the close of business, Thursday, May 15, 2003. Those
filing written statements who wish to have their statements distributed
to the press and interested public at the hearing should deliver their
200 copies to the Subcommittee on Social Security in room B-316 Rayburn
House Office Building, in an open and searchable package 48 hours
before the hearing. The U.S. Capitol Police will refuse sealed-packaged
deliveries to all House Office Buildings.

FORMATTING REQUIREMENTS:

Each statement presented for printing to the Committee by a
witness, any written statement or exhibit submitted for the printed
record or any written comments in response to a request for written
comments must conform to the guidelines listed below. Any statement or
exhibit not in compliance with these guidelines will not be printed,
but will be maintained in the Committee files for review and use by the
Committee.

1. Due to the change in House mail policy, all statements and any
accompanying exhibits for printing must be submitted electronically to
[email protected], along with a fax copy to
(202) 225-2610, in WordPerfect or MS Word format and MUST NOT exceed a
total of 10 pages including attachments. Witnesses are advised that the
Committee will rely on electronic submissions for printing the official
hearing record.

2. Copies of whole documents submitted as exhibit material will not
be accepted for printing. Instead, exhibit material should be
referenced and quoted or paraphrased. All exhibit material not meeting
these specifications will be maintained in the Committee files for
review and use by the Committee.

3. Any statements must include a list of all clients, persons, or
organizations on whose behalf the witness appears. A supplemental sheet
must accompany each statement listing the name, company, address,
telephone and fax numbers of each witness.

Note: All Committee advisories and news releases are available on
the World Wide Web at http://waysandmeans.house.gov.

The Committee seeks to make its facilities accessible to persons
with disabilities. If you are in need of special accommodations, please
call 202-225-1721 or 202-226-3411 TTD/TTY in advance of the event (four
business days notice is requested). Questions with regard to special
accommodation needs in general (including availability of Committee
materials in alternative formats) may be directed to the Committee as
noted above.

Chairman SHAW. I think we have a problem with seating this
morning, but if we will all be patient with each other, we will
get through this and have the hearing that we promised a few
weeks ago. Social Security has been an enormously successful
program. It has been providing essential income replacement for
families when a breadwinner retires, dies, or becomes disabled.
It is based on a simple principle: workers pay a portion of
their hard-earned wages into Social Security in return for
promised benefits. In addition, Social Security promotes social
goals, such as poverty reduction, through its family benefits,
and a benefit formula that provides more generous earnings
replacement for low-wage workers. Policy makers have aimed over
the last 70 years to make Social Security fair to all workers.
One of the greatest challenges in achieving fairness is
balancing the program's social goals with the principle of
benefits as an earned right. Two examples of how Congress has
struggled to find that balance are the Government Pension
Offset (GPO) and the Windfall Elimination Provisions (WEP).
Although their jobs may be exempt from Social Security taxes,
hard-working and dedicated teachers, police officers,
firefighters, and other public officials and public servants
may still qualify for Social Security benefits based on
marriage to another worker. While planning for retirement, many
of these workers count on receiving both their government
pension and full spouse benefits. Many are shocked to learn
when they apply for Social Security benefits that their spousal
benefits may be reduced or eliminated because of a provision
called the GPO.
Many people wonder how such provisions ever made it into
law. The reason is because Social Security spousal benefits
were created to help homemakers who have little or no earned
pension of their own. Consequently, every working wife or
husband, regardless of their job, has their Social Security
spouse and widow benefits reduced--everyone--reduced based on
retirement benefits that they earn, even though their spouse
paid into Social Security and earned that spousal benefit. In
fact, if you compare two workers who have earned equal
retirement benefits during their lifetime, the government
worker who does not pay Social Security tax will receive a
higher spouse or widow benefit than the worker who does pay
Social Security taxes. That is because workers who pay into
Social Security have their spouse benefits offset by their
worker benefit dollar dollar-for-dollar. Workers who did not
pay Social Security have their spouse benefit reduced by $2 for
every $3 in pension. Let me repeat that: workers who pay into
Social Security have their spouse benefits offset by their
worker benefits dollar-for-dollar. Workers who did not pay
Social Security taxes have their spouse benefits reduced by $2
for every $3 of the pension. The WEP help ensure certain public
employees who did not pay Social Security taxes on their
government wages, but earn a benefit through other jobs, do not
inadvertently receive more than their fair share of benefits.
Social Security's benefits formula is designed to help people
out of poverty by replacing more of low-wage workers' pre-
retirement wages. However, if a worker does not pay Social
Security payroll taxes for his or her job, the benefit formula
records $0 of earnings for that job.
If a person has many years where zero earnings are recorded
for his job, he or she may appear to have low average wages
when that was actually not the case. As a result, the benefit
formula will treat him or her as a low-wage worker and replace
more of their pre-retirement wages, giving an unintended, so-
called windfall. Here again, many public servants are unaware
of these provisions and are stunned to learn that they will
receive less than planned. We have found this through our
hearings, and we have also found that the notice that is being
sent out sometimes does not reflect that, and people are indeed
unable to really plan for their retirement reasonably. Some
have suggested newly-hired State and local workers should be
required to pay Social Security taxes. Such a change would have
several positive effects: family benefits and cost-of-living
adjustment for public servants, elimination of both the GPO and
the WEP, improved program finances, and simplified program
administration. However, State and local governments might have
to reduce or eliminate their current pension plans to pay the
employer's share of the Social Security taxes.
Although these provisions were intended to equalize, not
penalize, public servants, these complex provisions and
proposals for change are often misunderstood. Through today's
hearing, I hope we can clear the air and examine the facts on
why these provisions exist, how efficiently they serve their
intended purpose, as well as their effect on beneficiaries'
lives. We will also examine legislative proposals to modify or
repeal the WEPs and the GPO. As we move forward, we must
carefully consider their short-term and long-term costs and
their effects on benefits. Since Social Security benefits are
paid out of current taxes, benefit increases for one group
would have to be offset by benefit reductions for others, tax
increases, or cutting back on other budget priorities. Clearly,
any change potentially affects both today's workers and the
taxpayers and everybody who will depend on Social Security in
the future, so we must proceed very prudently. I look forward
to hearing the views of all of our witnesses, and we are making
progress to identify ways to improve Social Security's fairness
to all American workers. Mr. Matsui?
[The opening statement of Chairman Shaw follows:]
Opening Statement of the Honorable E. Clay Shaw, Jr., Chairman, and a
Representative in Congress from the State of Florida
Social Security has been an enormously successful program,
providing essential income replacement to families when a breadwinner
retires, dies, or becomes disabled. It is based on a simple principle--
workers pay a portion of their hard-earned wages into Social Security
in return for promised benefits.
In addition, Social Security promotes social goals, such as poverty
reduction, through its family benefits and a benefit formula that
provides more generous earnings replacement for low-wage workers.
Policymakers have aimed over the last 70 years to make Social
Security fair to all workers. One of the greatest challenges in
achieving fairness is balancing the program's social goals with the
principle of benefits as an earned right. Two examples of how Congress
has struggled to find that balance are the Government Pension Offset
and the Windfall Elimination Provision.
Although their jobs may be exempt from Social Security taxes, hard-
working and dedicated teachers, police officers, firefighters, and
other public servants may still qualify for Social Security benefits
based on marriage to another worker. While planning for retirement,
many of these workers count on receiving both their government pensions
and full spouse benefits. They are shocked to learn when they apply for
Social Security benefits that their spousal benefits may be reduced or
eliminated because of a provision called the Government Pension Offset.
Many people wonder how such a provision ever made it into law. The
reason is because Social Security spousal benefits were created to help
homemakers who have little or no earned pension of their own.
Consequently, every working wife or husband, regardless of their job
has their Social Security spouse and widow benefits reduced based on
the retirement benefits they earn, even though their spouse paid into
Social Security and earned that spouse benefit.
In fact, if you compare two workers who have earned equal
retirement benefits during their lifetime, the government worker who
does NOT pay Social Security taxes will receive a higher spouse or
widow benefit than the worker who DOES pay Social Security taxes.
That's because workers who pay into Social Security have their spouse
benefit offset by their worker benefit dollar for dollar. Workers who
did not pay Social Security taxes have their spouse benefit reduced by
$2 for every $3 of the pension.
The Windfall Elimination Provision helps ensure certain public
employees who do not pay Social Security taxes on their government
wages, but earn a benefit through other jobs, do not inadvertently
receive more than their fair share of benefits. Social Security's
benefit formula is designed to help keep people out of poverty by
replacing more of low-wage workers' pre-retirement wages. However, if a
worker does not pay Social Security payroll taxes for his or her job,
the benefit formula records ``zero'' earnings for that job.
If a person has many years where ``zero'' earnings are recorded for
his job, he may appear to have low average wages when that was not the
case. As a result, the benefit formula would treat him as a low-wage
worker and replace more of his pre-retirement wages, giving an
unintended so-called ``windfall.'' Here again many public servants are
unaware of these provisions and are stunned to learn they will receive
less than planned.
Some have suggested newly hired state and local workers should be
required to pay Social Security taxes. Such a change would have several
positive effects: family benefits and cost-of-living adjustments for
public servants, elimination of both the Government Pension Offset and
the Windfall Elimination Provision, improved program finances, and
simplified program administration. However, state and local governments
might have to reduce or eliminate their current pension plans to pay
the employer's share of Social Security taxes.
Although these provisions were intended to equalize, not penalize
public servants, these complex provisions and proposals for change are
often misunderstood. Through today's hearing, I hope we can clear the
air and examine the facts on why these provisions exist, how
effectively they serve their intended purpose, as well as their effect
on beneficiaries' lives.
We will also examine legislative proposals to modify or repeal the
Windfall Elimination Provision and the Government Pension Offset. As we
move forward, we must carefully consider their short-term and long-term
costs and their effects on benefits. Since Social Security benefits are
paid out of current taxes, benefit increases for one group would have
to be offset by benefit reductions for others, tax increases, or
cutting back on other budget priorities. Clearly, any change
potentially affects both today's workers and taxpayers, and everybody
who will depend on Social Security in the future, so we must proceed
prudently.
I look forward to hearing the views of all our witnesses and our
making progress to identify ways to improve Social Security's fairness
for all workers.

Mr. MATSUI. Thank you very much, Mr. Chairman. I want to
particularly thank you for calling this hearing and also
suggesting that we might move expeditiously to perhaps markup
legislation. I realized that this issue had become very, very
critical a few months ago when we had an issue in Texas, in
terms of the Texas teachers' pension fund, and the fact that
there was a way for the Texans to get around, so to speak, the
GPO. There is a lot of pressure on us to take action on the
broader issue, so I appreciate again the hearing, and also the
possibility of a markup. Last year or the year before, I had
suggested that we pull back on the reform of these two
provisions, mainly because I had expected that we would be
reforming the Social Security system. The President, as all of
us know, in 2000, during the presidential race, had suggested
that he wanted to privatize Social Security and so I had
expected that by 2001, 2002, or perhaps 2003, we would raise
this issue in the context of a larger Social Security reform
package--particularly after the President's Commission came out
with its recommendations, in December 2001.
Unfortunately, I believe the President will not raise the
issue of reforming Social Security in 2003 or 2004. He probably
will wait until the year 2005, after the election is over,
because obviously, the issue of privatization has become very,
very critical. It could obviously result in significant cuts in
benefits for those current retirees. That being the case, I
think we need to address this issue today, because
unfortunately, about 400,000 people a year are affected by
these provisions. Second, I think as the Chair had indicated,
most people, almost all people, are not aware of the fact that
these provisions exist in law. For example, the GPO was enacted
in 1977, and we did not phase it fully in until 1983, mainly
because of the impact on individual families. Because of the
lack of awareness, people are really caught off-guard,
particularly the surviving spouse but, in many cases, the
entire family. In addition, to this, Federal property
guidelines indicate that the surviving spouse in America today
needs about 80 percent of what they were living on when two
spouses were alive. The GPO causes a significant reduction in
Social Security benefits--in many cases eliminating them
altogether. We cannot allow widows particularly, and others to
be put in this position.
The Chair has mentioned that this will cost money, and
there is no question about that. We have calculated, based on
estimates by the Social Security actuaries, that the costs of
eliminating both the WEP and the GPO over a 75-year period
would be one-tenth of 1 percent of the total gross domestic
product (GDP) of this country. If, in fact, we reform Social
Security completely for 75 years and make it whole and not have
a reduction in the benefit levels, it would cost about seven-
tenths of 1 percent of total GDP. So, it is an expensive
proposition to eliminate these two provisions. However, because
next week, we are going to be marking up a tax bill in
Committee, and probably be on the floor of the House, I might
just point out that the President's entire tax proposal since
he has been in office costs 2.7 percent of GDP. That is three
times the actual cost of reforming the entire Social Security
system for the next 75 years. I think the public ought to know
that, because the trade-off is do we want to take care of the
WEP and the GPO, or do we want to give a tax cut, such as
eliminating the double-taxation of dividends, which we all know
helps wealthy people? So, these are the trade-offs that we are
really talking about. It is my hope that through this
testimony, through my colleagues, through those witnesses, that
will be talking about this issue, that we really define this
issue, because the question is one of values. Do we want to
really help widows and widowers, people who are really hurting,
or do we want to help those that are wealthy in America? So,
Mr. Chairman, I thank you for this hearing, and I also thank
you for the possibility of perhaps marking up this legislation.
Thank you.
[Applause.]
Chairman SHAW. We have several Members of Congress who have
voiced interest in testifying before us this morning: a
classmate of mine, Mr. Barney Frank, who came to Congress with
me back in 1981; Mr. Berman of California; and Mr. McKeon of
California. If we can proceed in that order, Barney?

STATEMENT OF THE HONORABLE BARNEY FRANK, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF MASSACHUSETTS

Mr. FRANK. Thank you, Mr. Chairman, and I appreciate your
having this hearing. I think we have a moral obligation to make
some changes here. I know we play games with words, but I must
say, to begin calling this the windfall elimination is really
quite offensive. We have people who are being told that they
cannot fully collect money that, when they earned it, they were
legally entitled to. This is an after-the-fact change for a lot
of people. Nobody told people that it was a windfall when they
worked both jobs, and we should not be telling them after the
fact that it was a windfall to get what they had legally
earned. I think the whole idea was a bad one, and if we can
find the resources to repeal it, I think we should do that. I
have a lesser proposal, and I must say I can think of no
morally acceptable or economically good reason why we would not
do it.
The proposal I have on the windfall elimination, which, as
you know, was cosponsored by more than a majority of the House
last year thanks to the active energies of a lot of people,
would say that for people whose total income is less than
$24,000, this does not apply at all, and between $24,000 and
$36,000, it would phase it down. In other words, people who
were making more than $36,000 would not get any relief. I am a
little embarrassed that it is so modest, but I think it is
important to try to do something. To take people whose total
income from these two programs would be $24,000 a year or less,
and to penalize them and reduce money they earned seems to me
outrageous. I will be submitting, if I have the consent of the
Subcommittee, a memorandum from the Social Security chief
actuary, and what they told us in July 2002 was after the bill
is enacted, where at the rate of $2,000 a month, you are
exempt, and up to $3,000, phased-in, the total cost in the year
2003, unfortunately, since the Committee did not act on it last
year, and the House did not get to that, but it would have been
$1 billion. For the 10 years that they estimated, the total
cost was $17 billion. That is $1.7 billion a year.
[The information follows:]

SOCIAL SECURITY
MEMORANDUM

Refer To: TCB
Date:
July 9, 2002

From:
Tim Zayatz
Office of the Chief Actuary

Subject:

Revised Estimates for a Proposal to Limit the Windfall Elimination
Provision (WEP) to Workers with Combined Social Security (OASDI)
Benefits and Non-Covered Pensions in Excess of $2,000 per Month--
INFORMATION

Under present law, the Windfall Elimination Provision (WEP) may
reduce benefits for workers who first become eligible after 1985 for
OASDI benefits and at the same time are eligible for a pension based on
non-covered employment. Auxiliary benefits are affected only through
the reduction in the worker benefit.
The subject proposal, introduced as H.R. 1073, would eliminate WEP
for workers with combined OASDI Primary Insurance Amount (PIA) and
monthly non-covered pension of $2,000 or less; keep the current-law WEP
for combined amounts above $3,000; and provide for a phase-in, in
steps, for combined amounts between the thresholds. Under the proposal,
these thresholds remain fixed over time. Estimates for this proposal
were provided in my earlier memorandum dated May 8, 2002, but are
restated here to correct for a problem discovered with those previous
estimates.
Threshold amounts apply to benefits in current-payment status as of
the effective date, which we assume to be January 1, 2003, as well as
to benefits awarded in that year and later. The table below provides
10-year estimates for the proposal, in terms of the number of worker
and auxiliary beneficiaries affected and the additional benefits that
would be payable. Estimates are based on the 2002 OASDI Trustees Report
intermediate set of assumptions.

----------------------------------------------------------------------------------------------------------------
Beneficiaries affected Additional benefit payments
Calendar year (In thousands) (In millions)
----------------------------------------------------------------------------------------------------------------
2003 583 $1,033
----------------------------------------------------------------------------------------------------------------
2004 658 1,187
----------------------------------------------------------------------------------------------------------------
2005 741 1,347
----------------------------------------------------------------------------------------------------------------
2006 823 1,508
----------------------------------------------------------------------------------------------------------------
2007 904 1,667
----------------------------------------------------------------------------------------------------------------
2008 981 1,821
----------------------------------------------------------------------------------------------------------------
2009 1,053 1,965
----------------------------------------------------------------------------------------------------------------
2010 1,118 2,099
----------------------------------------------------------------------------------------------------------------
2011 1,177 2,219
----------------------------------------------------------------------------------------------------------------
2012 1,226 2,323
----------------------------------------------------------------------------------------------------------------
Totals:
----------------------------------------------------------------------------------------------------------------
2003-2007 -- 6,743
----------------------------------------------------------------------------------------------------------------
2003-2012 -- 17,170
----------------------------------------------------------------------------------------------------------------

Note that language from bill H.R. 1073 was not specific as to how
thresholds would be applied to beneficiaries in current-payment status
as of the effective date (1/1/03). We assume that the combined PIA and
non-covered pension amounts received in 2003 will be compared to the
thresholds, which is consistent with previous estimates provided by our
office. Alternatively, we could compare thresholds to the combined PIA
and non-covered pension amounts at the time they are first concurrently
received. This would result in markedly different estimates. We also
assume threshold comparisons are done one time, as opposed to an
ongoing annual basis.

/S/
Tim Zayatz, A.S.A.
Actuary

Now, I realize $17 billion is a considerable sum, but let
me put that in perspective. President Bush said that a tax cut
of $350 billion over a 10-year period was, to use the technical
economic term he used, an itty-bitty tax cut.
[Laughter.]
Well, if $350 billion is itty-bitty, I am asking for 5
percent of an itty-bitty.
[Laughter.]
It would seem to me that to compensate people who worked
hard at two jobs and who would otherwise be getting less than
$24,000 a year, we could afford 5 percent of an itty-bitty. I
think that may be a new method of counting here: one itty-
bitty; two itty-bitties.
[Laughter.]
As Everett Dirksen said, an itty-bitty here and an itty-
bitty there, and pretty soon, you are talking about a very
large national deficit.
[Laughter.]
So, equity clearly argues for that, but also, efficiency
does. I would also like to submit a letter from the
Massachusetts Association of School Committees. I was visited
by a group of people who run vocational schools in my district.
They are regionalized in Massachusetts. We all agree that it is
very important for us to train people in various fields of
work. It has now become a major problem in the recruitment of
vocational education teachers with experience in these trades,
because they are told that they would run into this. People did
not know this.
[The information follows:]

Massachusetts Association of School Committees, Inc.
Boston, Massachusetts 02109
January 21, 2003

Representative Barney Frank
United States House of Representatives
Room 2252 Russell House Office Building
Washington, DC 20515

Dear Congressman Frank:

Our Massachusetts delegation was delighted to have met with you to
discuss critical federal legislation for public schools. We are very
grateful, once again, for your willingness to give us time and to share
your thoughts on several important bills pending before Congress and
the newly enacted No Child Left Behind Statute.
We are particularly pleased to respond to your request for an
explanation of how the Social Security Windfall Elimination Provision
(WEP) and the Government Pension Offset (GPO) works to the specific
disadvantage of our Massachusetts School districts and to our regional
vocational technical schools in particular. Since you are a long time
champion of Social Security beneficiaries and you and your staff
understand the pension reduction mechanism well, I will not go into
detail about the pension calculation process. Suffice to say
Massachusetts teachers are victims of the WEP and GPO. I would like to
focus, however, on the unique problems for our public school districts
trying to recruit teachers in vocational subjects and other
disciplines.
Vocational Technical Schools attract many able teachers who bring
years of private experience in the trades with them to the classroom.
They are among our finest teachers because they share years of expert
on-the-job training and skills with young students aspiring to enter
their trades. Because Massachusetts public school employees have their
own public pension system and do not participate as faculty in the
Social Security retirement system under which many of them worked prior
to teaching, many of our vocational teachers find their Social Security
pension benefits reduced under WEP. Unfortunately, many did not
anticipate this impact when they entered the teaching profession. Their
successors, however, are much more mindful of the impact.
In the past we have always been able to recruit excellent teachers
for vocational technical schools from the ranks of skilled
tradespersons who were willing to retrain as educators. However, now,
as we recruit craftspersons of all ages, but particularly among those
who are doing life and retirement planning, we find they are unwilling
to risk the loss of their hard earned Social Security pension benefits
to enter a public retirement system. Tradespersons who might consider
entering teaching in their mid 40s or 50s will, at best earn a public
pension equal to 30 or 40% of their pre-retirement wage. Many will earn
less. They would consider this career change seriously if they knew
they could count on the full Social Security benefit to which they
would be entitled had they not earned a separate Massachusetts public
pension in their second careers.
When they confront having to sacrifice a significant share of their
Social Security benefit to earn a public pension, they are reluctant to
make a career switch to work with young students.
In the same situation are highly skilled workers in other
professions, including those skilled in mathematics and sciences and
other transferable subject matters who are also reluctant to give up
Social Security to enter public employment when it means a meaningful
reduction to their benefits.
We also note the impact of the Government Pension Offset for
spouses establishes a similar disincentive for people to change careers
to work in public schools. By offsetting the spouse's Social Security
benefit based on that spouse's public pension earnings a two tiered
system is created. Workers in identical jobs covered by Social Security
might generate substantially different pensions for their spouses based
solely on where those spouses worked or did not work.
We thank you again for your interest in this matter and for
requesting our explanation of the impact of the WEP and GPO upon
Massachusetts public school districts. We look forward to working with
you and thank you most sincerely for your efforts on behalf of Social
Security beneficiaries.

Yours truly,
Kenneth Pereira
Vice President

Let me, if I may, read a statement from this letter from
the Massachusetts Association of School Committees. ``In the
past, we have always been able to recruit excellent teachers
for vocational-technical schools from the ranks of skilled
tradespersons who were willing to be trained as educators.
However, now, as we recruit craftspersons of all ages but
particularly among those who are doing life and retirement
planning, we find they are unwilling to risk the loss of their
hard-earned Social Security pension benefits to enter a public
retirement system. Tradespersons who might consider entering
teaching in their mid-40s or 50s will at best earn a public
pension equal to 30 or 40 percent of their pre-retirement age;
many will earn less. They would consider this career change
seriously if they knew they could count on the full Social
Security benefits.'' I cannot understand why the richest
country in the world has to impose on these people that kind of
penalty. So, I believe that the cost is very reasonable. I
would hope that we could even do more, but at the very minimum,
it seems to me, what we are talking about is, and people talk
about rewarding work, et cetera, we are talking about people
who worked. They are only asking that they be allowed to
collect, in their retirement years, the amount of money that
they earned by their work. What we did with those earlier
amendments was to take away from some of them who retroactively
worked at the time, and now, we are imposing this kind of
disincentive. So, I hope we will act this year.
Chairman SHAW. Thank you, Barney, and thank you for staying
within the 5 minutes. I want to ask all the witnesses to stay
within the 5-minute limit. The only problem is, you are not
going to be able to get as many words in as Barney did in 5
minutes.
[Laughter.]
I am sure you can work on it. Howard, would you grab that
microphone and pull it over to you? Howard Berman.

STATEMENT OF THE HONORABLE HOWARD L. BERMAN, A REPRESENTATIVE
IN CONGRESS FROM THE STATE OF CALIFORNIA

Mr. BERMAN. Yes, I am going to try to just do an itty-bitty
number of the words that----
[Laughter.]
I do appreciate very much, Mr. Chairman, your holding this
hearing. This is an important issue, and it gives us a chance
to highlight the unfairness public employees face when they
retire. I became aware of this issue--I just did not quite know
about it until a few years ago, when my friend, Bill Lambert,
who represents the Los Angeles teachers, shared with me the
plight that public school districts encounter in recruiting
teachers. It turns out that one of the main deterrents to
convincing professionals to teach in California is that
teachers, in addition to agreeing to what I think are somewhat
inadequate wages and overcrowded classrooms, lose most of the
Social Security benefits they accrued working in other jobs. In
fact, in some cases, retired teachers can lose up to two-thirds
of their benefits because of the GPO and the WEP. This is quite
unfair, since these teachers or their spouses paid into Social
Security in former jobs, and now, they are penalized for
becoming State employees. It is ironic: the whole essence of
the Social Security system; it does not matter how much wealth
Bill Gates has, how much income they have, what private pension
programs they have. Nothing can affect their Social Security
benefit. If you are a government employee who is entitled to a
benefit in another pension system, you start dramatically
losing your Social Security benefits. It is a real penalty on
people who work in the public sector, and it has a very
negative public policy implication in that it prevents what has
become essential.
We have a desperate, desperate shortage of teachers in Los
Angeles. We very much are interested in recruiting mid-career
people, men and women who want to become teachers after
spending time in other industries. Why taking that teaching job
should ruin and cut into their ultimate Social Security benefit
that they earned in that other job is inexplicable to me. It is
not just a California problem. Alaska, Colorado, Connecticut,
Illinois, Kentucky, Louisiana, Maine, Massachusetts, Ohio,
Nevada, Texas, and Washington all face this very same
challenge.
I think we should do something to help our States and our
counties and municipalities in recruiting these employees, and
getting rid of the GPO and the WEP are two ways to do this. I
really hope that by conducting this hearing, you are showing
that the Committee considers this to be a serious issue, and I
hope we can go from here into action on this matter and would
ask permission--someone has given me a group of letters of
people far from my district--Texas seems to be the State of
origin--that they would like as part of this record, and I do
not know what happens to this record, but I would like to see
if I can get these letters into it.
[The prepared statement of Mr. Berman follows:]
Statement of the Honorable Howard L. Berman, a Representative in
Congress from the State of California
Thank you, Chairman Shaw, Ranking Member Matsui and Members of this
Committee for holding this hearing to highlight the unfairness some
public employees face when they retire.
I became aware of this issue some years ago when my good friend
Bill Lambert, who represents the teachers in Los Angeles, shared with
me the plight school districts encounter in recruiting teachers. He
told me that one of the main deterrents to convincing professionals to
teach in California is that teachers--in addition to agreeing to
inadequate wages and overcrowded classrooms--lose most of the Social
Security benefits they accrued working in other jobs.
In fact, in some cases, retired teachers can lose up to two-thirds
of their benefits because of the Government Pension Offset (GPO) and
the Windfall Elimination Provision (WEP). This is unfair since these
teachers--or their spouses--paid into Social Security in former jobs
and now they are penalized for becoming state employees.
The two provisions were created under the false assumption that
government pensions are the result of substantial careers in public
service. All too often, this is not the case. For example, many of the
teachers in the Los Angeles Unified School District are ``mid-career''
teachers--men and women who became teachers after spending time in
other industries.
Los Angeles, in particular, has an extreme shortage of teachers,
which is why teacher recruitment is so critical for them. But the
provisions affect not only teachers, but also the majority of public
employees: police officers, fire fighters, school bus drivers, and so
on. In addition, this problem is not unique to California. Alaska,
Colorado, Connecticut, Illinois, Kentucky, Louisiana, Maine,
Massachusetts, Ohio, Nevada, Texas and Washington face the same
challenge.
We are all familiar with the critical need our need for dedicated
public employees. We must help our states, counties and municipalities
in recruiting these employees. We can do this by eliminating the GPO
and WEP.
Thank you again for holding this hearing. I hope this is the first
of many conversations that will lead to the elimination of this
unfairness in Social Security.

Chairman SHAW. Without objection----
Mr. BERMAN. Thank you.
Chairman SHAW. Whatever happens to this record, those
letters will be with it.
Mr. FRANK. Excuse me, but I neglected to ask for permission
to submit a couple of documents.
Chairman SHAW. All witnesses will be able to submit the
full statement or extraneous material as they see fit. Mr.
McKeon, who has been very, very persistent and stubborn about
wanting this hearing--now, you have it. You have your own
microphone, so you may proceed.

STATEMENT OF THE HONORABLE HOWARD P. ``BUCK'' MCKEON, A
REPRESENTATIVE IN CONGRESS FROM THE STATE OF CALIFORNIA

Mr. MCKEON. Thank you, Chairman Shaw, Ranking Member
Matsui, and Members of the Subcommittee on Social Security for
allowing me the opportunity to testify before you today on the
GPO and WEP. I would like to express my gratitude to you for
your willingness to hold an open dialogue on the problems that
these provisions pose to the retirement of millions of
dedicated public workers. I would also like to take this
opportunity to welcome my fellow colleagues and other
distinguished guests for their support and testimony on this
important issue. Two years ago, along with my colleague,
Congressman Howard Berman--he has already talked a little bit
about how Mr. Lambert approached us and made us aware of how
important this was to teachers in our area of California--
together, we introduced the Social Security Fairness Act (H.R.
594), which would have brought a complete repeal of the GPO and
WEP. These portions of Social Security law reduce Social
Security benefits for people who have invested money into both
a State pension plan and Social Security. Specifically, the GPO
cuts spousal benefits by two-thirds, and the WEP uses a formula
to determine the precise amount of benefit loss, which could
turn into a complete loss of one's Social Security. In the
107th Congress, this bill garnered the bipartisan support of
186 cosponsors. Shortly thereafter, we had to divert our
attention to national security and the impending war on terror
in the shadows of the September 11th tragedy.
As our great country has risen out of the tragic events of
2001 to proclaim victory against al-Qaeda, and most recently
freedom for the people of Iraq, Congressman Berman and I
reintroduced the Social Security Fairness Act and look forward
to working with our colleagues this year to pass this important
piece of Social Security legislation, which already has 188
bipartisan cosponsors. As the post-9/11 world has shown us the
beginning of a new chapter in our history, it has also
illustrated the utter importance our first responders,
firefighters, and peace officers, play in our national defense
and protection. I feel that this repeal would take large
strides in showing our appreciation to these selfless public
servants. They risk their lives every day for our safety. It is
imperative that we change these laws to encourage people to
make the personal sacrifices associated with this line of work.
This encouragement, however, must expand to other professions
in the public sector as well, as our educational system is
experiencing a severe shortage of teachers. That was the thing
that I think really caught my attention. In California alone at
the time, we were suffering from a shortage of over 30,000
qualified teachers, and that problem is only going to get
worse. Our children's educators play a vital role in the
development of our Nation's youth. Education is the cornerstone
upon which our country is built, and anything we can do to
improve it enhances these United States.
Nevertheless, it has become increasingly difficult to
recruit people to teach due to the knowledge that Social
Security benefits will be reduced if he or she has past or
present employment where they paid into Social Security. I
talked to a lady the other night who happens to be a lobbyist
in town. She enjoys a good living and a good job. She said, in
my later years, I would like to do something that I would get a
little more satisfaction out of, and I would like to teach. She
said I know of the windfall provision problem, and because of
that, I do not want to take the risk. We have many people who
could add a great deal to the teaching profession in their
later lives and join teaching, but they are deterred by this.
Mr. Chairman, we must alleviate the financial pressures our
teachers will face once they reach the age of retirement and
repeal these provisions to thank them for their dedicated
efforts in the instruction of our children. Our legislation
will improve and grant more incentives for teaching and bring
more qualified people into this profession for the future.
Again, I would like to thank you, Mr. Chairman, for your
attention to this problem and your leadership in addressing
this issue today, and I also have a few letters that I would
like to enter, with your permission, into the record.
Chairman SHAW. It is going to be a very fat record, but
without objection.
Mr. MCKEON. Thank you.
Chairman SHAW. Do any of the Members have any questions of
these witnesses? If not, we thank you very much for taking the
time to be here, and your effort. You have all delivered very
powerful testimony.
Mr. MCKEON. Thank you very much.
[Applause.]
Chairman SHAW. We do have an additional Member who does
wish to testify, and that is Mr. Jefferson. We will take him
immediately after the next panel, which is made up of Robert
Wilson, who is the Deputy Commissioner of Legislation and
Congressional Affairs at the Social Security Administration
(SSA). He will be accompanied by Timothy Kelley, Director of
Benefits Staff, Legislation and Congressional Affairs at the
SSA. Barbara Bovbjerg, who is the Director of Education,
Workforce, and Income Security at the U.S. General Accounting
Office (GAO). We thank all of you for being here. Your full
testimony will be made a part of the record, and you may
proceed in any way you wish. We will ask you to try to confine
your remarks to 5 minutes. Mr. Wilson?

STATEMENT OF ROBERT M. WILSON, DEPUTY COMMISSIONER, LEGISLATION
AND CONGRESSIONAL AFFAIRS, SOCIAL SECURITY ADMINISTRATION;
ACCOMPANIED BY TIMOTHY J. KELLEY, DIRECTOR OF BENEFITS STAFF

Mr. WILSON. Thank you, Mr. Chairman. I do have a written
statement.
Chairman SHAW. It will be made a part of the record.
Mr. WILSON. Mr. Chairman and Members of the Subcommittee, I
am accompanied today----
Chairman SHAW. Oh, you do not have a mike. Excuse me; Mr.
Kelley, would you pull your mike over for Mr. Wilson?
Mr. WILSON. Thank you. Good morning, Mr. Chairman, Members
of the Subcommittee. As you have pointed out, I am accompanied
today by Mr. Tim Kelley--still cannot hear me? Sorry.
Chairman SHAW. Pull it a little closer to you.
Mr. WILSON. Okay.
Chairman SHAW. That should do it.
Mr. WILSON. All right; thank you. I am accompanied today by
Mr. Tim Kelley, Director of the Benefits Staff of the Office of
Legislation. Thank you for the opportunity to discuss two
Social Security provisions that are not well understood: the
GPO, and the WEP. Today, I want to briefly describe how they
work and also discuss issues that we should bear in mind when
considering legislative changes to these provisions. First, the
GPO provision was enacted in 1977. It affects government
retirees who are eligible for two retirement benefits: a
pension based on their own work in a Federal, State or local
government job not covered by Social Security and a spouse's or
surviving spouse's benefit based on their husband or wife's
work in jobs covered by Social Security. The GPO reduces a
person's Social Security benefit entitlement as the spouse or
surviving spouse by an amount equal to two-thirds of their
government pension. Before GPO, a person who worked in a
government job not covered under Social Security could receive,
in addition to a government pension, a full Social Security
spouse's or surviving spouse's benefit. Today, about 376,000
beneficiaries have benefits fully or partially offset by the
GPO, and of these, 73 percent are women. It is important to
note that a person who works in a job covered under Social
Security has always been subject to an offset under what is
commonly known as the dual entitlement provision. This means
that Social Security benefits payable to a spouse or a
surviving spouse are reduced by the amount of that person's own
Social Security benefit; thus, today, 6 million so-called
dually-entitled beneficiaries receive the equivalent of the
worker's benefit or the spouse's or surviving spouse's benefit,
whichever is higher.
The GPO provision is intended to accomplish the same
purpose as the dual entitlement provision, but the amount of
the reduction is different. Under the dual entitlement offset,
there is a dollar-for-dollar reduction. Under GPO, there is a
two-thirds reduction. Because the reduction is less under the
GPO than the dual entitlement offset, the government worker is
somewhat better off even with GPO. Let me now turn to the WEP
provision, which dates from the Social Security Amendments of
1983 (P.L. 98-21). It was intended to eliminate windfall Social
Security benefits for retired and disabled workers who receive
pensions from employment, again, not covered by Social
Security. Without the WEP, high-income workers who spent part
of their careers in jobs not covered by Social Security could
be treated as low-lifetime earners for Social Security
purposes, and they would inappropriately receive the advantage
of a heavily-weighted benefit formula intended to provide
workers who spent their whole lives in low-paying jobs with a
relatively higher benefit in relation to their prior earnings.
The WEP provision eliminates this potential windfall through a
different, less-heavily weighted benefit formula, but unlike
the GPO, the WEP can never eliminate a person's Social Security
benefit. The WEP now reduces Social Security benefits for about
635,000 retired and disabled workers. Of those affected, about
two-thirds are men.
The President's fiscal year 2004 budget includes a proposal
to improve the administration of WEP and GPO provisions. By
obtaining information from State and local government pension
administrators, it would allow the SSA to independently verify
whether beneficiaries have pension income from employment not
covered by Social Security. This change would improve our
program stewardship and reduce program costs by an additional
$2.2 billion over the first 10 years. In conclusion, let me say
that Congress established the WEP and GPO provisions for good
reason: to provide fair and equitable benefits under Social
Security for workers in both covered and non-covered
employment. A number of proposals have been made to change WEP
or GPO provisions. Some proposals would eliminate the
provisions entirely. Other proposals would provide higher
Social Security benefits for government workers whose pensions
from non-covered employment, in combination with their Social
Security benefits, are below certain levels. However, as has
been pointed out, these proposals would restore the favorable
treatment many workers in non-government jobs had before
enactment of the GPO and the WEP provisions, and these
proposals, as has been previously pointed out, all share a
common element: they would significantly increase the cost of
the Social Security program. Finally, let me say that I believe
that at this time, any significant changes should be considered
in a broader context of addressing the financing of the Social
Security program in the long-term. I want to thank you, Mr.
Chairman and the Subcommittee, for giving me the opportunity to
discuss the GPO and the WEP provisions. We would be glad to
answer any questions you may have.
[The prepared statement of Mr. Wilson follows:]
Statement of Robert M. Wilson, Deputy Commissioner, Legislation and
Congressional Affairs, Social Security Administration; accompanied by
Timothy J. Kelley, Director of Benefits Staff
Mr. Chairman, Members of the Subcommittee:
Thank you for the opportunity to discuss the Government Pension
Offset provision, or GPO, and the Windfall Elimination Provision, also
known as WEP. These provisions are not well understood, so today, I
would like to take some time to describe the purpose of these
provisions, how they work, and issues that should be evaluated when
considering legislative changes to them.
GPO Background
I would first like to describe the GPO provision and discuss why it
was enacted in 1977. For ease of discussion, when referring to
government employment, I am referring to employment at all levels of
Federal or State government that is not covered by Social Security.
The GPO affects government retirees who are eligible for two
retirement benefits:

A pension based on their own work in a Federal, State, or
local government job that was not covered by Social Security, and
A Social Security spouse's or surviving spouse's benefit
based on their husband's or wife's work in covered employment.

If the GPO applies, the person's Social Security spouse's or
surviving spouse's benefit is reduced by an amount equal to two-thirds
of the amount of the person's government pension based on work not
covered by Social Security. As of December 2002, about 376,000
beneficiaries had their benefits fully or partially offset due to the
GPO. Of those, 27 percent were men and 73 percent were women.
The intent of Congress when the GPO was enacted, was to assure that
when determining the amount of a spousal benefit (e.g., wife's,
husband's, widow's, widower's), individuals working in non-covered
employment would be treated in the same manner as those who work in
covered employment. The GPO provision removed an advantage that some
government workers had before the GPO was enacted. Until then, a person
who worked in a government job that was not covered under Social
Security could receive, in addition to a government pension based on
his or her own earnings, a full Social Security spouse's or surviving
spouse's benefit.
However, a person who works in a job that is covered under Social
Security is subject to an offset under the dual entitlement provision.
This provision, which has applied since 1940 when benefits were first
payable to a worker's family members, requires that Social Security
benefits payable to a person as a spouse or surviving spouse be offset
by the amount of that person's own Social Security benefit. Thus,
dually entitled beneficiaries receive the equivalent of the worker's
benefit or the spouse's/surviving spouse's benefit, whichever is
higher.
The GPO acts as a surrogate for the dual entitlement offset for
workers receiving a government pension based on work not covered under
Social Security because, if the work had been covered, any spouse's or
surviving spouse's benefit would have been reduced by the person's own
Social Security worker's benefit. The result of enactment of the GPO is
that spouses and surviving spouses are treated similarly, regardless of
whether their jobs are covered under Social Security or not.
Two-Thirds GPO Reduction
As noted previously, although the GPO provision is intended to
accomplish the same purpose as the offset under the dual entitlement
provision, the amount of the reduction under the GPO is different:

Under the dual entitlement provision, there is a dollar-
for-dollar reduction--if a person gets a Social Security retirement
benefit of $600 based on his or her own work, then $600 is subtracted
from any Social Security benefit the person would get as a spouse.
Under the GPO, there is a two-thirds reduction. If a
person gets a pension of $600 based on her own work in government, then
two-thirds of it ($400) is subtracted from any Social Security benefit
he or she would get as a spouse.

I would like to use an example that may help to clarify how the
dual-entitlement offset applies to a widow and compare that to a
similarly situated widow who is also entitled to a government pension.
Ms. Jones is receiving a Social Security retirement benefit of $900 per
month based on her own work. The amount she is potentially eligible for
as a widow is also $900. The amount of her Social Security retirement
benefit is subtracted from her widow's benefit, resulting in her
widow's benefit being fully offset under the dual entitlement
provision; she receives only her own Social Security retirement benefit
of $900.
The other widow, Ms. Smith, is in a comparable situation, but Ms.
Smith worked for the government, and her pension is $900. Potentially,
she too, is eligible for a Social Security widow's benefit of $900.
However, the GPO provision reduces the $900 widow's benefit by two-
thirds of the $900 pension (i.e., $600). After subtracting the $600
offset, the $300 result is the amount of the Social Security widow's
benefit payable in addition to her $900 government pension.
In this case, Ms. Jones, who worked only in covered employment,
receives a total of $900, and Ms. Smith, who worked in government
employment, receives a total of $1,200. As you can see, because the
reduction under the GPO is not as large as under the dual entitlement
provision, the government worker is better off than the person who
worked in employment covered only by Social Security.

--------------------------------------------------------------------------------------------------------------------------------------------------------
Dual Entitlement--Ms. Jones GPO--Ms. Smith
--------------------------------------------------------------------------------------------------------------------------------------------------------
Social Security Worker's Benefit = Worker's Government pension = $ 900
$900 Social Security Widow's benefit = $
Social Security Widow's Benefit = $900 900
----------------------------------------
Total Widow's Benefit Payable = $ 0

Total Social Security Payable = $900
(before offset)
GPO formula 2/3 of $900 = $ 600

Worker's Government pension = $ 900
Widow's Benefit ($900 - $600) = $ 300
----------------------------------------
Total Pension & Social Security =
$1200
(after offset)
--------------------------------------------------------------------------------------------------------------------------------------------------------

``Last Day Test'' Legislation
I would also like to discuss an issue that has received much
attention in the last couple of months--the so-called ``last day test''
used in the GPO provision. The criterion used in the law to determine
whether the government pension is based on work not covered by Social
Security is to determine the coverage status on the last day of
government employment. If the last day is not covered by Social
Security, then the GPO reduction applies.
The present ``last day test'' allows certain workers eligible for a
government pension based on non-covered State and/or local government
employment to also receive full Social Security spouse's and/or
surviving spouse's benefits by working only one day in covered
employment. As GAO has testified before this Subcommittee, in these
situations, Social Security contributions of less than $5 can result in
lifetime benefits of nearly $100,000. As you know, section 418 of H.R.
743 (the ``Social Security Protection Act of 2003,'' which passed the
House of Representatives on April 2, 2003) would require that State and
local government workers be covered by Social Security throughout their
last 60 months of employment with the government entity in order to be
exempt from the government pension offset provision.
The Social Security Administration supports this provision in H.R.
743 as a way to improve the equity of the application of the GPO
provision. Essentially the same proposal is included in President
Bush's Fiscal Year 2004 Budget. Under present law, the vast majority of
government employees affected by the GPO are not able to use the last
day test because of the structure of the States' retirement systems. By
replacing the last day test with a requirement that an individual's
last 60 months of government employment must be covered, the provision
would more equitably apply the GPO to all non-covered workers in a
uniform and consistent manner. It would also provide more equitable and
consistent treatment between workers in covered and non-covered
employment for eligibility to Social Security spouse's and surviving
spouse's benefits.
Purpose of the WEP
I would now like to discuss the WEP provision. The Social Security
Amendments of 1983 (P.L. 98-21) included the WEP provision as a means
to eliminate ``windfall'' Social Security benefits for retired and
disabled workers receiving pensions from employment not covered by
Social Security. (The provision does not affect the Social Security
benefits payable to survivors of workers who received pensions based on
non-covered employment.)
The purpose of the provision was to remove an unintended advantage
that the weighting in the regular Social Security benefit formula would
otherwise provide for persons who have substantial pensions from non-
covered employment. This weighting is intended to help workers who
spent their whole lives in low-paying jobs by providing them with a
benefit that is relatively higher in relation to their prior earnings
than the benefit that is provided for higher-paid workers.
However, because benefits are based on average earnings in
employment covered by Social Security over a working lifetime (35
years), a worker who has spent part of his or her career in employment
not covered by Social Security appears to have lower average lifetime
earnings than he or she actually had. (Years with no covered earnings
are counted as years of zero earnings for purposes of determining
average earnings for Social Security benefit purposes.) Without the
WEP, such a worker would be treated as a low-lifetime earner for Social
Security benefit purposes and inappropriately receive the advantage of
the weighted benefit formula. The WEP provision eliminates the
potential ``windfall'' by providing for a different, less heavily
weighted benefit formula to compute benefits for such persons.
Computation of the WEP Reduction
Let me explain how the reduction under the WEP is computed. To do
this, I first need to explain how the regular (non-WEP) benefit formula
works. Under the regular benefit computation rules, a three-step
weighted benefit formula is applied to a worker's average indexed
monthly earnings (AIME) to determine his or her primary insurance
amount (PIA). The PIA is the monthly benefit amount payable to a
retired worker first entitled at the full retirement age or a disabled
worker. The PIA formula applicable to workers who reach age 62 or
become disabled in 2003 is:

90 percent of the first $606 of AIME, plus
32 percent of the next $3,047 of AIME, plus
15 percent of AIME above $3,653.

Under the WEP computation, the 90-percent factor applied to a
worker's average earnings in the first band of the Social Security
benefit formula generally is replaced by a factor of 40 percent for
workers who are receiving a pension from non-covered employment.

Under the regular Social Security benefit formula, a
worker would receive 90 percent, or $545, of the first $606 of his or
her average indexed monthly earnings.
Under the WEP formula, that worker would generally
receive 40 percent--$242--of the first $606 of AIME.
Under both scenarios, the 32 and 15 percent factors are
the same.

For a worker first eligible in 2003, the maximum WEP reduction is
$303 per month. Unlike the GPO, the WEP can never eliminate a person's
Social Security benefit.
For workers who have 30 or more years of substantial earnings, the
WEP does not apply at all. The reduction under the WEP is phased out
gradually for workers who have 21-29 years of substantial covered
earnings under Social Security.
However, the WEP provision includes a guarantee designed to help
protect workers with relatively low pensions based on non-covered
employment. This guarantee provides that the reduction in Social
Security benefits can never exceed one-half the amount of the pension
based on non-covered work.
As of December 2002, the WEP reduced the Social Security benefits
of about 635,000 retired and disabled workers. Of those workers
affected, 66 percent are men and 34 percent are women.
Proposal to Improve Administration of the WEP and GPO
The President's FY 2004 Budget includes a proposal that would
improve the administration of the WEP and GPO by improving the
coordination of reports of pension payments based on employment not
covered by Social Security. This change would give SSA the ability to
independently verify whether beneficiaries have pension income from
employment not covered by Social Security. When a person applies for
Social Security benefits, he/she is required to tell SSA if they are
receiving a pension based upon non-covered employment. SSA then obtains
verification of the pension and applies the WEP and/or GPO accordingly.
SSA largely relies on the applicant to correctly inform us that he/she
is entitled to a non-covered pension.
SSA has an ongoing computer-matching program with the Office of
Personnel Management (OPM) that matches persons receiving Social
Security benefits with persons receiving a pension from OPM based on
non-covered employment. However, SSA does not have any similar program
to identify Social Security beneficiaries who are also receiving
pensions based on non-covered work for a State or local government.
A past study of SSA's administration of the WEP and GPO provisions
by the General Accounting Office (GAO) found that there are many
beneficiaries who are not subjected to the WEP and GPO because SSA does
not know they are receiving pensions based on non-covered employment.
With respect to the issue of Social Security coverage for State and
local government employees, approximately 6.3 million such employees
are not covered by Social Security. This group represents 28 percent of
the 22.6 million employees who work for State and local governments.
There is much variation in the extent of Social Security coverage--both
within States and between States. For example, about 70 percent of all
non-covered State and local government employees work in seven States.
With this change, SSA would be able to obtain data on pensions
based on non-covered work in a more timely and consistent manner. The
proposal would thereby improve SSA's stewardship over the program and
the Social Security trust funds. SSA's Office of the Chief Actuary
estimates that this change would reduce program costs by $2.2 billion
over the first 10 years.
Conclusion
In conclusion, let me note that Congress established the WEP and
GPO provisions to prevent workers who spent a portion of their careers
in employment not covered by Social Security from receiving more
favorable treatment under Social Security than comparable workers who
had worked a lifetime in covered employment. Congress' intention was to
provide fair and equitable benefits under Social Security for workers
in both covered and non-covered employment.
A number of proposals have been advanced to change the WEP or GPO
provisions. Some proposals would eliminate the provisions entirely.
Other proposals would provide higher Social Security benefits for
government workers whose pensions from non-covered employment, in
combination with their Social Security benefits, are below certain
levels. These latter proposals focus on providing higher Social
Security benefits to public sector retirees, who were not covered by
Social Security during their years in government work, simply because
their combined public pension and Social Security benefits are deemed
to be ``too low.'' However, in doing so, these proposals would
reinstate the favored treatment afforded many workers in non-covered
employment prior to enactment of the GPO and the WEP. Further, these
proposals all share a common element--all would significantly increase
the cost of the OASDI program.
Finally, because changes to the GPO and the WEP would be costly, we
believe that at this time, any significant changes in the GPO or WEP
should only be considered as part of the broader context of
comprehensive reform of the Social Security program. Given that the
program is not in actuarial balance, it seems appropriate that
significant changes should be evaluated only when considering other
elements in the future modernization of Social Security.
I want to again thank the Chairman and the Subcommittee for giving
me this opportunity to discuss the GPO and WEP and to share SSA's
analysis on the legislation before this Subcommittee. As always, I
would be more than happy to provide assistance to the Members and more
than willing to work with you to provide any additional information you
request. I would be glad to answer any questions you might have
concerning the WEP and GPO provisions.

Chairman SHAW. Thank you, Mr. Wilson. Ms. Bovbjerg?

STATEMENT OF BARBARA D. BOVBJERG, DIRECTOR, EDUCATION,
WORKFORCE, AND INCOME SECURITY ISSUES, U.S. GENERAL ACCOUNTING
OFFICE

Ms. BOVBJERG. Thank you, Mr. Chairman, Mr. Matsui, Members
of the Subcommittee. I appreciate your inviting me here today
to discuss Social Security provisions affecting public
employees. Social Security is designed to be a universal social
insurance system and indeed covers 96 percent of American
workers. The non-covered status of the other 4 percent, who are
nearly all public employees, poses issues of fairness in the
program, and you have asked me to focus on how these issues are
addressed. My testimony is in three parts: first, a discussion
of Social Security's coverage of public employees; second, a
description of Social Security's special provisions affecting
non-covered public employees; and third, the potential
implications of mandating coverage for such employees. My
statement is based on a body of work we have published on these
topics in recent years. First, public employee coverage:
approximately one-fourth of the nation's public employees are
not covered by Social Security, which means they do not pay
Social Security taxes on their earnings from government
employment. At its inception, Social Security did not cover
government employees, because they had their own retirement
systems, and there was concern over Federal authority to impose
tax on State governments. Since then, many State and local
governments have elected Social Security coverage, and Congress
has covered all Federal Government workers hired after 1983.
However, about 6 million State and local government workers
today remain outside the Social Security system.
Even though non-covered employees may have many years of
earnings on which they did not pay Social Security taxes, they
can still become eligible for benefits. Because their Social
Security earnings records would show low- or no-covered
earnings, under Social Security benefit formulas, these workers
would be treated like low earners and would benefit from the
program's progressive benefit structure. To avoid paying
windfall benefits to such workers, Congress enacted provisions
designed to recognize non-covered workers' special
circumstances. Let me turn now to those provisions, and in the
interest of time, I will not repeat Mr. Wilson's explanation of
the GPO and the WEP. Let me move to the administration of these
provisions, which we have found to be problematic. The SSA
needs to know whether beneficiaries receive non-covered
pensions. However, work we did in 1998 found that SSA is often
unable to obtain this information, particularly for State and
local workers. At that time, we recommended that the Internal
Revenue Service (IRS) revise the reporting of pension
information on the form 1099-R, but the IRS has concluded it
does not have the authority to make that change. We are today
asking the Congress to direct the IRS to collect and report
this information. Doing so would save millions of dollars for
the trust funds and would reduce uneven and inequitable
enforcement of these provisions.
These provisions are also viewed by many as confusing and
unfair, and indeed, there are a variety of proposals to reduce
or repeal these benefit reductions. Such actions, while they
would reduce the confusion some retirees express when these
benefit reductions are applied, would also be costly to the
trust funds. Eliminating both provisions would cost about $40
billion over 10 years and would increase the long-range trust
fund deficit by about 6 percent. Further, repeal would in fact
redistribute income from those who have contributed to Social
Security for a working lifetime to those who have not, which
creates other issues of fairness. Finally, let me turn to the
question of mandatory coverage. Making Social Security coverage
mandatory for all has been proposed in the past to help address
the program's financing problems and would ultimately eliminate
the impetus for GPO and WEP provisions. Mandating coverage for
public employees would reduce the long-term trust fund deficit
by 10 percent. However, such a mandate could also increase
costs for the affected State and local governments, and even
then, because current uncovered employees would be
grandfathered at their own option, the GPO and WEP would still
be applied, although they would eventually, of course, become
obsolete. In conclusion, there are no easy answers to the
difficulties of equalizing Social Security's treatment of
covered and non-covered workers. Any reductions in the GPO or
WEP would ultimately come at the expense of other Social
Security beneficiaries and of taxpayers. Mandating universal
coverage would promise eventual elimination of the GPO and WEP,
but at potentially significant cost to the affected State and
local governments. Whatever the decision, it is important to
administer all elements of the Social Security program
effectively and equitably. To that end, I urge you to give IRS
the authority it needs to identify recipients of non-covered
pensions and help SSA maintain the integrity of its programs.
That concludes my statement, Mr. Chairman. I am here for
questions.
[The prepared statement of Ms. Bovbjerg follows:]
Statement of Barbara D. Bovbjerg, Director, Education, Workforce, and
Income Security Issues, U.S. General Accounting Office
Mr. Chairman and Members of the Subcommittee:
I am pleased to be here today to discuss Social Security provisions
affecting public employees. Social Security covers about 96 percent of
all U.S. workers; the vast majority of the rest are state, local, and
federal government employees. While these noncovered workers do not pay
Social Security taxes on their government earnings, they may still be
eligible for Social Security benefits. This poses difficult issues of
fairness, and Social Security has provisions that attempt to address
those issues. However, these provisions have been difficult to
administer. They have also been a source of confusion and frustration
for the workers they affect.
I hope I can help clarify and provide some perspective on the
complex relationship between Social Security and public employees.
Today, I will discuss Social Security's coverage of public employees,
Social Security's provisions affecting noncovered public employees, and
the potential implications of mandatory coverage of public employees.
My testimony is based on a body of work we have published over the past
several years.\1\
---------------------------------------------------------------------------
\1\ See the list of related GAO products at the end of this
statement.
---------------------------------------------------------------------------
In summary, Social Security's provisions regarding public employees
are rooted in the fact that about one-fourth of them do not pay Social
Security taxes on the earnings from their government jobs, for various
historical reasons. Even though noncovered employees may have many
years of earnings on which they do not pay Social Security taxes, they
can still be eligible for Social Security benefits based on their
spouses' or their own earnings in covered employment. To address the
fairness issues that arise with noncovered public employees, Social
Security has two provisions--the Government Pension Offset (GPO), which
affects spouse and survivor benefits, and the Windfall Elimination
Provision (WEP), which affects retired worker benefits. Both provisions
reduce Social Security benefits for those who receive noncovered
pension benefits, and both provisions also depend on having complete
and accurate information on receipt of such noncovered pension
benefits. However, such information is not available for many state and
local pension plans, even though it is for federal pension benefits. As
a result, GPO and WEP are not applied consistently for all noncovered
pension recipients. We have made recommendations to improve the
availability and tracking of key information, and in the federal case,
the implementation of our recommendations has saved hundreds of
millions of dollars. However, congressional action appears to be needed
in this area with respect to state and local government pensions. At
the same time, a number of proposals have been offered to either revise
or eliminate GPO and WEP. While we have not analyzed such proposals, we
believe it is important to consider both the costs and fairness issues
they raise.
Aside from the issues surrounding GPO and WEP, another aspect of
the relationship between Social Security and public employees is the
question of mandatory coverage. Making coverage mandatory has been
proposed to help address the program's financing problems. According to
Social Security actuaries, doing so would reduce the 75-year actuarial
deficit by 10 percent. Mandatory coverage could also enhance inflation-
protection, pension portability, and dependent benefits for the
affected beneficiaries, in many cases. However, to provide for the same
level of retirement income, mandatory coverage could increase costs for
the state and local governments that would sponsor the plans. Moreover,
the GPO and WEP would continue to apply for many years to come even
though they would become obsolete in the long run.
Background
Social Security provides retirement, disability, and survivor
benefits to insured workers and their dependents. Insured workers are
eligible for reduced benefits at age 62 and full retirement benefits
between age 65 and 67, depending on their year of birth.\2\ Social
Security retirement benefits are based on the worker's age and career
earnings, are fully indexed for inflation after retirement, and replace
a relatively higher proportion of wages for career low-wage earners.
Social Security's primary source of revenue is the Old Age, Survivors,
and Disability Insurance (OASDI) portion of the payroll tax paid by
employers and employees. The OASDI payroll tax is 6.2 percent of
earnings each for employers and employees, up to an established
maximum.
---------------------------------------------------------------------------
\2\ Beginning with those born in 1938, the age at which full
benefits are payable will increase in gradual steps from age 65 to age
67.
---------------------------------------------------------------------------
One of Social Security's most fundamental principles is that
benefits reflect the earnings on which workers have paid taxes. Social
Security provides benefits that workers have earned to some degree
because of their contributions and those of their employers. At the
same time, Social Security helps ensure that its beneficiaries have
adequate incomes and do not have to depend on welfare. Toward this end,
Social Security's benefit provisions redistribute income in a variety
of ways--from those with higher lifetime earnings to those with lower
ones, from those without dependents to those with dependents, from
single earners and two-earner couples to one-earner couples, and from
those who do not live very long to those who do. These effects result
from the program's focus on helping ensure adequate incomes. Such
effects depend to a great degree on the universal and compulsory nature
of the program.
According to the Social Security trustees' 2003 intermediate, or
best-estimate, assumptions, Social Security's cash flow is expected to
turn negative in 2018. In addition, all of the accumulated Treasury
obligations held by the trust funds are expected to be exhausted by
2042. Social Security's long-term financing shortfall stems primarily
from the fact that people are living longer. As a result, the number of
workers paying into the system for each beneficiary has been falling
and is projected to decline from 3.3 today to about 2 by 2030.
Reductions in promised benefits and/or increases in program revenues
will be needed to restore the long-term solvency and sustainability of
the program.
About One-Fourth of Public Employees Are Not Covered by Social Security
About one-fourth of public employees do not pay Social Security
taxes on the earnings from their government jobs. Historically, Social
Security did not require coverage of government employees because they
had their own retirement systems, and there was concern over the
question of the federal government's right to impose a tax on state
governments. However, virtually all other workers are now covered,
including the remaining three-fourths of public employees.
The 1935 Social Security Act mandated coverage for most workers in
commerce and industry, which at that time comprised about 60 percent of
the workforce. Subsequently, the Congress extended mandatory Social
Security coverage to most of the excluded groups, including state and
local employees not covered by a public pension plan. The Congress also
extended voluntary coverage to state and local employees covered by
public pension plans. Since 1983, however, public employers have not
been permitted to withdraw from the program once they are covered.
Also, in 1983, the Congress extended mandatory coverage to newly hired
federal workers.
The Social Security Administration (SSA) estimates that 5.25
million state and local government employees, excluding students and
election workers, are not covered by Social Security. SSA also
estimates that annual wages for these noncovered employees totaled
about $171 billion in 2002. In addition, 1 million federal employees
hired before 1984 are also not covered. Seven states--California,
Colorado, Illinois, Louisiana, Massachusetts, Ohio, and Texas--account
for more than 75 percent of the noncovered payroll.
Most full-time public employees participate in defined benefit
pension plans. Minimum retirement ages for full benefits vary; however,
many state and local employees can retire with full benefits at age 55
with 30 years of service. Retirement benefits also vary, but they are
usually based on a specified benefit rate for each year of service and
the member's final average salary over a specified time period, usually
3 years. For example, plans with a 2-percent rate replace 60 percent of
a member's final average salary after 30 years of service. In addition
to retirement benefits, a 1994 U.S. Department of Labor survey found
that all members have a survivor annuity option, 91 percent have
disability benefits, and 62 percent receive some cost-of-living
increases after retirement. In addition, in recent years, the number of
defined-contribution plans, such as 401(k) plans and the Thrift Savings
Plan for federal employees, has been growing and becoming a relatively
more common way for employers to offer pension plans; public employers
are no exception to this trend.
Even though noncovered employees may have many years of earnings on
which they do not pay Social Security taxes, they can still be eligible
for Social Security benefits based on their spouses' or their own
earnings in covered employment. SSA estimates that 95 percent of
noncovered state and local employees become entitled to Social Security
as workers, spouses, or dependents. Their noncovered status complicates
the program's ability to target benefits in the ways it is intended to
do.
Provisions Seek Fairness but Pose Administrative Challenges
To address the fairness issues that arise with noncovered public
employees, Social Security has two provisions--GPO, which addresses
spouse and survivor benefits and WEP, which addresses retired worker
benefits. Both provisions depend on having complete and accurate
information that has proven difficult to get. Also, both provisions are
a source of confusion and frustration for public employees and
retirees. As a result, proposals have been offered to revise or
eliminate both provisions.
Under the GPO provision, enacted in 1977, SSA must reduce Social
Security benefits for those receiving noncovered government pensions
when their entitlement to Social Security is based on another person's
(usually their spouse's) Social Security coverage. Their Social
Security benefits are to be reduced by two-thirds of the amount of
their government pension. Under the WEP, enacted in 1983, SSA must use
a modified formula to calculate the Social Security benefits people
earn when they have had a limited career in covered employment. This
formula reduces the amount of payable benefits.
Regarding GPO, spouse and survivor benefits were intended to
provide some Social Security protection to spouses with limited working
careers. The GPO provision reduces spouse and survivor benefits to
persons who do not meet this limited working career criterion because
they worked long enough in noncovered employment to earn their own
pension.
Regarding WEP, the Congress was concerned that the design of the
Social Security benefit formula provided unintended windfall benefits
to workers who spent most of their careers in noncovered employment.
The formula replaces a higher portion of preretirement Social Security-
covered earnings when people have low average lifetime earnings than it
does when people have higher average lifetime earnings. People who work
exclusively, or have lengthy careers, in noncovered employment appear
on SSA's earnings records as having no covered earnings or a low
average of covered lifetime earnings. As a result, people with this
type of earnings history benefit from the advantage given to people
with low average lifetime earnings when in fact their total (covered
plus noncovered) lifetime earnings were higher than they appear to be
for purposes of calculating Social Security benefits.
Both GPO and WEP apply only to those beneficiaries who receive
pensions from noncovered employment. To administer these provisions,
SSA needs to know whether beneficiaries receive such noncovered
pensions. However, our prior work found that SSA lacks payment controls
and is often unable to determine whether applicants should be subject
to GPO or WEP because it has not developed any independent source of
noncovered pension information.\3\ In that report, we estimated that
failure to reduce benefits for federal, state, and local employees
caused $160 million to $355 million in overpayments between 1978 and
1995. In response to our recommendation, SSA performed additional
computer matches with the Office of Personnel Management to get
noncovered pension data for federal retirees in order to ensure that
these provisions are applied. These computer matches detected payment
errors; correcting these errors will generate hundreds of millions of
dollars in savings, according to our estimates.\4\
---------------------------------------------------------------------------
\3\ See U.S. General Accounting Office, Social Security: Better
Payment Controls for Benefit Reduction Provisions Could Save Millions,
GAO/HEHS-98-76 (Washington, D.C.: Apr. 30, 1998).
\4\ SSA performed the first such match in 1999 and advised that it
will be done on a recurring basis in the future. SSA identified about
14,600 people whose benefits should have been calculated using WEP's
modified formula. We estimate that detecting these payment errors will
generate $207.9 million in lifetime benefit reduction for this cohort.
We further estimate each year's match will generate about $57 million
in lifetime benefit reductions for each new cohort.
---------------------------------------------------------------------------
Also, in that report, we recommended that SSA work with the
Internal Revenue Service (IRS) to revise the reporting of pension
information on IRS Form 1099R, so that SSA would be able to identify
people receiving a pension from noncovered employment, especially in
state and local governments. However, IRS does not believe it can make
the recommended change without new legislative authority. Given that
one of our recommendations was implemented but not the other, SSA now
has better access to information for federal employees but not for
state and local employees. As a result, SSA cannot apply GPO and WEP
for state and local government employees to the same degree that it
does for federal employees. To address issues such as these, the
President's budget proposes ``to increase Social Security payment
accuracy by giving SSA the ability to independently verify whether
beneficiaries have pension income from employment not covered by Social
Security.''
In addition to facing administrative challenges, GPO and WEP have
also faced criticism regarding their design in the law. For example,
GPO does not apply if an individual's last day of state/local
employment is in a position that is covered by Social Security.\5\ This
GPO ``loophole'' raises fairness and equity concerns.\6\ In the states
we visited for a previous report, individuals with a relatively minimal
investment of work time and Social Security contributions gained access
to potentially many years of full Social Security spousal benefits. To
address this issue, the House recently passed legislation that provides
for a longer minimum time period in covered employment.
---------------------------------------------------------------------------
\5\ Exemption due to ``The Last Day of Employment'' Covered Under
Social Security--State/Local or Military Service Pensions (SSA's
Program Operations Manual System, GN 02608.102).
\6\ See U.S. General Accounting Office, Social Security
Administration: Revision to the Government Pension Offset Exemption
Should Be Considered, GAO-02-950 (Washington, D.C.: Aug. 15, 2002).
---------------------------------------------------------------------------
At the same time, GPO and WEP have been a source of confusion and
frustration for the roughly 6 million workers and nearly 1 million
beneficiaries they affect. Critics of the measures contend that they
are basically inaccurate and often unfair. For example, some opponents
of WEP argue that the formula adjustment is an arbitrary and inaccurate
way to estimate the value of the windfall and causes a relatively
larger benefit reduction for lower-paid workers. A variety of proposals
have been offered to either revise or eliminate them. While we have not
studied these proposals in detail, I would like to offer a few
observations to keep in mind as you consider them.
First, repealing these provisions would be costly in an environment
where the Social Security trust funds already face long-term solvency
issues. According to SSA and the Congressional Budget Office (CBO),
proposals to reduce the number of beneficiaries subject to GPO would
cost $5 billion or more over the next 10 years and increase Social
Security's long-range deficit by up to 1 percent. Eliminating GPO
entirely would cost $21 billion over 10 years and increase the long-
range deficit by about 3 percent. Similarly, a proposal that would
reduce the number of beneficiaries subject to WEP would cost $19
billion over 10 years, and eliminating WEP would increase Social
Security's long-range deficit by 3 percent.
Second, in thinking about the fairness of the provisions and
whether or not to repeal them, it is important to consider both the
affected public employees and all other workers and beneficiaries who
pay Social Security taxes. For example, SSA has described GPO as a way
to treat spouses with noncovered pensions in a fashion similar to how
it treats dually entitled spouses, who qualify for Social Security
benefits both on their own work records and their spouses'. In such
cases, each spouse may not receive both the benefits earned as a worker
and the full spousal benefit; rather the worker receives the higher
amount of the two. If GPO were eliminated or reduced for spouses who
had paid little or no Social Security taxes on their lifetime earnings,
it might be reasonable to ask whether the same should be done for
dually entitled spouses who have paid Social Security on all their
earnings. Far more spouses are subject to the dual-entitlement offset
than to GPO; as a result, the costs of eliminating the dual-entitlement
offset would be commensurately greater.
Mandatory Coverage Has Been Proposed
Aside from the issues surrounding GPO and WEP, another aspect of
the relationship between Social Security and public employees is the
question of mandatory coverage. Making coverage mandatory has been
proposed in the past to help address the program's financing problems.
According to Social Security actuaries, doing so would reduce the 75-
year actuarial deficit by 10 percent.\7\ Mandatory coverage could also
enhance inflation-protection for the affected beneficiaries, improve
portability, and add dependent benefits in many cases. However, to
provide for the same level of retirement income, mandatory coverage
could increase costs for the state and local governments that would
sponsor the plans. Moreover, if coverage were extended primarily to new
state and local employees, GPO and WEP would continue to apply for many
years to come for existing employees and beneficiaries even though they
would become obsolete in the long run.
---------------------------------------------------------------------------
\7\ SSA uses a period of 75 years for evaluating the program's
long-term actuarial status to obtain the full range of financial
commitments that will be incurred on behalf of current program
participants.
---------------------------------------------------------------------------
While Social Security's solvency problems have triggered an
analysis of the impact of mandatory coverage on program revenues and
expenditures, the inclusion of such coverage in a comprehensive reform
package would need to be grounded in other considerations. In
recommending that mandatory coverage be included in the reform
proposals, the 1994-1996 Social Security Advisory Council stated that
mandatory coverage is basically ``an issue of fairness.'' The Advisory
Council's report noted that ``an effective Social Security program
helps to reduce public costs for relief and assistance, which, in turn,
means lower general taxes. There is an element of unfairness in a
situation where practically all contribute to Social Security, while a
few benefit both directly and indirectly but are excused from
contributing to the program.''
The impact on public employers, employees, and pension plans would
depend on how states and localities with noncovered employees would
react to mandatory coverage. Many public pension plans currently offer
a lower retirement age and higher retirement income benefit than Social
Security. For example, many public employees, especially police and
firefighters, retire before they are eligible for full Social Security
benefits; new plans that include Social Security coverage might provide
special supplemental benefits for those who retire before they could
receive Social Security benefits. Social Security, on the other hand,
offers automatic inflation protection, full benefit portability, and
dependent benefits, which are not available in many public pension
plans. Costs could increase by as much as 11 percent of payroll for
those states and localities, depending on the benefit package of the
new plans that would include Social Security coverage. Alternatively,
states and localities that wanted to maintain level spending for
retirement would likely need to reduce some pension benefits.
Additionally, states and localities could require several years to
design, legislate, and implement changes to current pension plans.
Finally, mandating Social Security coverage for state and local
employees could elicit a constitutional challenge.
Conclusions
There are no easy answers to the difficulties of equalizing Social
Security's treatment of covered and noncovered workers. Any reductions
in GPO or WEP would ultimately come at the expense of other Social
Security beneficiaries and taxpayers. Mandating universal coverage
would promise the eventual elimination of GPO and WEP but at
potentially significant cost to affected state and local governments,
and even so GPO and WEP would continue to apply for some years to come,
unless they were repealed. Whatever the decision, it will be important
to administer all elements of the Social Security program effectively
and equitably.
GPO and WEP have proven difficult to administer because they depend
on complete and accurate reporting of government pension income, which
is not currently achieved. The resulting disparities in the application
of these two provisions is yet another source of unfairness in the
final outcome. We have made recommendations to the Internal Revenue
Service to provide for complete and accurate reporting, but it has
responded that it lacks the necessary authority from the Congress. We
therefore take this opportunity to bring the matter to the
Subcommittee's attention for consideration.
Matter for Congressional Consideration
To facilitate complete and accurate reporting of government pension
income, the Congress should consider giving IRS the authority to
collect this information, which could perhaps be accomplished through a
simple modification to a single form.
Mr. Chairman, this concludes my statement, I would be happy to
respond to any questions you or other members of the Subcommittee may
have.
GAO Contributions and Acknowledgments
For information regarding this testimony, please contact Barbara D.
Bovbjerg, Director, Education, Workforce, and Income Security Issues,
on (202) 512-7215. Individuals who made key contributions to this
testimony include Daniel Bertoni and Ken Stockbridge.
Related GAO Products
Social Security: Congress Should Consider Revising the Government
Pension Offset ``Loophole.'' GAO-03-498T. Washington, D.C.: February
27, 2003.

Social Security Administration: Revision to the Government Pension
Offset Exemption Should Be Considered. GAO-02-950. Washington, D.C.:
August 15, 2002.

Social Security Reform: Experience of the Alternate Plans in Texas.
GAO/HEHS-99-31, Washington, D.C.: February 26, 1999.

Social Security: Implications of Extending Mandatory Coverage to
State and Local Employees. GAO/HEHS-98-196. Washington, D.C.: August
18, 1998.

Social Security: Better Payment Controls for Benefit Reduction
Provisions Could Save Millions. GAO/HEHS-98-76. Washington, D.C.: April
30, 1998.

Federal Workforce: Effects of Public Pension Offset on Social
Security Benefits of Federal Retirees. GAO/GGD-88-73. Washington, D.C.:
April 27, 1988.

Chairman SHAW. Thank you. Mr. Matsui?
Mr. MATSUI. Thank you very much, Mr. Chairman. Mr. Wilson,
you indicated in your testimony verbally and also in your
written testimony that we should not really be addressing these
issues until there is a broader context of Social Security
reform. When do you think the President is going to have his
Social Security reform package before us? In this Congress? In
2003-2004?
Mr. WILSON. Mr. Matsui, I cannot address that question.
Mr. MATSUI. You do not know?
Mr. WILSON. No, I do not know.
Mr. MATSUI. Do you know whether, at any time in the near
future, he will bring it up, or is it just speculation at this
time as to when he may come forward with a proposal?
Mr. WILSON. Again, I do not know.
Mr. MATSUI. Right; my understanding is that he is not going
to do so, but I understand where you think he may or may not,
but we really do not know. So, you are basically saying let us
just put this off?
Mr. WILSON. Well, no, Mr. Matsui, that is not really my
intent. My intent is to indicate that changes in the WEP and
GPO involve costs, particularly proposals eliminating them----
Mr. MATSUI. I understand what you are saying, and I do not
mean to interrupt, but I am on a 5-minute rule here.
Mr. WILSON. Okay.
Mr. MATSUI. So, let me just say this, then. You are saying
that we really do not need to make changes? Because your
testimony really kind of said that, though it did not really
say that. So, you are saying that basically, we do not need to
make changes; the current situation with the WEP and the GPO
are fine? Or are you trying to have it both ways? I just want
to know, because I just want to know what we are up against.
Chairman SHAW. If I might interrupt you, I believe that
whether it is changed is our job and not Mr. Wilson's.
Mr. MATSUI. I understand that, but you do have a President,
and he makes a lot of recommendations. I assume that he will
not want to duck this one.
Mr. WILSON. On the WEP and GPO?
Mr. MATSUI. So, I was wondering what the position might be.
Mr. WILSON. The Administration has no position on whether
or not----
Mr. MATSUI. So, you are here today to tell us that you have
no position on whether or not there should be a reform of the
GPO or WEP, one; and then, second, you are here to say whatever
you do, do not do it until we do Social Security reform; and
three, last, that I do not know when this Social Security
reform is coming up? So, I would like some help. What are you
telling me? What did we waste our time here talking about this
for?
Mr. WILSON. Well, I do not think it is a waste of time, Mr.
Matsui, with all due respect.
Mr. MATSUI. Well, what is the President's position on this?
What is your position on this?
Mr. WILSON. Again, we do not have an Administration
position on any particular bill at this point with respect to
WEP and GPO. The Commissioner's position on this is that, the
SSA is here and willing to work with the Committee on
addressing whatever issues it thinks it needs to address with
respect to these programs.
Mr. MATSUI. I would like to move over to another area. You
are suggesting, I think, and GAO is suggesting as well, that no
general fund moneys go into this. Is that right? At least your
testimony kind of indicated or at least ruled out general fund
moneys going into solving this problem; is that correct?
Mr. WILSON. I believe that is correct.
Mr. MATSUI. Right, but I am sure you have, because you are
obviously second in command at the SSA you have had an
opportunity to review the Commission's recommendations to the
President on his Social Security privatization proposal. I am
sure you have; is that correct?
Mr. WILSON. I have----
Mr. MATSUI. Yes, you are familiar with the three proposals.
Mr. WILSON. Generally, yes.
Mr. MATSUI. In two of those proposals, there is a
recommendation of general fund moneys at least for a temporary
period of time to go to pay for the private accounts; is that
correct?
Mr. WILSON. Yes.
Mr. MATSUI. Yes. So, you are willing to do it for private
accounts and privatizing Social Security, but you are not
willing to do it to help widows. I do not understand that.
Where are the values there? You cannot answer that. So, I
understand; I just want to--let me finish. You are willing to
use general fund monies to pay for private accounts, for
privatizing Social Security, but you are not willing to do it
for first responders like firefighter families, police
officers' families, and teachers' families. Is that correct,
Mr. Wilson?
Mr. WILSON. No, I would not put it that way.
[Laughter.]
Mr. MATSUI. How would you put it, then, if you could tell
me? I would like to get to the bottom of this.
Mr. WILSON. Well, not to be argumentative, Mr. Matsui, but
the provisions here that we are talking about, while they
affect government employees, they are not really targeted
necessarily to those whom you have identified. They apply to
government employees across the board. Again, we are here to
work with the Committee in any way that we can to assist in
addressing these concerns----
Mr. MATSUI. Thank you.
Mr. WILSON. About WEP and GPO.
Mr. MATSUI. Thank you.
Chairman SHAW. I would like to mention at this point that
two of the recommendations did increase a widow's benefit as
does my particular reform of Social Security, and I would be
very happy to entertain the gentleman from California's
proposal should you put one on the table.
Mr. MATSUI. Will the gentleman allow me to respond?
Chairman SHAW. Yes.
Mr. MATSUI. I think what you should do is bring your Social
Security privatization proposal before the House so that we
could vote on it, because I know that provision is in there,
but we would love to have a vote on your proposal, because your
proposal borrows about $11 trillion----
Chairman SHAW. Which pays every bit of it back----
Mr. MATSUI. Yes, in the year 2067.
Chairman SHAW. Preserves benefits and creates a $5
trillion----
Mr. MATSUI. If I might just respond to the gentleman and
his first question, you do not pay it back until the year 2067.
[Laughter.]
Chairman SHAW. Well, it pays it back, and it does not
decrease benefits. We are looking at some huge problems, but we
have got our plate full on this particular subject, and we need
to go forward on it. I would be glad to put my proposal next to
the gentleman's proposal, should he have one.
Mr. MATSUI. I think we should just vote on your proposal.
Chairman SHAW. Yes, well--Mr. Ryan?
Mr. RYAN. No questions.
Chairman SHAW. Mr. Brady.
Mr. BRADY. Thank you, Mr. Chairman. I appreciate the
testimony so far and know this is an important issue. I think
Social Security is confusing, and I think there are some myths
associated with the dealing with GPO that we need to discuss
today. What I really wanted to do was go from the abstract to
the real. This is a comparison for GPO. This is when you have
identical families who have worked the same amount of time; who
have got identical retirement benefits, and we chose basically
the average family in America. What happens when the husband's
Social Security retirement is about $1,000 a month, and the
average wife's is about $700 a month. It varies a little by
State-to-State as you would guess. This is what happens when
the husband passes away, because that is where we are really, I
think, concerned the most is when the widow is on her own. The
way it works today is that the Social Security family, when the
husband deceases, would have a month's retirement of $1,000.
That is because there is a dual entitlement offset. I think
that is one of the myths you talk about today: people do not
know; every working family in America has an offset. It is 100
percent if you are in Social Security, but for GPO families,
the reduction is less. Their spouses' benefits are reduced by
two-thirds. So, they keep more than the Social Security
families.
If we were to repeal GPO, the gap between all the rest of
America, 96 percent who are Social Security families and the 4
percent that are not, would increase dramatically, because when
you repeal GPO, you, in effect, treat those families like they
have never worked at all; they are completely dependent, and
so, we give them all of their husband's benefits. In this, the
gap is pretty dramatic between the rest of America with an
offset and the $1,700 if we repeal GPO. My question to our
panelists today is sort of to verify this formula: if we were
to repeal GPO, does that make the treatment between Social
Security families and GPO families more equal, or does it make
it less equal? Does it increase or decrease the gap between
Social Security families and GPO families? Barbara, if you
would like to start or Robert----
Ms. BOVBJERG. Well, in fact, this is one of the issues of
fairness that we have raised. One of the things that I think
Congress would have to consider in assessing these bills is
that the GPO was designed to create a rough equivalence between
people who have not been covered by Social Security and so have
not been making contributions to the system and couples who
have both been working and contributing--dually-entitled, we
call them. Those latter folks are offset. So, that is the
source of the GPO. If you were to repeal the GPO without
consideration of the dually-entitled couples, you would restore
that inherent inequity.
Mr. BRADY. Thank you. Sir?
Mr. WILSON. Yes, I would concur with that, Mr. Brady.
Mr. BRADY. That you increase the gap between identical
families? They would be treated much differently if GPO was
repealed--identical families?
Mr. WILSON. I believe that would be the case, as I
understand your question. You are referring to a family where
both a husband and spouse were covered by Social Security; when
the husband or one of the spouses dies, then, the surviving
spouse has an option of getting either her own benefit or the
spousal benefit. In the circumstance where the spouse in this
family was covered, and the spouse in the other family was
working in a non-covered situation, the latter would get a full
spousal benefit absent the GPO.
Mr. BRADY. This type of----
Mr. WILSON. Without the GPO, the spouse in the latter
situation would get the full benefit of their pension, as well
as, the full spousal benefit.
Mr. BRADY. So, this chart is essentially correct for the
average Social Security and GPO family in America as far as
treatment of how their retirement and spousal benefits would
work?
Mr. WILSON. I believe it is.
Mr. BRADY. Thank you. Any other comments? Let me just make
a point, and David, if you could change this real quickly; real
quickly, Mr. Chairman, I think we have got three myths
surrounding Social Security that are being discussed today that
I think are real important. Just so you know, I have put these
charts together trying to wade through the complications of
Social Security and find out how this affected my families; the
more work I did, the more I realized that these myths really, I
think, are hurting the debate. The first is, back home, I hear
this all the time: only teachers and government workers have
their spouses' benefits offset. In a recent town hall meeting
with 350 of my best teachers there, I asked the question how
many of you know, how many of you realize that every other
working family in America has an offset, too, has their
spouses' benefits reduced? Not a single hand went up. No one
was aware, and no one had been told that everyone else in
America has an offset. In fact, GPO workers are treated a
little better--I say a little better, not worse--than other
families in America.
[The charts follow:]

The second, private pensions are not offset, just
government pensions. That is not correct, either. Government
pension plans that do not pay into Social Security are not
private retirement plans. They are legal substitutes for Social
Security. So, they are treated like Social Security plans.
Again, while Social Security plans for most of Americans are
offset 100 percent, the GPO offset is only two-thirds, which I
think again most people do not understand. Then, the third
comment I get at home all the time is when my spouse dies, I
will not see a penny of their Social Security, but if I stayed
home all my life, I could keep all of it. Well, I did the
research through the SSA. I asked the simple questions: how
many stay-at-home moms are there? How many people really never
work throughout their life, and get all of their husband's
benefits? The bottom line is that today, it just does not
happen much. About 6 percent of Social Security people today
getting benefits are what you and I would describe as stay-at-
home moms. It is getting rarer and rarer and rarer, because
most people work after school, before they have kids. Many of
them go back--even if they can stay home, go back and work
again. So, sort of the traditional American family from 40
years ago, where only one works their whole life, just does not
happen anymore. So, that has become a false argument. Mr.
Chairman, I know I took way too much of my time, but maybe if
any of the other panelists have comments later on, we can
tackle this.
Chairman SHAW. Mr. Cardin?
Mr. CARDIN. Thank you, Mr. Chairman. Mr. Wilson, I am
disappointed that you do not have recommendations before us in
dealing with this issue. It seems like you are trying to defend
these offsets knowing full well that they add complexity to the
system; that they are not well-understood, as you pointed out,
and a lot of our constituents are confused by this. It does
create inequities. There are inequities created based upon the
length of service you have in the private sector or covered
employment or non-covered employment. We have inequities in the
Social Security system when you die. If you die early, you are
not going to get as much benefit as if you lived longer. So,
there are inequities in the system. There are certainly
inequities on the offsets. I guess I would have hoped that we
would have had at least some comment of how we could reform the
system to deal with that. On affordability, Mr. Matsui made
this point, but let me just underscore it if I might. We have a
proposal by Mr. Jefferson; we have a proposal by Mr. Frank, the
total cost of which, I believe is somewhere around 0.03 percent
of payroll. The current Social Security 75-year projected
deficit is 1.92 percent of payroll, so that would take it from
1.92 percent to 1.95 percent, not very much change at all.
So, when you say defer until we look at a comprehensive
proposal, I think it is unfair to the people who are adversely
impacted by our current system of inequities. So, I just would
have hoped that we would have had some discussion here at this
hearing by SSA on what type of changes should be made in these
offsets in order to deal with legitimate problems that are out
there. Unfortunately, we have not seen that, and I would hope
as we move forward, we would get some concrete suggestions,
because I can tell you, as Members of Congress, we cannot
defend how these offsets are being applied in certain
circumstances in our community, and we are looking for
reasonable suggested changes in the system. Let me, if I
might--I saw some inconsistency, I thought, between the
testimonies of our witnesses on what is happening on need of
information. Mr. Wilson, you get me a little bit nervous when
you say that you are getting to be getting direct information
from local government pension administrators, which seems to
indicate to me that we perhaps are going to have a lot larger
number of people who are going to be affected by the offset, or
the dollar amounts of the offsets are likely to be adjusted.
From GAO's testimony, I got the feeling that that cannot be
done unless there was Congressional authority given to obtain
that information. Can I get some clarification as to what we
might expect on administrative changes that are taken by SSA;
the number of people who may be affected by it and whether, in
fact, Congressional authority is needed?
Mr. WILSON. I am sorry; I did not mean to suggest to you
that we have definitely decided what approach to take. In fact,
that is something that is under current discussion among SSA,
the IRS, and the Office of Management and Budget. There are a
number of ways that it could be approached. One option that Ms.
Bovbjerg points out in her testimony is one approach which
would require legislation, and as----
Mr. CARDIN. Sir, in your testimony you said that it will
reduce program costs by an estimated $2.2 billion over the
first 10 years.
Mr. WILSON. Yes.
Mr. CARDIN. How is that $2.2 billion arrived at if you do
not have a specific proposal or specific change in
administration?
Mr. WILSON. Well, I think it is based on an estimation of
the number of people receiving income from non-covered
pensions, non-covered work, and the amount that benefits would
be reduced by the SSA having better information on the numbers
of people potentially affected. Right now, the situation is
that the SSA finds out if someone is receiving a pension from
non-covered work based on their statement at the time that they
apply. We have very little other sources of information. Your
question earlier about going out to all the State and local
governments, that is certainly one approach. Ms. Bovbjerg also
suggested----
Mr. CARDIN. To obtain this extra $2.2 billion, do you know
how many additional people will be subject to the offsets and
how much the offsets would be increased?
Mr. WILSON. We estimate that 9 percent of the beneficiaries
whose benefits should be affected by WEP or GPO.
Mr. CARDIN. How many are affected today? Maybe you should
make this available for the record, because I know that my time
is running forward, but there is a second point I want you to
address also, and whether you can do that without Congressional
authority. The GAO indicates that Congressional authority is
needed. You are indicating you are going to do this on your
own.
Mr. WILSON. I did not mean to suggest that we could do it
on our own.
Mr. CARDIN. Well, I thought you did. I thought you said
that the budget would implement these changes, and Mr.
Chairman, I would hope that we could get for our record how
many people would be affected by this new policy. We know the
number of people currently subject to the offset. I think we
should know how many people SSA or GAO believe are out there
that are not being subject to the offset today that you believe
should be or if the dollar amount is wrong would be increased,
because obviously, $2.2 billion over 10 years is a lot of
money, and it would affect a lot of people. We have a right to
know who is out there that you think are not currently--who are
subject to it who are not getting the offsets today.
Mr. WILSON. If I could, I would like to supply that to you
for the record, Mr. Cardin.
[The information follows:]

Based on a small sample from GAO's work in the State of Illinois,
SSA's Office of the Chief Actuary (OCACT) estimates that, if SSA had
perfect knowledge, the number of prior State and local government
employees whose Social Security benefits are affected by the WEP or GPO
would increase by 9 percent. OCACT assumes that about 80 percent of
these potentially affected beneficiaries would be detected by
enforcement with ``reliable'' data, which then represents a 7.2 percent
increase, rather than 9 percent. The cost estimates are based on these
assumptions.
With respect to beneficiaries who receive pensions from State and
local government employment not covered by Social Security, there were
235,708 beneficiaries (including auxiliaries) affected by WEP and
239,267 beneficiaries subject to GPO as of December 2002. Thus, a 7.2
percent increase would raise the number of beneficiaries subject to WEP
and GPO by about 17,000 beneficiaries for each--for a total of about
34,000 additional beneficiaries impacted by the WEP and GPO provisions.
The proposal would just impact prior State and local government
employees because, for the Federal government sector, SSA already has
in place a computerized record match with the Office of Personnel
Management to inform SSA of pension receipt.

Ms. BOVBJERG. Could I jump in for a moment?
Mr. CARDIN. Yes, please do.
Ms. BOVBJERG. In 1998, when we did the work on the GPO and
WEP, what we discovered is no one really knew for sure how many
people should have been subject to these provisions who were
not being offset because SSA did not know that they were
receiving pensions from non-covered employment. We had
recommended two things. One, which SSA did fairly quickly, was
to go back to the Office of Personnel Management and do not
only a pre-entitlement match on Federal retirees but also a
post-entitlement match. They are identifying everybody on the
Federal side now who receives a non-covered pension and
applying these provisions. They are not able to do that with
State and local retirees, and I do not think that anyone really
knows to what extent SSA is making overpayments there.
Mr. CARDIN. Mr. Chairman, if I could just make one point to
the Committee: if we are contemplating a change in the offset,
it seems to me we should do that before you go out and change
the way that the current program is being administered. I would
think that you would want to get some direction from Congress.
Chairman SHAW. Yes, I understand what you are saying, but I
think what I am hearing from the witnesses is that there are a
lot of people who are not getting the offset who under the law
should be getting the offset, but we do not have the data in
which to catch them. I think that is what you are saying.
Mr. CARDIN. That is correct.
Chairman SHAW. I think what Mr. Wilson is saying is that if
we treated everybody equally, that is where he came up with his
figure. So, many of these are estimates, at best.
Mr. CARDIN. My point is that rather than getting a lot of
people all upset, if we are going to change the policy, it
would be good for Congress to state its position before----
Chairman SHAW. I think that is absolutely right, but I
think that our instructions to the SSA from Congress is that
until the law is changed, enforce it. I think that has to be
the message.
Mr. Collins?
Mr. COLLINS. No questions.
Chairman SHAW. Mr. Pomeroy?
Mr. POMEROY. I thank the Chairman. I must begin by a
statement of surprise that the hearing where we are really
learning a good bit about people on Social Security in poverty
and some of them in poverty by application of a government-
imposed formula that reduces benefits, the concern from the
majority apparently is that we are not reducing the benefits
enough and that we have got to catch some more and reduce the
benefits further on a larger number of clients.
Chairman SHAW. If the gentleman will yield----
Mr. POMEROY. I yield.
Chairman SHAW. These laws were passed in a Democratic
Congress, so let us not go there.
Mr. POMEROY. Reclaiming my time, Mr. Chairman, we are in
this Congress, and you have advanced no proposal, and in the
middle of this hearing, you talk about we have got to reduce
the pensions for some others. I find that absolutely stunning,
and I also find stunning the fact that we have--I have the time
now, Mr. Chairman. I have the time, and I am going to keep the
time.
Chairman SHAW. You are misstating the facts.
Mr. POMEROY. Mr. Chairman, I have not yielded to you, and I
do not intend to. We have the Administration talking about--I
beg your pardon? We have the Administration here indicating no
plan, no proposal. We know that 11 percent of Social Security
recipients are living in poverty. The proposals before us at
least address some of that 11 percent. We have people on fixed
incomes in Social Security living in poverty. No plan; no broad
proposal; no little proposal; nothing. I just wish some of the
zeal, some of the planning, some of the effort and some of the
President's time and attention on corporate dividend taxation
which disproportionately benefits the richest 1 percent of the
people in this country, was directed to the people who are the
bottom levels of income in this country.
[Applause.]
Do not do that. Do not do that.
Chairman SHAW. I would--excuse me, I will give you this
time back. I would say to our guests that any type of clapping,
cheering, jeering or anything of this nature is not provided
for under the rules. I know that there are a lot of people
here, and emotions are high, and I can understand it, and I
appreciate it. I would ask you to take your enthusiasm out into
the hall if you feel that you have to have some type of an
outburst.
Mr. POMEROY. The issue is not simple, and I think the GAO
has done an interesting job of trying to put before us how all
of these things interrelate. It sharpens, in my opinion, the
need to look at the broader issue of people on Social Security
in poverty, especially widows, especially widows of very old
age. We need to do something about that. I think a place to
start is to at least modify the impact of this government-
imposed offset that is driving some of these widows into
poverty, and so, the Jefferson bill, which would at least have
some kind of income floor, so that when you impose this
government-imposed offset, you at least leave them enough money
to live on with some basic dignity would be a good place to
start. Now, as we move from that to the broader issue of the
consideration, there are all kinds of cost consequences that
relate to the long-term funding of the program. I do note that
the GAO states as fact on page 3 of their testimony reductions
in promised benefits and/or increases in program revenues will
be needed to restore the long-term solvency and sustainability
of the program. That does not seem to contemplate the prospect
of infusion of general fund resources into Social Security so
that you could avoid benefit reductions. If we were in a
position next decade to make a general fund contribution to
Social Security, we could get along without either raising
taxes or cutting benefits. Would that not be correct?
Ms. BOVBJERG. It would depend on how much of a contribution
you made and how stable the system became as a consequence,
what other things we did to----
Mr. POMEROY. I will accept that, but you acknowledge that
if the general fund was in a position to move some money into
Social Security, you could avoid benefit cuts. That is one of
the reasons why I am so very concerned about the tax cut
proposals we are considering which blow up the budget next
decade and make it absolutely certain that we will not be able
to move money into Social Security or avoid a benefit cut. As
people look at structural deficits in our budget, they should
also be forewarned that this is putting us right on a train
track down to benefit cuts in the future, and the poverty in
Social Security problems we have today could even get worse. I
thank the Chairman.
Chairman SHAW. Ms. Tubbs Jones?
Ms. TUBBS JONES. Mr. Chairman, thank you very much. I have
a couple of questions, because I am concerned, too, about this
whole issue of seniors being placed in greater poverty. Is
there a cost-of-living increase with Social Security for
seniors?
Mr. WILSON. Yes.
Ms. TUBBS JONES. What is that cost-of-living.
Ms. BOVBJERG. It rises with the consumer price index.
Ms. TUBBS JONES. What is it currently?
Mr. WILSON. It is 1.4 percent.
Ms. TUBBS JONES. Can you tell me what the inflation rate is
right now? You can answer, Mr. Kelley. Do not write notes.
Answer the question. Why are you here?
Mr. KELLEY. The consumer price index is used to adjust
Social Security benefits. The measuring period is the third
quarter of one year to the third quarter of the next year, and
the full consumer price index increase is used to adjust Social
Security benefits the following December.
Ms. TUBBS JONES. So, it is 1.4 percent? Once again, what is
the inflation rate right now?
Mr. KELLEY. Well, if the inflation rate is defined as equal
to the consumer price index, at least from the third quarter of
last year to the third quarter of last year----
Ms. TUBBS JONES. You say if it is. I am asking you. Is it?
Mr. KELLEY. I believe that is what the consumer price index
is supposed to measure the inflation rate.
Ms. TUBBS JONES. Okay; so 1.4 percent. So, you are saying
to me that when the inflation rate was greater than 1.4
percent, maybe 2 years ago, that Social Security benefits
increased by that amount?
Mr. KELLEY. Yes, I believe the previous year, it was 2.6
percent.
Ms. TUBBS JONES. It was 2.6 percent? What was it before
that?
Mr. KELLEY. I cannot recall.
Ms. TUBBS JONES. Okay; now, the way this operates is, for
example, if we use the numbers that my colleague put up there,
is--let me back up. What is poverty-level income?
Mr. KELLEY. Well, the poverty level for a person who is age
65 in 2002, is $8,628.
Ms. TUBBS JONES. Now, if I am 25, what is the poverty level
rate?
Mr. KELLEY. I do not have that figure with me.
Ms. TUBBS JONES. It is different if I am 65 or 25?
Mr. KELLEY. It is based on the standards that the U.S.
Census Bureau uses.
Ms. TUBBS JONES. So, if I am 25, and I am paying $2.50 for
a gallon of gasoline, and I am 65 and paying $2.50 for a gallon
of gasoline, there is no adjustment there.
Mr. KELLEY. Well, I am not sure why the poverty level is
different, but I am pretty sure it is different for the 25-
year-old versus the 65-year-old.
Ms. TUBBS JONES. Perhaps that is something that we need to
look at, as well, as we start to talk about retirement and the
benefit or the dilemma in putting people in retirement--if I am
considered at 65 not to have the same value. Let me ask you--I
am still a little confused on this. Let me, for the record,
before I go there, say that I am adamantly opposed to mandatory
participation in Social Security for those who choose not to
participate in Social Security, and they are in a plan for
whatever that is worth. Let us look again at this $1,000 chart
here, assuming $1,000. Even if there were a repeal of the GPO,
and I got $1,700 a month, let us multiply that by 12. Where
would I be in the poverty level or what we consider poverty
level in government?
Mr. KELLEY. You would certainly be above it.
Ms. TUBBS JONES. How much?
Mr. KELLEY. Well, I can do the math here. It is about
$18,000 or so and----
Ms. TUBBS JONES. Poverty level, again, is how much?
Mr. KELLEY. It is $8,000.
Ms. TUBBS JONES. Okay, $8,000. Out of that $8,000, I have
to pay my rent, do whatever else I have to do. Are you
considering in all of this process, in this change of Social
Security, the fact that there are senior citizens on a Medicare
government program that does not provide prescription drug
benefit; are in an even greater dilemma after their spouse
dies? It does not mean they need any less prescriptions because
their spouse died, right?
Mr. KELLEY. Right.
Ms. TUBBS JONES. So, the spousal income helped to pay some
of that prescription drug benefit; fair? Mr. Wilson, you are
looking kind of confused. What I am trying to say is that we as
a government need to have policies that work together, meaning
that if I am in a retirement income, and you are not giving me
any prescription drug benefit, then I ought to have the money
from the money I made; you ought to give me all of my money
that I made so I can perhaps cover the prescription drug
benefit that I did not get. Are you with me, Mr. Wilson?
Mr. WILSON. I was following you.
Ms. TUBBS JONES. Okay; you had a bit of a confusing look on
your face, so I just wanted to make sure we were staying
together. The bottom line is that I am with my colleagues that,
in fact, we need to study the impact any changes are going to
have on people before we make a change. We need to look at,
perhaps, that we are not even giving people with the Social
Security that they are getting the ability to survive in the
current economic environment. We need to take a look at--let me
ask this question: where do the dollars--say I am in a private
Social Security fund--am I out of time? I guess I am out of
time. I really wanted to ask this question. If you can give
me----
Chairman SHAW. You are on a roll. I will give you another
minute.
Ms. TUBBS JONES. Thank you, Mr. Chairman.
[Laughter.]
I appreciate it. I am in a private pension plan, right?
Additionally, I have dual entitlement, okay? If I am in a
private pension plan, and I have a spouse who is in Social
Security; I have dual entitlement, right?
Ms. BOVBJERG. You are in Social Security, too? Because you
are in a private plan.
Ms. TUBBS JONES. I am in Social Security, too, right. When
I do not get the money that I paid into the plan, it goes to
other people to keep the fund going. Is that a fair statement
with the offset--with the dual entitlement; I am sorry.
Ms. BOVBJERG. Yes; Social Security is essentially an
intergenerational transfer. So, anything that you are
contributing today as a worker is immediately being used to pay
for benefits of current retirees.
Ms. TUBBS JONES. So, in essence, then, I do not have a pot
that I have been paying into that over time is there that is
mine?
Ms. BOVBJERG. You are earning credits as a participant in
Social Security. It is not like a 401(k), though, where you
make contributions, and they accumulate in a fund.
Ms. TUBBS JONES. You know what, Mr. Chairman, I would like
to pursue this line of questioning, but it is probably going to
take too long for me to get an answer. I thank you for giving
me an opportunity to answer these questions, and I will submit
some written questions to you to get an answer, and I thank you
for coming. Also, Mr. Chairman, one last thing, if you will
allow me. There is going to be a witness from Ohio in the next
panel. I do not know that I am going to get a chance to hear
all of her testimony, but I would like to welcome her to our
Committee and thank her for coming.
Chairman SHAW. It is done. I am going to yield 2 minutes of
my time to Mr. Brady, and then, I have one line of questions
for the witness.
Mr. BRADY. Thank you, Mr. Chairman, for holding this
hearing. I know GPO and WEP have been around for almost a
quarter of a century, and I appreciate your taking a leadership
role in a first step here today. I agree with Congresswoman
Tubbs Jones that Social Security does not pay enough. A lot of
people are struggling. I think one of the bipartisan goals of
this Committee should be to increase the Social Security and
retirement rate for everybody. We had another myth that just
got perpetuated, and the myth is that there are more people on
government retirement pension in poverty than are affected by
Social Security. It is just the opposite. According to the
written testimony that both of you provided us today, nearly 15
percent of those on Social Security and in Social Security
families are below the poverty level, but in government
pension, only 5 percent are below that poverty level. So, if we
increase the gap between Social Security families and identical
government pension families, we have helped a small number on
poverty, but we have left behind the greatest number of
Americans who are struggling on Social Security. So, it seems
to me--I actually agree with Stephanie on this as well--
government pension plans should not look more like Social
Security. Social Security should look more like government
pension plans so that we could increase the rate of return for
all of the people in their retirement age. Mr. Chairman?
Chairman SHAW. Thank you, and I think you make a good point
here. My final question is that most of those testifying on the
next panel, and some of the questioning occurring here, raises
another interesting question, because they are urging the
repeal of the GPO, saying it is unfair. If it is unfair to
reduce spouse benefits for those who do not pay Social
Security, then I think logic--and I think everyone else in this
room--would have to say that it is also unfair to reduce
spousal benefits for workers who do pay Social Security taxes,
since these workers--husbands and wives--earn spousal benefits
just like the husbands and wives of public employees. What
would be the effect of Social Security's longstanding term
deficit and the trust funds if what they were asking for was
applied to the entire population, including people who have
paid Social Security? Mr. Wilson?
Mr. WILSON. Yes, Mr. Chairman; the estimated 5-year cost
would be about $500 billion to eliminate the dual entitlement.
Chairman SHAW. It would be $500 billion for how long?
Mr. WILSON. Over 5 years.
Chairman SHAW. Do you have anything to add to that?
Ms. BOVBJERG. I do not have numbers on that with me. That
is a large number; it reflects 6 million people who are dually-
entitled now, and when you go out further into the future, that
number continues to grow.
Chairman SHAW. The problem becomes very, very clear. If it
is unfair for one group, it is unfair for another group. When
we look at Mr. Brady's chart down there, we see that the people
who are not in the Social Security program--and I think it is
important to note here that the offset does not apply to
general public employees. It applies to general public
employees who are not part of the Social Security system and
who do not pay into Social Security. So, I think that is very
important to realize, because when we talk about workers who
are affected by this, they are not being singled out because
they are public employees or school teachers or police
officers. They are being treated the way they are being treated
because they have not paid into the system. Mr. Collins, did
you have something? You did not ask any questions.
Mr. COLLINS. Just one comment, Mr. Chairman. I think there
is another myth here, too, and that is that Social Security is
a retirement program. Social Security is an insurance program
to supplement the income of those who reach retirement. That is
the only supplement that I have, because I do not participate
in the Congressional pension plan, nor do I work for or have
formed a company that I participate in. I am very much
interested in Social Security, and I want to see it treated
fair, the recipients treated fair. It is a pay-as-you-go
system. The workers who are providing the benefits, the tax for
the benefits, should be treated fairly, and I do think we have
to find out exactly how many people this does pertain to before
you can begin a process to determine what is fair for all. We
are not talking about something that you just go out and pick
up out of the field or off of a tree. You are talking about
money that comes from the earnings of every worker in this
country. As far as this tax bill that people keep throwing up,
this tax bill is to help 92 million working Americans with the
income tax that they pay. It is a very worthwhile tax bill. The
provision dealing with the double-taxation of stock dividends,
again, is a fairness issue, and it is a way that we can help
make our work force and this Nation more competitive in the
world market with industrialized nations who do not double-tax
the stock dividends; who treat investors far different which
also pertains to their competitiveness as far as their work
force versus our work force. If we do not concentrate and work
toward the workers in this country and the benefits that they
pay, the costs that they pay, the benefits that they receive,
we are not doing a just cause. Thank you, Mr. Chairman.
[Question submitted from Chairman Shaw to Ms. Bovbjerg, and
her response follows:]

Question: When GAO examined the websites of various organizations for
your report on the GPO last-day-rule (also known as the GPO
``loophole''), did you find information provided on the GPO and WEP to
be accurate? If not, what kind of misinformation was prevalent?

Answer: Pursuant to your May 14, 2003, request, here is additional
information on the Web sites that we reviewed in the course of our work
for you on the Government Pension Offset ``loophole.'' Generally, the
limited number of teaching association, retirement plan, and financial
planning Web sites that we reviewed presented a mix of accurate,
inaccurate, and/or incomplete information on the Government Pension
Offset (GPO) and Windfall Elimination Provision (WEP). Some Web sites
contained information that did not present the GPO and WEP in their
full context, which allowed them to dramatize and misconstrue their
effects. Such Web sites' presentation of specific guidance on using the
``last-day'' GPO exemption was generally accurate, however. Examples
and excerpts from selected Web sites follow below.
Sites that presented inaccurate and/or incomplete information on
the GPO and WEP sometimes dramatized the effects of these offset
provisions. For example, a teaching association's site referred to the
GPO and WEP as ``a nasty surprise'' awaiting many retiring teachers and
other education employees. This particular site said

``. . . instead of honoring public service, both of these
provisions [GPO and WEP] harshly and unjustifiably punish
individuals such as Texas school employees who have earned
public-sector pensions . . .'' and that ``. . . recipients of
private pensions [who also paid into Social Security] are not
subject to the same penalty.'' Moreover, the site stated, ``. .
. this punitive and inequitable provision targets hundreds of
teachers, police officers, firefighters, and other public
servants . . .'' and ``These folks . . . are thus pushed to
live at or even below the poverty level.''

As you know, the GPO and WEP exist because of concerns about unfair
benefit advantages that accrued to non-covered government workers.
Therefore, generalized ``blanket'' comparisons of offsets applicable to
employees in covered and non-covered employment, as made in the above
site, are inaccurate. Social Security benefits are generally payable to
the spouses of retired, disabled, or deceased workers covered by Social
Security. The above statement does not take into account the ``dual
entitlement'' rule that affects individuals who worked in the private
sector and also paid into Social Security. In these cases, if both
spouses worked and are eligible for Social Security, the Social
Security benefits earned as a worker are subtracted from the Social
Security spousal benefit.
Web sites that presented ``how-to'' guidance to individuals on use
of the GPO last-day exemption appeared to provide this limited
information accurately. For example, a teaching association's site
contained an explanation of the GPO ``loophole'' and listed the names
and telephone numbers of school officials in counties covered by Social
Security.
This particular site stated

``[We have] received many inquiries about the loophole that
allows some school employees to receive the full amount of both
their TRS [Teacher Retirement System of Texas] pension and
their Social Security benefit. Most Texas school employees do
not participate in Social Security, so according to federal
law, the amount of any Social Security benefit to which they
are entitled is reduced or eliminated by the amount of their
TRS benefit. . . . [We have] become aware of some school
districts that participate in both TRS and Social Security
facilitating the use of this loophole by agreeing to hire
employees for one day to allow the employee to become exempt
from the Social Security offset. A list of Texas school
districts participating in Social Security is available on
[our] website.''

Although the method to use the GPO ``loophole'' is presented
accurately in the above excerpt, its phrase ``. . . the amount of any
Social Security benefit to which they are entitled is reduced or
eliminated [emphasis added] by the amount of their TRS benefit . . .''
does not recognize that the GPO is a two-thirds and not a full offset.

Chairman SHAW. Thank you. Ms. Bovbjerg, Mr. Wilson, we
thank you for your testimony, and I also thank the audience for
limiting their participation.
[Laughter.]
Mr. WILSON. Thank you, Mr. Chairman.
Chairman SHAW. We now have our next panel. Excuse me. We
have Mr. Jefferson. Mr. Jefferson from Louisiana has been a
long fighter in this area, and I might say that in my Social
Security Reform Act, I have adopted some of his views with
regard to the GPO. Your full statement will be made a part of
the record, and you may proceed.

STATEMENT OF THE HONORABLE WILLIAM J. JEFFERSON, A
REPRESENTATIVE IN CONGRESS FROM THE STATE OF LOUISIANA

Mr. JEFFERSON. Thank you, Mr. Chairman, Mr. Matsui and
other Members of the Committee. I appreciate the opportunity to
speak to you briefly about the GPO. The efforts that I have
made in this arena do not have to do with repealing the GPO in
its entirety. It has to do more properly with reforming the GPO
so that it is not so harsh in its effect on the lower income
workers in the country, public income workers who do not make a
lot of money. There are lots of presumptions that are made with
respect to the GPO which justifies its inclusion in the law.
You remember how this whole thing came up. The Social Security
system was established as it was with the offsets that have
been talked about by Mr. Brady and others for folks who have
two persons in their family, both who receive Social Security
benefits. The system made a judgment early on that it did not
see the need to have a spouse eligible for the benefits of his
or her deceased spouse; therefore, the system made that
judgment. It also provided that people could opt out of the
system if they decide to, and they would not, therefore, be
affected by the rules of the Social Security system, so people
made that decision in some cases and opted out. In that event,
there was no offset provided for people who were in the other
systems.
That was because there was a rule of dependency in the law
back then that required that in the case of a man who was a
recipient, he had to prove dependency. In the case of a woman,
she did not and could receive the benefits. That is how the
system was put together back at its inception. The U.S. Supreme
Court ruled that it was improper to require that a man prove
dependency, not a woman, and therefore, it brought up this new
issue about what to do about people who had opted out, as the
system rules provided, and who found themselves now able to
receive their wife's benefits. So, the system worried that it
would be too expensive, that men who are working in highly-
paying jobs in the government would receive windfalls, if you
will, that they did not deserve and therefore result in some
unfairnesses. What it did not really take into account was that
the pension systems outside of the Federal Government were
fairly modest and that women were working at jobs that were
very low-paying jobs outside of the Federal Government system.
What we have now is a system that has an unfairness built
into it by the nature of the work force that it affects. For
someone who makes a high income, for two people who make high
incomes, there is hardly--while it is somewhat arguably unfair
for them to have an offset in the Social Security system
dollar-for-dollar, the effect of what we do here is much more
harsh when you have people who work as firemen and policemen
and teachers and teachers' aides and librarians and cafeteria
workers when they find out that after their husbands pass away
that they will have that benefit they expected reduced by two-
thirds, and they have very little expecting to come in to them.
The object is not to repeal the offset altogether but to take
care of those workers who are the most distressed and who are
treated the most harshly under these provisions. There is no
large pension involved for these people. There is no large
windfall that the government is going to give up for them if
they are able to receive their benefits. These are just
questions of survival for these people.
I have examples. I will just read you one, if I could, from
a lady who works at the sheriff's office down in Jefferson
Parish, which is a part of the State that I represent in
addition to New Orleans. She writes: I get a small pension from
the Jefferson Parish Sheriff's Office, $473 a month. Because my
Social Security check is offset by half, I should receive close
to $500 a month that I put in many years of my life for, and it
is cut to $243 a month. I would appreciate whatever you can do
about this, and I hope that someone will change the other
offset also. When I paid my personal Social Security, they
grabbed it, she says. When it comes to getting it back, it is
another story. That is the problem ordinary people have with
this. Here is a lady who, because of the offset, is going to
get, instead of $973 is going to get some figure that is around
$500, which is extremely hurtful to her. So, as we talk about
all of these great expansive notions here, it is important to
think about the people who are affected. Our objective here is
not to take care of the high-paid government workers and to put
money in their pockets; it is to take care of people who are in
the worst conditions, I think, who are suffering the most. It
is not to means-test Social Security at all. It is no more than
to work a different reform than was worked earlier. You will
remember that after Goldfarb, there was a dollar-for-dollar
offset just like for Social Security, but when the results came
in, those who were in the Congress then considered the results
too harsh and changed it to a two-thirds offset.
So, if that were not the case, it would be dollar-for-
dollar. Now, we are looking at it again, and we are saying two-
thirds is too harsh. Let us do something different about it.
So, we are proposing a reform that takes care of some of the
harsh results that no one intended but which nonetheless befall
the low income workers. My statement goes into more detail, Mr.
Chairman, but that is the essence of what we are trying to do
here: not to means-test but to make sure that the people who
are at the lowest end of the totem pole here get some help, get
some relief, and are not so harshly affected by the rules.
[The prepared statement of Mr. Jefferson follows:]
Statement of the Honorable William J. Jefferson, a Representative in
Congress from the State of Louisiana
Mr. Chairman, I am pleased to testify on my GPO reform legislation,
H.R. 887. As you know, my approach is not to repeal the GPO, but to
lessen the harsh impact it currently has on low-income seniors.
Pension Offset is an important issue to me and to many of my
Democratic and Republican colleagues. It is an important issue for my
constituents in Louisiana and it is an important issue for many state
and local government employees across the nation.
As you are aware, state and local government employees were
excluded from Social Security coverage when the Social Security System
was first established in 1935. These employees were later given the
option to enroll in the Social Security System and in the 1960's and
1970's many public employees opted to join in.
Some local governments chose to remain out of the system. Their
employees and spouses planned for retirement according to the rules in
effect. It is estimated that about 4.9 million state and local
government employees are not covered by Social Security. Seven states
(California, Colorado, Illinois, Louisiana, Massachusetts, Ohio and
Texas) account for over 75 percent of non-covered payroll.
The Pension Offset will unfairly affect many of the state and local
government employees that are covered by government pension.
As you may be aware, the Pension Offset was originally enacted in
response to the perceived abuses to the Social Security system
resulting from the Goldfarb decision.
The Social Security System provides that if a spouse who worked and
paid into Social Security died, the benefits were to be paid to the
surviving spouse as a survivor benefit. Men were required to prove
dependency on their spouses before they became eligible for Social
Security survivor benefits. There was no such requirement for women.
The Goldfarb decision eliminated the different treatment of men and
women. The court instead required Social Security to treat men and
women equally by paying benefits to either spouse without regard to
dependency.
Many of the men who would benefit from the Goldfarb decision were
also receiving large government pensions. It was believed that these
retirees would bankrupt the system, receiving large government and
private pensions in addition to survivor benefits.
To combat this perceived problem, Pension Offset legislation was
enacted in 1977. The legislation provided for a dollar for dollar
reduction of Social Security benefits to spouses or retiring spouses
who received earned benefits from a federal, state or local retirement
system. The Pension Offset provisions can affect any retiree who
receives a civil service pension and Social Security but primarily
affects widows or widowers eligible for survivor benefits.
In 1983, the Pension Offset was reduced to two-thirds of the public
employer survivor benefit. It was believed that the impact of the
Pension Offset was too harsh and that one-third of the pension was
equivalent to the pension available in the private sector.
The Pension Offset aimed at high paid government employees also
applies to public service employees who generally receive lower pension
benefits. These public service employees include secretaries, school
cafeteria workers, teachers' aides and other low wage government
employees. The Pension Offset as applied to this group is punitive,
unfairly harsh and bad policy.
Government pensions were tailored to produce benefits that were
equal to many combined private pension-Social Security benefits in the
private sector for upper level government workers. However, this was
not true for lower income workers such as employees who worked as
secretaries, school cafeteria workers, teachers' aides and others who
generally receive lower pension benefits.
To illustrate the harsh impact of the Pension Offset, consider a
widow who retired from the federal government and receives a civil
service annuity of $550 monthly. The full widow's benefit is $385. The
current Pension Offset law reduces the widow's benefit to $19 a month
(2/3 of the $550 civil service annuity is $367, which is then
subtracted from the $385 widow's benefit, leaving only $19). The
retired worker receives $569 ($550 + $19) per month.
Proponents of the Pension Offset claim that the offset is justified
because Survivor benefits were intended to be in lieu of pensions.
However, were this logic followed across the board, then people with
private pension benefits would also be subject to the offset. But that
is not the case.
While Social Security benefits of spouses or surviving spouses
earning government pensions are reduced by $2 for every $3 earned,
Social Security benefits of spouses or surviving spouses earning
private pensions are not subject to offset at all.
If retirees on private pensions do not have Social Security
benefits subject to offset, why should retirees who worked in the
public service?
The Pension Offset has created a problem that cries out for reform.
It will cause tens of thousands of retired government employees,
including many former para-professionals, custodians or lunch room
workers, to live their retirement years at or near the poverty level.
My office has received numerous calls, all from widows, who are
just getting by and desperately need some relief from the Pension
Offset. For example: (Attach testimony)
The following is a letter we received from Helen J. Emery from Fair
Oaks, California.
I am a 68 year old and worked 27 years for the Government. My
government retirement monthly after deductions is a ``very'' modest
$988.69. I am sure you know this is just a fraction above poverty
level. The ``windfall'' benefits law reduced my Social Security
benefits and only allows me an additional $116.00 per month even though
I alone paid into this Social Security prior to working for the
Government.
Effective January 1998, I became a divorced widow and the
``offset'' affecting my $724.80 widows Social Security benefits brings
my widow's benefits to zero.
I am hoping and praying that you will continue to fight this very
unjust ``offset'' law.
Millard J. Downing from stWallingford, PA wrote:
I am retired from the Agency for International Development with a
$12,000.00 a year annuity and through employment outside of federal
service have become eligible for Social Security, age 62. Upon visiting
my local Social Security Office I was advised that normally I would be
eligible for $425.00 month. However, due to the present Pension Offset
and being a federal annuitant, my Social Security annuity will be
reduced to approximately $207.00 month. I do not consider this
reduction as being a fair game when all deductions for above were made
while being employed outside of federal service.
Patricia C. Cook from Metaire, LA wrote.
I get a small pension from the Jefferson Parish Sheriff's Office
($473.00) and because of this my Soc. Sec. Check is offset by half. I
should receive close to $500.00 a month that I put in many years of my
life for and it is cut to $243.00. I would appreciate whatever you can
do about this and I hope someone will change the other offset also.
When I paid my personal Soc. Sec. they grabbed; but when it comes to
getting it back, its another story.
During the 107th Congress, I introduced the Government Pension
Offset Repeal Bill, H.R. 1217. I have re-introduced this important
legislation in the 108th Congress as H.R. 887.
The legislation, does not completely repeal the Pension Offset, but
provides a modification to a complete repeal. It will allow pensioners
and widows affected by Pension Offset provisions to receive a minimum
$2,000 per month before offset provisions could be imposed. The bill
has 109-recorded cosponsors.
Mr. Chairman, I urge my colleagues to adopt this important
legislation.

Chairman SHAW. There is certainly precedent for that in the
Social Security law right now, as low-income people do get a
better return. Any questions?
Ms. TUBBS JONES. Mr. Chairman, very briefly: Mr. Jefferson,
thank you for your leadership on this issue. When Mr. Kelley
walked out the door, this is the question I should have asked
him. I asked him in order to get a $1,000 monthly benefit from
Social Security, how much money did you have to make annually?
His response was $36,000. So, many workers out in our world are
not even making $36,000. So, even if they were taking the woman
that wrote in to you, her example, even if she worked a job
that should have kept her above the poverty level during her
lifetime, if you take her example with the $600, the reduction,
she is getting $7,200 a year, which is below poverty level, or
even without the GPO, she is only about 20 percent above
poverty level with all the money she is getting. So, I clearly
think your leadership on this issue is a wonderful, wonderful
thing, and I thank you for testifying before the Committee.
Chairman SHAW. Mr. Matsui?
Mr. MATSUI. Thank you very much, Mr. Chairman. I want to
thank you, Bill, for your work on all this over the years. It
has been tremendous, and we really appreciate the fact that we
are at this point now in this whole discussion. You were here
when the Administration testified. The impression I had was
that they are going to ratchet up the enforcement of this
issue, so instead of trying to work something out, they are
going to probably add another 100,000 people that will be
subject to the GPO and WEP. What are your thoughts on that?
Mr. JEFFERSON. Well, that will just exacerbate the problem
that we are talking about here. I suppose most folks have
already been discovered by them. There are lots of folks out
there who talk to me who do not think that the government is
letting them get away with anything and who, frankly, are very
depressed over the situation, and many of them did not expect
it. Now that we have talked a lot about this legislation,
people are becoming more and more aware of it, and they are
calling in and talking about it. This is not designed to
inspire the SSA to go out and do an even better job of making
it difficult for people. We are hoping that what they will do
is be spurred on to reform the system, given that people out
there are suffering who we did not intend to have them suffer.
I think that the important message here is that when the
Congress put this in place, they were looking at the high-
income people. They never thought, I do not believe, that they
would have this kind of bad effect on people who do not make
much money. These people happen to be public servants, in most
cases, who are low-paid public servants. These are the folks--
this is aimed at trying to fix the problem for them, and I hope
that Congress will have the heart to correct it for these
people. I know that it costs a lot of money to correct the
whole system. We are not asking for that. We are trying to do
something that will affect about 400,000 people across the
country who are in dire need of this result. I want to thank
the Chairman for holding the hearing, and I also want to thank
him for including at least a skeletal beginning of some of the
things that we have talked about here, and I hope that we will
build on that skeleton to actually put some real meat on it to
help us reach the result we are looking for. I do appreciate
the chance to have this matter aired, and I do hope that we
will make some progress on it.
Chairman SHAW. Thank you, Mr. Jefferson. It is always a
pleasure to work with you. You are always intelligent, and you
are always a gentleman. Thank you.
Mr. JEFFERSON. Thank you, Mr. Chairman. Thank you, Mr.
Matsui.
Chairman SHAW. Our final panel is made up of several
witnesses: Charles Fallis, who is the President of the National
Association of Retired Federal Employees (NARFE); Annette
Williams, who is a retiree of the City of Los Angeles,
California, a member of the American Federation of State,
County and Municipal Employees; Donna Haschke, who is President
of the Texas State Teachers Association on behalf of the
National Education Association; William Johnson, the Executive
Director of the National Association of Police Organizations;
Chuck Canterbury, who is the National President of the
Fraternal Order of Police; and Terri Harrison, who is the
Chairman of the Coalition to Preserve Retirement Security from
Columbus, Ohio. Welcome to all of you. We do have your
statements that will be made a part of the record, and you may
proceed as you see fit. I will do my best to enforce the 5-
minute rule. Mr. Fallis? We are going to have to pull these
microphones down. We are going from my left to right or your
right to your left, so if we could get this down here, we can
proceed. Mr. Fallis, please? Welcome.

STATEMENT OF CHARLES L. FALLIS, NATIONAL PRESIDENT, NATIONAL
ASSOCIATION OF RETIRED FEDERAL EMPLOYEES, ALEXANDRIA, VIRGINIA

Mr. FALLIS. Mr. Chairman, Members of the Subcommittee, I am
Charles Fallis, President of NARFE, and I am here today
testifying for our 400,000 members. Let me commend you, Mr.
Chairman, for once again stepping up to the challenge by
holding hearings on Social Security provisions affecting public
employees. For NARFE, it is the offsets that affect them--GPO
and WEP. For years, NARFE has worked for the revision of GPO
and WEP, because these insidious laws have denied many of our
retired members, particularly women, the economic dignity that
they were led to expect would be theirs when they retired. Mr.
Chairman and Members of this Committee, I know as I am sure
most of you do that the harshness of GPO and WEP causes both
fears and tears among hundreds of thousands of older Americans.
They fear for their financial future, and they shed bitter
tears of frustration that Congress has not acted to reform
these provisions despite widespread support for doing so.
Today, over 300 Members of this 108th Congress have already
indicated their support for changes in GPO and WEP by
cosponsoring one or more of the pending bills. Mr. Chairman,
your own Social Security reform bill proposes to reduce the
current two-thirds offset to one-third. Almost 3 years ago at a
hearing on GPO before this Subcommittee, Ms. Ruth Pickard, a
long-time NARFE member and a constituent of yours, Mr.
Chairman, testified as an affected witness. Before her
retirement, she had worked 24 years in the U.S. Postal Service
and 24 years in the private sector while raising children and
trying to make ends meet.
Because of GPO and WEP, Ruth had to go back to work. Today,
at age 76, she is still working, because she cannot afford to
stop. To add insult to injury, she pays Social Security taxes
on the wages she earns despite the fact that she will never
reap the benefits of those payments because of WEP. The GPO
prevents her from getting any spousal benefit, because two-
thirds of her civil service annuity totally eliminates that
benefit. She is eligible for her own Social Security benefit,
but even that earned benefit is slashed because she is also
affected by WEP. Since its enactment during the Great
Depression, the Social Security system has been modified time
and time again to respond to specific economic and social needs
of the Nation, and I believe it is imperative that we make
additional changes now. Restoring earned income to victim
retirees would bring them the dignity of self-support and, at
the same time, strengthen this country's economy. Is this not
consistent with the tax break proposals the President is now
requesting of Congress? In his radio address last Saturday, the
President eloquently stated, and I quote, ``America's greatest
economic strength is the pride, the skill and the productivity
of American workers.'' Mr. Chairman, he is absolutely right.
Our workers certainly do continue to support and strengthen our
Nation's economy just as does 76-year-old Ruth Pickard. Ruth
continues to work, even though these heinous offsets debilitate
her efforts to contribute significantly. If she and others like
her are ever to feel vindicated, these punitive offsets must be
repealed.
Mr. Chairman, you stated in your hearing advisory, and I
quote, ``the hard work and dedication of teachers, police
officers, firefighters and other public employees and all
workers is deeply appreciated by our Nation. Everyone, public
and private sector workers alike, deserves fair treatment under
Social Security.'' I could not agree more. I firmly believe
that fair treatment can only be assured through changes in GPO
and WEP. The NARFE stands ready to work with you and the
Members of this Committee, this Subcommittee, to find an
acceptable solution to this growing dilemma. Please, let us
solve the problem, and let us solve it this year. Thank you,
Mr. Chairman.
[The prepared statement of Mr. Fallis follows:]
Statement of Charles L. Fallis, National President, National
Association of Retired Federal Employees, Alexandria, Virginia
Mr. Chairman and Members of the Subcommittee, I am Charles L.
Fallis, President of NARFE, the National Association of Retired Federal
Employees. I am testifying today on behalf of our 400,000 members.
Let me commend you, Chairman Shaw, for once again stepping up to
the challenge, by holding hearings on ``Social Security Provisions
Affecting Public Employees.'' For NARFE, it is the Social Security
offsets which affect our members, the Government Pension Offset (GPO)
and the Windfall Elimination Provision (WEP). Each year, more and more
individuals are finding themselves affected by these onerous offsets.
And each year, more and more Members of Congress have recognized the
need for changing them. And now is the time to do it. I hope that
today's hearings lead to enactment of change before the end of this
year.
For years, NARFE has worked for revision of the GPO and the WEP,
which have denied many of our retired members, particularly women, the
economic dignity they were led to expect in retirement. So I appreciate
your invitation to appear here today to reiterate NARFE's call for
change and to urge this panel's immediate action for repeal of these
insidious laws.
Present GPO law prevents government retirees who were first
eligible to retire in December 1982 and later from collecting both a
government annuity based on their own work and Social Security benefits
based on their spouse's work record.
This law provides that two-thirds of the government annuity offsets
whatever Social Security benefits would be payable to the retired
government worker as a spouse (wife, husband, widow, widower, etc.).
By the Social Security Administration's own account, the use of
two-thirds of the public retirement income, as offset against the
Social Security income, was an arbitrary decision. As such, we believe
it can and should be reexamined and repealed.
Of the approximately 335,000 GPO-affected beneficiaries, about 80
percent are fully offset, which means they receive no spousal or
survivor benefit at all. It is worth noting that about 40 percent of
the total number of affected beneficiaries are widowed individuals, and
roughly seventy percent of that number are fully offset. And, I think
it is crucial to recognize that almost 70 percent of the victims are
poor women.
The current WEP greatly reduces the Social Security benefit of a
retired or disabled worker who also receives a government annuity based
on his/her own earnings. It applies to anyone who becomes 62 (or
disabled) after 1985 and becomes eligible for her/his government
annuity after 1985. This windfall reduction can diminish a worker's
earned Social Security benefit by as much as 60 percent. Today that is
a loss of up to $303 per month.
Mr. Chairman, and Members of this Committee, I know--as I'm sure
most of you do--that the harshness of the GPO and the WEP, as they
exist today, causes both fears and tears among hundreds of thousands of
older Americans. They fear for their financial future, and they shed
bitter tears of frustration that Congress has not acted to reform these
provisions despite widespread support for doing so.
There are several bills pending before this Congress which would
offer relief to the hundreds of thousands of former teachers, cafeteria
workers, postal workers, VA nurses, Social Security employees, and
others who worked long and hard to help support their families. Over
300 Members of this 108th Congress have already indicated their support
for change in the GPO and the WEP by cosponsoring one or more of the
pending bills. Mr. Chairman, your own Social Security reform bill
proposes to reduce the current two-thirds GPO offset to one-third.
Obviously, you are well aware of the need for change, and I believe a
majority of your colleagues now agree with you.
Almost three years ago, at a hearing on the GPO before this
Subcommittee, Mrs. Ruth Pickard, a longtime NARFE member and a
constituent of yours, Chairman Shaw, testified as an affected witness.
She spoke of working twenty-four (24) years in the U.S. Postal Service
and twenty-four (24) years in the private sector while raising her
children and trying to make ends meet. Because of the GPO, Ruth had to
go back to work. Today, at age 76, she is still working because she
cannot afford to stop. And, to add insult to injury, she has to pay
Social Security taxes on the wages she is earning, although she stands
no chance of reaping any benefit from those tax payments.
The current GPO prevents her from getting any spousal benefit
because two-thirds (2/3) of the amount of her civil service annuity
totally eliminates that Social Security benefit. She is eligible for
her own Social Security benefit, but even that earned benefit is
slashed, because of the WEP which also affects her.
Mr. Chairman, not long before the Easter/Passover recess, the House
adopted a bill from this Subcommittee which, among other things,
effectively closed a loophole in the GPO which had allowed some
individuals to legitimately escape the loss of Social Security spousal
benefits by working just one last day of their careers under Social
Security covered employment. I contend that had this unfair offset been
reviewed and revised earlier, the machinations of the ``last-day rule''
would not have been necessary. If the law had been fair in the first
place, the loophole would not have been needed.
Since its enactment during the Great Depression, the Social
Security system has been modified time and again to respond to specific
economic and social needs of the nation. Surely, it will continue to
face and endure serious changes and challenges in the years ahead. None
of us can predict today what changes will be necessary to keep this
program fiscally sound for the next seventy-five years. And, we will
not be around to share the benefit or the blame. But we are here right
now, and we know that some change is needed. I believe that it is
imperative that we make additional changes now.
Social Security Administration actuaries have determined that the
repeal of the GPO and the WEP would increase the size of the OASDI
actuarial deficit by an amount estimated at 0.11 percent of taxable
payroll. This amount is not negligible; but returning this income to
these victimized retirees would provide them with increased purchasing
power. It would allow them the dignity to support themselves and at the
same time strengthen this country's economy. Isn't this consistent with
tax breaks the President now is requesting of Congress?
In his radio address to the Nation this past Saturday, the
President eloquently stated, ``. . . America's greatest economic
strength is the pride, the skill, and the productivity of American
workers.'' Mr. Chairman, he is absolutely right. NARFE members, along
with other federal, state, and local government retirees and employees
in this country are the proud, skilled, and productive American workers
of yesterday and today. They continue to support and strengthen our
nation's economy just as does 76-year-old Ruth Pickard, who continues
to work, even though these heinous offsets debilitate her efforts to
significantly contribute. If Ruth and others like her are ever to feel
vindicated, these punitive offsets must be repealed.
Mr. Chairman, you stated in your hearing advisory ``The hard work
and dedication of teachers, police officers, firefighters, other public
employees and all workers is deeply appreciated by our nation.
Everyone, public and private sector workers alike, deserves fair
treatment under Social Security.'' I couldn't agree more. And I firmly
believe that fair treatment can only be assured through changes in the
GPO and the WEP. I contend that repeal of these offsets would be ideal.
But change is essential and can no longer be put off. We must get
legislation reported out and onto the floor of the House to allow
Members of Congress to debate and decide this issue.
NARFE stands ready to work with you and the Members of this
Subcommittee to find an acceptable solution to this growing dilemma of
the Social Security System. Please, let's solve the problem this year.

Chairman SHAW. Ms. Williams?

STATEMENT OF ANNETTE WILLIAMS, ON BEHALF OF AMERICAN FEDERATION
OF STATE, COUNTY AND MUNICIPAL EMPLOYEES, AMERICAN FEDERATION
OF LABOR-CONGRESS OF INDUSTRIAL ORGANIZATIONS

Ms. WILLIAMS. Mr. Chairman and Members of the Subcommittee,
good morning. My name is Annette Williams, and I retired only a
few weeks ago at age 58 from my job as a clerical worker
employed by the City of Los Angeles. I am here today
representing my union, American Federation of State, County,
and Municipal Employees (AFSCME), and the thousands of AFSCME
members who work in jobs not covered by Social Security. I
would like to begin by saying that I think Social Security is a
wonderful insurance program. My husband was covered by Social
Security when he passed away over 20 years ago. At the time I
was widowed, three of my four children were minors and still
living at home. All three received Social Security benefits
based on my husband's work record. Those benefits helped our
family maintain a decent standard of living despite the loss of
our primary breadwinner. Only now has Social Security let us
down. I never knew about the GPO until recently, when I began
to explore my retirement options. I always thought I would be
able to collect a widow's benefit when I reached the eligible
age. I am sure my husband believed that too. With every
contribution from his paycheck, I know he felt he was providing
for my future. Clearly, that is not the case. Instead, I will
be forced to offset my city pension against my Social Security
widow's benefit. Two-thirds of my $1,300 pension will
completely eliminate my widow's benefit of $812 a month.
I know that Social Security's dual entitlement rule is
often cited as justification for the GPO. The dual entitlement
rule says that a person can receive their own earned Social
Security benefit or a spousal benefit, whichever is higher, but
not both. The GPO law essentially applies this rule to two-
thirds of my pension, which is considered to be equivalent to a
Social Security benefit. This logic seems questionable,
however. Here is why. As a city employee, I contributed the
same amount to my pension as private sector workers contribute
to Social Security. My employer's contribution was substantial,
as high as 16.5 percent of payroll. In the private sector,
however, most workers do not contribute to their pension plans.
Those plans are financed entirely by the employers. The workers
contribute only to Social Security. When those workers retire,
they not only collect their full pension but also full Social
Security benefits, which are based on their own record or that
of their spouse. These retirees are not subject to any penalty
or offset based on their pension amount, even though they
contributed no more to their combined Social Security and
pension than I did. To add insult to injury, not only am I
penalized by the GPO, but I am also affected by the so-called
WEP. From 1966 to 1983, I worked as a checker at Safeway market
and had other jobs that required me to pay into Social
Security. Since I also worked in public employment, however, I
will not get the full benefit to which I am entitled. To get a
full benefit, I will have to work many more years in covered
employment. Until I discovered the GPO and the WEP, retirement
seemed like such a nice idea.
[Laughter.]
Now, faced with a double-whammy, my real retirement is on
hold. I will be forced to keep working for the foreseeable
future, and it hardly seems fair. These laws need to be
changed. The most aggrieved victims are women like me: average
people with relatively small pensions. We tend to live longer
than men and often outlive our resources. Far too many of us
end life in poverty. The GPO and the WEP are contributing to
this catastrophe. So, I am urging the Subcommittee to take a
serious look at legislation that will reform the GPO and the
WEP and help make Social Security fair to public employees like
me. Please, do not think you can solve this problem by
requiring all public jurisdictions to join the Social Security
system. The AFSCME's research shows how costly this would be
for States and cities and how dangerous for public pension
plans. The AFSCME is a member of the Coalition to Preserve
Retirement Security (CPRS), which is also providing testimony
today. The Coalition's views on mandatory coverage reflect
AFSCME's views, so I will leave it to CPRS to make our case.
Please note, however, that AFSCME has supplied written
testimony to the Subcommittee that explains our opposition to
mandatory Social Security coverage in the public sector. In
closing, I would like to thank the Subcommittee for inviting me
here today and once again urge you to take action on the GPO
and WEP. Thousands of public retirees all across the country
are counting on your support. Thank you.
[The prepared statement of Ms. Williams follows:]
Statement of Annette Williams, on behalf of American Federation of
State, County and Municipal Employees, American Federation of Labor-
Congress of Industrial Organizations
Good morning Mr. Chairman and Members of the Subcommittee. My name
is Annette Williams and I retired only a few weeks ago, at age 58, from
my job as a clerical worker employed by the City of Los Angeles. I'm
here today representing my union, the American Federation of State,
County and Municipal Employees (AFSCME), and the thousands of AFSCME
members who work in jobs that are not covered by Social Security.
I'd like to begin by saying that I think Social Security is a
wonderful insurance program. My husband was covered by Social Security
when he passed away over twenty years ago. At the time I was widowed,
three of my four children were minors and still living at home. All
three received Social Security benefits based on my husband's work
record. Those benefits helped our family hold on to a decent standard
of living, despite the loss of our primary breadwinner.
Only now has Social Security let us down.
I never knew about the Government Pension Offset (GPO) until
recently, when I began to explore my retirement options. I had always
thought that I would be able to collect a widow's benefit when I
reached the eligible age. I'm sure my husband believed the same thing.
With every contribution from his paycheck, I know he felt that he was
providing for my future.
Clearly, that was not the case. Instead, I will be forced to offset
my city pension against my Social Security widow's benefit. Two-thirds
of my $1,300-a-month pension will completely eliminate my widow's
benefit of $812.
I know that Social Security's dual entitlement rule is often cited
as justification for the GPO. The dual entitlement rule says that a
person can receive their own earned Social Security benefit or a
spousal benefit--whichever is higher--but not both. The GPO law
essentially applies this rule to two-thirds of my pension, which is
considered to be the equivalent of a Social Security benefit. However,
I find this logic to be questionable. Here's why:
As a city employee, I contributed the same amount to my pension as
private sector workers contribute to Social Security. My employer's
contributions have been as high as 16\1/2\ percent of payroll. In the
private sector, however, most workers don't contribute to their pension
plans. Those plans are financed entirely by the employers and the
workers contribute only to Social Security.
But when those workers retire, they not only collect their full
pension, but full Social Security benefits too--based on their own work
record or that of a spouse. These retirees aren't subject to any
penalty or offset based on their pension amount, even though they've
contributed no more to their combined Social Security and pension than
I have.
To add insult to injury, not only am I penalized by the GPO, but
I'm also affected by the so-called ``Windfall Elimination Provision.''
From 1966 to 1983, I worked as a checker at Safeway and at other jobs
that required me to pay into Social Security. Since I also worked in
public employment, however, I won't get the full benefit to which I'm
entitled. To get a full benefit, I would have to work many more years
in covered employment.
So I'm being hit with a double whammy: the GPO and the WEP.
Retirement seemed like a nice idea, but I'm forced to put it on hold
and continue working. It's just not fair.
These laws need to be changed. The most aggrieved victims are women
like me--average people with relatively small pensions. We tend to live
longer than men, and often outlive our resources. Far too many of us
end life in poverty. The GPO and WEP are contributing to this
catastrophe.
So, I would urge the Subcommittee to take a serious look at
legislation that will reform the GPO and WEP and make Social Security
fair for public employees like me. But please, don't treat this plea as
a reason to require all public jurisdictions to join the Social
Security system. AFSCME's research shows how costly this would be for
non-participating states and localities, most of which are currently
struggling with enormous budget problems. At the same time, forced
participation could destabilize dozens of public pension plans and
jeopardize future benefits.
AFSCME is a member of the Coalition to Preserve Retirement
Security, which is also providing testimony today. We support the
Coalition's views on mandatory coverage.
While AFSCME is a strong supporter of Social Security and
recognizes its profound importance to the majority of our members, we
also understand that mandatory coverage could be a serious problem for
the 25 percent of AFSCME members in non-covered jurisdictions.
It needs to be strongly emphasized that these individuals do not
lack pension coverage. Nearly all are covered by state or local defined
benefit pension plans. Furthermore, the Omnibus Reconciliation Act
(OBRA) of 1990 has already ensured that any temporary, part-time or
seasonal employee not covered by one of these public plans is covered
under Social Security.
So, already there is basic pension protection for all American
workers--private and public sector. There is no need to mandate Social
Security coverage in an effort to protect workers' interests.
Public employees and their employers have been given ample
opportunity to come under Social Security. Most have voluntarily done
so. Those still outside the system clearly prefer their own state or
local pension plans. The vast majority of these plans are actuarially
sound. Most of them have been in existence longer than Social Security
and were designed to function without it. They have excellent records
for providing disability protection and retirement security to their
participants.
Mandated Social Security coverage could have serious implications
for public employees, their employers and their pension plans, even if
the coverage applies only to future hires.
Employees would be required to pay 6.2 percent of their paychecks
in FICA tax, even though most already make substantial contributions to
their public employee pension plans. Unlike the private sector--where
plans are usually financed entirely by employers--contributions by
public workers in non-Social Security jurisdictions typically range
from 8 to 10 percent of pay. Adding the Social Security payroll tax
would create an unaffordable burden for millions of these workers, most
of whom have lower- to middle-incomes.
Employers would also be required to contribute 6.2 percent of
payroll to Social Security, on top of the contributions they now make
to their own pension plans. These contributions are typically 13 to 15
percent of payroll. Public employers simply cannot afford to meet the
additional expense of Social Security--particularly in light of the
serious fiscal crises that most state and local governments now face.
If forced to participate, the result could be a catastrophic loss of
public services and jobs.
Faced with a requirement to pay FICA tax on behalf of employees,
governments would most likely try to create new pension plan tiers for
new hires that would integrate Social Security with a supplemental
public pension. This could result in reduced benefits, higher employee
contributions, and changes in retirement ages. Benefit structures for
future retirees could be drastically altered.
It could also destabilize public pension funds for today's workers
and retirees. Benefits in existing public pension plans rely heavily on
a fund's investment earnings. If some of these investments are cut off
and the proceeds diverted to new plans, it could spell serious trouble
for AFSCME members and other public employees.
The result could be the inability of pension plans to pay promised
benefits to current participants, unless taxes are raised to fund much
higher employer contributions. Employers might also look at cutting
post-retirement cost-of-living-adjustments and retiree health
coverage--a disastrous consequence for vulnerable pensioners.
At the same time that it would create havoc for public employees
and retirees, mandatory coverage would provide only limited relief for
Social Security--extending trust fund solvency by only 2 years.
Eventually, new participants would be eligible to collect benefits,
placing new burdens on the system.
So, mandatory coverage is not an answer to Social Security's long-
range shortfall, nor is it an answer to the GPO or WEP. Rather than
create new financial dilemmas and benefit inequities, Congress needs to
seek real solutions to the problems that confront Social Security now
and in the future.
In closing, I would like to thank you for inviting me to testify on
these important issues. Thousands of public employees and retirees are
counting on your support.

Chairman SHAW. Thank you, Ms. Williams. Ms. Haschke?

STATEMENT OF DONNA HASCHKE, PRESIDENT, TEXAS STATE TEACHERS
ASSOCIATION, AUSTIN, TEXAS, ON BEHALF OF THE NATIONAL EDUCATION
ASSOCIATION

Ms. HASCHKE. Mr. Chairman, Mr. Matsui, and fellow Texan,
Mr. Johnson, I am Donna Haschke. I have been a teacher for 25
years, and I am currently serving as the President of the Texas
State Teachers Association (TSTA), and I am here representing
TSTA and the National Education Association (NEA) today. Both
TSTA and NEA strongly support complete repeal of the GPO and
the WEP. These offsets are hurting our members, sometimes
leaving them facing poverty in retirement and convincing some
to leave the teaching profession. So, I am here today to put a
human face on the problem. I brought about 500 letters, and Mr.
Berman already had some of those, that people have written.
They have e-mailed; they have faxed; they have written on
notebook paper, typing paper. You probably will find a couple
of first grade teacher letters in here written on Big Chief
tablet paper.
[Laughter.]
Because any opportunity that teachers and school employees
have to share their views, they take that opportunity. We are
very, very concerned about this issue. The GPO penalizes
individuals who have dedicated their lives to public service.
The offset has the harshest impact on those who can least
afford the loss: lower-income women. Ironically, those impacted
have less money to spend in their local economy and sometimes
have to turn to expensive programs such as food stamps to make
ends meet. The NEA and TSTA receive hundreds of phone calls and
letters each months from educators impacted by the GPO. Many
are struggling to survive on incomes close to poverty, fearing
they will be unable to cover their housing, medical and food
expenses on their meager incomes. For example, Laurie Trapp
from Paris, Texas--that is deep East Texas--writes, ``I am a
widow at age 43. My husband worked and paid into Social
Security for over 25 years. I have found out that I am not
eligible to receive his Social Security benefits at this time,
because my salary is more than the allowed amount. Both of my
children will be in college at the time of my retirement. I
will not be able to support myself and put them through college
on just my retirement income.'' We are equally concerned about
the WEP. Educators enter the profession, often at considerable
financial sacrifice, because of their commitment to our
Nation's children and their belief in the importance of
ensuring every child the opportunity to excel. Yet many of
these dedicated individuals are unaware that their choice to
educate America's children comes at a price: the loss of
benefits they earned in other jobs. Like the GPO, the WEP can
have a devastating impact on educators' retirement security.
For example, Lucinda Trusdale, from the Alief School District
near Houston, says I did not start teaching until I was 33. I
worked in the private sector from the time I was 17 until I
graduated and began teaching.
If they take Social Security away from those with teacher
retirement, I will not be able to afford to retire until well
after the age of 65. As it is, I am a single mom aged 47 with
an 8-year-old and a 5-year-old. Financially, we have a very
hard time. I know it is not as bad as others, but I surely
thought at 47 with a teaching degree, I would not have to
struggle to make ends meet every month. John Duncan, who is a
teacher in Odessa: ``I worked and paid into Social Security for
17 years. I wanted to do something in my life to help someone
else. I needed to do this, so I left a good-paying job to go
back to school, receive my certification, and teach. I am now
68 years old, and I have taught for 28 years. I am approaching
retirement and have counted on my Social Security to help me.
Now, because of the WEP, I will lose approximately $5,700 a
year of my Social Security. My wife will lose another $2,400 in
spousal benefits. That is a total of $7,100 that we counted on
for our retirement. This might not mean much to a lot of
people, but to a teacher, this is a lot of money.'' We have
some members who are penalized twice because they are affected
by both the GPO and the WEP. I have a letter here from Mary
Hall, but let me just tell you a little bit about Mary. She
teaches at Memorial High School in Spring Branch Independent
School District (ISD), near Houston. She is 86 years old. She
has been teaching for 55 years, over half of those in Texas.
Her husband is deceased, and she has been collecting $1,200 a
month on his spousal benefits. She thinks that she cannot
retire, because she would lose that benefit, and she would
revert back to her benefit that she acquired from other school
districts, which was $500, and that would be offset to about
$300.
Mary is sharp as a tack. She has very, very good teaching
skills. She is a wonderful teacher. Unfortunately, she is
disabled; she teaches from a walker; she had a hip replacement
that did not take; and her body is slowly deteriorating.
So, you would think of someone age 86 with 55 years of
teaching experience, that she certainly should be looking
forward to a good retirement. In Texas, as in other States, we
are very worried about our ability to attract and retain
quality teachers if they know about the GPO and the WEP. We are
finding it harder and harder to convince people to enter the
teaching profession, and we are seeing teachers leave the
profession or the State because of the impact of the offsets.
Linda Whitner from Richardson ISD at Lake Highlands High School
says, ``I am a Texas teacher that is retiring in about a month.
I have 20 years in Texas, 16 years before that in other States.
I would like to show you my budget and let it speak for
itself.'' Here, she has written out all of her monthly expenses
and her annuity, and she says as you can see, ``I will have
$141 a month for food, household supplies, clothes, 20 percent
of doctors' appointments, auto care and all of the little
things that make life possible.'' The last word she says here
is, ``help.'' We are very pleased that Representatives McKeon
and Berman have introduced the Social Security Fairness Act of
2003. We are gratified that this legislation already has over
190 cosponsors, and now, we urge Congress to take action and
move this important legislation, and thank you for allowing me
to address you today.
[The prepared statement of Ms. Haschke follows:]
Statement of Donna Haschke, President, Texas State Teachers
Association, Austin, Texas, on behalf of the National Education
Association
Mr. Chairman and Members of the Subcommittee:
On behalf of the National Education Association's (NEA) 2.7 million
members, we would like to thank you for the opportunity to submit
comments on the Government Pension Offset (GPO) and Windfall
Elimination Provision (WEP), and on the issue of mandatory Social
Security coverage. We commend the Subcommittee for holding this
important hearing on a matter of great concern to educators and other
public employees.
NEA strongly supports complete repeal of the Government Pension
Offset and the Windfall Elimination Provision, which unfairly reduce
the Social Security and Social Security survivor benefits certain
public employees may receive. We oppose requiring public employees to
participate in Social Security. Our testimony will cover both of these
issues.
The Government Pension Offset: A Devastating Loss of Benefits for
Widows and Widowers
The Government Pension Offset reduces Social Security spousal or
survivor benefits by two-thirds of the individual's public pension.
Thus, a teacher who receives a public pension for a job not covered by
Social Security will lose much or all of any spousal survivor benefits
she would expect to collect based on her husband's private sector
earnings.
Congress and the President agreed in 1983 to reduce the spousal
benefits reduction from a dollar-for-dollar reduction to a reduction
based on two-thirds of a public employee's retirement system benefits.
This remedial step, however, falls well short of addressing the
continuing devastating impact of the GPO.
The GPO penalizes individuals who have dedicated their lives to
public service. Nationwide, more than one-third of teachers and
education employees, and more than one-fifth of other public employees,
are not covered by Social Security, and are, therefore, subject to the
Government Pension Offset.
Estimates indicate that 9 out of 10 public employees affected by
the GPO lose their entire spousal benefit, even though their deceased
spouse paid Social Security taxes for many years. Moreover, these
estimates do not include those public employees or retirees who never
applied for spousal benefits because they were informed they were
ineligible. The offset has the harshest impact on those who can least
afford the loss: lower-income women. Ironically, those impacted have
less money to spend in their local economy, and sometimes have to turn
to expensive government programs like food stamps to make ends meet.
NEA receives hundreds of phone calls and letters each month from
educators impacted by the GPO. Many are struggling to survive on
incomes close to poverty, fearing they will be unable to cover their
housing, medical, and food expenses on their meager incomes. For
example, consider the following stories:
From NEA member Dorothea in Ohio:

``When my husband and I were planning our retirement, we knew
that I would not be able to receive full retirement credit from
the years I was able to teach. However, with my share of his
Social Security, and a small annuity, we felt that we were
adequately covered. [A]fter I started teaching, the Offset
Penalty was voted into effect and the Social Security he
contributed to for over 35 years is not available to me.
Currently I receive $203 a month as my share of his Social
Security. It just is not fair--if he could rise from the grave
in protest, I'm sure he would. One goes to college, marries,
raises a family, and, in this country, expects to be able to
retire in a comfortable situation. I'm only asking for benefits
which my husband and I have earned--it's time to correct this
injustice.''

From NEA member Patricia in Texas:

``I am a retired teacher . . . who chose to say at home and
be with my four children during those most important early
development years. I did not begin teaching until I was 40
years old and left at 55 because my husband had retired. . . .
My retired pay is $517 per month. Next year when I am 65 and
the GPO is used to calculate my Social Security benefits, I
will be lucky if I can get enough to pay for my Medicare
costs.''
The Windfall Elimination Provision: A Shocking Loss of Earned Benefits
The Windfall Elimination Provision reduces the earned Social
Security benefits of an individual who also receives a public pension
from a job not covered by Social Security. Congress enacted the WEP
ostensibly to remove an advantage for short-term, higher-paid workers
under the original Social Security formula. Yet, instead of protecting
low-earning retirees, the WEP has unfairly impacted lower-paid retirees
such as educators.
The WEP penalizes individuals who move into teaching from private
sector employment, or who seek to supplement their often insufficient
public wages by working part-time or in the summer months in jobs
covered by Social Security. Educators enter the profession often at
considerable financial sacrifice because of their commitment to our
nation's children and their belief in the importance of ensuring every
child the opportunity to excel. Yet, many of these dedicated
individuals are unaware that their choice to educate America's children
comes at a price--the loss of benefits they earned in other jobs.
While the amount of reduction depends on when the person retires
and how many years of earnings he or she has accumulated, many public
employees can lose a significant portion of the Social Security
benefits they earned in other jobs. Like the GPO, the WEP can have a
devastating impact on educators' retirement security. For example:
NEA member Lytell from California reports:

``This offset makes my life a financially insecure one. Down
the road, I will be desperate. I had always wanted to be a
teacher. . . . I worked as a medical secretary for 10 years. As
I matured, I decided to go back and fulfill my earlier dream.
It took 4 years of financial hardship and other lifestyle
sacrifices but I persevered. . . . Finally, I was able to get a
job in a remote Idaho town, leaving my family, friends and worn
out car behind. And so began a wonderful and rewarding career.
. . . As the second half of my working life [in California]
came to a halt, I learned that I would be financially penalized
for teaching here in California. . . . I have to work to
supplement my retirement, having experienced a 50% penalty in
my Social Security benefits. . . . When I can no longer work, I
am afraid that I will lose my home. . . . It's a very
frightening thought.''

From NEA member Marilyn in Ohio:

``In June of 1956 I graduated from high school and began
working as secretary to the president of Dime Bank in Akron,
Ohio. . . . I worked there for a little over seven years,
leaving to raise three children. I worked [in retail] during
the hours the children were in school (still paying into SS).
In February of 1985 I took a part-time position at the
University of Akron, which later turned to full-time. In March
of 2000, I reported to my Social Security Office in Akron, Ohio
to make plans for my retirement. . . . I was retiring with 15
years of service. For several years prior, I had been receiving
information by mail from the Social Security Office that I
would be receiving $1,022 a month in Social Security benefits
upon retirement. [However, I was told] `since you retired from
the University of Akron, you will only receive $220 per month.'
I was angry, astonished, upset and I cried. I . . . was
absolutely amazed that I had been put into such a position.
Consequently, I am still working through a temporary job
placement company, pouring my money into Social Security
coffers, for which I will only receive $220 a month until the
day I die. Is this fair?''

From NEA member Theresa in Illinois:

``Currently, I am a Guidance Counselor at Lockport Township
High School. I also have experience teaching special education
in low income and inner city high schools. Prior to entering
the education field, I was working in the business world and
paying into Social Security. I am a single person with no other
income. I decided to leave the business world and teach. I
never realized this move would jeopardize my Social Security
money when I retired. . . . [B]ecause I did work in the
business world for years I do not have an opportunity to put in
the full amount of years to receive a full teachers pension. I
will not receive a full teachers pension either. Since I have
never married, I will not receive any spouse benefits. . . . I
find it appalling that teachers are bearing this burden.
Teachers who changed careers should not be penalized from
receiving full Social Security benefits.''
The ``Double Whammy'': Educators Impacted by Both the GPO and WEP
Many NEA members report that they are subject to double penalties--
losing both their own benefits and spousal benefits due to the combined
impact of the GPO and WEP. For example NEA member Mary from Ohio
reports:

``I became a teacher at the age of 41 after working at
various jobs under Social Security for 20+ years. I'm 64 years
old and retired now. Little did I know the financial impact my
decision to become a teacher at midlife would have on my
retirement. I can only collect 40% of the Social Security I
worked for and paid into for many years--a whopping $189.00 a
month. Worse yet, if my husband dies before me, I will collect
NONE of the Social Security benefits he paid into for 30 years.
I didn't teach long enough to receive a full teacher's
pension--silly me, I always thought Social Security would help
fill the gap. After all, I worked for it, didn't I? Wrong! . .
. I feel betrayed. What a terrible way to treat someone who
dedicated half her work life to the education of children. I
know the $250 (approximately) a month I'm missing due to the
WEP is small change to [Congress] but it would help me
tremendously to get through the month, especially with the cost
of health care for my husband and me through the State
Teachers' Retirement System. I don't know how much I will lose
in Social Security benefits if my husband dies first, but I'm
sure however much it is, I will miss it dreadfully.''
The National Impact of the GPO and WEP: Undermining Teacher Recruitment
Efforts
The GPO and WEP have an impact far beyond those states in which
public employees like educators are not covered by Social Security.
Because people move from state to state, there are affected individuals
everywhere. The number of people impacted across the country is growing
every day as more and more people reach retirement age.
Perhaps most alarming, the GPO and WEP are impacting the
recruitment of quality teachers to meet urgent national shortages.
Record enrollments in public schools and the projected retirements of
thousands of veteran teachers are driving an urgent need for teacher
recruitment. Estimates for the number of new teachers needed range from
2.2 to 2.7 million by 2009.
At the same time that policymakers are encouraging experienced
people to change careers and enter the teaching profession, individuals
who have worked in other careers are less likely to want to become
teachers if doing so will mean a loss of Social Security benefits they
have earned. Some states seeking to entice retired teachers to return
to the classroom have found them reluctant to return to teaching
because of the impact of the GPO and WEP. In addition, current teachers
are increasingly likely to leave the profession to reduce the penalty
they will incur upon retirement, and students are likely to choose
other course of study and avoid the teaching profession.
The GPO and WEP also impact other critical public services fields,
including police and firefighters. Our nation can ill-afford to allow
the very real fear of poverty in retirement to force talented,
dedicated individuals out of these professions.
The GPO/WEP Solution: Total Repeal
Representatives McKeon (R-CA) and Berman (D-CA) have introduced the
Social Security Fairness Act of 2003 (H.R. 594). This bipartisan
legislation, which already has over 180 cosponsors, would eliminate the
GPO and WEP, thereby allowing public employees, like all other
employees, to collect the benefits they earned and need.
While other proposals would address the GPO and WEP by making
changes to the formulas or setting minimum benefit levels, NEA strongly
believes that total repeal is the best solution. The change in the GPO
formula enacted in 1983 has still left thousands of retired educators
in desperate financial circumstances. Only a complete repeal will
ensure the financial security our nation's public servants deserve.
Therefore, NEA urges the Subcommittee, and the entire House of
Representatives, to take immediate steps toward passage of the McKeon-
Berman bill.
Mandatory Coverage: An Unwise and Unnecessary Approach
NEA's position on repeal of the Government Pension Offset and
Windfall Elimination Provision should not in any way be interpreted as
support for requiring public employees to participate in Social
Security. NEA strongly opposes mandatory coverage. Instead, NEA simply
believes that workers should be able to receive the benefits they or
their spouse earned by working in covered employment, without
jeopardizing their public pension.
Social Security is a ``one-size-fits-all'' program. Many existing
public employee programs are tailored to meet the needs of specific
employee groups. Forcing public employees into Social Security would
jeopardize these state and local plans. In addition, Social Security
trust funds can be invested only in U.S. Treasury bonds. State and
local governments permit a greater diversity of investment options,
thereby potentially achieving a greater rate of return.
Mandatory coverage of public employees would also increase the tax
burden on public-sector employers. Ultimately, these increased tax
obligations would lead to difficult choices, including reducing the
number of new hires, limiting employee wage increases, reducing cost-
of-living increases for retirees, and reducing other benefits such as
health care. Mandating coverage of certain categories of workers in
high-risk professions, such as police and firefighters, might also
increase program costs since these workers are more likely than the
general population to receive Survivors and Disability Insurance.
Finally, mandating coverage of public employees will not solve the
Social Security system's financial difficulties. The amount of money
gained by mandating coverage would be relatively small and would not
solve the long-term Social Security crisis. Requiring new state and
local employees to pay into Social Security would enable the federal
government to continue borrowing money from Social Security trust
funds, and, therefore, could exacerbate financing problems.
Conclusion
NEA strongly urges Congress to:
1. Take immediate action to pass the Social Security Fairness Act
of 2003, repealing both the Government Pension Offset and Windfall
Elimination Provision.
2. Reject proposals to require public employees in uncovered states
to participate in Social Security.
We thank you for your consideration of these comments.

Chairman SHAW. Thank you. Mr. Johnson?

STATEMENT OF WILLIAM J. JOHNSON, EXECUTIVE DIRECTOR, NATIONAL
ASSOCIATION OF POLICE ORGANIZATIONS

Mr. JOHNSON. Mr. Chairman, Representative Matsui and
Members of the Subcommittee, my name is William Johnson, and I
serve as the Executive Director of the National Association of
Police Organizations (NAPO). On behalf of 230,000 rank-and-file
police officers from across the United States, I would like to
thank you for this opportunity to testify today on the future
of Social Security and the impact of the GPO and the WEP
provision. The Social Security program is an important source
of future retirement security for millions of Americans, and
NAPO realizes that the program needs to be put on a sound
footing for future generations of retirees. We commend Congress
and this Subcommittee for their efforts to consider various
reforms but wish to stress that mandating Social Security
coverage for State and local governmental employees will
neither assist solvency nor assure proper and fitting coverage
for the law enforcement community. Forcing State and local
governments and employees to pay a combined 12.4 percent tax
would have major consequences; specifically, mandating Social
Security taxes on the 70 percent of public safety officers now
not covered would have a dramatic and negative impact on the
recruitment and retention of well-qualified public safety
officers. In addition, it would constitute an unfunded mandate
on public safety agencies, amounting to over $25 billion in the
first 5 years alone according to one recent study.
Under a mandatory Social Security system, police officers
and firefighters would pay more taxes for inadequate benefits
as compared to their current pension plans. Fourteen States,
many represented on this Subcommittee, cover substantial
numbers of their public employees under independent plans which
will be jeopardized by mandatory Social Security. Those States
are Texas, Louisiana, Missouri, California, Ohio, Colorado,
Illinois, Massachusetts, Kentucky, Minnesota, Nevada,
Connecticut, Maine, and Alaska. Firefighters and police
officers in nearly every State are covered by independent plans
rather than Social Security and nationwide, about 5 million
public employees are covered by State or local plans in lieu of
Social Security. State and local governments were excluded from
the Social Security Act of 1935 (P.L. 74-271) for two reasons:
first, there were and still are questions as to whether and the
extent to which the Federal Government could properly tax State
and local governments. Second, many State and local governments
have their own adequate and already existing pension systems.
It makes no sense whatsoever to do away with a system of
pension plans that is working well and paying needed benefits
to those who serve and protect the public. Tampering with the
current system would most assuredly result in some of our
better candidates and current officers going into other
professions.
Social Security benefits do not provide anywhere near the
same level of benefits of current public safety pension plans
and provide no disability benefits unless one generally is
unable to perform any work, not just public safety work. To
meet the new mandated costs, a majority of government entities
would be forced to pay both their new 6.2 percent tax share and
retain their current pension systems, because they are required
by law or collective bargaining agreement to do so. Imposing
Social Security taxes on these State and local governments
would strain their already tight budgets and would have serious
consequences on the pay and working conditions of public safety
officers. State and local governments would likely consider the
following actions to try to address that situation: decreasing
the number of public safety officers; reducing the pay of law
enforcement officers; freezing future cost of living increases;
paying the 6.2 percent tax share by reducing proportionately
their contributions to the current pension systems; or saving
funds by not providing public safety officers with the
essential equipment and technology needed to perform their
duties.
Over time, the increasing transfer of contributions of both
employers and employees from existing pension plans to Social
Security would severely reduce the plans' assets and investment
income as more grandfathered employees in the current systems
retire and new employees covered by Social Security are hired
to replace them. This would threaten the financial viability of
sound, secure and longstanding retirement systems. Existing
pension plans would become underfunded and place at serious
risk the future benefits paid to retirees. In a 1998 report to
this Subcommittee, the GAO stated that the SSA estimates that
extending mandatory Social Security coverage to all newly-hired
State and local government employees would reduce the program's
long-term actuarial deficit by about 10 percent and would
extend the trust solvency by about 2 years. Fundamentally
changing and jeopardizing the pension systems of over 5 million
Americans is not worth the minimal gains such actions would
produce.
A second concern NAPO has regarding Social Security
concerns those provisions that have been discussed here today,
the GPO and the WEP provisions. I know that my written remarks
are already in the record, and I thank you for that, and I know
those provisions have been discussed in detail. If I could
depart briefly in the time I have remaining, it just seems
fundamentally that when we talk about the GPO in particular, we
are talking about spousal benefits. We are talking about
benefits earned by the person who worked, knowing and believing
that his or her spouse would be covered when they die. It seems
fundamentally unfair to deprive the widow, in most cases, of
those benefits that had already been earned and paid for by the
worker who is already deceased. If we could focus on the
promise made to that worker while he was still alive and honor
that promise that we have made as a country, I think that we
would do an honor both to the person who worked, the surviving
widows and to this Congress. Thank you.
[The prepared statement of Mr. Johnson follows:]
Statement of William J. Johnson, Executive Director, National
Association of Police Organizations
Mr. Chairman, Representative Matsui, Members of the House
Subcommittee, my name is William Johnson and I am the Executive
Director of the National Association of Police Organizations. NAPO is a
coalition of police unions and associations from across the United
States that serves here in Washington D.C. to advance the interests of
America's law enforcement through legislative and legal advocacy.
On behalf of 230,000 rank-and-file police officers from across the
United States, I would like to thank you for this opportunity to
testify today on the future of Social Security and the impact of the
Government Pension Offset and Windfall Elimination Provisions.
Today, I will discuss our paramount concerns regarding Social
Security reform and how they impact America's law enforcement
community. First, the incorrect theory that mandating Social Security
coverage for state and local governmental employees will ensure future
solvency and second, the unfortunate effects of Government Pension
Offset and Windfall Elimination Provisions on the survivors of those
who, by professional need, are allowed to opt out of Social Security
coverage.
The Social Security program is an important source of future
retirement security for millions of Americans and NAPO realizes that
the program needs to be put on a sound footing for future generations
of retirees. We commend Congress and this Subcommittee for their
efforts to consider various reforms but wish to stress that mandating
Social Security coverage for state and local governmental employees
will neither assist solvency nor ensure proper and fitting coverage for
the law enforcement community.
Forcing state and local governments and employees to pay a combined
12.4 percent tax would have major consequences. Specifically, mandating
Social Security taxes on the 70 percent of public safety officers now
not covered would have a dramatic and negative impact on the
recruitment and retention of well-qualified public safety officers. In
addition, it would constitute an unfunded mandate on public safety
agencies, amounting to over $25 billion in the first five years alone
according a 1999 study done by the Segal Company. Under a mandatory
Social Security system, police officers and firefighters would pay more
taxes for inadequate benefits, as compared to their current pension
plans.
Fourteen states, many represented on this Committee, cover
substantial numbers of their public employees under independent plans
which will be jeopardized by mandatory Social Security. They are:
Texas, Louisiana, Missouri, California, Ohio, Colorado, Illinois,
Massachusetts, Kentucky, Minnesota, Nevada, Connecticut, Maine, and
Alaska. Firefighters and police officers in nearly every state are
covered by independent plans rather than Social Security and nationwide
about 5 million public employees are covered by state or local plans in
lieu of Social Security.
State and local governments were excluded from the Social Security
Act of 1935 for two reasons. First, there were and may still be
questions as to whether and the extent to which the Federal government
could tax state and local governments. Second, many state and local
governments had their own adequate pre-existing pension systems.
It makes no sense whatsoever to do away with a system of pension
plans that is working well and paying needed benefits to those who
serve and protect the public. Tampering with the current system would
most assuredly result in some of our better candidates and current
officers going into other professions, in view of the fierce
competition among public safety agencies and the private sector.
Social Security benefits do not provide anywhere near the same
level of benefits of current public safety pension plans and provide no
disability benefits unless one is unable to perform any work, not just
public safety work.
To meet the new mandated costs, a majority of government entities
would be forced to both pay the newly imposed 6.2 percent tax share and
retain their current pension systems, because they are required by law
or collective bargaining agreement to do so. Imposing Social Security
taxes on these state and local governments would strain their already
tight budgets and would have serious consequences on the pay and
working conditions of their public safety officers.
Because raising taxes to make up the difference is not politically
feasible, state and local governments would likely consider the
following actions: decreasing the number of public safety officers to
retain current pay levels and benefits; reducing the pay of law
enforcement officers; freezing future cost-of-living increases; paying
the 6.2 percent tax share by reducing proportionally their
contributions to current pension systems; or saving funds by not
providing public safety officers with the essential equipment and
technology needed to effectively perform their duties.
Over time, the increasing transfer of significant contributions, of
both employers and employees, from existing pension plans to Social
Security would severely reduce the plans' assets and investment income,
as more grandfathered employees in the current systems retire and new
employees covered by Social Security are hired to replace them. This
would threaten the financial viability of sound, secure and long-
standing retirement systems. Existing pension plans would become under-
funded and place at serious risk the future benefits paid to retirees.
In a 1998 report to this Subcommittee, the General Accounting
Office stated that, ``the Social Security Administration estimates that
extending mandatory Social Security coverage to all newly hired state
and local governmental employees would reduce the program's long-term
actuarial deficit by about 10 percent and would extend the trust's
solvency by about 2 years.'' Fundamentally changing and jeopardizing
the pension systems of over 5 million Americans is not worth the
minimal gains such actions would produce.
A second concern NAPO has regarding Social Security coverage
concerns provisions which disproportionately and unfairly penalize
those officers and their families who opt out of Social Security
coverage because of professional need. The Social Security system is
not appropriate for public safety officers who normally retire prior to
or around 50 to 55 years of age, due to the stresses and dangers they
face every day. Unlike current pension plans where officers may retire
after 20 or more years of service, Social Security will not pay these
individuals until they reach 62 to 67 years of age.
Many retire from public safety careers in their early to mid
fifties and look for new opportunities to serve their community though
they will be penalized by the Windfall Elimination Provision if they
retire from a non-Social Security paying job and move to one that does.
The Windfall Elimination Provision (WEP) was adopted as part of the
Social Security Amendments of 1983 and affects an individual's Social
Security if that person became eligible for a federal, State or local
government pension after 1985 based on work not covered by Social
Security.
The regular formula for computing a Social Security benefit is
based on Average Indexed Monthly Earning (AIME). The benefit is figured
by taking 90 percent of the first $606 of the AIME; 32 percent of the
next AIME to $3,653; and 15 percent of $3,653 and over. These figures
are indexed each year.
In contrast, the WEP formula unfairly overpenalizes lower paid
government employees who have had a career in both the public and
private sector by taking only 40 percent of the first $606 of the AIME.
While the other percentages remain the same, this reduces the benefit
by more than half.
Another penalty that survivors, of these officers see is the
Government Pension Offset which unfairly affects the survivor's own
Social Security payment.
As an example, if a man collects a Social Security benefit of $800
a month and his wife collects a government pension from a job outside
Social Security of $900 a month, the wife would, in the absence of GPO,
be eligible for a spousal benefit of half her husband's retirement
benefit, or $400 a month. GPO, however, requires that this amount be
offset by two-thirds of her pension--or $600--so, as a result, she
receives nothing. In contrast, had she never worked at all, she would
receive the $400 spousal benefit.
NAPO supports legislation that has been introduced in this Congress
to eliminate the Government Pension Offset for combined monthly
benefits of $1,200 or $2,000 or less depending on the legislation and
further legislation that will reform the Windfall Elimination
Provision. The Offset and Windfall figures were arbitrarily picked and
NAPO hopes that the Congress will correct them to properly assist those
Americans who survive a public safety officer or public employee.
Mr. Chairman, Representatives, our concerns are twofold. One,
mandating Social Security coverage for state and local governmental
employees will neither significantly assist solvency of the program nor
ensure proper and fitting coverage for the law enforcement community.
And second, that the officers and their families should not be unfairly
penalized for their service to their communities who opt out of Social
Security coverage because of professional need. I want to thank the
Committee and Chairman Shaw for this opportunity to speak to you all
today and I ask that my testimony be added to the official record. I
would be happy to answer any questions you may have.

Chairman SHAW. Thank you, Mr. Johnson. Mr. Canterbury?

STATEMENT OF CHUCK CANTERBURY, NATIONAL PRESIDENT, FRATERNAL
ORDER OF POLICE, NASHVILLE, TENNESSEE

Mr. CANTERBURY. Good morning, Mr. Chairman, Ranking Member
Matsui, and distinguished Members of this Subcommittee. I am
the National President of the National Fraternal Order of
Police (FOP), and I am the elected spokesperson of 305,000
rank-and-file police officers. The FOP has designated the
repeal of the WEP and the GPO as one of our top legislative
priorities, and we strongly urge this Committee to consider
passing H.R. 594. The FOP had the privilege of testifying
before this Subcommittee in May 1998, and we did so again in
June 2000 when past National President Gilbert Gallegos
testified on this same issue. It is our hope that the third
time is going to be the charm. The Social Security Fairness
Act, which was introduced by Mr. McKeon, would repeal both the
WEP and the GPO. With 190 cosponsors, and strong support from
both sides of the aisle, we hope to see this pass in this
Congress. Ultimately, this legislation is about fairness to
State and local employees who paid for and ought to receive
their Social Security benefits. Let me begin by explaining the
impact of the WEP on retired police officers.
Simply put, law enforcement officers who serve communities
that are not included in the Social Security system may lose up
to 60 percent of their benefits to which they were entitled by
virtue of secondary or post-retirement employment which
required them to pay into the Social Security system. This 60
percent is a lot of money, especially when you consider that
the officer and his family were likely counting on that benefit
when they planned for their retirement. The FOP contends that
this provision has a disparate impact on law enforcement
officers for several reasons. First of all, we retire earlier
than many other professions. Owing to the physical demands of
the job, a law enforcement officer is likely to retire between
the ages of 45 and 60. Second, after 20 or 25 years on the job,
many law enforcement officers are likely to begin second
careers and hold jobs that do pay into the Social Security
system. Even more officers are likely to moonlight throughout
their entire career and hold second or even third jobs after
their law enforcement career to make ends meet.
This creates an unjust situation that too many of our
Members find themselves in. They are entitled to a State or
local retirement benefit because they worked for 20 or more
years keeping their streets and neighborhoods safe and also
worked at a job or jobs in which they paid into Social
Security, entitling them to a benefit as well. However, because
of the WEP, if their second career resulted in less than 20
years of substantial earnings, upon reaching the age they are
eligible to collect Social Security, they discover they lose 60
percent of the benefit for which they were taxed. I doubt many
officers will live long enough to break even; that is, to
collect money they paid into the system, let alone receive any
windfall. These men and women earned their State and local
retirement benefits as public employees, and they paid Social
Security taxes while employed in the public sector. How is that
a windfall? I think it is clear that Congress did not intend to
reduce the benefits of hardworking Americans who chose to serve
their States and communities as public employees and then went
on to have second careers or work second jobs to make ends
meet. When the WEP was enacted in 1983, it was part of a large
reform package designed to shore up the Social Security system,
and its purpose was to remove a windfall for persons who spent
some time in jobs not covered by Social Security, like public
employees, and also worked other jobs where they paid Social
Security taxes long enough to qualify.
However, we can now clearly see that the WEP was a benefit
cut and designed to squeeze a few more dollars out of a system
facing financial crisis. The fallout of this effort has had a
profoundly negative impact on low-paid public employees outside
of the Social Security system like police officers. To us, this
is a matter of fairness. The arbitrary formula in current law
when applied does not eliminate windfalls because of its
regressive nature. The reduction is only applied to the first
bracket of the benefit formula and causes a relatively larger
reduction of benefits to low-paid workers. It also
overpenalizes lower-paid workers with short careers or, like
many retired law enforcement officers, whose careers are split
inside and outside of the Social Security system. Simply put,
this provision has not eliminated a windfall for individuals
who have not earned it. It has resulted in a windfall for the
Federal Government at the expense of public employees. Like the
WEP, the GPO was adopted in 1983 to shore up the finances of
the Social Security Trust Fund. The provision reduces a
surviving spouse's benefit. For example, the spouse of a
retired law enforcement officer who, at the time of his death,
was collecting a pension of $1,200 would be ineligible to
collect the surviving spouse benefit of $600 from Social
Security. Two-thirds of $1,200 is $800, which is greater than
the spousal benefit, and under the law, the spouse is unable to
collect a single dime of it. In 9 out of 10 cases, this
completely eliminates the spousal benefit even though the
covered spouse paid Social Security taxes for many years. Mr.
Chairman, we would like to urge this Committee to pass this
legislation, and we thank you for your time today.
[The prepared statement of Mr. Canterbury follows:]
Statement of Chuck Canterbury, National President, Fraternal Order of
Police, Nashville, Tennessee
Good morning, Mr. Chairman, Ranking Member Matsui, and
distinguished Members of the House Subcommittee on Social Security. My
name is Chuck Canterbury, National President of the Fraternal Order of
Police. I am the elected spokesperson of more than 305,000 rank-and-
file police officers--the largest law enforcement labor organization in
the United States. I am here this morning to share with you the views
of the members of the F.O.P. on the Windfall Elimination Provision
(WEP) and the Government Pension Offset (GPO) provisions in current
Social Security law.
The Fraternal Order of Police, by a vote of its delegates at our
National Biennial Conference in 1997, has designated the repeal of the
WEP and GPO as one of its top legislative priorities and we strongly
urge this Subcommittee to consider and pass H.R. 594, the ``Social
Security Fairness Act.'' The F.O.P. had the privilege of testifying
before this Subcommittee in May 1998. We did so again in June 2000,
when Past National President Gilbert G. Gallegos testified on this same
issue. It is our hope that the third time is the charm.
The ``Social Security Fairness Act,'' introduced by Representative
Howard L. ``Buck'' McKeon (R-CA), would repeal both the WEP and GPO.
The bill already has one hundred and eighty-three (183) cosponsors,
drawing strong support from both sides of the aisle. It is our hope
that Congress will take a serious look at the manifest unfairness of
the WEP and GPO and act to correct them by passing this bill.
Ultimately, this legislation is about fairness to the State and local
employees who paid for and ought to receive their Social Security
benefits.
Let me begin by explaining the impact of the WEP on retired police
officers. Simply put, law enforcement officers who served communities
which are not included in the Social Security system may lose up to
sixty percent (60%) of the Social Security benefit to which they are
entitled by virtue of secondary or post-retirement employment which
required them to pay into the Social Security system. This sixty
percent (60%) is a lot of money, especially when you consider that the
officer and his family were likely counting on that benefit when they
planned for retirement.
The F.O.P. contends that this provision has a disparate impact on
law enforcement officers for several reasons. First of all, law
enforcement officers retire earlier than employees in many other
professions. Owing to the physical demands of the job, a law
enforcement officer is likely to retire between the ages of 45 and 60.
Second, after 20 or 25 years on the job, many law enforcement officers
are likely to begin second careers and hold jobs that do pay into the
Social Security system. Even more officers are likely to ``moonlight,''
that is, hold second or even third jobs throughout their law
enforcement career in order to augment their income. This creates an
unjust situation that too many of our members find themselves in: they
are entitled to a State or local retirement benefit because they worked
20 or more years keeping their streets and neighborhoods safe, and also
worked at a job or jobs in which they paid into Social Security,
entitling them to that benefit as well. However, because of the WEP, if
their second career resulted in less than twenty (20) years of
substantial earnings, upon reaching the age they are eligible to
collect Social Security, they will discover that they lose sixty
percent (60%) of the benefit for which they were taxed! Actuarially
speaking, I doubt many officers will live long enough to ``break
even''--that is collect the money they paid into the system, let alone
receive any ``windfall.'' These men and women earned their State or
local retirement benefit as public employees and they paid Social
Security taxes while employed in the private sector. How is this a
windfall?
I think it is clear that Congress did not intend to reduce the
benefits of hard-working Americans who chose to serve their States and
communities as public employees and then went on to have second careers
or worked second jobs to make ends meet. After all, when Social
Security was established in 1935, it intentionally excluded State and
local employees. And though most public employees are now in the Social
Security system, fifteen (15) States--Alaska, California, Colorado,
Connecticut, Georgia (certain local governments), Illinois, Louisiana,
Kentucky (certain local governments), Maine, Massachusetts, Missouri,
Nevada, Ohio, Rhode Island, and Texas--remain outside the Social
Security system. It is these public employees that need the help of
Congress.
When the WEP was enacted in 1983, it was part of a large reform
package designed to shore up the financing of the Social Security
system. Its ostensible purpose was to remove a ``windfall'' for persons
who spent some time in jobs not covered by Social Security (like public
employees) and also worked other jobs where they paid Social Security
taxes long enough to qualify for retirement benefits. However, we can
now clearly see that the WEP was a benefit cut designed to squeeze a
few more dollars out of a system facing fiscal crisis. The fallout of
this effort has had a profoundly negative impact on low-paid public
employees outside the Social Security system, like law enforcement
officers.
This is a matter of fairness. The WEP substantially reduces a
benefit that employees had included and counted on when planning their
retirement. The arbitrary formula in current law, when applied, does
not eliminate ``windfalls'' because of its regressive nature--the
reduction is only applied to the first bracket of the benefit formula
and causes a relatively larger reduction in benefits to low-paid
workers. It also overpenalizes lower paid workers with short careers
or, like many retired law enforcement officers, those whose careers are
split inside and outside the Social Security system. This provision has
not eliminated a windfall for individuals who did not earn it, it has
resulted in a windfall for the Federal government at the expense of
public employees.
Let me now discuss the other aspect of the McKeon bill, which would
repeal the Government Pension Offset (GPO). In 1977, Federal
legislation was enacted that required a dollar-for-dollar reduction of
Social Security spousal benefits to public employees and retired public
employees who received earned benefits from a Federal, State, or local
retirement system. Following a major campaign to repeal the provisions
in 1983, Congress, which was looking for ways to reduce the fiscal
pressure on the Social Security system, adopted instead the Government
Pension Offset, which limits the spousal benefits reduction to two-
thirds of a public employee's retirement system benefits. This remedial
step falls far short of addressing the inequity of Social Security
benefits between public and private employees. This ``offset''
provision should have been repealed in 1983 and might have been were it
not for the fiscal condition of the Social Security system.
The new GPO formula reduces the spouse's or widow(er)'s benefit
from Social Security by two-thirds of the monthly amount received by
the government pension. For example, the spouse of a retired law
enforcement officer who, at the time of his or her death, was
collecting a government pension of $1,200, would be ineligible to
collect the surviving spousal benefit of $600 from Social Security.
Two-thirds of $1,200 is $800, which is greater than the spousal benefit
of $600 and thus, under this law, the spouse is unable to collect it.
If the spouse's benefit were $900, only $100 could be collected,
because $800 would be ``offset'' by the officer's government pension.
In nine out of ten cases, this completely eliminates the spousal
benefit even though the covered spouse paid Social Security taxes for
many years, thereby earning the right to these benefits. It is
estimated that approximately 349,000 spouses and widow(er)s of State
and local employees have been unfairly affected by the Government
Pension Offset. Moreover, these estimates do not capture those public
employees or retirees who never applied for spousal benefits because
they wrongly believed themselves ineligible. According to the
Congressional Budget Office, the GPO reduces benefits for some 200,000
individuals by more than $3,600 a year. Ironically, the loss of these
benefits may cause these men and women to become eligible for more
costly Federal assistance, such as food stamps.
The present system creates a tremendous inequity in the
distribution of Social Security benefits. The standard for this narrow
class of individuals--retired public employees who are surviving
spouses of retirees covered by Social Security--is inconsistent with
the overall provisions of the Social Security Act and does not apply to
persons receiving private pension benefits. This imbalance exists even
though Congress, through ERISA standards and Tax Code provisions, has
more direct influence over private employers than public employers.
Clearly, this is an issue that Congress must address.
The need to repeal the WEP and GPO is related to an issue recently
debated on the floor of the House. On 2 April, the House considered
H.R. 743, the ``Social Security Protection Act,'' for the second time.
The legislation had previously been considered by the House on 5 March,
but failed to obtain the two-thirds majority necessary to pass under a
suspension of the rules. The crux of the legislation aimed to crack
down on fraud and abuse in Social Security programs by strengthening
protections for vulnerable recipients dependent on representative
payees to manage their financial affairs. The bill would prohibit
fugitive felons and probation/parole violators from receiving Social
Security disability benefits and enhance the ability of the Inspector
General to fight fraud. The bill also contained the text of the F.O.P.-
backed H.R. 134, legislation authored by Representative Ron Lewis (R-
KY), a Member of this Subcommittee, which would add Kentucky to the
list of States permitted to operate a separate retirement system for
certain public employees. We strongly supported this language and the
overall intent of the legislation.
However, the F.O.P. did object to Section 418 of the bill which
would close a ``loophole'' in the Government Pension Offset (GPO) that
enables some public employees, mostly teachers, to spend their last day
of employment in a position in which they would pay into Social
Security. Despite having worked their entire career in non-covered
position, a single day in a covered position is sufficient for them to
avoid the benefit cuts which would have otherwise been incurred under
the GPO. This practice is very recent and I do not know if law
enforcement officers are making use of this loophole, or even if it is
possible for them to do so in any jurisdiction in the country.
Representative Gene Green (D-TX) offered an amendment in the nature
of a substitute which would have stripped out Section 418 of the bill.
The F.O.P. supported this amendment, but it was ultimately defeated on
a 196-228 vote (Roll Call Vote No. 100). In our view, the GPO is unfair
to begin with, thus there is no margin on ``fixing'' any loophole in
that provision.
I am concerned that Congress continues to look for ways to save
money for the Social Security system by cutting benefits earned by
State and local employees. This is not right and it is not fair. The
Federal government has a commitment to these men and women that must be
honored.
I also want to speak to the advocates of mandatory participation in
the Social Security system by all State and local employees. This is
not the way to solve the inherent unfairness of the WEP or GPO, nor is
it a sound fiscal or retirement policy for those States and localities
which are better off outside the Social Security system. Mandatory
inclusion in Social Security must be seen for what it is--a scheme to
require participation for all employees currently outside the system--
thus covering the expected shortfall with a huge influx of new tax
dollars.
If the Federal government imposes mandatory Social Security
participation, it severely compromises the financial solvency of
existing pension and retirement plans into which these employees
contribute. These plans, which are often designed and tailored with the
public safety employee in mind, deliver a greater benefit to their
participants than does Social Security.
Additionally, the cost to States, localities, and the individual
employees would be immense. The employee would be required to pay 6.2%
of his or her salary into the Social Security trust fund. This amount
would be in addition to the contribution already paid by the employee
into the State or local retirement system. The employer would have to
match the employees contribution--another 6.2% cost to the employing
agency for each employee. And that, too, would be in addition to
whatever matching contribution must be made by the employer into the
existing State or local retirement system.
Clearly, the damage that would be done to State and local
governments and the families of the employees cannot be overestimated
if the Federal government forces them to pay a new tax of 12.4%.
Collected data shows that the first year cost to employers--local and
State governments--to cover newly hired employees only would be over
$771 million. The newly hired employees would be responsible for an
equal amount, making the cost of the first year of coverage over $1.5
billion. The total annual cost to employers for covering employees not
currently in the Social Security system would be $8.5 billion. When the
employees' share is counted, that amount rises to over $17 billion per
year.
The result of this is obvious: less take home pay for the employee
and cut backs in services, equipment and other expenditures on the part
of State and local governments. Police departments and other law
enforcement agencies already stretch every dollar to the limit to meet
homeland security burdens. Mandatory participation would mean huge new
costs that will devastate their budgets.
Federally mandated participation in Social Security is not a minor
issue. Such a mandate would adversely affect millions of employees and
impose billions of dollars in additional costs to State and local
governments. Many retirement and pension plans for public sector
employees have been specifically designed and refined on the assumption
that local governments would not be required to participate in the
Social Security system. This was a reasonable assumption since local
governments have never been required to pay into the system. An
important consideration for law enforcement and other public safety
officers is a much earlier retirement age than other, more typical,
government employees. Local and State retirement plans take this early
retirement into consideration, Social Security does not.
Sometimes, proposals sound good on the surface, but after careful
examination are revealed to be unsound policies with damaging
consequences. We believe that mandating the inclusion of all public
sector employees into the Social Security system falls into this
category. It is wrong to change the rules sixty-eight (68) years later
because the Federal government is looking for an easy way to fund
Social Security without making hard choices. The State and local
governments who chose not to participate in Social Security did not
create this problem, nor did the nearly four million employees who do
not pay into the system. But those States and localities would be
paying a hefty price for their previous decision to create their own
retirement plans. Destroying the retirement programs of these hard-
working Americans and raiding the budgets of State and local
governments should not be part of the Federal government's solution.
The President's Commission to Strengthen Social Security (CSSS)
rejected the mandatory participation scheme in its final report issue
on 21 December 2001. Congress should do likewise.
Mr. Chairman, I want to thank you and the other Members of this
distinguished Subcommittee for the chance to appear before you today.
It is my hope that you will call on the Fraternal Order of Police for
its help and support when you consider H.R. 594, the ``Social Security
Fairness Act.''

Chairman SHAW. Thank you, Mr. Canterbury. Ms. Harrison?

STATEMENT OF TERESA HARRISON, DIRECTOR OF GOVERNMENT RELATIONS,
STATE TEACHERS RETIREMENT SYSTEM OF OHIO, COLUMBUS, OHIO, AND
CHAIRMAN, COALITION TO PRESERVE RETIREMENT SECURITY

Ms. HARRISON. Good afternoon, Chairman Shaw, and Ranking
Member Matsui. My name is Terri Harrison. I am the Director of
Government Relations for the State Teachers Retirement System
of Ohio. I am testifying today, however, in my capacity as
Chairman of the Coalition to Preserve Retirement Security. I
also realize I am the only thing that stands between you and
lunch, so I will keep this short.
[Laughter.]
On behalf of the Coalition, thank you for this opportunity
to appear before you today to discuss the issue of mandatory
Social Security coverage for public sector workers. Our
coalition includes members from public pension plans, public
employee and retiree groups, public employer organizations. The
purpose of our coalition is to keep Social Security coverage
optional for the over 5 million public workers outside of the
program. We oppose forced Social Security coverage due to the
immense cost to public employers and workers and the few if any
pension improvement benefits deriving from that. While this
issue has been around for decades, most recently, we were very
pleased that the President's Commission to Strengthen Social
Security made history by being the first commission to not
recommend mandatory Social Security coverage in their report
for Social Security reform. When the Social Security system was
established in 1935, State and local government employees were
not allowed to participate in the system. Beginning in the
1950s, they could elect to have their employees covered, and
they were allowed to opt in or opt out. That opt out ended in
1983. As a result, many State and local government entities set
up their own pension plans. For my own system in Ohio, the
teachers, we were established 15 years prior to Social
Security. So, the programs were up and established and funded
prior to Social Security even being available as an option.
As fellow testimony here has reported, the cost of Social
Security on public sector employers, taxpayers, workers, is
projected to be over $26 billion in the first 5 years, yet it
only extends Social Security solvency by 2 years. Because of
the significant impact on the States and locals, we are opposed
to mandatory coverage. It would, in many cases, either reduce
benefits, increase taxes or put in jeopardy the existing
structure of those pension plans. Mandatory Social Security, as
also has been said, would be felt in all 50 States, not just
the large States such as Ohio, California, et cetera. There are
pockets of public employees in every State that are not covered
by Social Security. Some of the larger States such as Chairman
Shaw's Florida would have a $340 million price tag in those
first 5 years. For California, it would be $4.1 billion; for my
own State of Ohio, it would be $4 billion in just the first 5
years.
Proponents of mandatory coverage have contended that
applying the mandate only to newly hired workers would make it
less of a hardship. This is not the case. Because of the way
many of the systems are funded, as defined benefit plans, they
rely on actuarial funding and a continuing revenue stream for
new hires. So, as those new hires would be eliminated, the
revenue stream from the new hires would be eliminated as well,
increasing the cost on those already in the system. Given the
state of budgets around the country, including my own State of
Ohio, it is highly unlikely that our General Assembly members
would be able to find additional contributions to maintain the
benefit structure as it is. What would be more likely would be
a reduction in benefits for public employees in those systems.
Based on these facts, we strongly urge that forced Social
Security coverage not be included in future reform packages. We
understand that Social Security is an important program. All of
us have family members and friends who collect from Social
Security, but we urge, due to the impact on those State and
local systems, the benefit to the long-term solvency of Social
Security is really not enough to warrant the destruction of
many systems that have existed for many years. I thank you for
your time and would be happy to answer any questions.
[The prepared statement of Ms. Harrison follows:]
Statement of Teresa Harrison, Director of Government Relations, State
Teachers Retirement System of Ohio, Columbus, Ohio, and Chairman,
Coalition to Preserve Retirement Security
Chairman Shaw, Ranking Member Matsui and distinguished Members of
the Subcommittee, my name is Terri Harrison and I am the director of
government relations for the State Teachers Retirement System of Ohio.
I am testifying today in my capacity as chairman of the Coalition to
Preserve Retirement Security. On behalf of the Coalition, I thank you
for the opportunity to appear before the Subcommittee to discuss the
issue of mandating Social Security coverage for public sector workers.
While this issue has been around for decades, most recently, the
President's Commission to Strengthen Social Security made history by
being the first commission to not recommend mandatory Social Security
coverage in their report for Social Security reform.
The Coalition to Preserve Retirement Security (CPRS) is a non-
profit organization composed of members representing state and local
governments, public employee unions, and public pension systems
throughout the United States. The purpose of our organization is to
assure the continued financial integrity of our members' public
retirement systems. By successfully opposing efforts to mandate Social
Security coverage for all newly hired public employees we achieve the
principle goal of our coalition.
Our 39 members are found in Alaska, California, Colorado, Florida,
Illinois, Kentucky, Louisiana, Massachusetts, Missouri, Nevada, Ohio,
and Texas and represent about 4.1 million public employees and
retirees. They administer retirement benefits for nearly 12,000 public
employers in these states.
In addition, our national associations and public pension unions
represent more than 15 million public workers, five million of whom are
outside of Social Security.
The Problem
Over the years, some have recommended bringing all public workers
into the Social Security program. However, mandating that all newly
hired public workers must participate in the Social Security system
would create significant new cost pressures for the affected state and
local government jurisdictions while providing only minimal benefit to
the program.
These jurisdictions, with their own long-standing defined benefit
retirement plans, would have to make difficult choices. Adding an
additional 6.2 percent payroll tax per worker to the benefit costs of
public employers could result in cutbacks to their existing defined
benefit plans, cuts in government services, or even increases in taxes
or fees to absorb the added costs. The disruption that would likely
occur for these public jurisdictions and their workers seems a high
price to pay for adding an estimated two years of solvency to the
Social Security program. It is estimated that mandatory Social Security
coverage would cost the affected states and localities $26 billion over
5 years. This additional financial burden on affected states could be
an insurmountable budgetary hurdle particularly during these very
difficult days of huge revenue shortfalls hitting virtually every
state.
Background
When the Social Security system was created in 1935, state and
local government employees were not allowed to participate in the
system. Beginning in the 1950s, state and local government employers
could elect to have their employees covered by the Social Security
program and were allowed to opt-in or -out of the system.
In 1983, there was a major revision of the Social Security and
Medicare laws, triggered primarily by a concern about the long-term
solvency of these two trust funds. Congress decided not to require
state and local employees who were outside the system to be covered,
but did end the opt-out for public employees who had chosen to be
covered.
In 1986, as part of the Consolidated Omnibus Budget Reconciliation
Act of 1985 (``COBRA''), Congress required universal participation in
the Medicare system on a ``new hires'' basis, but chose to leave public
employee retirement plans in place, and did not change the law with
respect to Social Security.
In 1990, Congress enacted a law requiring that all public
employees, not covered by a state or local retirement plan meeting
specified standards, must be covered by Social Security. That law,
adopted as part of the Omnibus Budget Reconciliation Act of 1990 (the
``1990 Act''), ensures that all public employees will be covered either
under Social Security or under a public retirement plan that provides
comparable benefits. Today, about one-third of all state and local
government employees, about five million public servants, are outside
the Social Security system because they are covered by their employer's
public retirement plan. In addition, millions of current retirees from
non-Social Security public pension plans depend on those plans for a
significant share of their retirement income.
From 1994 to 1996, the Advisory Council on Social Security examined
the mid-term and long-term solvency of Social Security and the Social
Security Trust Fund. The panel submitted its report in January 1997 but
there was no majority on the council for any single set of
recommendations. Three proposals were put forth by different groups of
members. However, a majority of the Advisory Council recommended
mandatory Social Security coverage of public employees, although the
three labor members of the council opposed this proposal ``because of
the financial burden that would be placed on workers and employers who
are already contributing to other public pension systems.''
There is some evidence that the 1994-1996 Advisory Council had not
fully considered the ramifications of such a dramatic change on state
and local workers. In an April 1997 speech before the National
Conference of Public Employee Retirement Systems, Edith Fierst, a
member of the Advisory Council, said of the mandatory coverage
proposal, ``We did it primarily because it would be good for Social
Security, not because it would be good for the employees. Our interest
was that if people came into Social Security and began to pay the
Social Security tax, that helps the Social Security's trust fund, and
they won't start to draw benefits based on those contributions for some
years.''
In 2001, as mentioned earlier, the President's Commission to
Strengthen Social Security decided not to include mandatory coverage in
its final report. This is particularly remarkable, since the late New
York Senator Daniel Patrick Moynihan, a vociferous proponent of forced
coverage, co-chaired the Commission.
Based upon the assumptions in the 2003 Social Security trustees'
annual report, if left unchanged, the program will be insolvent--that
is unable to pay all benefits owed--beginning in 2042. However, some
experts warn that Social Security reform is needed soon. As so-called
baby boomers begin retiring over the next decade, there will be
increased pressure on the solvency of the program and by 2018 costs
will exceed revenues, according to the trustees' report.
Accordingly, forcing newly hired state and local public workers
outside of the Social Security program to participate is seen by some
as an attractive way of generating additional revenues for the program
in the short term. This position is flawed and, for the reasons
discussed below, mandatory coverage should not be included in any
Social Security reform package.
The Myth of Covering Just New-Hires: Covering Only New-Hires is Still
Harmful
Proponents of mandatory coverage contend that applying the mandate
only to newly-hired workers would make it less onerous for public
employers--nothing could be further from the truth. Public sector
defined benefit plans rely on a constant and reliable revenue stream in
order to meet actuarial goals and provide a retirement benefit for plan
participants at affordable contribution levels.
Proponents of this solution fail to understand that the normal cost
of the existing retirement plan will increase as a percentage of
payroll as younger members are eliminated from the plan. Thus,
employers and new workers will not only have to add an additional 6.2
percent for the new payroll tax, but employers may also have to
increase contributions to the existing plan or cut benefits. When
states and localities are under extreme fiscal stress as they are
currently, this added expense will create enormous burdens with
negligible, if any, positive outcomes.
Mandatory Social Security Coverage Will Only Extend Social Security's
Solvency by Two Years, But Could Destabilize Public Pension
Systems Nationwide
According to a 1998 report by the General Accounting Office,
``Social Security: Implications of Extending Mandatory Coverage to
State and Local Employees,'' bringing newly hired non-federal public
workers in the program would only ``reduce the program's long-term
actuarial deficit by about 10 percent and would extend the trust funds'
solvency by about 2 years.''
According to a 1999 study by The Segal Company, mandatory Social
Security coverage could cause a reduction in employee and employer
contributions to existing defined benefit plans, ``which are an
essential part of their actuarial funding. This could destabilize the
existing plans on which current workers and retirees depend.'' The
report continued, ``Lower funding would not only have an impact on
retirement benefits, but could affect disability and survivor benefits
as well,'' which are often more generous than those offered by Social
Security.
The Costs of Mandatory Coverage Greatly Outweigh the Benefits
As noted above, mandatory coverage would only add two years of
solvency to the 75-year projection for the Social Security program.
But, it would cost public employees, their employers and ultimately
taxpayers nationwide more than $26 billion over the first five years,
according to the Segal report. Mandatory Social Security would be felt
in all 50 states and over time would add new beneficiaries to the
program who would draw down benefits like other Social Security
recipients, increasing financial pressures on the system.
The chart below illustrates how mandatory coverage would affect the
home state of each Member of the Ways and Means Social Security
Subcommittee.

----------------------------------------------------------------------------------------------------------------
Home Employees 5-Year Cost to Employees,
Congressman State Affected Employers and Taxpayers
----------------------------------------------------------------------------------------------------------------
Clay Shaw (Chair) Fla. 61,817 $340,002,664
----------------------------------------------------------------------------------------------------------------
Sam Johnson Texas 515,751 $2,647,073,158
----------------------------------------------------------------------------------------------------------------
Mac Collins Ga. 102,120 $512,375,928
----------------------------------------------------------------------------------------------------------------
J.D. Hayworth Ariz. 11,908 $71,247,564
----------------------------------------------------------------------------------------------------------------
Kenny Hulshof Mo. 59,992 $307,459,512
----------------------------------------------------------------------------------------------------------------
Ron Lewis Ky. 64,120 $359,832,512
----------------------------------------------------------------------------------------------------------------
Kevin Brady Texas 515,751 $2,647,073,158
----------------------------------------------------------------------------------------------------------------
Paul Ryan Wis. 46,579 $309,713,918
----------------------------------------------------------------------------------------------------------------
Robert Matsui (Ranking Dem.) Calif. 903,027 $4,103,961,329
----------------------------------------------------------------------------------------------------------------
Ben Cardin Md. 28,126 $194,296,602
----------------------------------------------------------------------------------------------------------------
Earl Pomeroy N.D. 7,831 $41,640,094
----------------------------------------------------------------------------------------------------------------
Xavier Becerra Calif. 903,027 $4,103,961,329
----------------------------------------------------------------------------------------------------------------
Stephanie Tubbs Jones Ohio 921,404 $3,974,734,068
----------------------------------------------------------------------------------------------------------------
Subcommittee Totals \1\ 2,722,675 $12,862,337,349
----------------------------------------------------------------------------------------------------------------
National Totals 4,803,876 $26,021,562,331
----------------------------------------------------------------------------------------------------------------
\1\ Duplicate figures not included.
Source: ``The Cost Impact of Mandating Social Security for State and Local Governments,'' The Segal Company,
1999.

Mandatory Coverage: Tough Choices for States and Localities
If all newly hired state and local employees are forced to
participate in the Social Security program, their employers--state and
local government entities--and policy makers will have to make
difficult decisions on how to offset these new taxes.
According to the Segal report, these taxes would likely be absorbed
through ``tax increases, cuts in existing benefits and/or reductions in
workforce and services,'' none of which are particularly popular and
which would be met with strong resistance by the affected
constituencies. In light of the recent downturn in the economy, states
and localities are already facing huge deficits. Mandating Social
Security coverage would severely exacerbate already troubled financial
landscapes for jurisdictions across the country.
Hidden Impacts
Mandatory coverage could also undermine other benefits of public
pension plans. These plans, in addition to offering sound and secure
retirement benefits for public workers also provide valuable benefits
that reduce pressure on federal government programs. These benefits are
overlooked by mandatory coverage proponents.
For instance, certain classes of public sector workers have special
needs that would not be met by the Social Security program. Safety
workers, like police and fire, because of working conditions and job
qualifications, retire earlier than other workers, often before age 62,
the earliest age to receive a Social Security benefit. Consequently, if
these workers no longer had their traditional defined benefit public
retirement, they could be forced to retire from their public safety job
but have little or no retirement benefits until reaching 62.
Public retirement plans also offer partial disability benefits,
unlike Social Security. These disability benefits go a long way towards
providing an income stream so partially disabled workers do not have to
depend on public assistance programs.
Most plans provide pre-retirement survivor benefits. For children,
Social Security's survivor benefits cease when the child turns 18. Many
public plans provide benefits after that age has been reached if the
child is a full-time student.
Early retirement, partial disability and survivor benefits are
among the benefits specifically tailored to meet the needs of public
workers that would be threatened by mandatory coverage.
Conclusion
Mandating Social Security coverage for all public sector workers
would only create huge costs and burdens for public employers without
contributing significantly to the solvency of the Social Security
program. The least disruptive and most cost-effective solution would be
to allow the well-established public sector retirement system to
continue in its current form. It has proved to be a stable and
financially sound system that ensures the retirement security of
millions of public sector workers.

Chairman SHAW. Ms. Harrison, I will preface this by saying
that Congress has to pay into both. Members of Congress have to
pay both into Social Security and into a pension plan, and
then, we are penalized even though we pay full Social Security
like any American worker. That used to not be the case, and a
lot of people do not realize that we did vote ourselves into it
and did not get rid of the penalty either. What would be your
thoughts with regard to allowing in those areas which have
opted out of Social Security and have opted for their own
pension, the people in those programs to continue to pay into
Social Security if they wished?
Ms. HARRISON. Usually, it is an employer decision and----
Chairman SHAW. What if we made it an employee decision?
Ms. HARRISON. An employee decision? Well, that would still
have a significant impact on the funding of the State systems,
because most of them are defined benefit, so they are
actuarially funded. It is very similar to the argument for
defined contribution plans that has become quite common around
the country.
Chairman SHAW. So, it sounds like you are making the same
argument that I would make: if they, say, let people opt out of
Social Security, we would have a huge problem.
Ms. HARRISON. I understand.
Chairman SHAW. Maintaining benefits, and you are saying
that if we allow people to opt out of the pension, that the
pension plan would have trouble maintaining benefits--of
course, I would assume that in Ohio, anyway, that the employee
benefit plan is much more attractive to the employee than
Social Security would be.
Ms. HARRISON. Chairman Shaw, that has been the case in the
years since 1920.
Chairman SHAW. What would be your thought if we allowed the
employee to voluntarily pay into the Social Security plan
without opting out of the State pension plan?
Ms. HARRISON. Chairman Shaw, if it were possible for
employees to elect on an individual basis to pay an additional
tax in order to participate in Social Security, but it would
not have an impact on the contributions funding the State
plans, I do not know that the system would have a position
opposed to that, as long as it was a voluntary position by the
member, that it would be out of their own pocket. Our only
problem would be a mandate on employers.
Chairman SHAW. I see; I understand what you are saying. To
all the panel members, the GPO and the WEP have been law for
roughly 20 years, yet many are shocked to learn of their
existence when they are ready to collect benefits. I might say
that this is largely because of the problem of communication
between the SSA and the employee. When you get your statement
each year saying what you are eligible for, then, when they
really get down to figures, I would say, whoops, we have got a
huge problem here. Are you educating all of your members as to
these provisions? I think that is tremendously important. Well,
I know in Texas, you are. Good grief!
[Laughter.]
Ms. HASCHKE. Guilty as charged.
[Laughter.]
Chairman SHAW. Is the information complete and accurate? I
ask this, because there is a statement on the NEA website this
morning that said--and listen to this; this is a direct quote:
``while retired public employees have their Social Security or
survivor benefits reduced, non-public employees with private
pension plans get to keep their entire pension and receive
their entire Social Security or survivor benefits,'' end of
quote; which SSA's testimony clearly shows that this is
inaccurate, and it is misleading. I would simply say that we
can have a good debate, but we need to be sure that the
information that we are giving out is accurate and complete.
This Congress, you know, we do work, and Mr. Matsui and I,
occasionally, we do work together. We try to do what is fair
and maintain fairness, and I think this has been a good
hearing. If we could keep our testimony, and the testimony of
this panel of witnesses, I think, has been excellent, and I
complement all of you for keeping it that way, but we need to
be sure that all of the facts are out there. If somebody is in
a private pension plan, they still are paying into the Social
Security Trust Fund, and they are Social Security workers, and
they are classified as such. It is important to realize that
the public employees in some areas have opted out of the system
and have their own pension plan. So, there is a difference if
you paid into Social Security and have not paid into Social
Security. Basic fairness has to be part of what we are talking
about. So, someday, but not too soon, I hope, I will be joining
my friends at NARFE and probably be up here asking for more
money, too.
[Laughter.]
Maybe we can, and as you, Mr. Fallis, correctly pointed
out, I have addressed that in legislation, but it is very broad
legislation which pays for itself, even though Mr. Matsui says
I am going to borrow money until 2060-something. We do pay it
back. We do maintain benefits, and we do increase benefits in
particular for many of the retired employees. Mr. Matsui?
Mr. MATSUI. Mr. Chairman, I just want to take this
opportunity to thank you very much for holding this hearing. I
really appreciate it. A lot came out of the hearing. A lot of
folks contributed, and certainly, the issues are fairly well
laid on the table. So, I want to thank you very much. I want to
mention to the panelists here, first of all, thank you for your
testimony; but second, I think it is important that you know
this, and I learned this today myself; I was not aware of it,
but both the GAO individual and also Mr. Wilson on behalf of
the SSA spoke of it. In the President's budget, which he
offered to us in February of this year, there is an increase in
revenues that will be projected over the next 10 years of $2.2
billion; in fact, in Mr. Wilson's testimony on page 2, in
paragraph 7, he said this change will improve our program
stewardship and reduce program costs by an estimated $2.2
billion over the first 10 years. Bear in mind what he means by
that: he means that they are going to have greater enforcement
of the WEP and the GPO; and so, as Mr. Pomeroy and Mr. Cardin
have said, this means that they are going to actually expand
the number of people that they are going to be hitting on your
behalf, so you need to tell your membership that not only has
Mr. Shaw mentioned that this is alive and well but also that
there is going to be greater enforcement of the provision. So,
you came here with the idea of getting some relief. You may be
leaving, having found that actually, if the Administration gets
its way, they are going to raise $2 billion more from your
constituency group. You just need to let them know that if you
want to solve this problem. Any comments on that? If there are,
fine, but I just wanted to let you know that this is not an
issue that is just going to fade away. You are going to find
more of your members hit by this.
Chairman SHAW. Okay; well, to follow Ms. Harrison's lead,
we are going to lunch. Thank you. Oh, I am sorry, Mr. Brady. I
did not see you come in. Go ahead. I apologize.
Mr. BRADY. No, no, I will be brief. Thanks, Mr. Chairman,
very much. I apologize. I had to step out for a moment. I agree
that Social Security and retirement pensions just are not
enough. Unfortunately, Social Security was not designed as a
retirement plan but to lift seniors out of poverty.
Unfortunately, over the years, it still stayed that way, and I
think these issues really beg the need for reforming Social
Security, and I think of teachers and other government workers
who if they could have put their money aside in a retirement
plan way back when and let that money grow for them each year
and have their own nest egg today that they can control, how
much better off we all would be. I want to make a point. I do
have, Mr. Chairman, a number of letters and e-mails from my
constituents, especially focused on WEP and the need to
modernize that. Just for the record, I need to let you know
that I oppose repealing GPO because when we really look at
identical families in America, we cannot justify treating those
with government pensions so much better than families with
Social Security when they have worked as hard, when they have
made the same contributions, when they have the same
retirement.
We are just not going to have two classes of citizens in
Social Security. I do support your comments and approach on the
WEP. I know why it was put in place. It makes perfect sense. I
think the times have changed. I think if you have earned two
retirements, you should get two retirements. When I look at
especially our teachers in Texas, those coming into the State
who we are glad to have in our education system really get
hurt. Those who have held summer jobs or second jobs throughout
their careers, which many teachers do, because we do not pay
them enough, they get hurt by it. I think that really makes it
harder--would you not agree?--to recruit new people into the
education system, because it is becoming more and more
understood just what kind of approach this is. Mr. Chairman,
all I would, I think, ask is that I took a look back almost 30
years ago to a report that many of our teacher groups were
making then about asking Congress to find a way to make teacher
retirements more portable, so in a mobile society, teachers and
others would not have to worry about losing parts of their
retirement. I think whether we repeal WEP, or we modernize the
formula, or we take a look at trying to differentiate those on
very low incomes whom we bump the formula for versus those who
have a second job and are in a different situation, perhaps
trying to differentiate from that, I actually see two or three
approaches that the Committee might want to pursue to try to
modernize WEP for today's society. With that, that was the only
comment I wanted to make other than to thank the testifiers for
being here today.
Chairman SHAW. I think we have learned a lot today, and I
think that, the pension offset, whether people believe it is
because of private pensions or it is because of Social Security
itself, I had an awful lot of mail from people on Social
Security who have found that the survivor benefits were not
there, and that is all they had, and found that that was not
there, and it came as a real shock. I would like to solve it
for everybody, but you saw the price tag that was given by Mr.
Wilson. I think he said half a trillion or $500 billion. We
cannot do anything that is going to expedite the demise of the
Social Security system. The Social Security system, and I will
say that now that Mr. Matsui is out of the room, and I can do
it without his coming in chiming in, but we are going to run
short of cash. There will not be enough cash paid in to pay
benefits beginning in 2017. We have to be very much aware of
that.
Sure, we are not going to run out of Treasury bills until
2040-something, but the Congress is struggling to maintain
these benefits, and we need to really start talking about it
and working on it. There are some things that will address some
of the concerns that have been raised here today, and we can do
it by legislation. I do not want anybody to leave here thinking
that we have the resources with which to grant everything that
has been complained about and that people are concerned about;
you see testimony such as Ms. Williams or Ms. Haschke, as she
has read certain letters. We all want to do a better job, and
our hearts go out to everybody, but we also have to be fiscally
responsible. My job as Chairman is to be the gatekeeper on some
of this legislation. I whispered to Mr. Matsui, I said what are
you going to do if you became Chairman of this Committee. I
will not tell you what his answer was.
[Laughter.]
It would not be fair. Being the Chairman of a Committee or
a Subcommittee in the Congress is a great honor, but it is also
a huge responsibility. Sometimes, you have to act differently
than if you were just a Member of the Committee or if you were
in the Minority. So, it is a tough job, but nobody makes us do
it. We like the public service that we are in also, as you and
your Members have enjoyed the public service that you are in.
We will continue to work with you. I think that we have
certainly today displayed our sensitivity to the issue, our
openness to suggestions, and I thank all of you; you were a
very fine panel. I appreciate your kindness and civility in
addressing this Committee, too. Thank you very much. Hearing
adjourned.
[Whereupon, at 12:22 p.m., the hearing was adjourned.]
[Questions submitted from Chairman Shaw to Mr. Fallis, Ms.
Williams, Ms. Haschke, Mr. Johnson, Mr. Canterbury, and Ms.
Harrison, and their responses follow:]
[The information from Ms. Williams was not received at the
time of printing.]

Question from Chairman E. Clay Shaw, Jr. to Mr. Charles L. Fallis, Ms.
Donna Haschke, Mr. William J. Johnson, Mr. Chuck Canterbury, and Ms.
Teresa Harrison

Question: The GPO and WEP have been law for roughly 20 years, yet many
are shocked to learn of their existence when they are ready to collect
benefits. Please describe the efforts of your organization to educate
members on these provisions. If your organization is not engaging in
widespread member education campaigns, why not? How would you explain
why so many members are unaware of these provisions until retirement?
Mr. Fallis's response:
NARFE has been advertising the existence of these two provisions
and advocating their repeal or reform for more than two decades. We
began educating our members when the omnibus Social Security
refinancing and reform bills were originally introduced in Congress, in
1977 and 1983, respectively. We have published numerous informational
articles in NARFE magazine (formerly Retirement Life), including
specific examples of how and by how much the provisions could impact
one's planned retirement income. We have developed, and continue to
distribute, publications and pamphlets to our own NARFE members, urging
them to share the information with others who may be affected now or in
the future. We sometimes conduct, and often provide pertinent
information for, federal pre-retirement seminars. We always highlight
the adverse impact many workers nearing retirement may expect from the
GPO and the WEP. NARFE representatives often staff a booth at federal
and postal organization conferences, local senior fairs across the
country, specifically targeting seniors and federal employees to warn
them about these offsets. The GPO and the WEP are two of three
legislative priority issues for NARFE.
In 1991, NARFE organized the Coalition to Assure Retirement Equity
(CARE) to both inform individuals about the GPO and work to reform it.
Today, CARE consists of fifty organizations that represent millions of
public service members who are or will be affected by the GPO and/or
the WEP.
There is such a significant number of affected retirees who are not
aware of the GPO and/or the WEP until after they retire, or even until
they apply for Social Security benefits, because their personnel
officers or agencies neglected to inform them of the offsets. The pre-
retirement seminars they may have attended were either not providing
them with the necessary warnings or information, or they were provided
it too late to make a change in their retirement planning.
Ms. Haschke's response:
The NEA has and will continue to alert members about the adverse
impacts to them from the GPO and WEP. NEA has conducted briefings
throughout the nation to inform affiliate members of this issue. In
addition, NEA maintains a dedicated section on its Web site that
informs members of GPO and WEP as well as latest legislative news
concerning this issue. NEA has a dedicated cadre of members devoted to
disseminating information and supporting legislative efforts addressing
the GPO and WEP. NEA also dedicates time at its representative assembly
to inform all members about the negative consequences associated with
the GPO and WEP.
TSTA has had many opportunities to educate our members about the
GPO and WEP over the last several years and we have done so and will
continue to do so. Twice yearly at all member conferences we have
presented workshops that are very well attended by members from all
areas of the state. We regularly publish articles in our all-member
publications, especially the Advocate which reaches all members five
times yearly. We have information on our Web site with a link to the
NEA Web site, as well as on our Briefing that is sent automatically to
all members whose e-mail addresses we have acquired. We recently helped
sponsor a Social Security forum in Houston that drew over 500 school
employees from that area. Rep. Kevin Brady's staff attended the forum.
Additionally, our Governmental Relations staff person, Jack Kelly, has
presented regular workshops at our yearly NEA Western Region conference
that includes members from nine states.
As to why many people are unaware of the existence of the GPO and
WEP before they retire, we believe that young people, eager to be
hired, do not know the questions to ask when they are interviewed. Too
often the school district does not provide the information unless it is
specifically requested.
Mr. Johnson's response:
Each of the past 15 years, NAPO hosts an annual pension and benefit
seminar for public employees. Social Security, WEP and GPO are almost
always on the agenda. This seminar is heavily advertised in the police
community, and we welcome employees, employers, managers, pension
trustees and administrators. Attendance is usually several hundred
persons. NAPO also participates in several coalitions in Washington,
including the Coalition to Preserve Retirement Security, where we hold
the public safety employees' seat on the executive committee. We also
make an effort to reach out to our members on this issue by including
information on our website, in our quarterly meetings, and in our
newsletter.
Part of it is human nature, employees in all walks of life put off
worrying about retirement issues because it often seems not to be an
issue of immediacy. Part of it is that these particular provisions are
complicated and are not intuitive or commonsensical, they fly in the
face of what most people understand Social Security to be, and how
Social Security works.
Mr. Canterbury's response:
Members of the Fraternal Order of Police are aware of these
provisions and the National F.O.P. continues to educate its members
about the potential negative impact that these benefits cuts can have
on their retirement plans.
In August 1997, the delegates at the 53rd Biennial National
Conference, adopted a resolution making the repeal of the Government
Pension Offset (GPO) and Windfall Elimination Provision (WEP) a top
legislative priority of the F.O.P.'s National Legislative Program. This
was due in large part because of the success we have had in making our
members aware of the reductions they face when they become eligible to
apply for Social Security benefits. Since that time, the F.O.P. has
been very involved in supporting various pieces of legislation in an
effort to correct the unfairness of the current law and regularly
update our membership as to our efforts. Our organization has also
testified on this issue before the Subcommittee on Social Security in
three of the last four Congresses: May 1998, June 2000 (submitted
written testimony), and May 2003.
Ms. Harrison's response:
As a coalition, our primary focus has been on the possibility of
mandatory coverage of state and local government employees. Only
recently has CPRS expanded its mission to include advocacy of GPO
reform. To that end, we have produced a brochure explaining the issue,
its history and the possible reform options. Frequent mention of GPO
has also been made in the CPRS newsletter and on the coalition website.
Mandatory coverage, however, remains our primary focus.
Individual members of the coalition have handled education of their
members in various ways. As an example, my own employer, the State
Teachers Retirement System (STRS) of Ohio, has tried to educate Ohio's
teachers about both GPO and WEP using an assortment of tools. STRS Ohio
publishes quarterly newsletters for both active members and retirees.
Explanations of GPO and WEP appear in these publications quite often.
The system also provides a number of educational seminars and workshops
for members to assist them in planning for their financial future. Both
GPO and WEP are included in the curriculum. In individual counseling
sessions and correspondence with our members, we provide the GPO and
WEP explanatory sheets produced by the Social Security Administration.
I have been with STRS Ohio for 21 years. It seems to me we have
been talking about GPO and WEP with members for all of that time and
longer. I think the problem of lack of awareness by workers is one of
human nature. Until something affects us directly, we tend not to pay
attention to it or read the information provided about it.
Question from Chairman E. Clay Shaw, Jr. to Mr. Charles L. Fallis, Ms.
Donna Haschke, Mr. William J. Johnson, Mr. Chuck Canterbury, and Ms.
Teresa Harrison

Question: Do you believe the Social Security Statement misleads many
public employees? If so, what changes to the Social Security Statement
would you recommend?
Mr. Fallis's response:
While the Social Security Statement may not intentionally mislead
future beneficiaries, the two minor references (page 2 and page 4) to
the offsets and who is affected by them are general at best, and, I
believe, easily overlooked by the vast majority of individuals who look
first and foremost for the ``estimated benefits'' amounts cited.
Nowhere does this statement issue a warning to public service
employees, nor does it provide them with an estimate of the amount of
their expected Social Security income they stand to lose if affected by
the GPO or WEP. When they visit their Social Security district offices
to enroll or get further information, they often encounter
representatives who do not have enough information to be of assistance.
I recommend specific training of the Social Security managers and
representatives on the offsets; their effect on one's Social Security
benefit and how they can assist individuals in calculating their
expected income. There should be an exchange of information between the
Office of Personnel Management (OPM) and the Social Security
Administration (SSA) in order to alert beneficiaries on this income
reduction years before the scheduled retirement date. Agency human
resource offices should take a more active role in informing employees
early in their careers about the possible effects of the GPO and the
WEP.
Ms. Haschke's response:
Yes, the statement is misleading. One recommendation is that a
disclaimer should be added alerting employees in GPO and WEP states
that their benefits could be adversely affected. This is especially
true for second career teachers and public employees who have worked in
the private sector, paid into Social Security, and do not know the
impact the GPO and WEP may have on their retirement benefits.
Mr. Johnson's response:
I do not think the statement is deliberately misleading, however,
specific attention perhaps ought to be drawn to the potential impact of
these provisions on the recipients.
Mr. Canterbury's response:
The Social Security Statement is not misleading, but it is not
entirely clear as to the individual impact of the GPO and WEP benefit
cuts, nor does it indicate if the individual is affected by them. The
language on the sample Social Security Statement on the website of the
Social Security Administration related to this point is as follows:
``(3) Your benefit amount may be affected by military service,
railroad employment, or pensions earned through work on which you did
not pay Social Security tax. Visit www.socialsecurity.gov/mystatement
to see whether your Social Security benefit amount will be affected.''
The affected employee must research how his benefits will be
affected, and he may not do this until he begins to plan his retirement
at the end of his working career.
The F.O.P. would advise making the information on the Social
Security Statement more clear by emphasizing that State and local
employees face a reduction in Social Security benefits. Perhaps a
supplemental Statement, similar to the special insert provided to those
aged fifty-five (55) and older, could be provided to all State and
local employees, explaining how the WEP and GPO will affect them and
their families.
Ms. Harrison's response:
The coalition has heard anecdotal evidence of public employees
being misled by the Social Security Statement. State and local
government workers who will be affected by GPO and WEP receive benefit
projections in the statement that do not reflect their special
situation and are, thus, inflated. The only hint in a four-page
document that the estimates may be inaccurate is a cryptic sentence
that cautions that, ``Your benefit amount may be affected by . . .
pensions earned through work on which you did not pay Social Security
tax'' and an instruction that the reader log on to the Social Security
Administration Web site. This simply is not enough. People look at the
dollar projections, not the 2,500-plus words of fine print.
While it is probably not possible for SSA to account for the
effects of GPO and WEP in the benefit projections sent to workers who
will be affected by these measures, it should provide the caveat about
possible benefit reductions more clearly on all statements. At the very
least, the sentence quoted above should be recast to reflect that
government workers may experience sharp decreases in benefits and it
should be prominently displayed directly above or below the benefit
projections, not buried in text, as is now the case.
It is worth noting that SSA does provide good information about GPO
and WEP on its Web site. This, however, is unlikely to have the same
impact as information that is mailed directly to people's homes.
Question from Chairman E. Clay Shaw, Jr. to Mr. Charles L. Fallis, Ms.
Donna Haschke, Mr. William J. Johnson, Mr. Chuck Canterbury, and Ms.
Teresa Harrison

Question: Most of the organizations testifying at the hearing advocated
repeal of the GPO and WEP. However, this would be extremely costly and
would cause Social Security to run cash flow deficits and exhaust the
trust funds more quickly. Given Social Security's and the government's
financial pressures, are there other options for reform that you could
support?
Mr. Fallis's response:
As stated in my testimony, NARFE supports repeal of these offsets.
However, we are cognizant of the political and fiscal cost of repeal.
That is why I concluded my statement by stating, ``But change is
essential and can no longer be put off. We must get legislation
reported out and onto the floor of the House to allow Members of
Congress to debate and decide this issue.'' Toward this end, I
reiterate my pledge that ``NARFE stands ready to work with you and the
Members of this Subcommittee to find an acceptable solution to this
growing dilemma in the Social Security system.'' Several years ago
Congress elected to repeal the Social Security earnings test for those
65 and over, in consideration of a changing society and workplace
needs, despite the considerable cost to the System. Today, Congress
should review the relevance and hardships imposed by the admittedly
arbitrary offsets of the GPO and the WEP, recognizing that fairness is
not always free.
Ms. Haschke's response:
NEA and the TSTA support full repeal of the GPO and WEP. The reason
most organizations testified for the repeal of the GPO is because of
the inequity of benefits being denied to the spouses of public
employees. Part of the reason Social Security will have cash flow
problems in the future is because the federal government has repeatedly
used Social Security funds for other programs and to balance the budget
rather than allow them to accrue the necessary benefits that will need
to be paid.
Mr. Johnson's response:
NAPO recognizes the difficult decisions to be made. As our written
testimony indicated, we have supported (and do support) efforts to
modify the GPO and WEP, lessening the severity of their impact, while
we look forward to a day when both provisions may be entirely done away
with.
Mr. Canterbury's response:
The Fraternal Order of Police appreciates the complexity of this
issue and the financial pressures faced by the Social Security trust
fund. However, we do not see any compelling reason why State and local
employees should have their benefits cut because a Federally mandated
program is managed into periodic solvency crises. Nor do we agree that
restoring fairness to the system spells fiscal doom for the Social
Security trust fund.
It is not right or fair to perpetuate inequitable reductions on
benefits earned by public employees in order to extend the life of the
trust fund for a few extra years. After all, the State and local
governments who chose not to participate in Social Security did not
create this problem, nor did the employees who do not pay into the
system. Penalizing them is not a solution in the long or short term.
Any Social Security reform considered by Congress must include a
repeal of the GPO and WEP and must reject any scheme to mandate
participation in Social Security by those local and State government
employees currently outside the system.
Ms. Harrison's response:
As an organization, CPRS remains concerned first and foremost about
the far greater impact on state and local governments and public
employees from mandatory coverage. That being said, we also understand
the detrimental impact that GPO, in particular, has on retirees,
especially women, at the lower end of the income scale. CPRS would
support some adjustment to the GPO formula that would lessen the offset
for those lower-income retirees. We fully understand that this is an
issue for both public and private sector workers.
Question from Chairman E. Clay Shaw, Jr. to Mr. Charles L. Fallis, Ms.
Donna Haschke, Mr. William J. Johnson, Mr. Chuck Canterbury, and Ms.
Teresa Harrison

Question: Public servants feel they are treated unfairly under Social
Security because they are paying into a public pension instead of
Social Security. However, your organization, and others that testified,
opposed mandatory Social Security coverage for newly-hired State and
local workers for several reasons, such as the government pension plan
meets employees' special needs, especially with regard to early
retirement, and mandatory coverage could jeopardize the pension plan's
funding. What would your organization think about allowing State and
local workers in jobs not covered by Social Security to voluntarily
choose Social Security coverage on an individual basis, where employees
would pay both the employer and employee portion of the payroll tax?
Mr. Fallis's response:
NARFE does not have a position on mandatory Social Security
coverage and did not reference this non-applicable issue in our
testimony.
Ms. Haschke's response:
NEA's support of full repeal of the GPO and WEP should not in any
way be interpreted as support for requiring public employees to
participate in Social Security. NEA strongly opposes mandatory or
voluntary coverage. Mandatory or voluntary coverage of public employees
would also increase the tax burden on public-sector employers. These
increased tax obligations would lead to difficult choices, including
reducing the number of new hires, limiting employee wage increases,
reducing cost-of-living increases for retirees, and reducing other
benefits such as health care. Mandating or allowing voluntary coverage
of public employees will not solve the Social Security system's
financial difficulties. The amount of money gained by mandating or
allowing voluntary coverage would be relatively small and would not
solve the long-term Social Security crisis.
Mr. Johnson's response:
In general, we would oppose this idea. We believe that many
employers would exert pressure on employees to opt in, believing that
this would save the employer money. For the vast majority of our
members, it would also be a foolish choice, frankly, to forego the
benefits of the average police retirement system in exchange for Social
Security coverage.
Mr. Canterbury's response:
Public employees feel they are treated unfairly, not because they
participate in a public pension plan, but because Federal law cuts
their benefits significantly if they worked or choose to work in a
second job or career in which they were forced to pay a Social Security
tax on that income. It should be no surprise that public employees are
angry when they discover they cannot receive the full amount of the
benefit for which they were taxed.
The Fraternal Order of Police does indeed oppose mandating
participation in Social Security for those currently outside the
system. The President's Commission to Strengthen Social Security (CSSS)
rejected the mandatory participation scheme in its final report issued
on 21 December 2001, and we believe Congress should do likewise.
To answer the last part of your question, I do not understand how
allowing State and local employees the option to pay both the employee
and employer portion of the payroll tax, which amounts to an additional
12.4%, in order to participate in Social Security solves the problem
for those employees who elect to remain outside the system. These
employees would still be penalized if they worked in a second job or
had a second career in which they were forced to pay into Social
Security because the WEP and GPO would still apply.
I am concerned that Congress continues to look for ways to save
money for the Social Security system by cutting benefits earned by
State and local employees and to increase the amount of revenue they
can generate from these employees. State and local employees are not a
cash cow to be milked for the Social Security trust fund. The Federal
government must find a way to honor their commitment to these men and
women, not find a loophole to accrue ``savings'' at their expense.
Ms. Harrison's response:
CPRS has not considered a situation where it would be possible for
employees to elect, on an individual basis, to pay the 12.4 percent tax
in order to participate in Social Security while continuing to make
their full contribution to their state or local pension system. The
critical issues would be 1) that there be no obligation on the part of
the employer or the public pension system to fund any of the employee's
Social Security contribution; 2) that the employee not be permitted to
opt out of the public pension system; and 3) that individual employees'
participation in Social Security not have a negative impact in any way
on the funding of state and local pension plans or on the other members
of the plans. We would have a major concern that individual
participation could be the first step toward mandating coverage in the
future for all public employees. Given this concern, together with the
inability of the vast majority of public employees and employers to
accept this additional financial obligation, CPRS may well oppose
voluntary participation on an individual basis.

[Submissions for the record follow:]
Statement of Paula Adams, The Woodlands, Texas
Thank you for giving those of us who have worked both in the
private sector and in public service a chance to voice our objections
to the WEP, which for me totally eliminates any Social Security I have
earned in the 21 years of working full and part time (mainly teaching)
outside the public school arena. I feel that it is an injustice to me
to have paid into both systems only to find out that I cannot collect
from Social Security. The way I have split up my employment between
public and private sectors, I will not have enough money to even
subsist on only my teacher retirement (20 years service credit in TRS).
I feel that I have been misled and treated unfairly, considering the
fact that I have not made enough money during my career to have a
substantial saving upon which to draw upon for retirement. Those of us
who have gladly given up a great deal in order to work in a public
service capacity should not be penalized for doing so. Thank you again
for looking into this injustice.

Statement of Anna Allebach, Houston, Texas
I am a school librarian at the Spring Branch Education Center in
Spring Branch ISD. This is my 17th year in education and I have
completed my 40 quarters in the private sector. I sincerely request
that you help me as I have been a productive, contributing member to
our society.
Presently I qualify to receive social security benefits two ways.
As mentioned above, I have completed 40 quarters of work in the private
sector. I also am a widow of nine years who has raised a child by
myself. This has been no small task as my child has been diagnosed with
Attention Deficit Disorder and mental illness. I have worked hard to
take care of her and to provide for her future so that she will not be
a burden on society. I have also prepared for my retirement by securing
income from both social security and teacher retirement. Now, there is
legislation to remove the income I am depending on for my future
retirement.
If you had told me that I would not be allowed to collect both when
I retired, I would say that I had selected that option and I must face
the consequences of my actions. But, that was not the case. I worked
all those years preparing for my retirement, and now the government is
trying to rob me of my hard-earned benefits. When I ran a company, I
led by example. Are the representatives and senators willing to be good
leaders and reduce their retirement benefits by at least one-third?
If the government decides to remove my benefits, it should at least
return all the assessed money plus interest it has deducted from my
paychecks. I had no option in contributing and that is my money. I will
gladly invest it so that I can have additional income when I retire.
Also, if I use all my savings, there will be no money left for the
care of my child when I am deceased. The government will have a
penniless person to support in an institution. Is that effective money
management?
I think our government needs to think twice about the long-term
consequences of its actions regarding the GPO and the WEP. Today's
quick fix may be tomorrow's horrendous headache.

Statement of Judith Faith Almond, Spring, Texas
I have taught in Spring ISD for 25 years. I have worked hard enough
to earn teacher of the year recognition in my school and at the
district level. I have loved my work. I will retire in 3 years.
After retirement, I have to get a job so I can eventually have
Medicare coverage because, after all of these years teaching in Texas,
I will retire without any.
I have two questions. What is wrong with this picture? What can we
do to fix it?

Statement of Andrea Andrews, Houston, Texas
Thank you for giving me this opportunity to write to you. I am a 47
year old single mother of two children. Teaching is my second career.
This is my 18th year with my school district. I work at a high school
for at risk youth. Prior to working for my school district I worked in
private industry, paying my Social Security taxes. I chose to become a
teacher when my children were in elementary school. I maintained my
full time job while taking the necessary classes to earn my teaching
certificate.
I have never had a time in my life, since the age of 15, that I was
not working and paying taxes (including Social Security). As the oldest
of five children (my mother was a single parent and a teacher), I often
worked two and sometimes three jobs in order to pay my way through
college (while paying my taxes including Social Security). I worked up
to the time of delivery of each of my children and returned to work as
soon as my doctor released me (while paying my taxes including my
Social Security). As a divorced parent I have always had to maintain a
second income. I have worked nights, sometimes until 4:00 a.m. taking
inventory (paying my Social Security tax); I have taught GED classes
for court appointed chemically dependent youth (Social Security was
deducted from my paycheck), and I have worked for a private company
tutoring adults for their GED (Social Security was deducted from my
paycheck).
I make these points because I have paid my taxes to Social
Security. According to an email that I received from Kay Bailey
Hutchison, ``The Windfall Elimination Provision (WEP) was enacted in
1983 to remove an unintended advantage that workers would receive if
they earned full benefits from both their non-Social Security-covered
employment and from Social Security.'' Windfall is a noun that means
unexpected. I paid into my Social Security and I expected to receive
it. ``I did not win the lottery!'' People who work in private industry
receive both their retirement money from their companies as well as
their Social Security! The difference is that our retirement money goes
into TRS (we do not have a choice) instead of a 401K plan, and we earn
much less interest on our TRS than in a 401K. For your Committee to
take away my Social Security benefit, that I have earned, is STEALING!
Why have you targeted teachers, civil servants, who can least
afford to retire at any age, to hurt financially? (Our retirement is
certainly less than members of Congress.) Where in private industry
does a person have to work until their age plus their years of service
have to equal 80 before they can retire at full benefit? Additionally,
our salaries are so low, that most of us cannot afford to invest in
other types of retirement accounts. Most of us will never retire; we
will gradually be reclassified into undesirable positions until our
positions are eliminated. Welfare has never been a part of my
vocabulary and I certainly don't want it to become a word in my
vocabulary in my retiring years.
This May will be the last time I receive a child support check
($300.00). My oldest child is my daughter who is in her second year of
college. Her career plan was to become an elementary school teacher.
Because you have chosen to treat teachers like second class citizens,
she has changed her career choice. Additionally, she has made it her
business to keep her many friends (many of whom intended to become
teachers) informed as to the latest developments in the attack on the
teaching career. She has been working since the day she turned 16
(paying her taxes including her Social Security tax). Because I am a
single parent, she must maintain employment in order to pay her way
through college. She must live at home and commute. My teaching salary
does not allow her to enjoy the benefit and experience of living on
campus. On the other hand, it is my same teaching salary that prevents
her from receiving the same financial aid that the children that I
teach receive (because most of them are on welfare!). My second child
is my son who is a senior in high school and thinks that I am already
selling myself short by being a teacher. My purpose in telling you
these things is to point out that we are already sacrificing
financially in order to teach. This financial sacrifice has a trickle
down effect. Our children are making alternative career choices. We
teach because we have chosen to teach. We did not choose to be
financially whipped. We should have chosen another career or should now
choose to leave teaching? We should look for another state to teach in?
The state of Texas wants exemplary schools. You can't have
exemplary schools if you do not have exemplary teachers. Private
industry pays their best and their brightest, they do not use them as
pawns to balance their budget!
Please do not vote for anything that will interfere with my ability
to receive the Social Security benefits that I have paid into and am
entitled to.

Statement of Diana Apsey, Houston, Texas
I am finishing my 27th year of teaching, 22 of which have been in
Texas. Because I will retire from teaching here in Texas, I will lose a
major portion of my social security benefits. Before coming to Texas, I
taught for 5 years in Indiana where I paid social security taxes. While
here in Texas, during the summer, I taught at Rice University where I
paid social security taxes. I have plenty of quarters to qualify for
social security benefits--that's not the problem. Rather, simply
because I teach in Texas, my benefits will be reduced because of
something called ``windfall.'' As if teachers ever are part of
windfall!
My teacher friends in other states have both teacher pensions and
full social security benefits. My aunt, who was a full-time homemaker,
now gets half of her husband's benefit even though she didn't pay in at
all! And yet, my benefits are going to be reduced because I'm going to
retire in Texas! This bill is most unfair and should be repealed!
Thank you for listening. Please repeal this law so that teachers,
police and firefighters across the country who are affected can enjoy
the same benefits as their colleagues.

Statement of Karen Arduini, Rock Falls, Illinois
I have been teaching in Illinois for 11 years, but began my career
in education later in life. I had a 20 year career in industry prior to
switching to education and paid my fair share into Social Security. I
have all my quarters paid and qualify for Social Security benefits when
I retire. But, due to the Windfall Exclusion, my benefits will be
drastically affected if not completely taken from me. I will, also, not
be able to work all of the years required to receive full TRS benefits
at retirement, due to starting teaching at an older age. I am really in
fear of my position at retirement. Please, readdress this issue and
realize the unfairness of depriving people of earned and paid for
Social Security benefits simply because they are teachers. If a teacher
never paid in to S.S., I can understand not qualifying, but the
reasoning does not hold up for those of us who are paid up.
Other government employees receive both their retirement and S.S.
benefits, such as military personnel and those under IMRF.
Thank you for your attention to this issue and for giving me a
place to voice my serious concerns.

Statement of Harriet Arvey, Houston, Texas
Thank you for giving me this opportunity to write to you concerning
the Social Security issues currently before you. I am a veteran
educator of 27 years. I have dedicated the majority of my career in
public service to working in schools with at-risk populations and have
faced a variety of challenges.
I am eligible to draw from my ex-husband's social security in
retirement and through my additional work, I have accrued enough
quarters to qualify for Medicare benefit when I retire in a few years,
but the Social Security offset will penalize these earnings. I never
fully realized what this meant until a close friend retired from a
career in education several years ago.
My friend spent many years working in the private sector and earned
many quarters of credit with Social Security. She stayed home to raise
her children for almost 20 years. When she returned to the working
world after they were grown and she was divorced, she returned to a
career working for the public schools. Since my friend entered the
teacher retirement system so late in her career, she could not begin to
have enough money for a comfortable retirement without working well
into her 70's. Imagine her horror when she was told that she would
receive far less due to the Social Security offset. She worked hard for
every penny of both funds and foresaw a monthly income which would make
every month a struggle. Just as she was set to retire, she had a
catastrophic stroke and her family had to find a way to pay for a care
facility and medicine as well as her other needs. Medicare funds were
available because she had opted for the offset to ensure this. In the
alternative scenario, she would qualify for Medicaid only after her
modest savings were spent down.
Many of our newest recruits to education are people who have many
years of Social Security income saved. In times when there are critical
teacher shortages and we are trying to attract seasoned professionals
with a diversity of experience to a career in the classroom we must
make this choice attractive. How attractive is a second career in
education, which forfeits these hard-earned funds?
In the next few years, many baby boom educators will retire. We do
not feel that we are asking for funds that we have not earned. Our
retirement income, modest at best, along with Social Security will
simply make it possible for us to keep up with rising costs without
penalizing us for many years of additional work. We are proud of our
years of service and want to remain self-sufficient. It is in the
interest of Congress to help us in that goal. Please repeal the laws
governing the GPO and WEP and consider real reform for Social Security.

Association of California School Administrators
Sacramento, California 95814
May 12, 2003

The Honorable E. Clay Shaw, Jr.
Chairman, Subcommittee on Social Security
U.S. House of Representatives
Rayburn House Office Building, B-316
Independence Ave. & S. Capitol St., SW
Washington, DC 20515

Dear Mr. Shaw:

The Association of California School Administrators (ACSA) is
pleased to submit the attached information for the May 1 hearing of the
House Ways and Means Subcommittee on Social Security. We are submitting
the attached testimony for consideration by the Subcommittee on the
issue of mandatory Social Security and its affects on schools.
In the fall of 2001 the Hemet Unified School District in Riverside
County, California submitted the attached testimony to the President's
Social Security Reform Commission. This school district of 18,000
students estimated that requiring mandatory participation of new
teachers and principals in the Social Security system would have an
ongoing impact to the school district budget of over $2 million. This
would be money that would otherwise be used to support direct classroom
instruction and services.
The Association of California School Administrators opposes any
reforms to Social Security that would require mandatory participation
by California educators.
We appreciate the opportunity to submit this testimony to your
Subcommittee on this important issue. If we can provide any further
information, please contact us.

Sincerely,
Karen Stapf Walters
Assistant Director
Governmental Relations

__________
A California School District's Response to the Proposal to Include the
California State Teachers Retirement System into the Social Security
System Being Considered by the President's Social Security Reform
Commission
The Hemet Unified School District located in Riverside County
serves 18,000 students in 20 schools throughout the rural and suburban
communities within boundaries of approximately 730 square miles.
Student enrollment reflects the ethnicity of the communities served by
the District with 30 percent Hispanic, 3.5 percent African-American, 3
percent other minorities, and 63.5 percent White. 67 percent of the
students reside in families that qualify for the Free and Reduced Lunch
program. The District is growing at an annual 2 to 5 percent growth
rate in student enrollment. During the past five years, over 60 percent
of the current certificated personnel have been employed. During the
1999-2000 school year, the following chart describes certificated
staffing and a higher than average state pupil, ratio.

Chart 1 Certificated Staff--1999/2000
----------------------------------------------------------------------------------------------------------------
District Statewide
Full Time Equivalent Staff -------------------------------------------------------------------
FTE * Pupils per FTE Staff FTE Pupils per FTE Staff
----------------------------------------------------------------------------------------------------------------
Administrators 41.5 405.1 21,652.9 274.9
Pupil Services 45.5 369.5 19,886.7 299.3
Teachers 774.1 21.7 284,628.2 20.9
----------------------------------------------------------------------------------------------------------------
* FTE: Full Time Equivalent
Source: California Department of Education, Educational Demographics Unit--CBEDS

The proposal to include new certificated personnel into the Social
Security System will have a significant negative impact on the
District's ability to offer quality educational programs and services
at a time of increasing demands from California's Education Reform and
Accountability initiatives.
During this past year, the District's general fund budget reached
$113,366,574, as presented in Chart 2. Prior to California's Education
Reform and Accountability initiatives, the District received revenues
with greater local discretion. This has changed significantly with
funding being restricted to specific purposes.

Chart 2 Historical Budget
----------------------------------------------------------------------------------------------------------------
Historic Historic
Budget Percent Budget 2001 Percent Difference
----------------------------------------------------------------------------------------------------------------
Revenue Limit Sources $ 87,743,607 77.4% $ 76,013,481 67.1% $11,730,126

Federal Revenues 6,304,463 5.6% 6,519,660 5.8% (215,197)
Other State Revenues 17,453,291 15.4% 23,551,883 20.8% (6,098,592)
Other Local Revenue 1,865,213 1.6% 7,281,550 6.4% (5,416,337)
Total Revenues $113,366,574 100.0% $113,366,574 100.0%
----------------------------------------------------------------------------------------------------------------

The District's unrestricted budget reflects 82.9 percent for
personnel salaries and health and welfare benefits. All other
expenditures represent 17.1 percent of the budget.
The projected benefit cost increase for new certificated personnel
to participate in the Social Security System is projected within eight
years to have an ongoing impact of over $2 million in lost unrestricted
revenues to support educational programs, services, and to maintain
competitive personnel compensation programs.
The Governing Board at their September 4, 2001 meeting approved the
2001/2002, adjusted District Budget. The District expects to receive an
increase of $4.8 million unrestricted revenue. However, anticipated
increases in expenditures to fund the cost of utilities which has risen
due to the ``energy crisis''; the cost of the operation of a new
school; additional cost of special education programs and services; and
the cost of employing new teachers, and staff leaves only $364,000
available for unrestricted uses.

Chart3 UnrestrictedSalariesandBenefitCosts
------------------------------------------------------------------------

------------------------------------------------------------------------
Salaries and Benefits: 82.9%
All Other Expenditures: 17.1%
------------------------------------------------------------------------

Chart 4 Projected Impact of Social Security System Participation
------------------------------------------------------------------------

------------------------------------------------------------------------
2002: $ 198,216
2003: $ 404,361
2004: $ 618,751
2005: $ 841,717
2006: $1,073,602
2007: $1,314,762
2008: $1,565,569
2009: $1,826,408
2010: $1,097,680
------------------------------------------------------------------------

Chart 5 2001/2002 Adopted Budget Revenue and Expenditure Summary
------------------------------------------------------------------------

------------------------------------------------------------------------
Unrestricted Revenue Increase--COLA $2,890,000
Growth Revenue Increase 1,950,000
Total Projected Unrestricted Revenue Increase $4,840,000
H&W Cost Increase $1,380,000
Step and Column & Professional Growth 1,130,000
Energy Cost Increase 836,000
Growth Teachers and Staff 700,000
New School Startup 350,000
Special Education 80,000
Total Projected Expenditures $4,476,000
Net Available for Salary Settlement $ 364,000
------------------------------------------------------------------------

A public school district is a human organization. To be successful,
it must have the ability to attract and retain well-qualified teachers
and other certificated personnel. In light of the teacher shortage,
this proposal will exacerbate this problem by reducing our ability to
attract teachers from outside California as well as within the state.
In closing, the Hemet Unified School District is representative of
school districts in California that are maximizing all available
resources to implement successful programs and services in response to
California's Educational Reform and Accountability initiatives. This
proposal not only will have a detrimental impact on those efforts but
also goes contrary to President Bush's goal of improving public
schools. Succinctly, this proposal ``drills a hole in the educational
boat'' with the potential to sink our efforts to provide quality
programs and services that graduate young adults who possess the
knowledge and skills to be responsible, contributing members of our
society.
Thank you for taking this testimony into consideration as you
develop your recommendations for the President's consideration to
reform the Social Security System.

Statement of Sheila Fields, Association of Texas Professional
Educators, Austin, Texas
The Association of Texas Professional Educators (ATPE) represents
more than 100,000 educators in Texas. We have been advocating for
educators for 23 years and are currently the largest professional
educators' association in Texas and the largest non-union educators'
association in the nation. ATPE is committed to: advocating for better
benefits for all educators; promoting a collaborative work environment;
the right of individuals to choose the association they feel represents
educators' interests; and providing the best education possible for the
children of Texas. We encourage you, committee members, to consider the
following issues as you determine the future of the Government Pension
Offset (GPO) and Windfall Elimination Provision (WEP).
ATPE supports amending the GPO, which reduces spousal and widow/er
Social Security benefits for public employees that participate in
public pension systems. We recommend that public school employees be
excluded from the GPO. ATPE also supports amending the Windfall
Elimination Provision, which arbitrarily reduces Social Security
benefits for Texas educators vested in Social Security to exclude
public school employees. ATPE also opposes mandating Social Security
coverage for public school employees not currently covered as a means
to address the controversy on these offset rules.
It is mandatory for Texas public school employees to participate in
the state Teacher Retirement System (TRS) and contribute 6.4 percent of
their pay to the system. Currently, only 45 of Texas' public school
districts participate in Social Security. Therefore, the large majority
of Texas educators do not work in jobs covered by Social Security and
are affected by the GPO.
The state of Texas faces a teacher shortage approaching 40,000 and
a drastic budget deficit projected for the next biennium. Several
proposals being made at the state level to reduce benefits and
compensation for both active and retired teachers coupled with almost
50,000 educators becoming eligible for retirement during the next
decade will increase the number of vacancies in Texas classrooms
exponentially.
ATPE believes that amending the GPO to exclude public educators
will bolster teacher morale and encourage qualified educators to remain
in the classroom. ATPE also believes that such an exemption could be
touted as a benefit used to attract new educators to the profession. It
is for these reasons ATPE supports any amendments to the Social
Security code that lessen the effect the GPO has on public school
employees, including the complete repeal of the GPO.
Similarly, the WEP arbitrarily reduces Social Security benefits for
individuals who are fully vested in Social Security and are also
eligible for a government pension such as TRS. The WEP was enacted to
address inequities for individuals who worked in positions not covered
by Social Security who benefited from the weighted formula used to
provide low-income workers with a higher percentage of their pre-
retirement earnings.
However, the WEP uses an amended formula to figure Social Security
benefits based on the number of years a person paid into Social
Security rather than the amount the person will receive from his
government pension. That means that a person who worked in a Social
Security covered job for 20 years and is eligible for a government
pension benefit of $500 per month will have his Social Security benefit
reduced by the same amount as a person who paid into Social Security
for 20 years but will receive a government pension benefit of $1,200
per year. Under this formula, a person who merely meets the minimum
eligibility requirements for a government pension could face the full
effect of the WEP.
ATPE believes this provision acts as a deterrent to talented,
private sector employees who are vested in Social Security and are
interested in pursuing teaching as a second career. Furthermore it
arbitrarily punishes those who have worked to become vested in both
Social Security and a government pension. ATPE believes that amending
the WEP to more accurately accomplish its original intent, or exempting
public school employees altogether would also serve as a useful tool to
address the teacher shortage.
Finally, it has been suggested that mandating all public school
employees to participate in Social Security would be an effective
solution to the controversy surrounding the GPO and WEP. ATPE
emphatically disagrees and opposes mandating Texas educators into the
Social Security system. As previously stated Texas is facing a $10
billion budget deficit for the next biennium, and already several
proposals are being considered at the state level to reduce benefits
and compensation for both active and retired teachers. Texas is one of
13 states where Social Security participation is not required of all
public school employees. In the 13 states where school employees are
not covered by Social Security, contribution rates, retirement formula
multipliers, and cost-of-living adjustments (COLAs) are higher than in
Social Security states. These higher rates are established by state
legislatures to make up for the lack of this important federal
retirement benefit.
ATPE believes the additional fiscal demands that mandatory Social
Security coverage would require of the state would ultimately be
reconciled through smaller state contributions to the TRS and larger
contributions from both active and retired educators. This would
produce additional strain on an already overworked and under-
appreciated profession and could have a devastating effect on the
actuarial soundness of the TRS fund, reducing benefits for TRS members.
The impact your work could have within the teaching profession is
phenomenal. Educators provide our future leaders with the tools
necessary to become successful and independent. Please support
amendments to the GPO and WEP that lessen the effect on our teachers
while protecting the retirement benefits they worked so hard to secure
and assist our districts in recruiting and retaining the best and
brightest individuals to teach our children.
Thank you for the opportunity to provide this input.

Statement of Eldon R. Aupperle, Toulon, Illinois
I am a victim of the work discrimination in the fact that I am
eligible for social security and have my benefits cut at least 50%.
I've paid my Social Security taxes and deserve what I have earned--not
50%.
I support the passage of H.R. 349--Social Security Offset/Windfall.
Please bring an end to this unfair and discriminatory policy that
exists today. We worked hard for our retirement and deserve it the same
as others.

Statement of Liz Baiardi, Trumbull, Connecticut
I've worked as a Ct. teacher for 17 years and as I approach my
retirement, I realize that the money I earned by working a second job
to put 2 children through college (and to which I paid many thousands
of dollars--for social security) will not accrue to me due to the
social security offset.
I will not receive a full Ct. teacher's pension and the social
security offset will cut my social security to mere change! What has
happened to the money I invested in social security, I ask.
This has been a lose-lose situation for me.
Please pass H.R. 594 or my hard lifelong labor will amount to a
pittance.
Thank you.

Statement of James P. Balzer, Quincy, Illinois
I am writing concerning the discrimination experienced by retired
teachers regarding Social Security Benefits. I worked as a Farmer and
my wife as a nurse along with my experiencing a 30 year career in
Education at the High School and Community College Level. My wife Pat
and I worked in production agriculture, nursing and teaching, all of
which are relatively low income services but these services are
probably more important to a healthy society than a very high
percentage of wage earners. We would appreciate receiving the benefits
of Social Security earned from these services.

Statement of Patricia Bauman, Sun City Center, Florida
I taught school in Ohio for 34 years and then retired to Florida.
It is very difficult to make it on my pension alone. I thought I would
be able to collect social security from my husband. After all I was
contributing through him as I was helping to pay our monthly bills. My
sister who never worked a day in her life can collect social security.
My neighbor who was raised in Germany and never contributed to our
country can collect social security through her husband. I guess I
shouldn't have devoted all those years to hundreds of children. I
didn't encourage my own two children to be teachers as there is little
money in it and no respect for what you do and give. It's a good thing
I love children.
Think of the amount of money social security would bring into the
state of Florida if those other 15 states could collect?
Please repeal the WEP offset.

Statement of Azel Hill Beckner, Bowling Green, Kentucky
We must protect the retirement pensions of all the people. The
government workers deserve the same protection as the people in the
private sector.

Statement of Mary Kathleen Benore, Sylvania, Ohio
I am writing in regarding the offset/pension situation. In November
I received a letter from Social Security that they needed an update on
my state pension which is $636.00 per month. I took it in to make sure
everything was alright. When I applied for SS at age 65, I informed the
lady taking my application that I was being divorced from the second
husband in four months and that I had only been married to him for five
years. She said not to worry because I could file on the first husband
who had left me after 36 years for another woman. I always thought that
I was collecting on the first husband, but found out when I went in to
update that I was collecting on the second husband. I INFORMED THEM
THEY WERE PAYING ME ON THE WRONG HUSBAND. They subsequently sent me a
letter telling me I owed them $12,239.00. When I explained that I had
told the original person taking the application they just held up their
hands and said, ``you can't prove we told you that, and we do not want
to hear `fair,' or `whose fault.' '' As a result my social security has
been suspended for five years, and I will receive a bill for medicare
quarterly. They explained that if I was poor they would not make me pay
it back. I cannot just pay the difference in the two husbands' amount
because they can only go back six months. THIS MEANS THAT FOR TEN YEARS
I HAVE BEEN DENIED SOCIAL SECURITY ON EITHER HUSBAND. The important
thing here is that they were already taking two/thirds of my social
security because of the offset. It seems that abandoned wives who went
to work instead of collecting welfare are being deprived simply because
they chose to go to work and make their own way. I finally got a job
after standing in the unemployment line for two years (sometimes all
day and sometimes outside in the cold because they couldn't get us all
in the building) with the county, then the state and lastly, the City
of Toledo. PLEASE SIR, THIS IS NOT RIGHT. WE NEED THIS OFFSET CHANGED,
ESPECIALLY IN A CASE LIKE MINE WHERE MY CITY PENSION IS ONLY $636.00
and I will not even be getting medicare except for paying it myself. I
will be 76 years old in September. I was trying to get a job in the
early 80's when Toledo and Detroit was virtually shut down. PLEASE
HELP. My social security is only $146.00 per month to begin with, but I
need it. Thank you.

Sebring, Ohio 44672
April 24, 2003

Representative E. Clay Shaw, Jr.
Chairman, Subcommittee on Social Security
1102 Longworth House Office Building
Washington, DC 20515

Dear Representative Shaw:

I am writing to you concerning the Windfall Elimination Provision
(WEP) and the Government Pension Offset (GPO) because I am a victim of
both--now the WEP and if my husband predeceases me, the GPO. I became a
teacher at the age of 41 after working at various jobs under Social
Security for 20+ years. I'm 64 years old and retired now. Little did I
know the financial impact my decision to become a teacher at midlife
would have on my retirement. I can only collect 40% of the Social
Security I worked for and paid into for many years--a whopping $189.00
a month. Worse yet, if my husband dies before me, I will collect NONE
of the social security benefits he paid into for 30 years. I didn't
teach long enough to receive a full teacher's pension--silly me, I
always thought social security would help fill the gap. After all, I
worked for it, didn't I? Wrong!
I first found out about the WEP and the GPO when I talked to a
Social Security representative on the phone. The statement of earnings
I received in the mail led me to believe I would get the full amount
shown. Wrong again! I wonder how many people get the big surprise when
they receive their first Social Security check?
I feel betrayed. What a terrible way to treat someone who dedicated
half her work life to the education of children. I know the $250
(approximately) a month I'm missing due to the WEP is small change to
you but it would help me tremendously to get through the month,
especially with the cost of health care for my husband and me through
the State Teachers' Retirement System. I don't know how much I will
lose in Social Security benefits if my husband dies first but I'm sure
however much it is, I will miss it dreadfully.
I know why both provisions were enacted--to prevent ``fat cats''
from double dipping but I wonder how many suffering little people there
are for every one of them. These provisions particularly hurt single
women but men are hurt by them, too.
I know, too, that should these provisions be repealed (and they
should be) it would be costly to the struggling social security system.
But let's not save social security at the expense of dedicated public
servants whose only mistake was to take a job outside the Social
Security system for part of their work lives? Think of it as a boon to
the economy--just like a tax cut.
I am writing not only for myself but for all the people in the
country who can tell similar stories. You will no doubt hear from many
of them. It's time to right this terrible wrong that has been
unwittingly done to people who have worked so hard serving the public.
We are not double dippers, we are double workers and I emphasize the
word WORKERS. We have given to the system. All we ask is to receive
what is rightfully ours. Please listen to the many members of congress
who have already signed on as co-sponsors of S. 349 and H.R. 594.
Thank you.

Sincerely,
Mary Bertolini

Johnston City, Illinois 62951
April 28, 2003

The Honorable E. Clay Shaw, Jr.
2408 Rayburn House Office Building
Washington, D.C. 20515

Dear Congressman Shaw:

I am writing in hopes that I can draw some attention to amending
the Social Security act to repeal the Government pension offset and
windfall provisions.
I understand you are the Chairman of the Subcommittee which will be
holding hearings. I would like to tell you my situation so you can see
how important this change is for me and a very large majority of my co-
workers.
I had worked under social security guidelines for thirty-five
years. But just two months shy of my fiftieth birthday I found myself
without a job due to downsizing. I was fortunate enough to secure a job
a month later with Southern Illinois University, Carbondale, IL. The
University does not pay into social security. I have contacted our
local social security office and found that because I no longer pay
into social security that when I retire the amount I receive from
social security will be offset 2/3. So now I can not work long enough
to get a sizable retirement from the university and will not get the
amount of social security I once thought I would. Before taking the
university job my social security statement indicated that I would
receive full benefits, around $1,200.00. As it looks right now between
both I might get $600.00 a month. I am very concerned for my future and
many other people who do not even realize this situation exists.
Please take this small example of the average person and the
devastating affects the offset and windfall provisions are having. Any
help you can be would greatly be appreciated. Thank you for your time.

Sincerely,
Patricia L. Bird

Statement of Mary Blackburn, Houston, Texas
There are many of us women who have worked for a school district
all of our lives. Some of us even have worked under social security and
have our quarters on our own benefit. My own work record shows that my
quarters are complete for social security. I also have 29 years in
education. My husband was collecting a disability social security
benefit up until this year. He died in September. He had been ill for
11 years. He worked until 5 years ago before he was on disability. When
my husband knew he had not long to live, he asked that I do whatever I
could to get his benefit for which he had worked and struggled all of
his life to ensure I receive. I only ask that other women like myself
not be penalized because the state in which they may reside does not
have the proper laws in place to ensure that fairness be there for
people like me. If I had not worked in a Texas school district but
somewhere else, and received a pension my social security would not be
affected. Our state pensions should not be treated as a ``windfall.''
They are what we have ``EARNED.'' And, our husbands have earned the
right to ensure we receive their hard-earned social security benefits.
There should be no ``OFFSET'' involved.
Thank you for the right to be heard on this very important matter.

Statement of Kandice Boatwright, Sour Lake, Texas
Thank you for giving me this opportunity to write to you. My name
is Kandice Boatwright, and I have been an educator for 25 years. Of
those 25 years, 12 years were spent teaching reading to middle school
children in the state of Louisiana. For the last 13 years I have been
teaching developmental reading and study skills to college students at
Lamar University.
For my first 12 years of teaching, I did not contribute to social
security. Rather, my retirement went into the Louisiana Teachers
Retirement fund. When I left Louisiana to move to Texas, I left my
money in the retirement system there. After all, I was vested in the
system, and I knew that one day I would get a small pension from it.
For the past 13 years I have been contributing to social security as an
employee of Lamar University. Even though I am on the low end of the
pay scale at LU, I always thought I would be able to add my social
security earnings to my small retirement from Louisiana and also what I
have accumulated in a retirement fund while at LU. Now, at 52 years of
age, I find that my social security will be reduced by 60% of my
earnings in retirement from Louisiana.
This seems grossly unfair to me that I should be denied my full
social security benefit--something which I have contributed to for the
past 13 years. No one ever asked me if I would like to proportionally
reduce my social security contribution by the amount it will be cut
under the present law. Needless to say, I feel cheated.
It has always been my plan to return to public school teaching when
my son reached high school. That will be next year. As a certified
teacher of reading (as well as other disciplines) with a vast amount of
experience, I feel I have much to offer to the youth of today--many of
whom struggle with reading and comprehension problems. However, knowing
how the social security system will penalize me for past earnings
invested in a teacher's retirement fund as well as any future earnings
from future employment in a state teacher's retirement fund, I am
definitely rethinking my future.
Furthermore, with the shortage of certified and experienced
teachers today, I think it would be to society's advantage to recruit
those individuals who have valuable skills that can be used in the
classroom. How many of those individuals who have spent years working
in the private sector will decide to join the teaching ranks when they
realize their social security benefits will be slashed? I think most of
these individuals will decide ``no.''
Why should hardworking educators be forced to give up those social
security benefits for which we have worked for and contributed to for
so many years? I do not see any justice in this present system. I do
not feel that I am ``double-dipping'' when I simply ask that I receive
those benefits for which I have worked hard and contributed.
I respectfully ask that members of the U.S. Congress repeal the
GPO/WEP which is grossly unfair to schoolteachers, policemen, firemen,
and other hardworking public servants.
Thank you for your consideration in this very important matter.

Statement of Carolyn Bond, Mendota, Illinois
I am an Illinois teacher soon to retire from a small school
district and am concerned that I will not be able to make ends meet
unless I have the spousal share of my husband's social security. Please
repeal this unfair provision of the social security law.

Statement of Charlotte F. Bowen, Houston, Texas
Thank you for giving me the opportunity to express my feelings on
the effect of GPO and WEP. I am a grade level secretary at Northbrook
High School in Houston, Texas. I entered the workforce in the school
system 17 years ago after my husband lost his job and was unemployed
for 2 years due to the collapse of the oil industry in 1986. I am still
working at age 68 and my husband is working at age 70 as we attempt to
recover from the financial damage of unemployment in 1986 and again
with the recent stock market crash decimating our funds saved for
retirement.
My husband has paid the maximum social security taxes since he was
22 years old except for the two years he was unemployed. Now as, we
contemplate a modest retirement; we face this inequitable law that will
take 2/3 of my Social Security Spousal Benefit away because of the
modest Teacher Retirement System pension I have earned.
Certainly, Congress could not have intended in 1983 to penalize the
average worker in America with these pension offsets. Perhaps there are
some highly paid government employees who will receive substantial
government pensions and should rightly be the target of these
``windfall'' laws. But do you really want to confiscate my Spousal
Social Security benefit because I have worked 17 years out of necessity
and earned a modest $600/month pension from the state.
Please, demonstrate the sense of fairness for which America is
famous and do not penalize the average person because they chose to
work. If I had not been forced to enter the workforce after raising my
children, I would be entitled to the Spousal benefit. Does it make
sense that I now actually draw Social Security payments while I am
employed in the School System, but I must sacrifice them when I retire
and need them the most? This prevents me from retiring.

Statement of Janice Bruner, Cambridge, Ohio
I am a retired school secretary. My retirement is $625 per month
from SERS. My social security check is $118 per month. I should be
receiving half of my husband's social security check of approx. $525.
Every year I receive a 3% increase which is a whopping $18. Social
Security deducts $12 of $18 from my check. That leaves me with an
increase of $6 or 1%. Considering the cost of living I am going
backwards. Is this fair? Please consider eliminating the social
security offset. The federal or state government does not pay into my
retirement so why should it affect my social security.
As you can see, my total pension is a small amount as compared to
some of the large government pensions. There are numerous other people
like me who are hurt by the offset penalty. Thank you for your
consideration and hearings on the offset problem.

Statement of Patricia H. Bunger, Prosper, Texas
Three cheers for your efforts to examine the Windfall Elimination
Provision and Government Pension Offset aspects of Social Security in a
public forum! I am against eliminating the Social Security spousal
benefit for Texas teachers and others employed by non-profits.
Elimination of this benefit discriminates against older women and those
non-profit workers who received low wages and scanty benefits during
their careers. In my case, I am a TSTA/NEA member and Special Education
teacher, Plano I.S.D., for 22 years. Before that I was employed in
positions covered by Social Security and have 30 qtrs. of credit. For
the past 5 years, I've worked part time in a local college library for
Medicare credits. I understand I could have gotten Medicare under my
husband Ronald's account, but I do NOT trust Medicare and wanted my own
credits in case the rules changed. I believe I should have the spousal
benefit available because:

I paid into Social Security for 30 quarters.
My SS covered employment ceased when our handicapped son
was born. I stayed home 5 years to care for him and no public monies
supported him. How does society recognize such sacrifice?
I supported Ronald through 2 degrees so he could earn
higher wages (and subsequently pay higher SS taxes.)
Ronald was laid-off at age 50 as a Comptroller at Texas
Instruments 10 years ago and has not held substantive employment since.
I am the primary breadwinner and support him.
Our IRA's and small investments have suffered substantial
losses in recent years. We counted on the supplementary SS monies in
retirement. Now we can both count on the necessity of continuing to
work during retirement due to rising medical costs, food, gasoline and
taxes. Congressmen do not face this because of the separate retirement
system they voted for themselves which is very generous!

Again, please accept my heartfelt thanks for your efforts to
examine these Social Security issues and the impact on teachers and
other non-profit workers. TSTA/NEA members are watching this hearing
closely. It is vitally important to those of us who dedicated our lives
to educate children in return for small wages and benefits.

Statement of the Honorable Max Burns, a Representative in Congress from
the State of Georgia
Chairman Shaw and members of the Subcommittee on Social Security:
As the representative for the newly-created Twelfth District of
Georgia, I have a particular interest in the Government Pension Offset
(GPO) and its application. Thank you for the opportunity to present my
views on behalf of the citizens of the Twelfth District.
The GPO affects nearly twenty-five percent of public employees
nationwide, especially public educators. As a member of the Committee
on Education and the Workforce, I am particularly sensitive to the
rapidly expanding problem of qualified public teacher shortages. To
attract new, young, committed professional teachers, incentives such as
generous retirement benefits are necessary. The GPO is a severe
impediment to attracting new, committed educators in Georgia and must
be overhauled to reflect changes in circumstances surrounding its
administration.
Currently, there are fifteen states in which public teachers are
affected by the GPO. Of those, Georgia is one of three in which the GPO
affects teachers only enrolled in certain local government pension
plans. I must credit a retired teacher from my district, Ms. Glenda
Reddick, for bringing this issue to my attention and for providing me
with vital information on the current situation affecting certain
dedicated Georgia teachers. She has doggedly researched this issue not
only because she has personally been subject to the limitations of GPO,
but because many of her fellow teachers in Bulloch, Screven, Bryan,
Evans, and Jenkins counties are adversely affected by this unfair
restriction on retirement income.
As members of the Social Security are well aware, the General
Accounting Office (GAO) issued results of its evaluation of the GPO in
August of 2002.\1\ GAO reviewed those affected by the GPO in Texas and
Georgia and concluded that certain changes to the system should be
made. In particular, GAO examined the use of a little-known exemption
to the GPO, called the ``last-day'' rule. Through this rule, public
employees working in jobs not required to contribute to Social Security
could receive full spousal or survivor benefits (a full exemption from
GPO) as long as their last day of employment was in a position that was
covered by Social Security. GAO's contention was that public employees,
particularly teachers, were taking advantage of the ``last-day'' rule
by transferring to a covered position only for a single day, thus
receiving a spousal or survivor benefit without paying into the system.
The report noted, however, that in Georgia only twenty-four educators
had taken advantage of the GPO exemption and the average educator
stayed in that position for a full year. Georgia teachers affected by
the GPO utilize the ``last-day'' rule because they have planned for
retirement based on expected benefits from Social Security. Many
educators and other public employees affected by GPO, like Ms. Reddick,
are not well-informed of the implications the offset carries for their
retirement planning.
---------------------------------------------------------------------------
\1\ GAO-02-950, Revision to the Government Pension Offset Exemption
Should Be Considered.
---------------------------------------------------------------------------
Recently, the House of Representatives passed H.R. 743, the Social
Security Protection Act of 2003, a bill on which this subcommittee held
a hearing in February. This legislation held particular significance
for Georgia educators because section 418 modified the ``last-day''
exemption from GPO for public employees in non-covered jobs to the last
five years of employment. The motives of the provision were clearly to
protect the Social Security trust fund from distributing funds to those
who have not contributed to the fund. GAO estimates that the Social
Security Administration distributes more than $400 million in benefits
to former public employees who transfer from non-covered to covered
jobs but contribute considerably less to Social Security than they
receive in spousal or survivor benefits. I believe, however, that while
the extension of a single day of work for exemption from the GPO to
five years is fair, the limitation on when public employees can become
exempt from the GPO is not.
In its report on GPO, GAO states, ``the intent of the `last day'
exemption is unclear in the legislation.'' \2\ Whether congressional
intent was clear within the legislation, the Social Security
Administration provides a reasonable explanation for the ``last day''
rule, stating that some state and local governments did not opt for
Social Security coverage originally but enter at a later date.\3\
Therefore the ``last day'' rule equalizes treatment for employees whose
coverage status changes due to the state or local government's pension
plan conversion into a Social Security-eligible system. My concern with
various proposals is that they only allow for exemption from the GPO on
the last day or last five years, as under the H.R. 743. Under current
law, the GPO still applies if the public employee entered his or her
non-covered position after five years of covered employment in a
private-sector job, for example. The GPO and ``last-day'' provision
have been law for twenty years, and hard-working Georgians are still
grappling with them. If the 108th Congress imposes any fix, I believe
that the least it can do is provide those adversely affected by the
``last-day'' exemption with a provision that applies the exemption for
a certain period of time worked; for instance, H.R. 743 could be
improved by modifying the five-year work requirement to apply at any
point in that public employee's career rather than the last five years
of his or her career. This modification, while not fixing the
underlying problem of the GPO, would grant relief to teachers and other
public employees, particularly those in Georgia.
---------------------------------------------------------------------------
\2\ Ibid, p. 1.
\3\ www.ssa.gov/pubs/10007.html.
---------------------------------------------------------------------------
In short, Mr. Chairman, I believe that Social Security reform is
the only true way to equitably solve the challenges we face with the
Government Pension Offset. While we continue to work toward that goal,
however, we should not lose sight of simple short-term relief that we
can provide the teachers, fireman, police officers, and other public
employees who are adversely affected by this unfairly administered
offset. Thank you for including these views on behalf of the
constituents of the Twelfth District of Georgia.

Cincinnati, Ohio 45247
April 29, 2003

Representative E. Clay Shaw, Jr.
Chairman, Subcommittee on Social Security
Committee on Ways and Means
United States House of Representatives
Room B-316 Rayburn House Office Building
Washington, D.C. 20515-6100

Dear Representative E. Clay Shaw, Jr.

Maybe it is a windfall for congressmen but not for clerical staff.
I was married for almost 25 years during which time I sacrificed to
help my former husband received his college degree, which helped him
get a good paying job. I stayed at home and raised four children, which
are now law abiding and tax paying citizens. Now, when I retire I won't
be able to collect anything or very, very, little of my ex-husband's
social security because of the windfall law. I will only be able to
receive the pension that I will receive from my work years at UC, which
will not be much because I was out of the work force so many years
raising the children. I don't consider receiving his portion of social
security a windfall. When employees work at businesses that give
employees a pension, they can receive the business pension as well as
the social security. There is no penalty. When women never work outside
of the home they can receive their husbands pension while their living
husband also receives his pension. They don't have to wait until the
husband dies to receive his pension. Isn't this double dipping?

Sincerely,
Mary Ann Bush

Statement of Judith Michaels, California Federation of Teachers,
Sacramento, California
My name is Judith Michaels and I am the Legislative Director for
the California Federation of Teachers, American Federation of Teachers,
AFL-CIO. I submit this testimony because of the serious affect the
offset and windfall provisions of the Social Security Act have not only
upon our members but upon those considering leaving employment covered
under Social Security to begin a second career as a teacher. The
``Offset'' and ``Windfall'' amendments to the Social Security Act will
negatively affect the retirement pensions of many of the 100,000 active
members of the California Federation of Teachers, specifically those
who are members of the California State Teachers Retirement System
(STRS). The consequences for some current retirees in California are
even more severe.
The GPO and the WEP have had devastating consequences for more than
800,000 low- and middle-income public employees who have seen their
Social Security benefits reduced or eliminated because they receive
pensions for non-Social Security-covered employment. Our teachers,
former teachers, and prospective teachers cannot count upon a full
Social Security benefit, either as a benefit from work they may have
done under Social Security or from benefits earned by a spouse.
When Congress created Social Security in 1935, it expressly
excluded government employees, and it was not until the 1950s that
state and local government agencies could join the system. Meanwhile
those agencies developed their own retirement systems, which tend to
offer higher benefits at lower cost than Social Security. The
California State Teachers Retirement System falls into that category.
The Government Pension Offset (1977) and the Windfall Elimination
Provision (1983) were Congressional efforts to contain the costs of the
Social Security program in the context of long-term solvency. They were
intended to curtail extraordinary benefits for highly paid individuals,
but applied only to public pensions. The Government Pension Offset
(GPO), reduces an individual's Social Security survivor benefits
(available to a person whose deceased spouse had earned Social Security
benefits) by an amount equal to two-thirds of his/her public pension.
The Windfall Elimination Provision (WEP) changes the formula used to
calculate benefit amounts, reducing an individual's own Social Security
benefits (earned while working in a job covered by Social Security).
For example, a STRS retiree can lose her entire spousal benefit
even though her deceased spouse paid Social Security taxes for many
years. Furthermore, some STRS retirees who survive their spouses face a
pension offset that deducts approximately two-thirds of their own
public pension benefits from their Social Security survivor benefits.
Additionally, the offset detrimentally affects widowed lower-income
career teachers, and part-time faculty who have accrued minimal
pensions from a number of sources.
We urge you to take steps to make sure that public employees will
not have to worry about their retirement due to these unfair provisions
that reduce Social Security spousal and worker benefits.

Statement of Gary Lynes, California State Teachers' Retirement System,
Sacramento, California

Introduction

The California State Teachers' Retirement System (CalSTRS) provides
retirement, disability and survivor benefits to more than 715,000
active and retired public school teachers and their beneficiaries.
California public school teachers are the largest single group of State
and local government employees in the country who do not participate in
the Social Security system.
On behalf of the 1,200 local school districts of the California
public school system that educate California's children, CalSTRS wishes
to express its very grave concern over any proposal to impose on these
school district employers mandatory Social Security coverage with
respect to newly-hired teachers.
CalSTRS was established by State law in 1913 to provide a defined
benefit pension for the State's public school teachers. Thus, CalSTRS
was in operation some 22 years before Social Security was even created.
At the time Social Security was established, California's teachers and
all other State and local government workers were barred by Federal law
from participating. Accordingly, forced by the Federal Government to go
its own way, CalSTRS has successfully provided retirement benefits to
generations of retired teachers in California. Through sound management
over nine decades, CalSTRS has developed into the third largest public
pension system in the United States, with over 715,000 active and
retired members and assets of about $90 billion. CalSTRS currently pays
out $4.5 billion a year in retirement benefits. Unlike the pay-as-you-
go Social Security system, the State of California has funded an
educator's future retirement liabilities throughout his or her career.

Mandatory Coverage Imposes a Tax Increase on Local School Districts

A proposal to mandate Social Security coverage for all newly hired
State and local government workers would impose a major new Social
Security payroll tax burden of 12.4 percent of payroll on local school
district employers and their employees in California.

This Tax Increase Will Have a Devastating Fiscal Impact on
Public Education in California

The 12.4 percent of payroll tax cost of mandatory Social Security
coverage would impose an average additional cost of at least $4,200
with respect to each new teacher, equally shared between the employer
and the teacher.
This new 12.4 percent of payroll Social Security tax cost would be
imposed on top of the over 16 percent of payroll cost that is necessary
to fund the current CalSTRS retirement plan. California's school
districts simply could not shoulder their share of this enormous
overall retirement cost burden.
To accommodate this heavy new Social Security payroll tax burden,
employer contributions to the CalSTRS retirement plan would have to be
pared back significantly under a new plan coordinated with Social
Security. However, the school districts would be left with sharply
higher total costs to deliver a combined Social Security and CalSTRS
retirement benefit on a par with the current CalSTRS benefit. The
current CalSTRS plan produces a much greater retirement benefit than a
plan coordinated with Social Security for the same level of
contribution. This is because State and local government retirement
plans such as CalSTRS--whose assets are invested in the private capital
markets--produce a substantially higher investment return than is
credited under the Social Security system, even if a portion of the
Social Security payroll tax were to be invested in private accounts.
Thus, the cost of benefits provided under Social Security is
significantly greater than the cost of equivalent benefits provided
under the current CalSTRS plan. Accordingly, if Social Security
coverage were to be substituted for a significant portion of the
current State pension plan benefit, the employer's overall retirement
costs would have to increase sharply in order to fund the same level of
retirement benefits as currently provided to California's retired
teachers under the CalSTRS plan.
In 2001, Milliman USA, the independent actuaries for CalSTRS,
calculated that mandatory Social Security coverage for new teachers
would drive up total retirement costs for California school districts
by an additional 7.389 percent of payroll simply to fund the same level
of retirement benefits as currently provided to California's teachers
under the CalSTRS plan.
The 1,200 local school districts in California have a combined
annual payroll for teachers in excess of $20 billion annually.
Therefore, a proposal to impose mandatory Social Security coverage for
new teachers will increase local school costs by as much as $1.5
billion annually.
Simply cutting current retirement benefits for California's
teachers would not be a viable way to absorb the harsh new cost burden
of mandatory Social Security coverage. CalSTRS's independent actuaries
have calculated that the current retirement benefit would have to be
cut by about 75 percent in order to keep the overall cost of a new
CalSTRS plan coordinated with Social Security on a par with the current
cost of the CalSTRS plan.
Accordingly, the State Superintendent of Public Instruction, the
chief educator for the State of California, has indicated that any
proposal to impose mandatory Social Security coverage on new teachers
would have ``a devastating fiscal impact on the California school
system.'' (See letter from Jack O'Connell, State Superintendent of
Public Instruction to the Chairman of Subcommittee on Social Security
of the Committee on Ways and Means, dated May 12, 2003).
Superintendent O'Connell elaborated:

``We currently have over 96,000 teachers and administrators in our
system who are 55 years of age or older, and the average age of
retirement is about 61. As a result, we will have to be replacing tens
of thousands of teachers over the next few years, as well as hiring
additional teachers to accommodate expansion of class size reduction in
our state. Mandatory Social Security coverage would dramatically
increase the cost of hiring these teachers, and will significantly
reduce the ability of our schools to maintain this important program. .
. .

Superintendent O'Connell concludes: ``Mandatory Social Security
coverage will only exacerbate these fiscal difficulties with which the
California school system already is grappling and could well even push
some of the weaker school districts into bankruptcy.''
State and local governments have only two responses available when
confronted by such an onerous cost burden imposed by the Federal
government: raising taxes or cutting spending on other essential
government services. School district administrators already have
indicated to CalSTRS that a reduction in education services would be
necessary in order to address the increased costs of mandatory Social
Security coverage. This could mean a cut in funds for libraries,
athletics, and other education programs and decreases in employer-
provided benefits for current teachers such as health care premium
coverage.
A case in point is the Hemet Unified School District, located in
Riverside County, California. (A statement on behalf of the Hemet
School District by its Superintendent, Stephen C. Teele, Ph.D., dated
September 7, 2001 was submitted directly to the committee). The Hemet
School District serves 18,000 students in 20 schools throughout rural
and suburban communities within a 730 square mile area. Sixty-seven
percent of the students reside in families that qualify for the Free
and Reduced Lunch program. Student enrollment continues to grow at the
rate of 2-5 percent annually. Over 60 percent of the current teacher
workforce has been hired within the last five years.
Superintendent Teele's detailed budget breakdown underscores the
heavy cost burden that mandatory Social Security coverage would impose
on a local school district struggling on a budget already stretched
thin to meet the fiscal demands of educating California's children. In
the Hemet School District's budget, after taking into account current
salary and facility costs, increased power costs, the cost of operating
a new school, the cost of recently-expanded special education programs,
and the cost of employing new teachers and staff to respond to student
body growth as well as class-size reduction and other State educational
reform initiatives, there would be no resources left to absorb the
harsh cost burden of mandatory Social Security, a cost burden which
will only grow over time as more new teachers are hired.
Accordingly, Superintendent Teele indicates, ``The proposal to
include new certificated personnel into the Social Security system will
have a significant negative impact on the District's ability to offer
quality educational programs and services at a time of increasing
demands from California's Education Reform and Accountability
Initiatives.'' Superintendent Teele concludes: ``[T]he Hemet Unified
School District is representative of school districts in California
that are maximizing all available resources to implement successful
programs and services in response to California's Educational Reform
and Accountability initiatives. This proposal not only will have a
detrimental impact on those efforts but also goes contrary to President
Bush's goal of improving public schools.''

Conclusion

For all of these reasons, CalSTRS, its 715,000 members, and the
1,200 local school districts in California strongly oppose any proposal
to impose mandatory Social Security coverage.
The members of CalSTRS--which predates Social Security--were barred
from participating in Social Security. CalSTRS was forced by the
Federal Government to go its own way and through sound management has
developed into a retirement plan that is capable of paying out $4.5
billion annually in benefits and shouldering all of its future
retirement liabilities on a fully funded basis. CalSTRS would be asked
to cast aside decades of successfully providing retirement benefits to
generations of teachers, in order to force new teachers into a
retirement scheme coordinated with Social Security that would provide
reduced benefits at higher cost. It is unfair at this late hour to
destroy the CalSTRS retirement plan--and indeed destroy the very
success of private investment that the Commission evidently seeks to
emulate--by mandating participation to solve a longstanding solvency
problem in Social Security that the State and its school districts had
no hand in creating and create an ``education tax'' on the over 8.5
million public school K-14 students in the state of California.

Statement of Virginia Cantara, Cape Elizabeth, Maine
My name is Virginia Cantara, and I live in Cape Elizabeth, ME. I am
age 70, and have been widowed for over 31 years. I have been a full-
time teacher, and for the past several years a part-time teacher. As I
have taught in public school, I am a recipient of the state pension,
which is considered a government pension. Consequently, I cannot
receive widow's benefits. Social Security, a few years ago, forwarded
me a check for back widow's benefits, totaling over $5,000. I was
elated, and immediately had a new heating system installed in my home .
. . a home that I had only had a few years, as I had to sell homes to
educate and raise two children. The system cost $3,000. Social Security
then proceeded to tell me it was an error and I had to repay the amount
sent me. I sent them the unused portion of $2,000, and have been paying
them monthly ever since. If I am late, or skip a month, the
administration harasses me in writing . . . for an error that was
theirs. I am working to supplement my income, so that I may keep my
home. Because I am working, and receive a pension from the state
($2,000) a month, I cannot collect a penny. Now, can your members live
on that? I have SS quarters of my own, as does my husband, who became
ill at age 28 and died at age 37. I plead with you to eliminate the
offsetting law, so I can keep my home, and not face devastation should
I become unable to work. I applied for a waiver on the overpayment, but
the paperwork, and demands were overwhelming, and I caved in. My state
senator did not help. All I have is what I earn. PLEASE help with the
elimination of this unfair, outdated law.
Thank you.

Statement of Wai-Kai Chen, Chicago, Illinois
I am writing to you in support of passage of H.R. 594 that amends
the Social Security Act that repeals the Government Pension Offset and
Windfall Elimination Provisions. I believe the offset and windfall
penalties are a form of work discrimination. First of all, I have both
public and private sector work experiences. Second, my work on a nine-
month contract at an institution of higher education and thus have
summers available for other employment. I too pay social security taxes
on wages earned. In short, I have been employed 40 years, contributed
to retirement funds and then are penalized for hard work.
I believe this is unfair and discriminatory, and strongly urge you
to pass H.R. 594.

Statement of Martha Chisum, Beaumont, Texas
I am requesting that the GOP and WEP be repealed. I feel this is a
terrible injustice to thousands of hard-working citizens who have
served in the public arena and, now at retirement, are being
discriminated against and harmed by the very government we have worked
for.
I, personally, have worked since the age of 15 and paid into Social
Security. At the time, it was minimal contributions because it was
part-time through school and then clerical work for many years. I have
all my own quarters needed for retirement in Social Security.
Additionally, I now have 5 years with ERS of Texas and 16 years
with Teacher Retirement System of Texas. I have given 100% Plus to
every job I have ever had. I have worked so hard, especially as a
teacher, that many nights each week, I go home totally exhausted! The
monies that have been held from my paycheck are MINE. I do not feel
like any of it should be ``reduced'' by any formula! I have EARNED it.
Even the portion that was paid by employers is mine. Thus the WEP is a
joke and should be repealed! This certainly does not amount to a
``windfall!''
Now, I have the most wonderful husband God allowed. We have been
married over 31 years. We started with absolutely nothing and we have
both worked long and hard to make a comfortable living and provide for
ourselves in retirement. If, God forbid, something should happen to
him, I feel I should be able to collect, in addition to my own TRS, his
full SS benefits, without reduction. A wife who chose to never work and
contribute to the system would be entitled to the same. To cut my
portion of his benefits at a time when I would need them most would be
simple discrimination just because I chose to work and be a productive
member of our economic system.
I appreciate your help in making right a wrong that has been in
place far too long. It never should have passed in the first place. I
realize this will cost millions of dollars. Alternative sources of
funding will have to be found. Start by eliminating SS payments to
felons/criminals, non-U.S. citizens, and I am sorry, but, even those
who have never contributed to SS (past the age of WWII veteran wives).
Most importantly, make the government pay back to the SS fund monies
that have been ``borrowed'' from it over the years to fund other
programs.
Again, thank you for your service to our great nation and for your
help in this very personal matter.

Rockton, Illinois 61072
April 29, 2003

Representative E. Clay Shaw, Jr., Chair
Subcommittee on Social Security of
House Ways and Means Committee
Rayburn House Office Building, Room B-316
Washington, D.C. 20525-6100

Re: Call to Action--Social Security Office/Windfall--H.R. 349

Dear Representative Shaw:

I am writing to you in support of passage of H.R. 594 that amends
the Social Security Act that repeal the Government Pension Offset and
Windfall Elimination Provisions. This issue has been a priority for our
member for four years now. We are very pleased that 12 Illinois
Congressmen currently support passage of this bill. We continue to work
with the remaining Illinois Congressmen about sponsorship. We have
bipartisan support for this issue.
We believe the offset and windfall penalties are a form of work
discrimination. First of all, many of our members have public and
private sector work experiences. They plan on receiving partial
retirement benefits from both work sectors. These folks that actually
worked and paid social security taxes and made contributions to Social
Security the public system they are members of. Second, many members
work on a nine-month contract at an institution of higher education and
thus have summers available for other employment. Many hold a summer
job within the private sector. They too, pay social security taxes on
wages earned. Third, many members have to hold a part-time job to make
all ends meet. They also pay Social Security taxes on wages earned. In
short, these members have been employed 30-40 years, contributed to
retirement funds and then are penalized for hard work.
We believe this in unfair and discriminatory These penalties are
directed toward windows, lower income men and women that have worked
hard to build the educational system in Illinois.
SUAA represents more than 120,000 members of the State Universities
Retirement System, a public retirement system for 12 state universities
and 50 community colleges in Illinois.

Sincerely,
Irene Christophersen

Huntington Beach, California 92646
May 15, 2003

Mr. Chairman, Members of the Subcommittee:

My name is Judith M. Clark. I'm a 65 yr. old retired Library
Director, having worked in the public sector--both County and City--for
18 years. I was a stay-at-home mom before my career began and a stay-
at-home Long and Short-Term Caregiver after I was ``retired'' at age
48, due to politics on my Library Board.
My husband (Lt. Col. USMC, retired) was a corporate pilot at the
time and earned considerably more than I, even though I was a
Department Head in a wealthy, but fiscally conservative city. The fact
that there were only 10 peer positions as a Library Director in Orange
County severely limited my career options.
I first learned about the GPO while researching information for our
retirement plans. I contacted the Retired Officers Assoc. and filled
out a form that asked if I received a government pension. I wondered
what my retirement pension had to do with receiving survivor benefits
as a military widow. Well, I soon learned. Not only did I learn about
the Social Security Offset of the Survivor Benefit Plan for military
widows, I learned about the GPO and WEP offsets for government
employees. Either offset obviously made a huge dent in our future
retirement plans and income.
When my husband paid into Social Security all his working life, he
did it not only for himself, but also for me. He expected benefits not
only for himself, but also for me. His benefits are my benefits. He
continues to pay a monthly annuity--until he's paid in 30 yrs.--for me
to receive 55% of his military retirement pay. He has since we married
in 1981. Not only do I receive nothing in Social Security benefits as a
spouse, I will receive reduced benefits (35%) as a military widow and
as a plain, white, vanilla widow, unless the law is changed. Since then
(finding out about the GPO/WEP), I have become an activist in support
of women, working to repeal legislation harmful to our financial well-
being.
As you, Mr. Chairman, state in your Social Security Guarantee Plus
Plan--Increasing Protection for Today's Women--``Several features of
the Social Security program are important to women: lifetime benefits,
inflation protection, a progressive benefit formula. . . .'' But, when
Social Security `lifetime benefits' are denied to us as spouses or
widows due to the GPO/WEP, what financial security do we have in
retirement? When those benefits that we so heavily depend on are taken
away, many women are thrust into poverty or near-poverty. I have heard
many stories from women who have lost some to all of their Social
Security benefits, up to over $1,000.00/month! ``In Dec. 2001, 72% of
persons affected by the GPO were women.'' (Official web-site of Cong.
E. Clay Shaw, Jr.--Social Security Information).
I became eligible to receive my first retirement check from CalPERS
in September 1987. In May 2000, I received an increase of $8.07/month
or $96.84/year--less than $100.00/year after twelve (12) years of
receiving a small pension!! This is `inflation protection' on a
government pension from the largest state pension fund in the U.S. I
believe this example illustrates the urgent need to repeal the GPO/WEP,
which will benefit women the most.
Chairman Shaw, I think your bill, H.R. 75 has excellent ideas that
will benefit women. I will urge my Congressman to support your bill
when it's time for a vote. The one exception is in reference to
government employees and the GPO. Although it is an improvement over
what we now have, the cleanest, fairest, most honorable solution is
simply to repeal it. The GPO/WEP issue is non-partisan. It goes beyond
politics. It affects voters of all parties. It is not a ``structural''
part of Social Security and, therefore, can be voted on separately--
like your bill. It is a situation similar to H.R. 5, the ``Earnings
Limitation Act,'' a poorly written public policy and injurious law that
was repealed on April 7, 2000. It received complete and total support
from Congress. If poorly conceived laws, with negative unintended
consequences, have been repealed by Congress before, it can be done
again. It's never too late to make amends. I urge you and the entire
Subcommittee on Social Security to support H.R. 594, ``The Social
Security Fairness Act of 2003.'' I think the title says it all.

Sincerely,
Judith M. Clark

Statement of Robert Gray, Colorado Public Employees' Retirement
Association, Denver, Colorado
Chairman Shaw, Ranking Member Matsui, members of the subcommittee,
I am Robert Gray, Director of Government Relations for the Colorado
Public Employees' Retirement Association (PERA). PERA covers 175,000
active state, school, local government, and judicial employees in
Colorado. PERA also pays monthly lifetime benefits to 60,000 retirees
and survivor beneficiaries.
I would like to thank you for having the hearing on May 1 and
receiving written testimony on the important subject of mandatory
coverage under Social Security for state and local workers. PERA
members, benefit recipients and the Board of Trustees of PERA have
worked hard for many years to maintain the ability to provide
retirement benefits pursuant to the state law governing PERA, free from
any mandate to cover employees under Social Security. The Colorado
General Assembly has stated several times that it also believes that
its employees are already well-served by existing retirement plans that
do not include Social Security.
Requiring public employees to be covered by Social Security would
increase costs to taxpayers and employees. Even if applied only to new
hires, as proposed, the cost would come after Colorado state government
has made severe cuts to balance its budget. State employees will
receive no salary survey increases in the coming budget year, and some
will be laid off or furloughed. If Social Security coverage were
mandated, total contributions for retirement would have to be increased
by about 5 percent of pay in order to provide benefits from a Social
Security and supplemental retirement package that would equal the
benefits that PERA currently provides. This cost could be split between
employees and their employers, but neither is in a position to pay it.
The alternative is to maintain current contribution levels, even
though that would provide a much smaller retirement benefit. This would
be strongly opposed by employees and employers, who see no benefit to
mandatory Social Security compared to the current PERA plan.
Social Security needs a longer-term solution than mandatory
coverage. The absence of mandatory coverage has not caused the long-
term financial problems that face Social Security. Federal employees
hired after 1983 were mandatorily covered by Social Security, but that
has not solved the long-term problem. Coverage of new hire state,
school and local workers would increase revenues to the Social Security
fund for several years, but those workers would become entitled to
Social Security benefits beginning around 2020.
PERA provides very comprehensive benefits as a substitute for
Social Security. PERA members have excellent survivor benefit and
disability coverage. Retirement benefits are paid for the life of the
retiree and his or her designated cobeneficiary, and the benefits have
a guaranteed annual increase. PERA benefits have been structured to
meet the needs of employees in a variety of circumstances. A career
employee who retires at age 62 with 30 years of service receives 75
percent of his highest 3-year average salary. Vesting occurs at five
years of service, but employees who leave with as little as one month
of service may leave their account in PERA until age 65 and begin
receiving a lifetime benefit. PERA benefit recipients may obtain group
health care coverage through a program administered by PERA.
Congress confirmed in 1990 that coverage outside Social Security
was appropriate. The OBRA law of 1990 required that all state, school
and local workers be covered under a public plan or Social Security.
Most state and local employees in Colorado, and k-12 employees, are
covered under PERA, The Denver Public Schools Retirement System, The
Fire and Police Pension Association, or other pensions in lieu of
Social Security.
State and local pensions are portable. PERA, like most public
plans, is a defined benefit plan that allows members to purchase credit
for in-state or out-of-state public service. To the extent permitted by
federal law, PERA allows members to purchase credit for prior
employment in the private sector as well, as long as such employment is
not vested in a company retirement plan. Employees who leave school,
state, or local government can rollover their account to a tax-deferred
retirement plan. The amount rolled over includes their own
contributions, 7 percent annual interest, plus a 50% or 100% match.
State and local pensions are soundly funded. At the end of 2000
many public retirement systems, including PERA, were overfunded for the
first time in their history. The sharp decline in stock prices has
caused PERA to have an unfunded liability once again. As of December
31, 2002, the actuarial value of PERA assets equals 88 percent of
actuarial accrued liabilities. This poses no challenge over the short-
term, since annual benefits paid equal about 7 percent of total assets,
and members and employers continue to contribute to the system.
Contribution rates include an amount to amortize liabilities that have
not been fully funded, and over the longer-term, contribution rates may
have to increase to fully accomplish this. In spite of the market's
decline and the negative impact on PERA, many local governments in
Colorado are exploring joining PERA so that their employees can have
the guaranteed, comprehensive benefits that thousands of current PERA
members have. The sound funding of PERA and its good long-term
investment returns are an attraction.
Mandating Social Security coverage would make it more challenging
for PERA to fulfill its existing benefit promises. The unfunded
liabilities of PERA would take longer to amortize if the payroll
covered by PERA contributions is decreased. Requiring Social Security
wouldn't reduce PERA's accrued benefit obligations, but contributions
paid to PERA would be reduced as a result of mandatory Social Security.
Also, the investment of PERA's assets may have to be altered and made
more conservative than it would otherwise be, resulting in a lower
investment return.
In conclusion, PERA does not believe Social Security coverage
should be required for state and local workers. The current retirement
system has worked well in the eyes of employees and employers.
Mandatory Social Security would challenge the soundness of the current
plan without benefiting employees, and in the long run it would not
benefit Social Security either.
Thank you for the opportunity to submit this testimony. I would be
glad to provide further information or answer any questions the
subcommittee members or staff may have.

Statement of Jan Conkrite, Woosung, Illinois
It has come to my attention that if a person retires and has paid
into Social Security for many years and has enough quarters that their
social security pension will be reduced in the amount that they will
receive as a pension through the state of Illinois. I also understand
that only certain states in our nation have this provision. It is both
unfair and unequal to have this law enacted in some states and not all
states.
I also understand that not all pension funds have their pensions
penalized even if they pay into Social Security. No one is going to get
rich on the government by collecting from Social Security and their
pension. We had a teacher in our district that was able to collect
Social Security from her husband because he had died many years ago and
she was at an age where she could collect Social Security. When she
retired from teaching she could no longer collect her husband's Social
Security. This was approximately $10,000 less a year that she had to
live on after she retired.
If a husband dies where does all the money go that he paid into
Social Security? It should go to his wife or vice versa. As the system
is set up now, if a person works as a public servant and works at a
much lower salary than if they had worked in industry, they are
penalized by not being able to collect their pension that they paid
into, plus Social Security which they also paid into.
When students are in college deciding on their career for life, one
thing they look at is their benefits. If they have the choice of
working as a chemist and starting at a salary of 40 to 50 thousand
dollars or a teacher and starting at 25 thousand dollars they need to
look beyond the salary. The people that could be chemists but opt for
teaching because they love kids and want to share their knowledge are
the type of people that we want in education. If that same person sees
that they will be starting their salary at half of what they would be
starting in industry, plus their retirement will be penalized because
they are a public servant might just get mad and say, ``No way!'' Our
country is built on equality and fairness to all, and this law is not
fair to educators and public servants.
Please use your influence to change this law, so that educators and
public servants will be able to retire and collect all the moneys that
they are entitled to collect.
Thank you for representing the people of our country.

Statement of John Corradetti, Joliet, Illinois
I think it is ludicrous that I should be penalized on my Soc. Sec.
because I was a school teacher in the state of Illinois and receive a
pension that I have paid dearly for. Please eliminate both offsets.

Statement of Ellen Cotten, Carbondale, Illinois
Hi, I am one of the many who will be affected by the offset. I am
eligible for social security from an ex-husband and am STILL affected
when I retire from Southern Illinois University Carbondale.
NO one has ever been able to explain the reasoning in this
circumstance. I cannot understand how/why I should be affected by
something I am entitled to receive.
Hoping something will change in this ruling soon.

Statement of Janice A. David, Washington, Illinois
This letter is in support of H.R. 594/349 that will amend the
Social Security Act and repeal the Government Pension Offset and
Windfall Elimination Provisions.
These penalties are a form of work discrimination. The penalties
seriously affect widows and lower income men and women. I personally
know two women (widows) who cannot retire because the day they draw
their first pension check they will lose Social Security benefits, and
the pension alone will not be enough to cover their living expenses.
Please do what you can to assure that this inequity will be
resolved. Thank you for your help in securing the passage of H.R. 349/
594.

Statement of Catherine Davis, San Anselmo, California
SOCIAL SECURITY FIASCO
I retired from the County of Marin, California in 1988. I have work
for 40 years.
My Social Security was from employment prior to working for the
County, except for seven years when the County no longer contributed to
Social Security.
My Social Security was reduced from $360.00 to $160.00 because of
my County Pension.
My husband died on January 22, 1998 and when I applied for his
Social Security benefits, I was told again I was not eligible because
of my County Pension which is $1,080.00 per month.
I have friends who receive Social Security benefits because of
their deceased husbands. One receives $1,000.00 per month and the other
receives $850.00 per month; neither of whom has ever contributed to
Social Security.
My husband and I have worked hard all our lives and tried to secure
our old age without financial distress.
I know you have been pilfering from the Social Security fund for
years; do you not consider yourselves thieves?
The straw the broke the camels back was when I discovered that my
husband's death policy was taxable.
Now at age 70 I feel I'm being penalized. Is it any wonder we
become cynical about our Representatives in Washington.
May 1, 2003 UPDATE
My situation now is more serious. Due to the stock market fiasco,
my IRA retirement is 75% less then it was in 2001. This was to pay for
any long term care I might need. I now must pay $280.00 a month for
Long Term Care Insurance.

Statement of Paul R. Doose, Ph.D., Santa Monica, California
Please accept my testimony for the hearing before the Subcommittee
on Social Security, May 1, 2003.
I am testifying on behalf of myself, Dr. Paul R. Doose, 625 Pier
Avenue, #1, Santa Monica, CA 90405. My employer is the Los Angeles
Community College District, 770 Wilshire Blvd., Los Angeles, CA 90017.
I am 58 years old. When I graduated from UCLA with my Ph.D. I went
to work for Hughes Aircraft Company. At the time Hughes required 15
years of service to be vested in their retirement plan. I received two
patents for which I was paid a $500 bonus, each, but receive none of
the royalties. I left the company after 8\1/2\ years and have no
retirement benefits from the service other than the credit earned
towards Social Security.
I then worked 7\1/2\ years for Windridge, Inc., a wind energy
development company. It was a small company struggling for existence.
Although the wind farm I designed and helped supervise the construction
of is still generating electricity, I gained no retirement benefits
from the service other than the credit earned towards Social Security.
Next, I worked for Southern California Edison Company. Edison
required 5 years of service to be vested in their retirement plan. The
first step in California's shift to energy deregulation was to
eliminate public funded research at public utilities. I was working in
Edison's Environmental Research Group and with only 4\1/2\ years of
service was ``severed'' from the company without any retirement
benefits for the service other than the credit earned towards Social
Security.
For several years worked part time as an instructor for the Los
Angeles Community College District, earning some partial retirement
credit and 3 years ago was hired full time. I have met the 5 years
service to be vested in California's State Teachers Retirement System
(STRS). I currently have 6.6 years of service credit.
If I were to retire at age 66 my earned Social Security benefit is
estimated to be $1,247 a month and my STRS benefit is estimated to be
$2,176 a month. But the dollar for dollar reduction of the Government
Pension Offset would eliminate my Social Security benefit. I have no
savings or retirement investment plan so my total annual retirement
income would be $26,112 per year (just the STRS) in the year 2011. My
college district also pays half of the cost of our health benefit plan
in retirement. This sounds good, but if health care costs go up by only
5% per year in 2011 my half will be $6,500 per year. By then the
property tax on my home will be roughly $8,000 per year. That would
leave only $11,612 for all other expenses for a whole year. Although
the Social Security benefit is not much, to have $26,576 left for a
years expenses might be doable.
Please do away with the Government Pension Offset. It is so unfair.
It would have me receive zero retirement for over 20 years of hard work
and allow the Social Security System to keep all of the contributions
made on my behalf while I get zero. If this does not change I will not
be able to retire until my late 70's.

Statement of Johnine Doutt, Houston, Texas
Thank you for giving me this opportunity to write to you.
Thank you for this opportunity to comment on the proposed
legislation to remove the grossly unfair GPO/WEP provisions of Social
Security.
I have been a counselor in an inner-city school of Houston ISD for
the last thirteen (13) years. I am also the wife of a Korean and
Vietnam veteran, a First Sergeant in the U.S. Army (now retired from
the Army and working for the Aldine ISD (adjacent to Houston ISD) as a
JROTC Instructor).
Although I have worked in this district under the Texas Teacher
Retirement System, I have worked before that and for seventeen years
under the Social Security system.
I hope to retire sometime within the next two years but find that
my expectations of even reasonably comfortable retirement harshly to be
modified because of the GPO/WEP rules that single out teachers,
firemen, policemen and other public servants (and who, before such
service, have paid handsomely and for years into Social Security) pay
dearly for economies in the Social Security System.
In my case, my Social Security benefits, which would have given me
some $680 a month for my seventeen (17) years of SS coverage, will,
because of my Texas Teacher Retirement (TRS) System involvement and the
conditions prescribed by the Windfall Elimination Provision, be reduced
to about $380.
Further, in the event my husband predeceases me, I will be allowed
virtually nothing of his social security benefits, although his own
benefits during his life will certainly have been an important part of
our common budget for expenses that will not significantly lessen
because of his death. (In addition to my loss of spousal benefit, my
husband's military retirement ($1,600/mo) will terminate with his
death.) On the other hand--and incomprehensibly--a ``regular'' pension
plan from an employer such as a bank reduces SS benefits not at all,
and a SS worker whose TRS spouse dies, can collect both the survivor
benefits set up from a TRS pension and their own SS with no penalty!
Quite beyond the financial inequities that make the present GPO and
WEP conditions unacceptable in the extreme, the message they deliver to
public servants rings out depressingly loud and clear: ``You alone will
pay for the SS economies provided by the GPO and WEP; your public
service as teachers, firemen, policemen is of negligible value to our
society.'' And that this message should have been announced by a
Congress that has pledged to serve the public good (but whose members,
in cavalier dismissal of that, have then so handsomely secured their
own retirement and their spouses' welfare after their death) is
depressing beyond the screaming of it; it is strikingly reminiscent of
the recent shameful conduct of Enron and American Airlines executives,
who so generously and outrageously took care of themselves at the
expense of those who depended on them for their livelihood.
As a person serving in our schools, as the wife of a military man
who has served his country in war and in peace for twenty-three (23)
years (and whom I and my children have supported with many, many
changes of residence and sacrifices of companionship), I protest this
gross inequity which so promises to make our hopes of a comfortable,
well-deserved retirement a virtual impossibility.
The GPO and WEP are simply and profoundly wrong. They must removed
as conditions for anyone's retirement. I urge that you act to effect
that removal.

Statement of Hugh E. Drisko, Orrington, Maine
Thank you for giving me the opportunity to write to you.
My name is Hugh Drisko and I am a retired teacher of 28 years and
the president of Drisko Farms, a small blueberry farming business,
which I have owned for 30 years.
I live in Orrington, Maine. I am 60 years old. I have a wife who
has been teaching in public schools for 33 years.
I am writing today in support of the need for complete repeal of
the Government Pension Offset (GPO) and the Windfall Elimination
Provision (WEP).
As a self-employed farmer, I have found the self-employment tax to
be particularly oppressive. I have paid approximately 15% of my self-
employment net income to the social security system in addition to the
normal income taxes. Because I receive a small pension from the Maine
Retirement System, my Social Security benefits will be reduced by
roughly two-thirds.
It seems that I and many other public employees are being forced to
subsidize the Social Security System with little hope of living long
enough to recoup my contributions, not to mention any increase in value
over time.
The GPO and WEP penalize that segment of the population who
contributes substantially to society, yet is generally underpaid and is
in greatest need of additional retirement funds for themselves and
their spouses.
Any system that discriminates against a small segment of the
population based on work experience and age is broken, unfair and must
be fixed.
After all, are Congressional pensions similarly affected?
Thank you.

Statement of David C. Emery, York, Maine
Thank you for giving me this opportunity to write to you.
My name is David C. Emery and my job was eliminated in November
2001. As I as an Engineering Manager for a printing press manufacturer
it has become very difficult to find a job in the engineering community
within our local area. Thus, I started to review the possibilities of
entering the teaching profession and wanted to give back to the young
children and adults the knowledge and practical experiences that I have
gained from my professional experience.
However, it was brought to my attention that if I did pursue the
above change in my career path I would be losing all my Social Security
benefits. Therefore, I have since continued to look for an other job
opportunities that will not penalize my Social Security Benefits.
Additionally, I can also relay the same message to you about my
married daughter who has been working as an accountant in Portland,
Maine. She also wanted to enter into the educational field so that she
would have the summers off in order to spend the time with her daughter
when school is out as well as all school vacations. She also has
elected to not enter into the educational field as a teacher duo to the
loss of her Social Security benefits.
With the average age of teachers increasing and then retiring, what
does the future hold for out children entering the public schools when
no one will want to enter the educational field due to the loss of
there Social Security benefits. This issues has to be addressed and
corrected ASAP for the future of our children and future leaders of the
country.

Statement of Ferol Empen, Polo, Illinois
As a teacher who will soon be retiring, but not with full
retirement benefits because I did not start my teaching career until
the age of 38, I will only have 24 years of teaching in. I am now 63
and would like to think about retirement soon will not have a very high
retirement pension as I have not put in the 35 years for full Illinois
teaching pension benefits. Therefore, it would greatly help if I could
also be able to collect on my social security. It does not seem fair
that Illinois residents are not able to collect social security if they
have the Illinois teacher pension. I would greatly appreciate it if the
laws could be changed so I could collect what I have put in social
security before my teaching career. As I am divorced and the sole
supporter of myself, I would welcome the additional social security
benefits and would ask that you support legislation so that Illinois
teachers could also receive them upon retirement age. This would
greatly help my income so I could retire from teaching and just enjoy
part time work with social security benefits.

Joliet, Illinois 60435
April 29, 2003

The Honorable E. Clay Shaw, Jr., Chairman
Subcommittee on Social Security of U.S. House
Ways and Means Committee
Room B-316, Rayburn Bldg.,
Washington, D.C. 20515-6100

Dear Representative Shaw:

I am writing to express concerns and opinions about the existing
WEP and GPO Social Security Offsets, so as to provide you with
information for the scheduled May 1, 2003 hearing on the Offsets.

My Personal Experience with the WEP:

I worked as a Medical Technologist, MT (ASCP), full-time for ten
years, and part-time for a few years. During that time, I earned my 40
Social Security quarters. There was a teacher shortage, and I had a
desire to teach, so I went back to college to complete courses that
would qualify me for an Illinois teacher's certificate for secondary
schools. Later I earned a Master's degree in Education-Guidance and
Counseling. I both taught at and coordinated a local hospital school of
medical technology prior to taking a teaching position in the Joliet
Township High School system, and later, a Counseling position at Joliet
Jr. College. I retired from Joliet Jr. College as Dean of Counseling
and Advising almost three years ago. I earned a state pension for my
high school and college employment. Had I not stayed 30 years, my state
pension would have been reduced. In this day and age, with schools
encouraging early retirement, it will be less likely that second-career
teachers and other school employees, who had prior jobs in which they
had paid into Social Security, will work 30 years in education.
I learned about the offsets back in the 80's, and wrote to then
Senator Paul Simon about the issue. The President's Commission on
Social Security, with chairman, Dr. Alan Greenspan, appointed by
President Reagan, apparently thought that those on State pensions, who
also qualified for Social Security benefits were double-dipping, and
should be penalized.
I lost around 60% of my earned Social Security benefits as a result
of application of the WEP Offset. I still do not understand why I was
singled out for such a cut, and feel I was penalized for entering the
teaching profession. Today, we have another teacher shortage. How many
will be willing to leave other careers or to begin a teaching career
when they learn their earned Social Security benefits from other
positions will be drastically cut once they begin receiving a teacher's
pension in one of the states affected by the Offsets? The WEP seems to
especially penalize those who worked 15-20 years in the private sector
and 15-20 years in the public sector.

Experience of Members of State (Illinois) Universities Annuitants
Association:

After retiring, I became chair of the Ad Hoc Committee on Social
Security Offset/Equity for the State (Illinois) Universities Annuitants
Association, (SUAA), which represents more than 120,000 members of the
State Universities Retirement System, a public retirement system for
Illinois' 50 public community colleges and 12 state universities. It
didn't take me long to form a committee of those who had lost their own
and/or their spouses earned Social Security benefits. Many were widows
who had retired from a variety of positions in Illinois public
colleges, from cafeteria worker to secretary to teacher, and had
counted on obtaining spousal survivor Social Security benefits, only to
be shocked to learn that because of the GPO they would receive no
survivor Social Security benefits. Yet, in order to have Medicare
coverage, they were expected to pay the Medicare B monthly supplement.
A few of these women, who are in their 70's and are fortunate to be in
good health are still working or have returned to work because of the
Offset cuts. Others are trying to make ends meet on small state
pensions.
Social Security has a tendency to inform benefit recipients of
Offset cuts way after the fact. Often, the Social Security letter
indicating an overpayment and need to reimburse Social Security is the
retiree's first knowledge of the offsets. Some of our members received
this letter nearly a year after their Social Security benefits had
begun and been spent. This Social Security letter neither presents a
full explanation of the Offsets nor the calculation used in determining
the exact amount of the cut. One of our SUAA members appealed her case,
but lost, and had to reimburse Social Security. It is my opinion that
these procedures are not good business practices, and lack a customer
service component. These women, as well as thousands of others, have
suffered hardship as a result of such practices.
Believing that the Offsets are discriminatory and harmful at best,
SUAA, along with some thirty or more other retiree groups is supporting
H.R. 594 and S. 349 for total elimination of the WEP and GPO Offsets.
We have been trying to make prospective retirees aware of the Offsets,
for more realistic retirement planning purposes, and thus, to relieve
the shock most face now when experiencing Offset cuts in their earned
Social Security benefits. SUAA members have been writing their stories
of how they were affected by the Offsets, and sending them to their
Congressional leaders.
It is my hope that the Offsets issue and Social Security practices
will be seriously reviewed, and changes made to help, not hinder
retirees of public positions. Closing the GPO loophole is not the only
answer to the Offsets problem.

Sincerely yours,
Carolyn T. Engers

Statement of Diane C. Evans, Katy, Texas
This is my 11th year teaching in Texas. I worked for 3 years before
starting college. I went to college for 3 years and stopped, intending
to work about 2 years to get out of debt. A couple of years working in
industry stretched into 11 years before I returned to University of
Houston to finish my degree in Business and also get certified to
teach. I started my teaching career at age 42. It was my intension to
teach for 20 years and then retire.
I paid into social security for 14 years before becoming a Texas
teacher. My husband worked for Monsanto for 30 years before retiring
from there. He went to night school for 12 years to earn his degree
while working full time at Monsanto. Then he worked another 7 years at
Clayton Library in Houston. As you can see, between myself and my
husband, we have paid social security taxes for an accumulation of 51
years.
Teachers work hard, long hours. I arrive at my school every morning
at 6:30 and sometimes stay as late as 5:30--preparing, grading,
tutoring. It doesn't stop there, because many times I continue grading
and preparing at night and on weekends. I am a computer applications
teacher and spend summers updating my knowledge by working through new
programs and texts and sometimes will even take a college class to help
learn new programs I would like to use in my classes. I teach Microsoft
Word, Excel, Access, PowerPoint and Adobe's Photoshop and InDesign and
Macromedia's Flash and Dreamweaver.
I say these things to try to help you to understand that teachers
are not slouches and we do not want anything that we do not fully
deserve. I love teaching. It is one of the most satisfying professions
in the world and I can not imagine myself doing anything else. But, I
am scared--here is why. . . .
My husband had open heart surgery 14 years ago which made him
uninsurable. Upon his death I will receive a small insurance settlement
from Monsanto, enough for burial and funeral fees, leaving little else.
I have always saved money, putting into Mutual Funds. The stock market
has not been kind and my proceeds there are disappointing. The
projection is bleak. I will retire with a take-home pension of about
$1,000 a month. I will have to sell my home even if I am able to pay it
off, because I won't be able to afford the upkeep and maintenance. All
of this, because I chose to be a teacher.
I wonder what my future would have been if I had not gone back to
school, finished my college degree, and become a teacher. If I would
have continued working in industry, I would have had a pension,
savings, and been eligible for social security. I am beginning to
regret becoming a teacher because every time I look, there is a
politician trying to pass a bill taking away what little security I
have. Why?? Do you think we don't deserve a decent life after we
retire? Am I not working hard enough to suit you? I would like for
someone to explain to me what I have done wrong, because, at the time I
was preparing to become a teacher, I thought I was doing a good thing.
Why am I being penalized for choosing to become a teacher?

Statement of Mike Ferguson, Carrollton, Texas
I worked in the private sector long enough to amass the necessary
quarters to qualify for Social Security. Since that time I decided to
go into the public sector as a teacher. I am now being penalized for
this altruistic move, because my social security has been taken away
from due to my Texas Teachers Retirement pension. Even though I paid
all that money into Social Security I will get none of it back.
Additionally, since I entered the teaching field late, my TRS pension
is significantly reduced. As you know, America is experiencing a
significant teacher shortage. The inequities of the Windfall
Elimination Provision is one major reason more people have to choose
not to enter the teaching field.

Statement of Rodney J. Fink, Macomb, Illinois
I am pleased to know that a hearing is underway with the
Subcommittee of Social Security on Ways and Means regarding the
Government Pension Offset and Windfall Profits Provisions. I am writing
to urge your support of passage of H.R. 594 that amends the Social
Security Act and repeals these provisions.
I believe that the offset and windfall penalties are a form of work
discrimination. Government pension offset is very discriminatory to
spouses who may have entered the work force after raising a family who
thus had reduced time to create a pension. Such examples are of a
divorcee who is entitled to a portion of the social security pension
due her husband (after his death) which may be partially or totally
eliminated due to the offset.
In my own case, I held several jobs from which I paid into social
security, expecting this to be a part of my retirement. To my surprise
when I retired, my annual pension from social security is reduced by
over $3,200.00 each year. I believe this to be discriminatory and urge
your support of the legislation to correct this injustice. In addition,
should I die before my spouse, my pension as a result of military
service will likewise be offset for my spouse--another level of
discrimination to my spouse.
I am pleased to know that 12 Illinois Congressmen currently support
passage of this bill and am also pleased that the issue has bipartisan
support.
Your consideration is appreciated.

Statement of Christine Fitzgerald, Houston, Texas
Thank you for giving me this opportunity to write to you concerning
the Social Security issues currently before you. I am a veteran teacher
of 27 years. I have dedicated the majority of my career in public
service to teaching in schools with at-risk populations and have faced
a variety of challenges.
My career choice and marital status have presented their own
challenges; in Houston in 1975, a beginning teacher received a salary
of less than $9,000 a year. This meant that if I wanted a winter coat,
a trip to see family, a car or any other major purchase, I had to take
additional jobs. For all the early years of my career I worked nights,
weekends and summers to meet these basic expenses.
As a single woman on a teacher's salary, I have had to be frugal.
It has been imperative that I plan for my retirement. I was fortunate
enough to purchase a small home and I want to be able to stay there
after I retire. Any retiree wants to relax or travel rather than take
another job. My retirement will be modest by some standards, but my
expectations are not extravagant.
Through my additional work, I have accrued enough quarters to draw
a small amount of Social Security income when I retire in a few years,
but the Social Security offset will penalize these earnings. I never
fully realized what this meant until my own mother retired from a
career in education several years ago.
My late mother spent many years working in the private sector and
earned many quarters of credit with Social Security. She stayed home to
raise us for almost 20 years. When she returned to the working world
after we were grown and she was divorced, she returned to a career
working for the public schools. Since mom entered the teacher
retirement system so late in her career, she could not begin to have
enough money for a comfortable retirement without working well into her
70's. Imagine her horror when she was told that she would receive far
less due to the Social Security offset. She worked hard for every penny
of both funds and foresaw a monthly income which would make every month
a struggle. Just as she was set to retire, she had a catastrophic
stroke and I had to find a way to pay for a care facility and medicine
as well as her other needs. Medicare funds were available because she
had opted for the offset to ensure this. In the alternative scenario,
she would qualify for Medicaid only after her modest savings were spent
down.
Many of our newest recruits to education are people who, like my
mother, have many year of Social Security income saved. In times when
there are critical teacher shortages and we are trying to attract
seasoned professionals with a diversity of experience to a career in
the classroom we must make this choice attractive. How attractive is a
second career in education, which forfeits these hard-earned funds?
In the next few years, many baby boom educators will retire. We do
not feel that we are asking for funds that we have not earned. Our
retirement income, modest at best, along with Social Security will
simply make it possible for us to keep up with rising costs without
penalizing us for many years of additional work. We are proud of our
years of service and want to remain self-sufficient. It is in the
interest of Congress to help us in that goal. Please repeal the laws
governing the GPO and WEP and consider real reform for Social Security.

Statement of Mary Jane Folkerth, Springfield, Ohio
I have just received word that Rep. Clay Shaw, Chairman of Ways and
Means is holding hearings regarding the Offset Provision that so many
of us have gotten caught with. Please let Rep. Clay Shaw know that much
attention is being given to this legislation and many retirees feel
strongly that they have been dealt with unfairly and are relying of him
and others to correct a wrong. . . .
As a retiree from Clark State Community College in Springfield,
Ohio where I paid for something that is being withheld, I ask
Representative Shaw's support.
Thank you for forwarding my reply to the proper channels.

Statement of Donald J. Foster, Ironwood, Michigan
As a retired Illinois educator, currently working in Michigan, I
hereby respectfully submit these four (4) pages in support of the
Social Security Fairness Act of 2003, which seeks to repeal the
Government Pension Offset and the Windfall Elimination Provision of the
Social Security Act:

I. TESTIMONY OF PERSONAL INJUSTICE BECAUSE OF GPO/WEP

Following graduation from high school, I farmed for several years
with my father in northern Illinois. After serving in the U.S. Army for
two years, I then worked at several jobs to put myself through college
and became a teacher. By the time I left Illinois in 1995, I had earned
over 40 quarters of Social Security credit--which is the required
amount of qualifying-credits for my age group.
I plan to retire from Michigan in 2005 and will have earned an
additional 40 quarters of Social Security credit, based upon full-time
employment--for a total of over 80 quarters. During these last 10 years
of employment I will have paid more than $70,000 into Social Security
($7,000+ x 10 years).
As I approach retirement, I feel betrayed. While my retirement
situation won't be a matter of ``poverty'' without the full Social
Security benefits; it is a matter of ``injustice'' and broken promises
from my government. I have worked in occupations that benefited my
country: farming, the military, and education. While paying Social
Security taxes throughout my working years, I never suspected that the
S.S. credits I earned would be treated differently than the credits of
the people with whom I worked side-by-side while earning those credits.
In addition, I thought I was also providing for my wife; however,
because of the GPO/WEP provisions, she will not receive the full
spousal-benefits that other workers are allowed to provide their
spouses by way of their earned Social Security credit.
HOW CAN THIS BE FAIR?
I am angry and disappointed about this unfair treatment. I ask
Members of this Congress to put an end to the discriminatory GPO/WEP
provisions of the Social Security Act.
ELIMINATE THE GPO/WEP PROVISION OF THE SOCIAL SECURITY ACT
II. STATEMENT OF THE ISSUE

A. GPO/WEP is discriminatory because it denies equal treatment of
Social Security credits to a select group of U.S. citizens; this
discrimination involves:

1. citizens who are public-sector workers; of these,
2. citizens who are public-sector workers in certain 15 states; of
these,
3. citizens who are public-sector workers in certain 15 states;
and who are not Federal legislators.

B. The underlying rationale for GPO/WEP is flawed because it
incorrectly presupposes that all Social Security credits earned by the
above-defined citizens are credits based entirely on part-time/
supplemental work; and would, thus, grant these public-sector workers
an advantage because of the Social Security formula that gives lower-
paid workers a higher percentage return than their more highly-
compensated counterparts.
Public-sector employees--including first-responders--who relocate
to a GPO/WEP state; or people who have worked in both the private and
public sectors; or military personnel who become teachers in a GPO/WEP
state are just a few examples of full-time workers who unfairly lose
their full Social Security benefits because of the flawed assumptions
of the GPO/WEP provisions.

III. EXAMPLE OF HOW GPO/WEP WORK

If a senior citizen receives a monthly public-sector pension of
$600 and qualifies for a Social Security benefit before Offset of $450,
two-thirds (2/3) of the $600 (or $400) is subtracted from the Social
Security $450--resulting in a monthly Social Security benefit of $50 .
. . instead of $450. (Spousal-benefits are similarly affected, also.)
Yet, the above senior citizen has paid the same Social Security
taxes for the required number of years--exactly as a private-sector
citizen has done.
HOW CAN THIS BE FAIR?
IV. LIST OF STATES AFFECTED BY GPO/WEP (15 states = 30% of U.S.)

Alaska Connecticut LouisiaMassachusetts Ohio
California Georgia Kentucky Missouri Rhode Island
Colorado Illinois Maine Nevada Texas

V. ADDITIONAL COMMENTS

WHAT IF 9-11 HAD HAPPENED IN A GPO/WEP STATE? The
benefits of the surviving spouses and dependents of many of those
killed would have been severely affected--not only the people working
in the damaged buildings; but also the first-responders who came to
their rescue, some of whom lost their own lives attempting to help
others.

Because first-responders put their lives in danger every day,
it is unconscionable that they and their families would be treated
unfairly by Social Security.

It is fair to note that Federal legislators, who are also
public-sector employees, exempted themselves from the loss of Social
Security retirement benefits when the GPO/WEP provisions were passed.
Many of our lawmakers come from public-sector backgrounds. Notable
among these is Speaker-of-the-House, Mr. Dennis Hastert of Yorkville,
Illinois, who taught at Yorkville High School. Mr. Hastert and his
wife, also a teacher at Yorkville High School, will not have to suffer
the inequities of GPO/WEP as will many of their teacher-colleagues.
It is ESPECIALLY EGREGIOUS that military personnel--many
of whom have been put in harm's way by their Government--would also
have their Social Security retirement benefits reduced only because
they later became a teacher, or a policeman, or some other public-
sector employee in a GPO/WEP state.

Pvt. Jessica Lynch, the young lady who was recently rescued
from Iraq, wants to become a teacher. What if she happens to move to a
GPO/WEP state? The Social Security credits she earned as a POW will be
``discounted'' under GPO/WEP upon her retirement.

Mrs. Laura Bush has made an admirable, national plea for
more citizens to join the teaching profession because there is a
shortage of teachers in many states, including some of the GPO/WEP
states. However, GPO/WEP often discourages interested people from
entering education as a second career because most folks can not afford
to jeopardize their Social Security retirement benefits.

At a time in our country when we desperately need the services
of public-sector workers: teachers, police, firemen, etc., we should
not discourage people from joining these critical professions by
continuing the unfair practice of taxing their wages and, then upon
retirement, treating their Social Security benefits differently than
other workers' benefits.

GPO/WEP does not take into account the realities of the
modern-day workforce. Denying full Social Security retirement benefits
to workers in certain states is especially discriminatory because the
current workforce is not place-bound--people move from state-to-state
during the course of their working lives. Workers also are healthier
and are able to work longer, often changing careers between private-
and public-sector employment.
We are not asking something from Social Security without
having contributed to that system. For those of us affected by GPO/WEP,
we qualify for Social Security benefits because we have paid Social
Security taxes for the required length of time. Under GPO/WEP, however,
the Social Security taxes that we have been forced to pay go into the
``general pot'' to pay for other workers' S.S. benefits; and, we and
our spouses/dependents are not allowed to receive our full benefits.

In all fairness, if we have paid into two pension plans during
our working years, we have the right to expect full retirement benefits
from both systems.

GPO/WEP has punished too many citizens for too long! We
should not allow a situation to continue whereby all citizens are
forced to pay Social Security taxes and, then, discriminate against
some of those citizens upon retirement.

TREAT ALL SOCIAL SECURITY CREDITS EQUALLY FOR ALL CITIZENS

Statement of Hollis K. Fox, Pagosa Springs, Colorado
I thank you for the opportunity to share my testimony.
I am a retired Air Force fighter pilot/career officer. I have a
sincere desire to pursue the Troops to Teach program, as I have a deep
love for children. I must tell you that the provisions of the WEP/GPO
have made me think twice about this. Here in Colorado, a teaching
career retirement is through the Public Employees Retirement
Association. While in the Air Force for 20+ years, I paid into Social
Security. My wife, who is a teacher in Colorado, has a similar problem
in that while we were in the Service, she moved around with me all over
the globe, and had jobs in which she paid into Social Security. I
understand the intentions of WEP/GPO as they were implemented, but they
have a drastic negative affect on those of us who live in states, like
Colorado, Texas and others. We have contributed into the Social
Security system, and are not getting ``something for nothing.'' It is
grossly unfair to penalize those of us with a heart for service, by
having our retirement reduced because of an unconsidered consequence of
WEP/GPO. I sincerely hope you will correct this injustice.

Statement of Jeanne Fuchs, Houston, Texas
I am a seasoned teacher, 13 years, in Texas and I would like to
share with you some of my reasons why teachers should receive social
security. During my teaching career, I have had to work 2 and 3 jobs
just to make ends meet. I work every summer, never giving myself any
time off. The pay scale for teachers goes up every year, but it is not
enough to keep up with inflation. I am always working during the school
week after teaching and on Saturdays to earn extra money. Last year
teachers finally were given some help with their insurance, but some of
that money has already been taken away. The 401 provided by the
district will be cancelled this year also.
It is very frightening for teachers to realize that after all the
years of dedicated service to students to learn that retirement will
not support you. Many teachers have taught for years and years, but not
all teachers can say that. Yes, you say, what about husbands. Well,
many husbands are dead by their retirement age and all teachers have at
this point is teacher retirement. At one point in my life, I was
looking forward to retirement, but now I stay awake at night worrying
about how I am going to make ends meet!
Please realize all the detrimental issues that are hurting
teachers, new and old. No one will want to enter the field of education
if they can't earn a decent salary, have affordable insurance, and a
retirement that one can live with without worrying. That said teachers
should be able to collect the social security from their husbands or
the social security they earned through the years of working when they
had to supplement their teachers salary.
Thank you for your time and please consider this request very
carefully. It is so very important that teachers can collect their
retirement and social security.

Statement of Barb Gallagher, Elmhurst, Illinois
Please eliminate the GPO and WEP. I speak for many teachers in this
country. We all have similar stories. Thanks very much.

Statement of Keren Eula Gardner, Murrieta, California
Thank you for giving me this opportunity to write to you.
My name is Keren Eula Gardner, age 55, and I am currently a high
school teacher in California. I am concerned that I will have very
little to retire on. My husband was in business for 21 years, paying
into social security. When the recession hit California in the 90's, we
were forced to close down our business, and we entered the teaching
profession. We have found this to be a very rewarding experience. We
had no idea that upon his retirement, (he is now 67 and still
teaching), he would lose one-half of his social security benefits; I
just found out at a teacher retirement meeting this week that when he
dies, I will not be able to receive any of his social security, just
STRS.
I plan to teach at least until I am 65 years of age. However, this
will only give me 17 years paid into California retirement, (STRS), on
which to survive.
I have heard the term, ``double-dipping,'' but how can this be when
all my husband and I have tried to do all our lives is to support
ourselves, asking nothing from our government? When citizens are forced
to make career changes, they should not be financially punished.
I am requesting that you, as a committee, vote to abolish the
Social Security Offset.

Statement of Betty Gordon, Skokie, Illinois
I am writing to you in support of passage of H.R. 594 that amends
the Social Security Act that repeal the Government Pension Offset and
Windfall Elimination Provisions. This issue has been a priority me
personally for many years now. I am very pleased that 12 Illinois
Congressmen currently support passage of this bill.
I believe the offset and windfall penalties are a form of work
discrimination. First of all, many people such as myself have public
and private sector work experiences. We planned on receiving partial
retirement benefits from both work sectors. I actually worked and paid
social security taxes and made contributions to Social Security. Many
people have to hold a part-time job to make ends meet and they also pay
Social Security taxes on wages earned. In short, these people have been
employed 30-40 years, contributed to retirement funds and then are
penalized for hard work. I believe this is unfair and discriminatory.

Statement of Helene Hammond, Harrington, Maine
Thank you for giving me the opportunity to write to you.
My name is Helene Hammond, and I am here today as a teacher who is
being heavily impacted by the Social Security Offset that has been
levied on all state employees from the state of Maine, as well as many
other states in our country.
My husband worked for years under the Social Security System during
the summers when he was in high school and college. He then taught
school for fourteen years, again working a full quarter each summer
under Social Security, since a teacher in our area does not earn enough
during the school year to support a family. Since he left teaching, my
husband has worked in his own business.
I have also worked a number of summers during my school years, as
well as many summers in the blueberry industry while I stayed home with
my five children. I have now taught a total of fifteen years, and since
I am already 57 years old, I do not have many years left to contribute
to the state retirement system.
As you can see, we are a couple who will really be penalized by the
Social Security Offset, since neither of us has worked long enough as a
teacher to qualify for a livable retirement benefit. Had we been aware
of this situation when I was ready to return to work after my children
went to school, I would probably have worked in the private sector
where I could have received a larger Social Security benefit upon my
retirement.
I love my job and feel that I have made a significant impact on the
lives of the children in Narraguagus High School. My rewards from
within are fulfilling, but the compensation from without has been less
then adequate, since we are some of the lowest paid teachers in the
country. Now to discover that we will also be penalized for the rest of
our lives for our dedication to the young people in our area is
distressing. In fact, it is almost a panicky situation when we think
ahead to retirement years, as I have in just the last month.
Thank you for your consideration of this issue and for the time and
dedication that you also give as you serve us in our country.

Roberts, Illinois 60962
May 2, 2003

Representative E. Clay Shaw, Jr., Chair
Subcommittee on Social Security
House Ways and Means Committee
Rayburn House Office Building, Room B-316
Washington, D.C. 20515-6100

Dear Representative Shaw:

I am writing to you in support of passage of H.R. 594 that amends
the Social Security Act that repeal the Government Pension Offset and
Windfall Elimination Provisions. This issue has been a priority for our
members for four years now.
I believe the offset and windfall penalties are a form of work
discrimination. I am allowed $58.00 of my deceased husband's social
security just simply because I receive another retirement income. My
husband paid into Social Security for many, many years and yet I am
only allowed $58.00. This along with my retirement income is way below
the $2,000.00 per month that is a reasonable income.. . . as told to me
by my Congressmen.
I believe this to be unfair and discriminatory. These penalties are
directed toward widows, lower income men and women who have worked hard
to build the educational system in Illinois.
I appreciate any support and action you may give to eliminate the
Government Pension Offset and Windfall Elimination Provision.

Thank you,
Carol J. Hari

Statement of Arlene Hendersen, Roseville, California
Thank you for giving me the opportunity to write to you.
I am a teacher who has not always been a teacher. I teach 8th grade
one of the more challenging jobs a teacher can have, but not only do I
teach 8th grade but I teach algebra to all my students. I work hard to
be sure all levels of students can learn. I do not believe I would be
as successful as I am if I had not had other outside experiences.
Teaching is a calling that some people receive later than others.
At 18 I was not sure what I wanted to do with my life, so I majored in
business and graduated from California Polytechnic State University San
Luis Obispo. I worked several jobs using my business degree, but still
wanted to do something else more important. I finally decided that I
really do like other people's children after being the neighborhood mom
who taught all the kids how to swim in my backyard pool. I also spend
time working at the school in my daughter's classroom. I looked into
teaching.
Now I am a teacher, but I spent several years gaining valuable
experience doing other jobs, cashier, waitress, retail manager, payroll
accounting and countless summer jobs earning money for college.
I am starting to think if I will have enough money to support
myself when I retire, but I find out my Social Security will be cut,
because I became a great teacher who cares. Wow what a slap in the
face. I work hard and I am totally underpaid, but that is not good
enough the federal government want my Social Security I earned too. I
started teaching late in my life which makes it impossible for me to
get in enough teaching years in and because of the low pay I will never
even begin to retire on enough money to get by on, I should be rewarded
for not selling out for a higher paying job with less stress. Teachers
should be honored, but instead get blamed because parents are lacking
in skill to raise children.
Please give me back the little Social Security I will get, because
I worked for it and do not deserve to have it taken away because of a
career change.

Statement of Sandra Hopper, Joliet, Illinois
Many of my family members and I have participated in long careers
in teaching and counseling in the public school system in Illinois. We
feel we have made a strong contribution to future generations with our
efforts. Since the education field is still underfunded, we have also
worked in the private sector during summers and taken part-time jobs
during the years. We have contributed to the Social Security system in
good faith. While other social security contributors also collect their
full pensions from other systems, we are being unfairly penalized when
we retire. I urge Representative Shaw and his committee to vote for a
full repeal of the GOP/WEP. It's the right thing to do! Thank you for
your consideration.

Normal, Illinois 61761
February 23, 2001

The Honorable Peter Fitzgerald
555 Senate Dirksen Office Building
Washington, DC 20510

Dear Senator Fitzgerald:

For the tax year 1999, I paid $2,154 ($485 in income taxes, $1,123
in self-employment Social Security tax, and $546 in Medicare premiums),
to receive $1,842 in Social Security (SS) benefits; in other words, I
paid more than the SS benefits that I received. (Please see attached
worksheet.) The reason for this is that my SS benefits are reduced by
approximately 60% as a result of a law passed by Congress in the 1980s
that reduces SS benefits of individuals who receive a pension from a
governmental agency.
For 35 years I was employed by the State of Illinois at Illinois
State University and am presently a retiree under the State University
Retirement System, SURS. The State of Illinois did not make any
contribution to SS on my behalf during those 35 years. The majority of
my accumulated credits for SS came from work for private companies and/
or self-employment. (There are several credits because of my military
service in the mid 1950s.) My wife currently receives SS benefits based
entirely on her work, primarily as a self-employed contractor.
My firm conviction is that this law is grossly unfair. (I believe
that this law affects many individuals who are/were employees at
universities in Illinois.) I can understand the concept of ``windfall''
when an employer makes contributions to multiple retirement funds for
an individual, e.g., if the State of Illinois had made contributions to
both SS and SURS. But the State of Illinois contributed only to SURS;
the majority of the contributions to SS were made by me because of
self-employment and/or by private employers. I continue to contribute
to Social Security based entirely on self-employment income; any
additional SS benefit that I might earn will be reduced by 60% because
of the federal law.
In addition, we have just learned that when I die and my wife
becomes the ``survivor'' of retirement benefits from SURS, with a
reduction of 50% of the current income, her SS benefits will be reduced
by the 60% offset even though no contribution to SS came from any
governmental agency! In our original financial planning for retirement,
we assumed that my wife would continue to receive the entire SS
benefits that she had earned. This reduction in SS benefits will reduce
the standard of living that we had planned for my wife and retarded
daughter.
This unfair practice needs to be repealed and/or modified quickly.
I will be happy to discuss my individual situation with you at any
time. I am anxious to learn your reaction to this practice.

Confused and angry,
Thaddeus C. Ichniowski, Ph.D.
__________

WORKSHEET SOCIALSECURITYBENEFITSFORT.C.ICHNIOWSKIFOR1999
------------------------------------------------------------------------

------------------------------------------------------------------------
TOTAL SOCIAL SECURITY BENEFIT RECEIVED IN 1999 * ($1,842)
------------------------------------------------------------------------
FEDERAL AND STATE INCOME TAXES ON SS BENEFITS ($485)
------------------------------------------------------------------------
SELF EMPLOYMENT SS TAX ON EARNINGS IN 1999 ** ($1,123)
------------------------------------------------------------------------
NET AMOUNT RECEIVED ($234)
------------------------------------------------------------------------
MEDICARE PREMIUMS ($546)
------------------------------------------------------------------------
ACTUAL SS BENEFITS RECEIVED IN 1999 *** ($312)
------------------------------------------------------------------------
* Note this is the benefit received after the so-called ``off-set.''
** The increase in benefits for 2000, based on the 1999 earnings, is
still being processed by the Social Security Administration.
*** This does not include payments made by Medicare for my benefit.

Statement of John H. Gebhardt, John Wood Community College Annuitants
Association, Quincy, Illinois
I am writing to you in support of passage of H.R. 594 that amends
the Social Security Act that repeal the Government Pension Offset and
Windfall Elimination Provisions. This issue has been a priority for me
ever since I heard about how this affects my situation. I stand to
loose over $200/month in Social Security benefits--just because I moved
to Illinois. I believe this is unfair. Had I known about it before, I
would not have taken a job in Illinois or I would have moved as soon as
I could have found other employment to a state which did not have this.
I would be more inclined to agree to this had every state been required
to do this. The idea that my educational pension is adequate may
apply--if I spent my whole working career in it. The premise of this
original act was to eliminate ``Windfall Profits.'' I can tell you, I
am not making windfall profits as a retiree of the educational system.
I have devoted my life to serving my country as a military reservist (a
31 year career) and as an educator (13 years in Illinois, 3 in
Nebraska, and 7 in Iowa). I did not think I was taking a ``vow of
poverty'' to do so. Is that the way we want to treat those who have
worked to serve the public? It is not unusual for educators to move
from state to state. Why should I be penalized because I came to work
at one of the only 13 states that have this situation? I paid social
security taxes and made contributions to Social Security thinking I
would receive the benefits when I retired to make up for working in the
public sector.
As President of our local chapter of the John Wood Community
College Annuitants Association, I know of several members who are being
hit harder than I am. Some are loosing over $800 in benefits and their
surviving spouses are even hurt more. My fellow retirees and I believe
this legislation is unfair and discriminatory. These penalties are
directed toward widows, lower income men and women that have worked
hard to build the educational system in Illinois.
We'd appreciate your sponsorship and support in getting this
discriminatory legislation changed.

Statement of Virginia B. Johnson, Hawthorn Woods, Illinois
I have been a public school teacher for 33 years with the intent to
retire at the end of my 34th year. I have also over the years worked
summers and evenings to either further my education or earn
supplementary funds. I'm sure you have heard the arguments over the
years about how teachers have the whole summer off and can make up for
low teaching salaries by working summers. Well, I did. And now, I find
out that the Social Security payments I made were essentially in vain.
I don't think that is right. Although my earnings for Social Security
were not great, the proportion removed from my earnings was the same as
full time workers. Each year when I receive a statement of earnings
from Social Security it states what I am eligible for and never a
mention of being offset by my teacher's pension. What a cruel treatment
of a public servant.
To add to my desire to have the GPO/WEP repealed is that my husband
is also a public servant. He has been a firefighter/paramedic for 25
years and has worked another job for over 28 years. Between his two
jobs he worked nearly 80 hours per week. There were weeks he worked 7
days. He has paid plenty into Social Security, is fully vested, and to
now learn that those funds will not benefit our retirement is
devastating.
While I would never change the emotional rewards I've had from my
career in teaching I have to question our country's procedures, which
penalize me for choosing it.
I am begging you to repeal the GPO/WEP and help insure that people
who dedicated their lives to serving the government and not forsaken by
it. I thank you for reading this letter and hope you act positively on
this matter.

Statement of Cathey Jones, Houston, Texas
Thank you for giving me this opportunity to share my concerns with
you.
I am a 26-year veteran high-school teacher. I am married to an
administrator in the same district. We do not currently qualify for
social security benefits because of the time period in which we started
teaching, but we do have a few quarters of social security because of
jobs we held during high school and college. We had hoped to work after
retiring from public schools to complete our number of quarters
necessary to qualify for at least minimal benefits from Social Security
and Medicare since we have willingly worked for less money than our
similarly-educated friends in the private sector and have put up with
the vagaries of the public schools because we love teenagers and love
seeing the light go on in a child's eyes. Those who are not cut out for
this job may not see that as enough reward for dealing with the
hormones, tantrums, and the plethora of requirements heaped upon the
schools by society. It is trying, to say the least, but I would not
change professions unless forced to by health problems.
I see no reason that because we chose to do this difficult job we
should be kept from collecting Social Security since there are people
who retire from the military and collect pensions from other sources
also. My father gets Social Security and his retirement from Chevron.
That is from working at one job for which he gets money from two
sources. A fellow teacher worked as an airline stewardess for twelve
years and then became a teacher. She will teach until she is sixty-
three to get her whole pension, but why should she not be able to get
those benefits from Medicare and Social Security she legitimately
earned? I have another friend who is in a similar situation who cannot
get enough years to get her full teacher pension since she worked for
18 years in the private sector before going back to school to become a
teacher. One teacher in my department is teaching a citizenship
Government course for Harris County to get Social Security because her
husband is self-employed and they will need every penny they can get
when they retire. Another teacher with a critically ill husband is
worried she will not get her husband's social security if he should die
because of her TRS status.
An additional concern I have now is for my daughter who wants to be
a teacher also. She is quite aware of the financial sacrifice she will
be making, but I do not want her to have to take up the slack for us
which may occur since our mutual funds are going south like everyone
else's. I also do not want her to face lessened retirement earning
potential since she has three chronic illnesses, and it is her medical
expenses out of pocket right now that are killing us financially since
she can see only a narrowed field of doctors given the rareness and
specificity of her conditions. Only one of them is on our medical plan
despite the fact that we pay the highest premium possible to get the
most extensive care available to employees in our district. She will
probably find her earnings eaten up by these expenses when she is out
of college and employed as a teacher, so her retirement will be even
more affected than ours since she will have less available to save and
invest than we have had.
It seems to me that this is a case not of closing a loophole, but
of reducing opportunity to one segment of the population that is
engaged in important work. If all others were to be prohibited from
this sort of ``double dipping,'' it would be different. Teachers are
repeatedly singled out and taken to task by one group or another for
whatever it is politically profitable for that person in that position
to bash. All people feel they are authorities on schools since everyone
has been at school as a student; this leads to the feeling that it is
not necessary to consult professionals who are actively teaching or
administrating in order to make statements about what is needed to fix
problems in school districts. That seems a bit foolhardy to me, but
nonetheless this tendency to feel everyone is an authority on schools
seems to lead people to think there should be huge disincentives
imposed on the teaching profession so we can weed out the bad ones. I
think you are weeding out a large number of potential new teachers and
discouraging many of the veterans like me when you try to pass
legislation that prohibits teachers from making their best effort to
climb out of that precarious financial position that the profession
puts us in.
Please consider the case of the old teachers like me who have
worked forever and have only the TRS to keep us from the poorhouse
since investments are losing so much, the teachers who have taught only
half their career and have roughly equal time in Social Security, and
the case of those who are now teaching for Harris County for a pittance
one night a week to get that meager minimum SS eligibility to be able
to avail themselves of Medicare. We are not money-grubbers! We have
worked long and hard with little respect because we love the children
and what we teach. Should we be denied the opportunity others still
have? Have we not paid in many ways for those benefits?

Statement of Ellen Kahn, Homewood, Illinois
I am writing to you in support of passage of H.R. 594 that amends
the Social Security Act that repeals the Government Pension Offset and
Windfall Elimination Provisions.
The offset and windfall penalties are a form of work
discrimination. As someone who has worked in both the public and
private sectors and made retirement contributions to both, I am being
punished by having a significant reduction on my benefits while others
get their full retirement benefits.
At age 65, when I would like to retire or work part time, I have to
work full time in order to meet expenses.
I believe the GPO and WEP are unfair and discriminatory. These
penalize widows, lower income men and women that have worked hard to
build the educational system in Illinois.

Statement of Martha Karlovetz, Lake Sherwood, Missouri
Thank you for providing the opportunity to write to you regarding
the personal impact that the Windfall Elimination Provision (WEP) and
the Government Pension Offset (GPO) have on me.
I retired in 1995 after a working career that spanned 35 years. For
15 years I worked full-time in jobs covered by social security. The
first six of these years were my lowest earning years. I worked as a
clerk-typist for a small manufacturing company in St. Louis while I
finished my teaching degree in night school at Washington University.
The last nine of these years (and the years immediately preceding my
retirement) were my highest earning years. In each of these nine years
I contributed the maximum F.I.C.A. required by social security.
For 17 years I was a teacher, contributing 9\1/2\ to 10\1/2\
percent of my salary to the Public School Retirement System of Missouri
(PSRS). My school districts, Ladue and Parkway, also contributed to my
pension. These are monies that I would have been paid in salary. I also
worked part-time during my teaching years as a consultant, teaching
summer school and teaching at the graduate level. For these jobs,
however, a F.I.C.A. contribution was automatically deducted. I did not
have a choice.
Although I tried several times, beginning in 1986 or 1987, to find
out what the impact of the Windfall Elimination Provision would have on
my social security benefit, I had difficulty getting any accurate
information. The local social security offices that I contacted, and
yes, I did contact several hoping that someone would have the answers,
would refer me back to the Public School Retirement System. PSRS would
refer me back to the social security offices. Written estimates of
benefits I requested from social security were also vague.
In 1995 I retired. Yes, I was only 55 at the time and took
advantage of an early retirement program offered by the Parkway School
District. Since I was vested but did not have 25 years in the
retirement system, I needed to wait until age 60 to start collecting
any pension and I also knew that I would be age 62 before I could start
drawing social security. I knew my social security benefit would be
reduced but still did not have an accurate estimate of how much.
But my husband and I were not worried about our financial security
at the time. We had saved and invested wisely over a period of many
years. We built our own home, literally, had no mortgage and no car
payments--and no debt. Our ``nest egg'' would be more than adequate to
support us through our retirement years.
In 2000 I began to collect my public pension, which now amounts to
about $1,300 a month, less federal and state taxes for a net of $1,151
per month. In 2002, at age 62, I applied for social security for which
I now receive $655 per month. Of course this is subject to income taxes
and is a $300 month deduction based on my average lifetime earnings,
just because I have a public pension. This is not a lot of money after
a 35-40 year career in the workforce!
When the Government Pension Offset was passed by Congress, I'm not
sure that I was even aware of it. And even if I had been, retirement
and the possibility of my spouse predeceasing me was something that was
so far in the future that I probably wouldn't have given it much
thought. My husband is now 67 and has a history of heart attacks in his
family. I am 62 and have a family history of longevity. Our future is
here. The probability that my spouse will predecease me is quite real.
My husband retired from McDonnell-Douglas/Boeing in September 1997,
after more than thirty years with that company and another ten years of
employment elsewhere. He was not a manager or an executive, but an
electrician. His pension from McDonnell now nets him $947 per month
after taxes and over $250 per month for health care and Medicare
supplemental coverage is deducted. He receives $1,047 per month for
social security, also subject to taxes. Even if you add our pensions
and social security benefits together, we are far from being wealthy.
In the last two years our financial situation has changed
significantly, making the repeal of the Windfall Elimination Provision
and the Government Pension Offset imperative. Because of the economy,
assumptions we made when we retired are no longer accurate even though
we did careful planning, invested wisely and met with all sorts of
financial advisors over the years.
Like many others in this country, our nest egg, the money we
counted on during retirement, has shriveled to less than 50% of its
value two years ago. We also aren't making the money on our investments
that were predicted at the time of our retirement. We have two older
model cars, both of which need to be replaced. We hate to take out an
automobile loan but may be forced to do so. We haven't had a mortgage
in 12 years, but may be forced to take a home equity loan to make ends
meet. And I am very concerned that my husband may predecease me for I
know I will receive absolutely no spousal survivor benefit from social
security because of the Government Pension Offset--unless you call $45
a month a benefit from 45 years of employment.
Ironically, both of us have continued to work since retirement and
are still contributing to social security--money that we will never see
and which will not increase our benefit.
The Windfall Elimination Provision and the Government Pension
Offset are bad public policy and were passed under false assumptions.
We're not talking about wealthy individuals. We're talking about
teachers in 15 states and public employees--policeman, firefighters and
federal employees--in all 50.
It's time to repeal the Windfall Elimination Provision and the
Government Pension Offset.

Statement of Stanley M. Kazmerski, Dixon, Illinois
I am a recently retired State of Illinois employee. In addition to
my public job I worked as a self employed consultant for 14 years part
time and then the last 11 years full time. So after paying into Social
Security for 25 years (both employers and employees portions) I was
very upset when my social security, I paid for, was reduced by 60%
because I had been a public employee.

Statement of Hugh Keene, Auburn, Maine
Thank you for giving me the this opportunity to write to you. I am
a retired teacher as is my wife. My wife is 4 years older than me, and
when she went to the Social Security office on turning 65 she was told
she did not have enough credits to receive social security. I retired
at age 60 and at the time I did not have enough credits for social
security. However, I worked part time after retiring, and by age 65 I
had enough credits. This meant we both went on Medicare. However
because she did not sign up for part B of Medicare until three years
after turning 65 she was penalized 30% for signing up late even though
at the time neither of us could qualify for social security or
Medicare! My wife had stayed home several years to raise the children,
and so her pension from the state is very small. However, because she
has a small state pension, she cannot get half of my social security
and must pay for Medicare part B at a rate 30% higher than others. Our
friends down the street worked for a private company and got a pension
from the company. He also has social security and she gets half of his
benefit even though her pension is much greater than my wife's.
Certainly is most unfair to penalize someone simply because her pension
is from one of the states that is affected by the Social Security
Government Pension Offset. All we ask is fairness. My wife worked
several years under social security, but did not earn enough credits to
get social security on her own. Now she is punished again for having a
small state pension and cannot get half of my benefits. Why does the
national government allow this unfair practice to take place. Please
repeal this most unfair law.

Statement of William J. Kelly, Visalia, California
After serving four years active duty with the United States Air
Force and 31 years as a California law enforcement officer at both the
local and state level I discovered, upon applying for my Social
Security benefits at age 65, that I will only be entitled to receive
approximately 40% of what I normally would be entitled to receive due
to the Social Security Offset.
Additionally, I received my Masters degree and teaching credential,
and taught at two local Community Colleges and one private Junior
College. I also taught lecture classes and facilitated small groups for
court-mandated participants as part of the first offender DUI program.
So, after paying into Social Security since 1953 by working before,
during, and after my law enforcement career I find I am somehow a
``second class'' citizen when it comes to obtaining my ``full'' Social
Security benefits. Let's correct this unfair and unjust system.
Immediately. And I am reading there is consideration of letting Mexican
nationals into our system??

Statement of Wanda Kirkpatrick, Flower Mound, Texas
It is not fair for men and women to pay social security and then be
told that they do not qualify for any benefits. As a widow I would
never have to rely on my family if I were to get my social security
benefits. There are many widows who are near poverty level who had an
upstanding job all their lives. Then to retire and realize that those
benefits are not here for them. The GPO is an unfair law that should be
repealed because it is not said that your spouse is a public servant
and therefore is not eligible for benefits. Thanks.

Statement of Mary Knepp, Moline, Illinois
I am strongly in favor of H.R. 349. This bill will provide fairness
to many retirees who contributed to Social Security.

Statement of Don Koesler, Mount Morris, Illinois
We urge the House Ways and Means Subcommittee on Social Security to
repeal the WEP and GPO laws initiated in 1979 and 1983 that impact
workers in 15 out of the 50 states in the USA.
Teachers and other public sector employees are all being
discriminated against and robbed of benefits they paid for, earned, and
deserve. These two laws, GPO and WEP do both of these things. Congress,
as many of us recall, passed these two laws in 1979 and in 1983 because
Congress had steadily robbed the Social Security Trust Fund for years.
So, they decided to help the Social Security Trust Fund out by
withholding benefits that had been honestly earned and counted on by
the people that now get reduced or totally denied benefits in the 15
states that have state pension plans. Congress pours all kinds of money
into questionable things! Now Congress is stealing from its own
citizens to help deal with the problem created with the Social Security
Trust Fund.
Playing games with the Social Security Trust Fund like Congress has
been doing is political suicide, so stop doing it!
Some say these laws are double dipping. What a laugh! Private
sector people get both a pension and Social Security from the same job.
If anything is double dipping, that is. The rest of us that paid Social
Security while doing one job and paid the state pension on another
completely different job are the ones said to be ``double dipping.''
What an insult!
U.S. citizens do not like being robbed by anyone, let alone their
elected representatives like has been done to hundreds of thousands of
us. We have earned our Social Security and pension benefits with our
hard work and the money we have paid into it. We want our money. It is
ours--completely ours--earned and paid to both Social Security and the
pension plan. Give us our money--stop stealing it!!!!
We all hear how important it not to discriminate against others for
any reason, yet here our own Federal Government is doing exactly that.
We are not supposed to, but you can, because we are just ordinary
working class people and you are in a position of power.
We are tired of being treated as second class citizens. And yet all
we hear is how highly teachers, policemen, firemen, postal carriers,
etc., are valued. Actions by the U.S. Congress speak much louder and
more clearly than any words. When the word gets out, who would want to
be a public employee. Who??

Personal Stories:

Both my wife and I have worked part of our years as teachers and
in the private sector C she as an administrative assistant and myself
as a carpenter. There is no way anyone can support a family on what one
earns when they start as a teacher C no way! Our new teacher's children
qualify for free lunches at school.

My wife began her career as a teacher and taught for seven years
before taking time off to raise our two children. She went back after
eleven years as a part time Reading Improvement Teacher and eventually
as half time Reading Improvement Director. She always applied for full
time positions where she was always told that she was too over educated
and qualified to be considered. She had twelve years of teaching
experience and a Bachelors Degree plus 28 hours. After the final
rejection in the district where she had taught for 12 years, the
Superintendent, told her that she was the candidate of choice, but the
school board would not hire her because she was ``in today's market,
overeducated and over experienced'' and hence, too expensive for them
to hire. She saw that she had no future in her chosen profession of
education after all the time she had spent in it.
She went on to have career counseling and took classes and has
become an administrative assistant. She has worked at this position for
9 years. However, it comes to our attention as we plan for retirement,
that she will not be able to receive both her teacher's pension (12
years) and her Social Security benefits. She was displaced from her
career of choice (teacher) and was forced to find other employment, the
teaching profession no longer wanted her.
I have been a teacher for 36 years in the same school district. My
concern is much like my wife's. I worked for many years during the
summers as a union carpenter and received many Social Security credits
towards retirement, but now I find out that my Social Security benefits
will be heavily reduced. What is going on here???

Bottom Line:

My wife will be getting more in Social Security than me, but
will get nothing of my Social Security if I die--and she will get
beaten up on her Social Security even though the years she worked under
Social Security were greater than the years she worked as a teacher.

I will get nothing if my wife dies from Social Security, and will
only get a small part of her teacher's pension--if anything.
I have worked 10 years under Social Security and will get a
severely reduced amount even though I worked \1/4\ of my life as a
carpenter.
Please consider bringing the 5 bills that are presently tied up in
congressional committees to the floor of Congress for serious
consideration of repeal. It is only right that people earn what they
have been paying into all their working lives.

Statement of James Kopel, Moline, Illinois
I am asking for your support of the above bill. This bill would
amend the Social Security Act to negate the Government Pension Offset
and Windfall Elimination Provisions. Currently, our retirees within the
State University Retirement System of Illinois who have paid into the
Social Security System DO NOT receive the full Social Security Pension
to which they are entitled simply because they have worked both in the
private and public sector. That is NOT FAIR. It is hurting those of us
who need all of the money from both systems to make ends meet. We
worked in both systems so we could provide for ourselves and our
spouses at retirement and then discover that we are penalized because
we were ambitious enough to work many extra hours to provide for our
needs.

Statement of Dorothea H. Kratzer, Midland, Ohio
When my husband and I were planning our retirement, we knew that I
would not be able to receive full retirement credit from the years I
was able to teach. However, with my share of his Social Security, and a
small annuity, we felt that we were adequately covered. However, after
I started teaching, the Offset Penalty was voted into effect and the
Social Security he contributed to for over 35 years is not available to
me. Currently I receive $203 a month as my share of his Social
Security. It just is not fair--if he could rise from the grave in
protest, I'm sure he would. One goes to college, marries, raises a
family, and, in this country, expects to be able to retire in a
comfortable situation. I'm only asking for benefits which my husband
and I have earned--it's time to correct this injustice.

Statement of Larry Ladwig, Moline, Illinois
I am in support of H.R. 349 which would restore fairness for all
Social Security recipients. If someone has worked enough to earn
benefits, they should be entitled to all of the benefits.

New Lenox, Illinois 60451
April 25, 2003

Dear Representative Shaw,

I am a high school teacher with OVER FORTY-QUARTER hours for social
security. After college and the Army, I worked for two different
companies for nine years in which I contributed to social security.
Because of those years in private business I will not receive the
maximum retirement benefits from my teachers' retirement program. I am
65 years old and just received my Medicare card. I will be retiring
from teaching this school year with 31 years of service. You need 38
years for full benefits in Illinois. I will get two extra years credit
for 340 days of un-used sick leave, but still short of the full
benefits. Because of this, I think it is fair to give teachers their
full social security benefits earned.
I teach in the business education department. In Illinois, all
teachers in this department need at least 2,000 hours of private work.
Of course, I far exceeded that requirement.

Sincerely,
Myril Lattz

Quartz Hill, California 93536-3175
April 11, 2003

Congressman E. Clay Shaw, Jr.
Chairman, Subcommittee on Social Security
Committee on Ways and Means
United States House of Representatives
Room B-316 Rayburn House Office Building
Washington, D.C. 20515-6100

Dear Congressman Shaw,

Below is a copy of a letter I sent to Mr. McKeon on August 18,
2002. I have since retired.

Sincerely,
Gary C. Layton
__________
Quartz Hill, California 93536-3175
August 18, 2002

The Honorable Howard ``Buck'' McKeon
2242 Rayburn HOB
Washington, DC 20515

Dear Representative McKeon:

I would like to inquire as to the status of H.R. 2638.
I paid into the Social Security system for 33 years and accumulated
94-quarter units during that time. This is over twice the required
number of quarter units required to qualify for Social Security
benefits.
The last 12 years I decided to dedicate my life to public service
by working for the County of Los Angeles Fire Department.
Because I was a low wage earner for many years while working under
the Social Security program I only accumulated 22 ``substantial
years.'' This action will cause me to lose 45% of my monthly Social
Security benefits when I retire.
This seems extremely unfair to punish me for dedicating the
remainder of my working years to public service.
I am going to have to retire soon because of physical limitations.
I hope H.R. 638 is resolved in the near future, as it would be a
blessing to me to receive the entire Social Security benefit that I
have earned.
I will be anxiously awaiting your action on this pending
legislation.

Sincerely yours,
Gary C. Layton

Statement of Carol Lewis, Salem, Ohio
I am one of the people affected by the offset which prevents me
from collecting any social security benefits.
My husband passed away in August of 2001. I should be entitled to
benefits as his widow. Because of the offset, I do not receive
anything. I filed for Medicare under his account (as directed by Social
Security office), but I still have to pay the premium.
My State Teacher's Retirement benefits are not sufficient for me to
live on. I have to take a monthly draw from my investments to subsidize
my income. If I could receive my entitled benefits from Social
Security, I wouldn't have to withdraw from my investments so heavily.
At this point, I'm not sure that my nest egg will last. I have
considered returning to work, so that my investments are not depleted
so quickly.
Whether I do go back to work or not, I feel that receiving my
widow's benefits is more than fair. From what I understand only a small
number of states penalize teachers and other public employees by
refusing full Social Security benefits.
I wish to add my full support to eliminating the offset.

Statement of Sharron Pearson, Lewisville Area Retired School Personnel
Association, Lewisville, Texas
As the president of the Retired Teacher's Association in
Lewisville, Texas, I would like to encourage you to repeal the
Government Pension Offset and Windfall Elimination Provision.
Many of our members have had their Social Security Benefits
unfairly reduced, or eliminated entirely. Because many of our members
retired 10 or more years ago, their pensions are not large. Several
have lost their spouses and expected to get at least a portion of their
Social Security benefits. This has not happened because of GPO and WEP.
These people have dedicated their lives to the service of the
children of Texas, and they need your support. Repeal the Government
Pension Offset and Windfall Elimination Provision, and send the message
that their hard work is appreciated.

Statement of Mary Linz, Bangor, Maine
Thank you for giving me this opportunity to write to you.
My name is Mary Linz. I am a teacher and taught 19 years in Maine.
I taught 3 years in NY before moving to Maine. (I get no retirement
benefits from NY.) I also took 10 years off to raise our two sons to
school age. Consequently my Maine retirement is quite low. I get about
$750.00 a month after health insurance and taxes. I also pay $58.70 a
month for Medicare. (That's going up to $65.70 next year.)
My husband is also a retired teacher, but built up 18 years SS in
NY and at other jobs. He, of course, is subject to the WEP. He gets
$344.00 a month after Medicare. Because his SS is so low, my pension
completely cancels any survivor benefits. Fortunately, we knew this
when he retired.
Because I will probably outlive him by several years, he is only
taking 80% of his Maine retirement so that I may continue to collect
after he is gone. Otherwise I would have barely enough to survive on.
This means that he does not get his full SS, and does not get 20% of
his earned pension. This causes us to have a considerably lower
retirement income than has been earned.
Even if the SS offsets were repealed, he would not be able to
collect his full Maine retirement because once the choice has been made
at retirement, it can not be changed. This is just another example of
how the SS Offsets affect the retirements of those subject to the GPO
and WEP.

Brecksville, Ohio 44141-2729
April 28, 2003

The Honorable E. Clay Shaw;
Chairman, Subcommittee on Social Security
Committee on Ways and Means
United States House of Representatives
Room B-316 Rayburn House Office Building
Washington, D.C. 20515-6100

Dear Congressman Shaw,

As retired secretary to the Business Manager of Brecksville-
Broadview Heights City Schools, Brecksville, Ohio, I am writing about
the two unjust Social Security provisions that affect hundreds of
thousands of educators and other public employees across the country.
These provisions are known as the Government Pension Offset (GPO) and
the Windfall Elimination Provision (WEP). I urge Congress to enact
legislation repealing these two Social Security provisions.
The GPO eliminates or reduces the spousal benefit by two-thirds the
value of a person's retirement benefit. The WEP reduces, but does not
eliminate, a portion of an individual's Social Security earned from
work outside public employment.
After 11 years working and paying into the Ohio State ``School
Employees Retirement System'' (SERS), my husband and I are affected by
both the GPO and the WEP. Of my SERS benefit of $243.22 I actually only
receive $68.92. Very little benefit for 11 years of work.

------------------------------------------------------------------------

------------------------------------------------------------------------
My School Employees Retirees System pension: $243.22 per month
------------------------------------------------------------------------
Social Security benefit from previous employment
and
spousal benefit: $732.50 per month
------------------------------------------------------------------------
TOTAL BENEFIT PLANNED FOR RETIREMENT: $975.72
------------------------------------------------------------------------
Affect of GPO/WEP: minus $174.30
------------------------------------------------------------------------
ACTUAL RETIREMENT BENEFIT: $801.42
------------------------------------------------------------------------

Persons working in other occupations can receive multiple pensions
with no reduction in Social Security. Even immigrants who never paid
into Social Security are entitled to receive benefits under Social
Security SSI.
Thank you for taking this matter into consideration.

Sincerely,
Joanne Lundstedt

Statement of Jacalyn J. Lynch, South Paris, Maine
Thank you for giving me this opportunity to write to you.
My name is Jacalyn Lynch, I am writing you today to ask you
consideration of amendment of the GPO/WEP rules governing Social
Security benefits.
I live in South Paris, Maine where my husband and I lived for the
past 24 years. We have raised our three children here and we both have
worked hard to maintain a standard of living that we feel has provided
our children and ourselves with a good life style. My husband has
worked over the past 32 years for a local machine shop that is a leader
in manufacturing of precision machine parts. I stayed home or worked
part time under Social Security for many years while raising our three
children. Over the past 15 years or so I have worked full time as a
medical secretary or receptionist. This was all under the Social
Security system until 3\1/2\ years ago when I decided to take a
position as Medical Records Clerk at the Maine Veterans' Home here in
South Paris. Maine Veterans' Homes have a wonderful reputation of
serving elderly and infirmed Veterans of Maine with the highest
standards of care found anywhere in the United States. I enjoy my job
and I love the opportunity to give back something, all be it in a small
way to the men and women who laid their lives on the line for our
freedoms.
The Maine Veterans' Homes organization is under the Maine State
Retirement System. It was not until after I took this position with the
Maine Veterans' Homes that I realized that I would not be able to
receive full benefits from my contributions to Social Security if I
continue to work there.
Now at age 54 with my husband aged 59 I am faced with the dilemma
of either staying at the Maine Veterans' Home, which I truly want to do
until retirement, or being forced to leave this position for another
under the Social Security system in order not to loose my full Social
Security benefits upon retirement.
I understand why the GPO/WEP programs were instituted. However,
somewhere there was a deviation from what I think the Subcommittee on
Social Security meant to do when they passed this amendment. I do not
``double dip.'' I do not hold another job under Social Security at the
same time I hold a job under Maine State Retirement. I do not plan to
do so. I do not understand why I am being penalized from receiving full
Social Security benefits upon retirement if I will also be receiving
some Maine State Retirement System benefits. I worked hard under Social
Security, and did not double dip then. I work hard under the Maine
State Retirement System and I do not double dip now.
One more factor I wish you to consider. Even though both my husband
and I have worked hard over the 36 years of our marriage, never taken a
hand out, never asked for help, raised 3 children, 2 of whom are
contributing to society with their respective spouses, working hard and
raising their families and the youngest who is just completing her
junior year at Emmanuel College in Boston, (most of her tuition is paid
by a scholarship from the college, because she has such a strong work
ethic and the grades to match), she wants to come back to Maine to live
and work after graduation. We, my husband, my children and myself are
one family of many who ``make America work.'' We take pride in our
contributions to our work and our community. I especially take pride in
serving Maine Veterans.
Now all that said, why is it that I face an uncertain future in
retirement? I have never made a lot of money, never had a lot of
benefits that would be channeled into funds to supplement my
retirement. When I do retire it will not be to live some dream life in
a fancy home with paid help if I need it, not much travel will be
affordable. But just to be able to hold on to our home for a longer
period of time, to be able to take our grandchildren out for a day at
the amusement park, not much to ask is it? My husband and I both have
contributed to 401K's and now I have to contribute to a 403B plan. A
few years ago we thought we would be ok after retirement. We have lost
most of what we had in the recent economic environment. Not because we
were foolish, not because we took risks, just because we went along
with the advice from our financial advisors.
Now you are telling me that because I choose to work to be a small
part of an organization that makes life better and nicer for Maine
Veterans I will have to be penalized! That is just not right. I know I
am not alone; some of our homes have lost good employees because of
this very same factor.
I ask each and every one of you on the House Ways and Means
Committee, Social Security Subcommittee to think twice about what kind
of an impact this is going to have on the future of this country. Those
of us who only want to change our jobs in order to better serve the
community and the country and in my case the Veterans of Maine will be
the next generation of poor elderly in this country. And I am sure each
of you knows that if there is one thing that says a lot about a
community, a state or a nation it is how the elderly population is
treated, cared for and respected.
I am sure you will each give this your most careful consideration.
Yes there may be double dipping in some segments of the Social Security
system. However, those who choose to serve our community by taking a
job that is not under the Social Security system should not be
penalized!
Thank you for your time and consideration.

Statement of Judy Lynch, Roseville, California
Imagine my shock to find out that I may lose 60% of the Social
Security benefits I have worked so hard to earn. I ask your help so
that this does not happen.
I am a 1st grade teacher and Reading Specialist at Madison School
near Sacramento, California. Early in my career, I took a break of 9
years to raise 3 terrific children (just a mom bragging!). I will never
regret those years on a tight budget, driving my husband to his high
school teaching job in a used van, because we could only afford 1 car
on his salary. I knew I was missing years towards retirement but vowed
to make it up when our children were older.
That's what I did. After returning to full time teaching in 1984, I
looked for ways to supplement our income for the kids' college tuition
funds and build my Social Security credits. After school, and during
the summers, I worked to build a small business as a Language Arts
Consultant. I worked for districts around my area training teachers in
the latest reading strategies. I am still doing that, now nationally,
to help implement the No Child Left Behind Act. I also became a
published author--writing books on weekends and in any spare moment.
Scholastic in New York published my two professional books for teachers
in 1998 and 2002. All the extra income earned Social Security credits
towards my retirement through my small business.
Now, I am told, that because I am a teacher and a member of the
State Teachers Retirement System in California that my Social Security
benefits will be reduced by 60%. Is this fair to a mom who stayed home
to raise her children and then worked twice as hard to make up for it?
My Social Security income should not be considered ``double dipping''
because I did it all on my own time: weekends, after school, and my
vacations!
Committee members, I will be retiring from teaching in 6 years. I
love teaching little kids to read--it is my passion. I also love
training teachers to do the same--especially teachers of Title 1
students in areas of high poverty. I also have been a successful mom to
Michael, Shannon and Kevin. Please do not penalize me in the retirement
benefits I have worked for and earned 100%.

DeLeon, Texas 76444
May 13, 2003

The Committee on Ways and Means
United States House of Representatives
1102 Longworth House Office Building
Washington, D.C. 20515

To Whom It May Concern:

I have been in education for fifteen years. Prior to teaching I was
a stay at home Mom for twenty years. I helped my husband on the family
farm and raised my two boys. Now I am aware that if something happens
to my husband I cannot collect his social security. If I had never gone
to work I could have received his benefits but since I went into
education I am being penalized. To add insult to injury if I died he
could collect my teacher retirement and his social security!!!! Where
is the fairness in the scenario? This is the thanks that teachers get
for working with the future leaders of our country?
For elected officials there is no limit on the retirement options
available to them. They can collect from private employment and
government retirement. Why should they get both? We as teachers only
want what we and our spouses have paid into all our working lives. What
we have earned and paid taxes on, its ours!!!!

Thank you for your consideration in this matter,
Darlene Mathis

Statement of Loretta and Carl Mayhew, Cherryfield, Maine
Thank you for giving this opportunity to talk to you regarding the
GPO and WEP offsets.
Our names are Carl and Loretta Mayhew, and we are both members of
the Maine State Retirement System. We live in Cherryfield, ME. I,
(Loretta) am retiring at the end of the current school year after 22
years as a teacher. Before that I worked as a secretary, a blueberry
factory worker, and other types of low wage jobs. I have my required 40
quarters paid in to social security with minimal income levels. The
application of the 60% or more offset will give me about $50 for social
security benefits. I will not receive anything from my husband's social
security benefits if he predeceases me! I will have only my MSRS
pension which will be approximately $15,000 minus health insurance of
which we have to pay all but 35% of the premiums and any other
deductions that are taken out.
Carl, my husband, has 18 years as a teacher in the public school
system. He got done in 1993 from Cherryfield Elementary School and went
into full-time self-employment as a land surveyor. We pay in regularly
for self employment taxes. Therefore, his MSR pension will also mean
that his social security pension will be offset as well. By the time
health insurance and the offsets are done with us, we will be receiving
close to poverty level income. This means that one or both of us will
have to continue working for several more years.
I truly believe that our social security benefits are being stolen
from us when we earned and paid in good faith for many years! I also
believe that we as citizens of the United States should be placed at
the front of the line for social security benefits before these
benefits ($345 billion?) are paid to illegal immigrants from Mexico and
other people from other countries as well receiving benefits. I am
totally against building a S.S. Administration office in Mexico and
doling out to the Mexicans what should be rightly ours. (I have nothing
against them personally).
As a teacher of career preparation classes, I have not been able to
recommend to my students who have perhaps been interested in going into
the teaching profession that they do so because of all the inequities
which teachers are faced with. All other state workers receive 100%
health benefits during their retirement years. We receive 35%. We are
considered state employees but we are not treated the same.
We urge you to vote for the total repeal of the Government Pension
Offset and the Windfall Elimination Provision.
We have as much right to our social security benefits as any other
employees who have worked under the social security system.

Statement of Perry McCall, Houston, Texas
I have always wanted to teach; to make a difference in students'
lives and to help them make connections from the past to the present.
My undergraduate and graduate studies and my year of study abroad
helped to expand my knowledge and life experiences so that I could do
my best to share the underlying causes both human and physical that
shape history. With a MA in history, my first year of teaching I made
the magnificent sum of $8,000 in 1972. Texas Retirement got a portion
of even that. I had no option to get Social Security.
After my son was born, I returned to teaching in 1976, but found
that my then $9,000 salary barely covered child care and the
``deducts.'' So I retired from teaching, did lots of volunteer work,
had twins, raised them, carpooled them, did all the non-compensated
``Mom Stuff'' and occasionally did some part time work for which I
earned Social Security.
When my twins were in the 8th grade, I began to substitute teach to
see if I had what it took to teach in the computer age. I was called on
continuously. (It is not often school districts have substitute
certified teachers with masters' degrees.) As a sub I earned about
$7.50 an hour . . . less than my yardman. But still, if I worked very
hard 90/180 days, Texas Retirement would ``let'' me pay for a year of
Retirement. So I did for 3 years. The district took advantage of me and
called me for long term subbing (which was really full teaching but at
sub rates). Eventually my twins moved on to college and I ended my 21-
year baby leave and worked full time. In 1996 @ $28,000. Again I paid
into TRS (retirement). I had no option. (They do not give a choice of
SS).
Then in 1998, 2 things happened, the State of Texas gave us a long
overdue raise and Houston Community College hired me as an adjunct
teacher. Students taking my Advanced Placement American History class
were eligible for Dual credit. They can earn both high school and
college credit. (My masters in U.S. history was finally valuable to
someone.) Oddly I pay into Social Security for the small stipend I
receive from HCC. But now I am paying more into TRS because of my raise
as a high school teacher.
Meanwhile all this time I have been married to Michael M. McCall
who served 4 years in the army (Vietnam era). He has been working (and
paying into Social Security ever since 1971). We have been told that
because of the supposed ``windfall'' tax, I am not eligible to receive
my TRS benefits because it will reduce either or both mine and my
husband's benefits (in the event of his death). This seems remarkably
unfair. We are the silent majority working hard. I put in 12-hour days
at school, and then go home and grade! When I face a stack of essays,
quizzes, and maps and think that I am paying money into TRS that I will
never see because Social Security will penalize me for working, I feel
very discouraged. I think why am I doing this? Although being selected
for Who's Who of America's Most Outstanding Teachers is nice, it won't
pay the bills in my old age.
Can you please help us receive what we earned and paid into Social
Security and TRS without being penalized for working. This unfair
windfall tax is a disincentive to work. I have students now at Harvard,
Princeton, U of Penn, Cal Tech, Stanford, Vanderbilt, BU, Yale,
Dartmouth, Rice, Duke, University of Virginia, W&L, Hollins, NYU, LSU,
and all the Texas schools among others. My students do very well on the
U.S. History AP exam. I am a really good dedicated teacher . . . I am
also one of the many thousands of teachers, who are approaching
retirement, full of knowledge, but wondering who will care for us. Our
pensions are at risk. Tell me; with the windfall tax on the books . . .
explain to me why I should not just retire early. If we do (there are
many of us), the teacher shortage will be increased. But worse, will be
the loss of so many excellent dedicated teachers.
Hoping that you will change this punitive tax so I can continue
doing what I love. Teaching.
I remain hopeful and serving America's future.

Statement of Carolyn McCormick, Beaumont, Texas
The United States House of Representatives has done to me and other
school/public servants what ENRON did to their employees in reducing or
eliminating earned retirement benefits. For 19 years, I paid into
Social Security through private sector jobs before working as a
secretary for school districts in Houston, Dallas, and presently for
the Texas Education Agency (TEA), Region V in Beaumont, Texas. For my
prior earned Social Security benefits to be reduced because I will now
retire from TEA that does not withhold Social Security singles me (and
thousands of other public servants) out unfairly for reduced benefits
that I earned by paying into Social Security for 19 years. This is
unconscionable.
My pension will not be a windfall because I have paid into the
Texas Teacher Retirement System (TRS) for fewer years than I paid into
Social Security. At 56 years of age with 13 years of TRS credit, my
pension is estimated at $367 per month. My earned Social Security
benefit is estimated at $643 per month before being reduced
approximately $300 per month by the WEP requirements. Where is the
windfall?
For me to also be denied full spousal Social Security benefits due
to the GPO as a widow from my husband who paid into Social Security for
40 years is just as unconscionable. I am part of a group being singled
out unfairly.
This is the first time I have ever written to a member of Congress
asking for support. No issue you have worked on or ever will work on in
the future will be as important to me and thousands of other public
servants as this. PLEASE ENDORSE AND SUPPORT THE SOCIAL SECURITY
FAIRNESS ACT, H.R. 594 and repeal these grossly unfair and unjust laws.

Statement of Melissa Means, Nome, Texas
Thank-you for giving me the opportunity to give my testimony. I am
36 years old and began teaching 4 years ago. Previous to my career as a
teacher I worked in the ``corporate world'' where I didn't work nearly
as hard and received much better benefits and salaries. Now I work much
harder, receive less money and poor benefits, but the job satisfaction
and rewards are excellent. I also have paid into social security for
over 15 years.
Before I decided to become a teacher, my husband and I contemplated
our financial situation to make sure we could continue to lead a
comfortable lifestyle with the cut in pay I would endure as a teacher.
We also researched the information we had for our retirement. Because
neither of us are vested in a retirement program and my husband is
self-employed, we obviously used social security benefits as planning
for part of our retirement. This was obviously before I was aware of
the GPO and WEP. We knew that we would have to put extra money aside
because my husband is self-employed. We also knew that between the
money we put aside and the social security benefits we thought we would
receive would suffice us for our golden years. Now that we are aware of
the unjust laws in the GPO and WEP, we are extremely concerned about
our retirement. This is a greater concern if something were to happen
to my husband first. The facts are that I only bring home $1,200 a
month after taxes, retirement and health insurance premiums are
deducted. Yes, that is NOT a typo, it is $1,200 per month. This is
poverty level. My husband is also 13 years older than I am and has been
paying maximum social security and matching it for 10 years assuming
that we (or one of us) would be able to benefit from his hard work one
day. Please explain to the committee why I should be punished and
forced into poverty if something were to happen to my husband because I
made a decision to teach our future leaders. The facts are very clear
to me and I am second-guessing my decision to become a teacher. I teach
7th grade math and do a very good job. I enjoy my job and would love to
continue to teach. I feel that I am teaching while gambling with my
family's livelihood due to the unfair laws that you can fix.
I am aware that these unfair laws do not single out teachers and
they affect other government workers. However, you need to realize that
most government workers do have much better benefits than teachers. For
example, they can retire with full benefits after 20 years. Teachers
cannot do this. This allows those government employees to subsidize
their retirement with other careers. Teachers have to subsidize their
income as opposed to retirement by working on their vacation (summer).
This again only helps the government because it forces teachers to pay
even more social security that they will not be able to receive. That
is unless you do something to change that. Other government workers
also receive excellent health benefits without paying extreme amounts
for them. Teachers do NOT receive this. Any extra money teachers could
be putting away to help subsidize their retirement usually has to be
used for the high cost in health insurance premiums. I am currently
paying $650 per month for family health insurance. I had to decline
family dental coverage due to affordability. So, in a way, yes we are
singled out. The way I perceive it is we are treated as ``government''
employees when it benefits the government (i.e., social security) and
we are NOT treated as government employees when it comes to benefits
other government employees receive (i.e., years to retirement, low cost
health and dental insurance, vacation days). If we have to follow
``government'' employee rules on any issue I feel we should be treated
as government employees on ALL issues. Currently we just receive the
ones that benefit the government.
PLEASE eliminate the unfair GPO and WEP. You hold the key to giving
teachers what they rightfully deserve and have earned. I have paid into
social security for over 15 years and my husband has paid the maximum
for 10 years. We should not be punished because I teach.
Again, I thank-you for the opportunity to have my voice heard. I am
very proud to live in a Democratic country where my freedom is
preserved.
PLEASE ELIMINATE THE UNFAIR GPO AND WEP BY VOTING FOR H.R. 594.

Statement of Jonathan P. Meyerson, Chevy Chase, Maryland
As a retired employee of the Federal Government who has been
impacted by the Windfall Elimination Provision, I wish to express my
satisfaction at how well the provision works for taxpayers and for
myself.
I worked for 32 years for the Federal Government, primarily in
various offices of budget and legislation, in OMB and other agencies
and departments. During that time I realized how important it is to use
Federal funds only when it is appropriate and worthwhile for society.
The Social Security retirement system provides additional funds for
those poor people who worked a short time and at low wages, so they
would be able to provide enough income for necessities of life.
The Windfall Elimination Provision was enacted to cut this bonus
for individuals, such as myself, who have earned large pensions from
the Federal Government and do not deserve this bonus.
Both the Government Pension Offset and WEP make a lot of sense and
I strongly believe there is no reason to make any changes--even though
I would benefit if the Windfall Elimination Provision was revoked. I
would be happy to testify in person, if you believe that would be
useful to the Committee.

Bridge City, Texas 77611
April 25, 2003

The Honorable E. Clay Shaw, Jr.
Chairman, Subcommittee on Social Security
Committee on Ways and Means
United States House of Representatives
Room B-316 Rayburn House Office Building
Washington, D.C. 20515-6100

Dear Sir:

This letter is concerning how the GPO/WEP offsets affect me
personally.
My name is Sally Montague and I retired from Jasper ISD in Jasper,
Texas. At the time I retired in 1997, the Jasper School District did
not pay into Social Security. However, I had worked in the Port Arthur
ISD that did deduct my salary for SS benefits and I had worked in some
other businesses where I earned over 40 quarters of Social Security.
Since I had a SS work record, I did not think that this GPO/WEP law
would keep me from getting my own benefits. One year later my husband
passed away and when I reached the age of sixty I tried to get the
widow benefits from SS. Our Port Arthur SS office said that because I
retired from a school district that did not pay into Social Security at
the time of retirement, I would neither get the widow's benefit nor any
of my husband's benefits. He had been a minister for many years and I
helped him pay into SS quarterly. This did not seem too fair. Also, the
SS office said that I would only get one-third of my own SS benefit
payments when I applied. They encouraged me to wait until I was 65 so I
could get more of the one-third amount. Needless to say, I was a very
upset widowed teacher.
Since finding out this information and having a house, insurance,
car, groceries, utility bills, and other living expenses I went back to
work at a private school. I have worked four out of the five years
after my husband died. My mother is still living with Social Security
as her only income. Since she has high medicine bills, I am helping her
to maintain her living expenses. This is another added expense that I
have.
Please repeal the GPO/WEP that is so very unfair to widowed Texas
teachers and other public service workers. It may mean just a few
hundred dollars a month, but that will help greatly.
Thank you for reading my testimony.

Sincerely,
Sally Montague

Statement of Walter Olihovik, National Association of Postmasters of
the United States, Alexandria, Virginia
Chairman Shaw, Congressman Matsui, and Members of the Subcommittee
I am Wally Olihovik, President of the 42,000 member National
Association of Postmasters of the United States (NAPUS). NAPUS
represents the approximately 27,000 postmasters in the United States,
as well as retired postmasters.
It is a privilege to share with you my thoughts about how current
social security provisions adversely affect a large number of public
employees. Specifically, I would like to address the unfair financial
burden that many NAPUS members must endure as the result of the
``government pension offset'' (GPO) and ``windfall elimination
provision'' (WEP). Pending before your Committee are three different
ways to address the social security penalty imposed on retirees, such
as retired postmasters. One strategy would be to do nothing; another
strategy, as proposed by Representative William Jefferson and
Representative Barney Frank, would be to reform the way in which the
GPO and WEP are to be calculated; and the final method, as offered by
Representative Buck McKeon and Representative Howard Berman, would be
to repeal totally the GPO and WEP. As the Meatloaf song goes: ``two out
of three ain't bad!'' Clearly, the Subcommittee should pursue
legislation that reduces, if not eliminates, the unfair burden
shouldered by many former public employees.
The GPO unjustly taxes government annuitants, including retired
postmasters, who are also eligible for Social Security survivor
benefits. The offset provision slashes the social security benefit by
two-thirds of the amount of their federal annuity. It is possible for a
retired postmaster to receive no social security survivor benefit to
which they would otherwise be entitled. Postmasters do not qualify for
a large pension. Many have managed small post offices for which their
salary history yields a subsistence CSRS annuity. Moreover, a large
number of retired postmasters happen to be female, who may have
interrupted careers that compound their limited CSRS benefit. These are
the NAPUS members who are most injured by the GPO.
Many NAPUS members suffer from the WEP, which dates back to the
mid-1980s. This social security provision also unfairly punishes many
public employees. The WEP cuts the earned social security benefit by up
to 50 percent, for the sole reason that an individual chose a career
path in the public service. Public employees should get full credit for
their employment no matter if they pursue public or private employment.
Mr. Chairman, there exists a fundamental misunderstanding of the
Civil Service Retirement System. This misunderstanding has bred the
present unacceptable and financially harmful situation for countless
postal and federal retirees. The CSRS is not a social insurance
program, like the social security system. It is an employer-sponsored
defined-benefit pension plan, similar to private sector plans. Its
interaction with social security should resemble the interaction
between private plans and the social security system. In this way,
public employees including postmasters will be treated with the respect
and fairness they deserve.
Mr. Chairman, thank you for conducting this hearing and providing
NAPUS with opportunity to share our views. We encourage you to
expeditiously report legislation to correct the unfair financial plight
suffered by so many who are committed to public service.

Statement of Frederick H. Nesbitt, National Conference on Public
Employee Retirement Systems
Good morning. My name is Frederick H. Nesbitt, Executive Director
and Legislative Counsel of the National Conference on Public Employee
Retirement Systems (NCPERS). My organization represents over 500 public
sector pension funds that cover firefighters, police officers,
teachers, and state and local government employees. NCPERS is the
largest national, nonprofit public pension advocate. Since 1941, we
have protected the pensions of public employees. We represent pensions
on Capitol Hill, provide trustee education, and deliver essential
pension information to trustees, administrators and public officials.
We appreciate the opportunity to share our views with the
Subcommittee on Social Security on the issue of mandatory Social
Security coverage of non-covered state and local government employees.
NCPERS was founded 62 years ago to stop the federal government from
disrupting and dismantling public sector pension funds by requiring
them to be part of Social Security. That remains one of our primary
goals today.
The Social Security system provides coverage for virtually all
segments of American society including most, but not all, state and
local government employees. When the system was established in 1935,
state and local government employees were initially excluded. Some of
these employees subsequently made a decision not to be included,
instead developing their own retirement and benefit programs tailored
to their occupational needs. In many instances, these retirement
programs predate the Social Security system. These state and local
government retirement systems are solvent and require a contribution by
both the employer and employee, in most cases NCPERS opposes expanding
Social Security coverage to non-covered state and local government
employees. Public sector employers were required to create separate
pension plans for their employees when they were excluded from Social
Security. Requiring Social Security coverage would undermine these
plans and place unnecessary financial burdens on state and local
government employers and employees. These public sector funds designed
their retirement benefits to meet the needs of their employees,
including such unique characteristics as retirement ages, disability
benefits, survivor benefits and death benefits. Because of the unique
makeup of the public sector workforce, many employees, such as public
safety officers, have earlier retirement ages or mandatory retirement,
higher disability rates, earlier deaths and earlier disability
retirements. All these factors are accounted for and provided by the
public sector plans.
In most cases, Social Security would not provide these employees
with coverage because of the age at which these employment events
occur. Public safety officers, for example, do not work until age 65
(or 67 when the age is finally raised), but retire at an earlier age
because of the stress and hazards associated with the job. Likewise,
the public sector plans have been designed to recognize the fact that
the employer must be prepared to provide disability retirements,
sometimes at an early age before an individual would qualify for Social
Security benefits.
Making Social Security mandatory would have little impact on the
projected funding shortfalls of Social Security system. However, such a
move would greatly affect public employees. Public employees not
covered would be required to pay an additional 6.2% in payroll taxes in
addition to what they are now required to contribute to their public
pension plan. Unlike most private sector employees who do not
contribute to their employer-sponsored pension plan, public employees,
for the most part, make an employee contribution which is combined with
the employer contribution. These contributions are then invested in
securities, with the investment returns paying a large portion of the
pension obligations during the lifetime of the employees and survivors.
Mandatory coverage would be costly to states and localities. As
employers, states and localities would also be required to pay an
additional 6.2% in payroll taxes on top of what they already contribute
to the pension fund. These employers are currently facing severe budget
shortfalls. These governments must balance their budgets, therefore,
adding such a financial burden would require them to either increase
taxes or reduce government services. For example, this would cost
California over $2.3 billion in additional expenditures annually, Ohio
$1 billion annually, and hundreds of millions to Texas, Illinois,
Colorado, Massachusetts and Louisiana. These states are already in a
financial crisis and do not need an additional burden. In addition, the
current economic climate in the states and local governments has forced
some employers to layoff firefighters, police officers and teachers,
thus making those remaining do the same job, but with fewer resources.
Mandatory coverage would be disruptive to existing retirement
programs. Many public employers would be unable to absorb the higher
costs. Either they would be required to continue funding their
respective retirement plans, in addition to the Social Security tax, or
severely reduce or eliminate current retirement benefits. The loss of
the investment returns on these pension funds, which averages over 8
percent per year, would add an additional burden to the employers. A
situation would be created whereby no new funds would be going into the
pension assets, but retiree benefits would continue to be paid.
Eventually, the funds would run out of money, thus placing the
retirement benefits of millions of employees in jeopardy. Many of these
plans are established constitutionally and to make such a change would
require legislative action and/or constitutional amendments.
It is a given that mandating coverage of non-covered state and
local government employees does not improve the financial stability of
the Social Security system. It solves approximately 10 percent of the
funding shortfall in the short run, but adds to the long-term benefits
payments, thus placing greater financial demand on the system. NCPERS
believes that the Congress should solve the long-term financial needs
of the system and ensure that Social Security is funded to guarantee
and protect the benefits of all those who are covered.
Mandating Social Security coverage of non-covered state and local
government employees is not the way to ensure Social Security's future
and it will destroy existing public sector plans that are well funded
and provide secure retirement benefits to millions of state and local
government employees.
We thank you for the opportunity to express our position on
mandatory Social Security coverage to the Subcommittee. We would be
happy to answer any questions you may have.

National Conference of State Legislatures
Washington, DC 20001
May 1, 2003

The Honorable E. Clay Shaw, Jr., Chair
Subcommittee on Social Security
U.S. House Ways and Means Committee
Room B-316 Rayburn House Office Building
Washington, DC 20515

Dear Chairman Shaw:

On behalf of the National Conference of State Legislatures (NCSL) I
want to thank you for holding today's hearing and for the opportunity
to share our concerns regarding mandatory Social Security coverage and
offsets to Social Security experienced by state and local government
employees. NCSL has opposed mandatory Social Security coverage for
state and local employees since the law was enacted. Similarly, NCSL
supports reform of the Government Pension Offset (GPO) and the Windfall
Elimination Provision (WEP) as they apply to Social Security benefits
paid to public employees whose incomes were earned in part or in full
through uncovered public employment.
NCSL has consistently maintained policy in opposition to mandatory
coverage of state and local government employees. Roughly twenty-five
percent of state and local government employees, working in all 50
states are not covered by Social Security. These public employees are
predominately teachers and public safety officers, whose primary
retirement benefits are provided by their state and local government
employers in accordance with federal law. Federal law requires these
benefits to meet a minimum standard for contributions and benefit
levels.
The application of mandatory coverage to all newly hired state and
local employees would constitute a massive unfunded federal mandate on
state and local governments. It would do little to extend the solvency
of the Social Security system. Recent estimates of its cost exceed $25
billion over 10 years. NCSL supports federal efforts to reform Social
Security and extend the solvency of the program. However, the nation's
state legislatures do not support exporting the program's long-term
insolvency to state and local governments.
While many state and local government employees do not contribute
to Social Security through their state or local government work, they
often earn Social Security benefits through other employment covered by
Social Security. These benefits are subject to the Windfall Elimination
Provision (WEP). Similarly, state and local employees may also earn a
Social Security benefit as the spouse of a beneficiary who paid into
the Social Security program. These benefits are subject to reduction by
the Government Pension Offset (GPO).
NCSL supports efforts to lessen the impact of these reductions to
the retirement income of state and local government retirees. NCSL
maintains that the reductions imprecisely and unfairly reduce the
Social Security benefits of government retirees. These reductions have
unintentionally harmed a disproportionate number of women and moderate
and lower-income state and local government retirees. As such, NCSL
supports efforts to reform or repeal these reductions. This includes
support for H.R. 887, S. 363, H.R. 594, S. 349, and section 207 of your
own bill, H.R. 75, which would reduce the impact of the government
pension offset by half.
NCSL supports reform of the Government Pension Offset and the
Windfall Elimination Provision but questions the appropriateness of
linking reform or repeal of these provisions to the extension of
mandatory coverage. NCSL believes linking these provisions increases
the burdens imposed on government employees and employers while doing
little to solve Social Security's long-term financing concerns.
Similarly, joining the provisions does little to strengthen Social
Security's mandate to provide an adequate safety net for the system's
beneficiaries.
We appreciate your consideration of the views of the National
Conference of State Legislatures on this issue.

Sincerely,
The Honorable Felix Ortiz
New York State Assembly, and Chair
Labor and Workforce Development Standing Committee

Ohio Public Employees Retirement System
Columbus, Ohio 43215
April 28, 2003

The Honorable E. Clay Shaw, Jr.
Chairman
Subcommittee on Social Security
Committee on Ways and Means
U.S. House of Representatives
B-316 Rayburn House Office Building
Washington, DC 20515

Dear Congressman Shaw:

Thank you for the opportunity to submit a written statement for the
May 1, 2003 Hearing on Social Security Provisions Affecting Public
Employees. The provisions that you plan to address at the hearing are
very important to us.
On behalf of the Ohio Public Employee's Retirement System Board of
Trustees and the more than one-half million active members and retirees
served by our system, I am writing to express our firm opposition to
mandating social security coverage on exempt public employees. There
are a number of large states that would be severely impacted by
mandatory coverage. In addition to Ohio, other large states that would
be affected include Alaska, California, Colorado, Connecticut,
Illinois, Kentucky, Louisiana, Maine, Massachusetts, Missouri, Nevada,
and Texas. In addition to these states, however, all 50 states have
significant subgroups of non-covered employees since the vast majority
of police and firefighters are also exempt from social security.
A GAO study reported in 1998 that mandating social security
coverage of public workers would extend the solvency of the social
security trust fund by only two years. Interestingly, the GAO study did
not detail the increased social security liabilities that would be
incurred by bringing in currently exempt public employees. In 1999, the
Segal Company did an independent study that reported extending
mandatory coverage would cost public employers over $26 billion for the
first five years. Since then the costs have gone up and, even worse,
most states are now facing budget crises.
Some proponents of mandatory coverage assert that bringing in ``new
hires'' only would cause no financial damage to our systems or to our
current members. That assertion is wrong. The fiscal impact of
excluding new hires from our systems would be financially devastating
to our pension funds over time. Our defined benefit plans operate under
the critical actuarial assumption that employer and employee
contributions and subsequent investment income will continue to flow
into our systems at rates projected by the actuaries. Directing new
hires to social security would lower employer and employee
contributions coming into our systems and consequently lower investment
income upon which our systems depend for nearly two-thirds of total
income. As a consequence, mandatory coverage will over time
dramatically undermine our financial ability to maintain benefits for
current members and retirees. Mandatory coverage would thus force
benefit reductions for both new hires and previous hires.
We understand that the hearing on May 1st will also address
Government Pension Offset (GPO) and Windfall Elimination Provision
(WEP). There is no question that GPO has had a very harmful impact on
many public employees, particularly women who entered the work force in
later years and who worked in relatively low paying jobs. It is
difficult to believe that the Congress ever intended that GPO should
have the damaging impact that it has had on so many lower-income
people. We urge the Committee to carefully consider changes and reforms
in the GPO and WEP in order to moderate the unintended detrimental
effects those provisions are having on public employees. Mandatory
coverage would be no solution to this issue because, as described
above, mandatory coverage would financially undermine our systems and
result in significant benefit reductions for public employees.
I want to be clear in stating that we believe that social security
should be preserved and strengthened so that it can continue to provide
its very valuable benefits. Social Security needs a long term solution.
Finally, I cannot put into words the sense of betrayal that would
be felt by the millions of non-covered workers who have placed their
faith and confidence in our systems and who have planned their
retirement years accordingly. It is absolutely critical for the
Congress to maintain the sense of stability, confidence, and security
for our employees who have served their communities, states, and the
nation so well.

Sincerely,
Laurie Fiori Hacking
Executive Director
Board of Trustees

Statement of Rodney Oakes, San Pedro, California
In 1951, at the age of 14, I worked five nights a week after school
in the Aura Bowling Alley in New Hartford, New York. I did this because
my family was poor. My father worked on construction, and when the
weather was good, and work was available, he made a modest living. In
the winter, construction employment was rare in the Snow Belt. My
mother worked part time cleaning the homes of the wealthy. With my
younger sister, the four of us lived in a trailer park. The income I
earned went to the family pot and was used to support the whole family.
I really needed the job, even though setting pins was very difficult
for a 14 year old! I also received my Social Security card. I was
thrilled! The United States government had entered into an agreement
with me, and I would receive a retirement income when I reached the age
of 65.
I did manage to work and maintain decent grades in school.
Eventually, the family moved to California where my father was able to
earn a better income in construction. I worked part time through high
school. My grades were good enough so that I could attend college. It
took me five years as I had to work 20 plus hours a week at various
jobs: dishwashing, waiter, construction, truck driver, musician, and
any other job that would help me reach my goal of a BA degree.
By 1961 I was ready to begin my final career. I made a huge
mistake. I decided to become a public school educator in the state of
California. I continued with my education, earning a Masters degree and
eventually a Doctor of Musical Arts Degree. I completed my career
teaching at the community college level. I also worked all this time as
a part time musician.
I lived to reach the age of 65 and I retired. I have a decent
retirement income from the STRS. I also have enough Social Security
credit to receive $450 a month and Parts A and B of Medicare. But,
because I chose to teach in California, I only collect $150 a month of
my allowance!
I feel as if the United States government has broken the agreement
that it made with that 14 year old junior high pin setter! I will be
able to survive without the additional $300 a month, but it seems as if
I am being punished because I chose a career in the California public
education system. It would be very easy to correct this injustice.

Statement of S. Parker, Nuiqsut, Alaska
When I recently learned that the social security I have been paying
into for many years in the lower forty-eight states will not be
available to me when I retire in Alaska I was outraged. I only started
my teaching career in 1999, after having spent many years employed in
other facets of the workforce. I had planned on having the money I had
put into social security as part of retirement. I understand that the
money I have deposited is not waiting for me to use, that it has been
spent on those who have retired before me, but still I had been losing
a good portion of my check every payday to that fund. Now, I am
teaching in Alaska and being advised that I will have to work for
thirty years before I can retire and have full medical coverage. I
won't be allowed to teach that many years! I moved to Alaska because of
many reasons that are near and dear to me, but I had no idea that I
would be losing my social security benefits by doing so.
It is true that we do not go into the field of teaching to ``make
money.'' However, it would be nice if all hours we spent at jobs to get
ourselves through school were recognized. Many of us worked two or
three part time jobs to get through every semester of college. We
didn't indebt ourselves with student loans or require financial aide.
We made it by working to pay for the classes and the labs we took. Now
it seems as though that was a waste of our time and resources. We are
not going to reap the benefits of those dollars taken through FICA for
all those years. We should have gone on welfare or accepted financial
aide and spent the time studying or with our families instead of going
to work.
I hope that you will consider the impact that social security
benefits will bring to those above the age of 45, who have gone into
teaching as a ``new'' career after leaving another behind. We can't
retire in the state of Alaska and survive without our social security
benefits waiting for us at the end of the trail.
Thank you for your time.

Statement of Bill Patterson, Roseville, California
Thank you for giving me this opportunity to write to you.
My name is Bill Patterson, and I am writing you today to let you
know about my story concerning Social Security and my decisions to be a
public school teacher.
I live in Roseville California. I'm 46 years old. I have a wife and
four children, two daughters, one 13-years-old and another, 19. Our two
boys are 22-years-old and 17.
I have paid into Social Security for 24 years. I am a teacher in
California who loves my job. I have been teaching for ten years. I have
been out of college for 22 years. For twelve years I worked in private
business. I enjoyed my different jobs, but felt there was more I could
do to help others. So, I returned to school to become a teacher. I am
glad I changed careers, but now I see a financial issue with my career
change that I did not see ten years ago.
Being in California, I am a member of the State Teacher Retirement
System (STRS), as are all public teachers. We have a good retirement
system, that will help in years to come. I, like many other teachers,
have a part time job to help make ends meet. Because I also have a part
time job, I also pay into Social Security. As I have been planning for
retirement, I was recently informed that when I do retire, because I
get STRS, my Social Security Benefit will be much less than what I
would have received had I not been a member of STRS.
Each of the ten years that I have been teaching, I have worked
second and third part time jobs to help make ends meet. Each of these
jobs pay into Social Security. I have earned well over the forty
quarters needed to qualify for Social Security.
This is a non-political issue, it is an issue that needs to be
fixed, to help teachers of today, as well as to help recruit more
teachers from the private industry.
Thank you.

Statement of Norma Petta, Sacramento, California
I thank you for making our plight public.
I am referring to the laws which would mandate that teachers in
certain states lose up to 60% of Social Security benefits because they
would receive a state pension. I worked 20 years in a private high
school during which time I paid into Social Security (in fact, I've
been working since I was 16 years old and paying into Social Security)
and have now been in a State Retirement System for only 11 years. I'm
54 years old. If I retire in 10 years, I'll get only 40% of my pay and
my Social Security will be reduced. I will have to pay for health
benefits at that time also. Is this how this nation should treat a
teacher who will have taught for over 40 years and really dedicated his
or her students? It's shameful!

Statement of Stephanie Pincson, San Francisco, California
When I became a teacher in San Francisco in 1973, after more than
20 years employment in other fields covered by Social Security, I never
realized that I would lose most of the Social Security benefits I
earned in those 20 years. Had I known, I might have thought twice about
becoming a teacher.
When I reached the age of 65, I applied for my Social Security
benefits and received $680 a month, not much, but then I worked only 20
years under Social Security. I continued to work until age 69 when I
retired. I was told that, despite the fact that I was already getting
benefits I had legally earned, those benefits would be cut to $340 due
to the ``offset.'' To cut the pittance I do receive is unconscionable.
I hope that finally something might be done to right this wrong
that was never intended to affect those of us who had worked under
Social Security before making a career change. I don't know any
business where employees' benefits are similar cut if they had worked a
previous job covered by Social Security.

Columbus, Ohio 43215
April 29, 2003

Rep. E. Clay Shaw, Jr.
Chairman of the Subcommittee on Social Security
2408 Rayburn House Office Building
Washington, D.C. 20515

Dear Rep. Shaw,

The Public Retirees of Ohio represented by the following
Associations welcome the opportunity to submit a ``Statement for the
Record.'' The associations joining voices are Police and Fire Retirees
of Ohio, School Employee Retirees of Ohio, Public Employee Retirees
Incorporated and The Ohio Retired Teachers Association.
The GPO/WEP is viewed by the Ohio retirees as an unfair law. The
test of time has rendered hostility among the residents of Ohio due to
these unfair practices of reduction and in some cases elimination of
rightfully earned social security.
The repeal of the GPO/WEP would enable retirees to receive their
full social security and would reduce the impact of the rising costs of
health care.
Petitions were signed in massive numbers in 2002 from across the
state for the repeal of WEP/GPO. This issue continues to be a topic for
the Committees in Washington. Now is the time to repeal these unfair
practices.

Sincerely,
William I. Winegarner
Administrator
Public Employee
Retirees Incorporated

Gary L. Monto
President
Police and Fire
Retirees of Ohio

David Travis
Executive Director
Ohio Retired Teachers Association

Valerie Rodgers
Executive Director
School Employee
Retirees of Ohio

Statement of John Reddington, Bright, Indiana
Please help to REPEAL the GPO/WEP--Simply stated it has reduced my
Social Security by 60%--to only $142. Per month. WHY ARE YOU PENALIZING
ME?????

Statement of Laura J. Reed, Canfield, Ohio
I retired in 1999. In 2001, by mistake, Social Security began
direct depositing $600 a month into my husband's account as my spousal
benefit. They did not notify us of this action. When we caught the
mistake S.S. had also deposited $2,000. And a few months later they
deposited $1,200. I was told (8 times by phone) that I wasn't titled to
receive spousal benefits. I told each Social Security contact that I
was a retired teacher from Ohio and was not to receive the money.
However, it took 4 letters, 8 calls and 4 personal visits to convince
them that they were in error. I repaid $12,600. This is the money which
I would receive if I had stayed at home or had worked in a low paying
job. I was punished because I attended school (at my own expense). I
retired with 28.8 years of experience, with a Masters Degree and 40
additional hours of credit. I worked two years at the Pine Bluff
Arsenal, Arkansas under the Federal Government. I worked, or attended
school from the age of 17. The Federal Government promised me from 1953
(when I married) until 1985 that I would receive the protection of
Social Security. My husband worked 40 years to give me additional
income on which to live. Should he pass away my household income will
be reduced by $1,000 a month plus the services that he can provide
(repairs around the house, etc.). With the additional income which
Social Security should be paying me I could be assured of taking care
of myself if something should happen to him and not become a burden to
my government. Since we are both living and active at this time, the
$600 due to me at this time would be spent and help the economy. Or I
could save the money. It could mean that my grandchildren would have a
college education (without help from the government). The government is
``penny wise and pound foolish'' on this issue. Please support the
complete repeal of the Offset and Windfall Provisions. I feel these
laws are unlawful because the ``contract'' between the government and
Federal/State employees was broken without giving people the chance to
do anything about it. You are elected to represent the people of the
United States--hard working Americans--how can you not vote to repeal
these two unfair laws? I have submitted 2,200 signatures on my petition
and I have over 200 more to send in--just from my surrounding area.

Statement of Zwi Resnick, Fresno, California
I would like to begin by noting my appreciation for the opportunity
to describe to you the consequences of the Social Security offset on
those of us who have chosen to make mid-life career changes.
My first professional career was as an Exploration Geophysicist in
the Oil and Gas Industry. In 1986 I became an instant consultant.
That's a nice way of saying that I, along with 400,000 others in the
Oil and Gas business, was laid off. I had made a sufficient number of
contacts over the previous twelve years that I started getting
consulting work almost immediately. Despite that I had this urge to
start looking at other work that I could do.
In the Fall of 1986 I started to teach part time. My degrees are in
Mathematics. In Denver, where I lived at the time, Metropolitan State
College and the University of Colorado-Denver use many adjunct faculty
in Mathematics. So I started to teach one or two courses a semester in
addition to my oil and gas exploration consulting work. As I continued
with this dual occupation I found that teaching became increasingly
attractive to me as a profession. Rather than continue with my
consulting work I decided to pursue a career as a teacher. Therefore,
in late 1989 I began actively looking for a full time teaching
position. It soon became apparent to me that the only way a career
change was possible would be by restricting my search to systems that
offered decent salary and benefits structures. I found that in the
California Community College system. In August 1990 I joined the
Mathematics faculty at Fresno City College. I was aware that any
pension I would earn would be based on a limited length of service
since I was starting my new profession at the age of 42. However, I
also knew that I had been paying Social Security taxes since 1964 and
would have my earned benefit to augment my STRS pension.
I was, of course, quite mistaken. The most recent statement I
received from the Social Security Administration indicates that I have
earned a benefit that could be as much as $1,337. I am advised in this
statement that this benefit has been computed assuming no further
Social Security taxable earnings. Because of the existing law I will be
deprived of most of this. I will lose the benefit I am being told I
have already earned!
As the President of my union--the State Center Federation of
Teachers, AFT local #1533--my colleagues frequently ask me questions
about earned STRS benefits. I answer these questions knowing full well
that I will not retire with anything approaching the level of benefit
that my colleagues have earned. By the time I retire my total
professional career as an Exploration Geophysicist and as a Mathematics
professor will easily match the length of service of any of my
colleagues. However, because of the Social Security offset I will not
receive the full benefit I believe I have earned.
Since I first began teaching part time in 1986, and full time in
1990, I have felt that my Mathematics students have benefited from the
experience in the private sector that I bring to the classroom. I like
to think that people with backgrounds like mine should be encouraged to
enter teaching. I do benefit from the priceless luxury of knowing that
my work is inherently valuable. However, why should I be financially
penalized for having found my true vocation later in life?

Retired, County, and Municipal Employees Association of
Massachusetts
Boston, Massachusetts 02108
May 15, 2003

Congressman E. Clay Shaw
Chairman, Subcommittee on Social Security
United States House of Representatives
Rayburn House Office Building, Room B-316
Washington, D.C. 20515

Dear Chairman Shaw:

Our Association appreciates this opportunity to offer our comments
on Social Security's Government Pension Offset (GPO) and Windfall
Elimination Provision (WEP), as well as mandatory Social Security
coverage. We thank you for including our statement in the May 1, 2003
hearing record of the Subcommittee on Social Security.
For the past 35 years, our Association has been the leading
advocate for public retirees and their survivors in Massachusetts.
Currently, our membership totals over 53,000, of which approximately
5,000 reside in.
While our primary focus has been, and remains, at the state and
local levels, we have also involved ourselves in federal issues,
particularly those related to Social Security and Medicare. Foremost
are the GPO, WEP and mandatory Social Security coverage.
Among our members are widows, who, in addition to being homemakers,
worked at relatively modest public sector jobs that supplemented their
family income and enabled them to earn, by today's standards, a
relatively small public pension. These members, and their husbands,
believed that if they became widows they would hopefully have an
adequate retirement income because they would also receive their
husband's full Social Security benefits.
Unfortunately, when their husbands died, they discovered, to their
shock and dismay, that because of their small pensions, they were not
eligible for their deceased husband's full Social Security. Instead,
they were told by the Social Security Administration (SSA) that because
of the GPO, they would receive far less than they anticipated.
Our membership also includes those who worked two jobs--one in the
public sector and another with a private employer--in order to support
their families. Naturally they expected that their hard work in the
private sector entitled them to the same Social Security benefits as
their co-workers.
However, these expectations for many of these members failed to be
realized when they received their first Social Security check. That's
because the WEP reduced their Social Security benefits by as much as
sixty percent.
Over the past years, the number of members contacting the
Association over the GPO/WEP's devastating effect on their lives has
steadily increased. They rose to such a level that our Association
committed itself to resolving their problem.
Attached to our letter is a copy of an article that we published in
our March 2003 edition of the Voice of the Retired Public Employee. It
tells how some of our members in Florida have been devastated by the
GPO and/or WEP. Similar personal stories can be found on our website
(http://www.massretirees.com).
These members are representative of the many who have described to
us their plight. Their calls for help have become, tragically, all too
commonplace.
It is because of this that we call upon the Subcommittee to report
out a bill for action by the House. We believe that such legislation
should repeal both the GPO and WEP.
We also believe that any bill should not include mandating that
newly hired public employees in Massachusetts, and other non-Social
Security states, be covered under Social Security. Analyses have shown
that the short term infusion of Social Security taxes from new hires
will have a relatively insignificant effect upon the system's future
solvency. Moreover, the revenues, generated by these taxes, will be
offset in the long term when those employees receive their Social
Security benefits.
More important is the overwhelming tax increase upon the
Commonwealth and its political subdivisions. State agencies have placed
the cost at nearly $3.9 billion over the first 10 years under mandatory
Social Security. As a result, state and local officials would have to
increase taxes, cut essential services in areas, such as education or
public safety, or both. Simply put, the end does not justify the means
in this particular case.
In the 1950s, state and local governments were given the option to
join in the Social Security system. While many states and localities
did enroll in the system, Massachusetts and its political subdivisions
chose to maintain their own comprehensive retirement system,
specifically developed for their own retirees and employees, because it
provides superior benefits for those who chose a career in public
service at lesser pay.
If one considers how mandatory Social Security will disrupt the
well-established system and cause new long-term fiscal problems at the
state and local levels, then only one conclusion can be reached. Social
Security should not be mandated for newly hired public employees in and
similarly situated states.
In conclusion, we again appreciate this opportunity to voice our
opinion on the GPO, WEP and mandatory Social Security and urge the
Subcommittee to act promptly on needed legislation repealing both the
GPO and WEP. There is no question that it will bring a deserved measure
of dignity to the lives of those currently being severely hurt by these
laws.
Thank you.

Sincerely yours,
Ralph White
President

__________
Association Enlists Florida Members In Fight Against GPO And WEP Relief
Bills Introduced In Congress
When it comes to relief from Social Security's Government Pension
Offset (GPO) and Windfall Elimination Provision (WEP), the Association
will do whatever it can to push this much needed legislation through
the Congress. Last year, we enlisted the help of our Maine and Vermont
members, and now we've turned to our Florida membership.
Earlier this year, several hundred members, living in the Ft.
Lauderdale/Pompano Beach area, met with Association officials. Ft.
Lauderdale is also represented by Congressman Clay Shaw, Jr. who has
served as chairman of the Social Security Subcommittee--a critical
committee to any earlier success toward relief.
One of the hot topics at the Florida meeting was the GPO and WEP.
``To be successful, we need to enlist the grassroots support of our
members living outside the Commonwealth,'' according to Legislative
Chairman Bill Hill. ``This meeting was an excellent opportunity to do
just that, and it appears to have been successful.''
It provided our members, who are hurt by the GPO and WEP, with a
forum to express their dissatisfaction with these laws and demand
change. ``It's not right that after I paid into Social Security all
those years, I should be treated (by the WEP) as if I'm trying to get
something for nothing,'' claims Gloria Bernier who worked at
Framingham's Cushing Memorial Hospital and now lives in Pompano Beach.
``Gloria is right on point,'' added friend and former coworker Joan
Anderson, now of Boyington, who is hurt by both laws as a widow. ``I
wish the politicians, who pushed through these laws so many years ago,
could see the harm they're causing today.''
``When I worked at the retirement board, I saw firsthand how
retirees were hurt and here I'm witnessing it again,'' according to
Florence of West Palm Beach, who was the former executive director of
the Fall River Retirement Board and receives nothing because of the
GPO. ``They can't wait any longer; the President and Congress must help
now.''
These comments are representative of the many heard by Association
officials at the meeting. Members not only had a chance to voice their
criticism but also join together and take action.
``Since moving here (Florida), I've been frustrated because I can't
have the direct impact that I had when I lived and voted in Mass,''
says Harold Greene of Pompano Beach. ``Now I can do my part for my
fellow members, who are being hurt by Social Security, and contact my
congressman, Clay Shaw, to correct the problem.''
``We'll be writing to him also,'' vowed both Bernier and Anderson.
``It's time for us to act.''
Continue Work With Coalition
``Our work with our members is part of the Association's activities
in conjunction with CARE (Coalition to Assure Retirement Equity),''
reports Hill. ``By way of explanation for our newer members, our
Association has belonged, for several years, to CARE which is dedicated
to eliminating the GPO and WEP.
``Several national unions and organizations have coordinated their
efforts to abolish the GPO and WEP through the coalition. NARFE
(National Association of Retired Federal Employees) spearheads CARE.''
It's important to note that even though the Congress has the same
two-year session as the Mass. Legislature, the Congress takes somewhat
longer to file bills for the current (108th) session. For example,
while the Association's 2003-2004 legislative was filed last December
in the State House, congressmen and senators began to introduce bills
in the U.S. Capitol after they convened in January.
In February (after we went to press), CARE met at NARFE's
headquarters to map out strategy for this year. Legislative Liaison
Shawn Duhamel has been representing the Association at these important
coalition meetings.
Just before the CARE meeting, the lead sponsors for the GPO relief
legislation, which the coalition has supported over the years, filed
their bills again for the 108th Session. Representative William
Jefferson (D-LA) and Senator Barbara Milkulsky (D-MD) have reintroduced
legislation that will exempt $2,000 of a public retiree's monthly
pension and Social Security benefits from the GPO.
Members should note that the sponsors have upped the monthly
amount--from $1,200 in last year's bill to $2,000 in the current
version. ``While the bills still do not eliminate the GPO, the number
of affected public retirees, who could benefit, has been obviously
expanded by raising the dollar amount,'' says Hill. ``Legislation,
repealing both the WEP and GPO, will also be before this Congress as it
has in prior sessions.''
Senator Dianne Feinstein (D-CA) and Representative Howard (Buck)
McKeon (D-CA) have reintroduced their bills to eliminate both the GPO
and WEP. A summary of the major relief legislation in the Congress,
including bill numbers, will be included in the May Voice.
On the home front, Senator John Kerry and Representative Barney
Frank are filing, once again, bills in the 108th Congress that will
offer WEP relief to those members with moderate retirement income
(i.e., pension and social security benefits totaling less than $3,000
monthly or $36,000 annually). While the Kerry and Frank bills do not
repeal the WEP entirely, they represent a major step in the relief
effort. Both had introduced WEP relief legislation in the previous
(107th) session, with Frank's bill sponsored by well over a majority of
that Congress.

Statement of Daniel Rice, Pewee Valley, Kentucky
I am a 60 yr old retired special education schoolteacher and must
continue to pay into Social Security but am penalized by being able to
draw only 30% of what I deserve. Please do the right thing and rectify
this unfairness. I am a former member of Jefferson Co Teachers Assn
(KY), Kentucky Education Association, and the National Education
Association.

Statement of Sharon Richard, Sour Lake, Texas
Thank you for giving me this opportunity to write to you.
I am a fifth-year Texas schoolteacher. I teach American history,
including the American Revolution, the Constitution, and the Bill of
Rights, to eighth grade students at Henderson Middle School in Hardin-
Jefferson Independent School District. I absolutely love what I teach.
As I strive to share with my students the ideas of the Founding Fathers
and the many reasons why they fought, deliberated, perspired, and
worked on the noble experiment known fondly as the United States of
America, I constantly urge my students to undertake a life-long
participation in their government. I do my best to instill the belief
that the founders' idea of popular sovereignty is still true in this
democratic republic, and they must always think of themselves as part
of ``We the People.''
Before my teaching career began, however, for over twenty-five
years my husband Randy and I owned and operated Sour Lake Drug, Inc., a
small independent community pharmacy.
Both my husband and I have paid significantly into social security
over the course of our lifetimes. He began paying into social security
at the age of sixteen. I first paid into social security at the age of
twenty-one. Also, since we owned our business, we MATCHED the social
security paid in by our employees and ourselves. Therefore, we consider
that for more than twenty-five years, we paid DOUBLE amounts into
social security.
Three years into my teaching career, I found out about the
Government Pension Offset and the Windfall Elimination Provision. Of
course, at first I could not believe that my government would really
take away EARNED social security at retirement. But in the course of
the last two years, I have learned that, indeed, my government really
will do that.
Yes, my government, the government ``of the people, by the people,
and for the people,'' really will literally deny our hard earned and
previously paid benefits because of two obscure and misunderstood laws
called the Government Pension Offset and Windfall Elimination
Provision.
I have learned that when I retire through the Texas Teacher
Retirement System, and draw a pension, I will likely lose ALL of my
spousal benefits because of the Government Pension Offset. My husband
simply cannot comprehend that he has spent thirty years as a diligent
independent community pharmacist, often serving the public around the
clock, and that his wife of over thirty years will be denied benefits
based on the social security he has paid in!
Further, because of the Windfall Elimination Provision, I will also
be denied much of my OWN paid-in social security, because I ONLY have
24 ``substantial'' years of social security. I will not receive the
amount of money per month that is quoted on my quarterly social
security earnings statement. Meanwhile, of course, I have no choice but
to pay into the TRS. I will lose hundreds of dollars each month when I
retire, dollars that will make a significant difference in our
retirement years. These are my earned benefits that I will be denied!
And I also paid matching amounts through my business! Unconscionable.
Unjust. Unfair. Unbelievable. Incomprehensible.
My salary as a fifth-year Texas social studies teacher is slightly
more than $28,000 per year. I am in my mid-fifties, and plan to teach
only a few more years. With a meager salary like this, my pension will
hardly be a ``windfall.'' And although many people consider pharmacy to
be lucrative, on the contrary, small-town independent pharmacies have
taken severe financial hits with the advent of insurance-driven HMOs,
PPOs, drug formularies, and the like. Accordingly, our business
retirement plan was minimal. Because of these factors, we have since
sold our little independent pharmacy. Therefore, we had certainly
counted on our fully earned social security benefits, along with my
small teacher pension, to help with our retirement.
As badly as the WEP and GPO are affecting public servants at
present, the future of education is also being severely undermined by
these laws. We need quality individuals to enter education, and we need
them now. As a measure to recruit these quality individuals, plans such
as Troops to Teachers and Careers to Classroom have tried to lure past
military and professionals into the classrooms of America. However, as
prospective teachers are made aware of these unjust social security
laws, they are foregoing the idea of going into the classrooms of Texas
and the other 14 impacted states, and rightly so. How wrong it is, for
example, to recruit retired military, praise them for excellence in the
classroom, and then deny them the social security benefits they earned
while serving their country! These laws are such an injustice to hard-
working public servants. And to be told that we are ``double dipping''
is unjustified and quite untrue.
We know the reasons these laws were implemented, to prevent the
``double dipping.'' But the effect is negligible on those who get large
pensions. Those who are hurt are the lowest paid public servants in
America. To allow the Government Pension Offset and Windfall
Elimination Provision to continue to force custodians and cafeteria
workers, bus drivers and school nurses into virtual poverty is simply
immoral. It is beyond unjust to allow these dedicated and
conscientious, but lowest paid personnel on Texas campuses to be
treated in such a manner by their government. To let these laws stand,
to postpone the elimination of these unfair laws through yet another
Congress, is a travesty. Two decades of this injustice is long enough.
The General Accounting Office may not have taken into consideration
that the cost of repeal of these laws must be measured by more than
dollars and cents. The cost must also be measured by the life of each
American public servant and the respect each deserves for a lifetime of
commitment.
``America's heroes,'' the firemen and policemen, along with the
millions of others who are affected by these unbelievably unjust laws
are also having a hard time understanding why this issue appears to be
so partisan. This is not a Republican vs. Democrat issue; this is a
simple issue of fairness to multitudes of public servants in this great
country.
As one of those public servants, I respectfully request immediate
elimination of the Government Pension Offset and Windfall Elimination
Provision.

Statement of Thomas W. Root, Moline, Illinois
I support H.R. 349. Please restore fairness which is the intent of
this bill.

Marion, Illinois 62959
April 28, 2003

The Honorable E. Clay Shaw, Jr.
2408 Rayburn House Office Building
Washington, D.C. 20515

Dear Congressman Shaw:

I am writing to you as the Chairman of the Subcommittee which will
be holding hearings on the Social Security act to repeal the Government
pension offset and windfall provisions.
I, and many others, would appreciate so much if we could draw our
full Social Security along with a small retirement from Southern
Illinois University in Carbondale, Illinois. When you work and pay into
Social Security, but you lose your job for reasons beyond your control
(my employer passed away) and then I was so fortunate to get a job at
the university but I had no idea what would happen at retirement.
Since I only have a few years under Social Security and a few years
at the university, I would not draw a lot from either one but with the
2/3's offset I will get very little to live on. I am 65 now but cannot
retire because if I work I can get my full Social Security and when I
retire they take most of it. We are talking about the difference of
about $800 verses about $1,300. Lower income employees really need your
help! Please help make our retirement years easier.
Thanking you in advance.

Sincerely,
Paula Rothschild

Statement of Mary A. Gazda Ryan, Charlestown, Rhode Island
Thank you for giving me this opportunity to write to you. My job as
a school teacher makes my presence at the hearings impossible.
My name is Mary Gazda Ryan. I am a 48 year old public school
teacher.
I believe in the American Dream and consider myself to be a
fortunate person. I am a third generation American, first generation of
college graduates. I started working the day I turned sixteen to save
for my college education.
My entire life I had been told, I would go to college. Thankfully,
I took it to heart. I studied hard in order to receive the best grades
and it was exciting to reach an age where I could actively contribute
to my college fund. I remember my first day of waitressing with great
pride. When my father died during my senior year of high school, my
commitment to my dream grew in importance. I would hear him in the back
of my mind saying, as he often did, ``You're not getting married until
you graduate from college.'' Not that there were any prospects of
marriage, but a father's love believed me to be irresistible as a
father's love drove me to improve my lot in life.
I was accepted into my state university, the University of Rhode
Island. I did not receive any scholarships, and my mother did not
believe in loans. Consequently, I worked all my years of college while
carrying a full load of courses. I took as many as I was allowed,
seven, because I knew the value of my education having earned every
dollar for it. I had to take a semester off during my junior year to
work full time in order to continue my education. With all of my extra
credits, I am proud to say I earned my degree the summer of my expected
graduation in May.
Teaching was not an easy field to get into at the time. I continued
to work in food service and took extra courses. I purposely took my
first teaching job in a poor section of a city, not because I would
help pay off my loans, remember I did not have any, but rather to give
back and help other children understand the dream. The pay was not
enough to live on, so I continued to work part time. Throughout my work
history, including my first two teaching jobs, Social Security was
taken out of my paycheck. For the last thirteen years I have worked in
a school system that does not participate in Social Security.
I am disheartened to believe my country would penalize me for this
omission in which I had no part. Paying into Social Security was not an
option. Proudly following in the footsteps of my parents, a mill worker
and a construction worker, I continue to work hard looking forward to
the day when I can retire with the expectation of living
``comfortably.''
It is beyond my comprehension that my government would penalize me
for putting money into a retirement fund. My mother would not survive,
if not for the extra monies my brother, sister and I prove monthly. I
began saving so that I would not find myself in a similar position one
day with no children to provide additional support. I am sure there are
many more people like myself. I feel sympathy for retirees who are
presently being penalized.
I believe in the American Dream. I ask you today to help me see it
in action. Right this wrong. Thank you.

Statement of the Honorable Max Sandlin, a Representative in Congress
from the State of Texas
Thank you Mr. Chairman and Ranking Member Matsui, for the
opportunity to testify today on the impact of the Government Pension
Offset and Windfall Elimination Provision on the Social Security
benefits of retired government employees. I am pleased that the
committee has called a hearing on how these two provisions affect
nearly six million federal, state and local government employees.
As a member of the House Ways and Means Committee, I am proud to
help lead the fight for our public employees. As my colleagues know, I
have introduced legislation in the past to eliminate the Windfall
Elimination Provision. Today, I come to re-iterate my support for two
bills I am proud to co-sponsor, H.R. 594, the Social Security Fairness
Act, introduced by Mr. McKeon, and H.R. 887, introduced by Mr.
Jefferson. I am hopeful that our public debate today on the importance
of restoring equity to the Social Security benefits of our retired
government employees will result in these bills being brought to the
floor of the House for a vote.
Mr. Chairman, when I am not voting in Congress, I travel through my
district visiting with my constituents. Last week, during Spring
District work period, I hosted a series of town hall meetings in
Texarkana, Mt. Pleasant and Marshall, Texas on Social Security and
Medicare. As I have heard for years from every corner of the 19
counties in the First Congressional District of Texas, many of my
constituents, who are former local, state and federal government
employees, asked me why their Social Security benefits continue to be
penalized by the GPO and WEP provisions.
One of these constituents happens to be my mother, Margie Sandlin,
whose suggestions and advice I have learned over many years not to
ignore. My mother was proud to spend nearly 30 years serving society as
a public school teacher, a job which simultaneously challenged and
fulfilled her. However, she never expected that her reward for these
years of service would be a significant reduction in her Social
Security benefits due to the Government Pension Offset. She never
expected that our government would penalize someone who dedicated her
life to public service. My mother rightly feels like the federal
government has turned its back on her when she needs its help the
most--during her retirement years.
The work our teachers, firemen, policemen, and other government
employees do strengthens the foundation of our nation every single day.
More often than not, these people accept lower pay checks in order to
serve their communities. I don't think anyone in this room believes we
should now penalize these teachers, firemen, and policemen again with
Social Security benefits that fail to meet their expectations and fail
to provide them with a basic standard of living.
Some claim the GPO and WEP provisions are not particularly onerous
to many of the affected retirees because the provision generally
affects only those who are well off and have a generous government
pension. I assure the members of this committee that my mother knows
from personal experience how false this assumption is. She spent much
of her life in public service and planned her retirement carefully. To
have had her Social Security benefits arbitrarily and unexpectedly
reduced was more than just an insult--it was also a lowering of her
standard of living in her retirement years.
We need to put the federal government back in the business of
providing our retired government employees with the retirement security
they deserve. I recognize that full repeal of the Windfall Elimination
Provision and Government Pension Offset would be expensive, and we need
to debate a reasonable way to pay for this legislation. Mr. Chairman,
as Congress moves forward with reform of the Social Security system, I
urge you and the members of this committee to remember our retired
federal, state, and local government employees. They deserve much
better from us. They have earned that much.
Thank you Mr. Chairman, Ranking Member Matsui, and members of this
subcommittee.

Statement of Karen Sanford, Bartlesville, Oklahoma
I was reinstated into the Postal Service in 1995, as a Civil
Service Offset. I have been contributing to both Civil Service and
Social Security since that time.
When I retire, and start getting Social Security, my Civil Service
Retirement will be reduced by the same amount that I receive from
Social Security. I will not be getting any more money. It will just be
coming from a different place. How can you call this a windfall? I feel
as though I have been robbed of the $20,000 that I have in Social
Security. This is a lot of money to me, which I need, being a widow.
If you paid for both Social Security and Civil Service Retirement,
you should get them both without penalizing the Civil Service
Retirement. If you did not pay for both then you should not get both.

Statement of Barton Schiermeyer, Orion, Illinois
I support H.R. 349. Please restore fairness which is the intent of
this bill.

Statement of Thomas R. Anderson, School Employees Retirement System of
Ohio, Columbus, Ohio
Mr. Chairman and members of the Subcommittee, thank you for the
opportunity to present comments for the record on the harmful effects
of the Social Security Government Pension Offset (GPO).
My testimony reflects the opinion of the School Employees
Retirement System of Ohio (SERS), which is the statewide public pension
plan for Ohio's non-teaching public school employees. SERS serves
120,000 currently contributing members, and 60,000 retirees and
beneficiaries. Members include school bus drivers, cafeteria workers,
custodians, teacher's aides, secretaries, administrative support staff,
business managers, treasurers, and school board members. All members
are exempt from Social Security.
Demographically, 73% of SERS' members are women. They enter the
workforce later in life, commonly to support their families, and often
after the loss of the family breadwinner. As a result of their shorter
public careers and lower wages paid due to the nature of the work, the
average SERS retiree receives a monthly pension of $639. As you can
imagine, the impact of the GPO on individuals who earn such a modest
pension can be devastating. The following examples demonstrate the
negative impact of the GPO upon actual SERS retirees:

Retiree #1

A disabled widow retired on SERS disability retirement in 1986.
She receives $403.41 in monthly disability benefits. She was originally
entitled to $216.30 per month in Social Security as a disabled widow.
Due to the GPO, she receives no Social Security, as two-thirds of her
SERS pension is larger than the widow's benefit. Her total pension
income remains $403.41 per month from SERS.

Retiree #2

A widow who retired from SERS as a school cleaner in 1989 with
15 years of service and a final average salary of $6,983 receives a
$214.91 monthly pension from SERS. Her Social Security widow's pension
was $361 a month, which would have provided a combined income of nearly
$576. However, due to the GPO, her Social Security was reduced by $143,
which means her total income is just $432 per month.

Retiree #3

A school employee retired in 1989 with nearly 15 years of
service and a final average salary of $6,389. She receives a gross SERS
pension of $241.88, and due to the offset, only $87 from her husband's
Social Security. Her combined monthly income is just $328.88. The
retiree writes, ``I don't know what they think people live on.''

Retiree #4

A school secretary retired in 1996 with 15 years of service and
a final average salary of $27,600. Because she draws $734.39 a month
from SERS, two-thirds of her pension completely offsets her spousal
Social Security benefit. ``I think this law is terrible,'' she writes.
``I have a hard time living on $700 a month. Try it. It's hard.''

For the first three retirees, an unreduced Social Security spousal
benefit would have provided each with a combined monthly income of less
than $700, an amount that is still below the federal poverty guidelines
for an individual.
The examples clearly illustrate that the GPO results in an
inequitable distribution of Social Security benefits and is
inconsistent with the overall provisions and intent of the Social
Security Act. The GPO most harshly impacts those lower-income women
whose combined public pensions and unreduced Social Security benefits
would still fall below the federal poverty guidelines.
Application of the GPO pushes these retirees more deeply into
poverty, and ironically renders them eligible for federal- and state-
sponsored assistance programs, merely shifting the liability from
Social Security to other taxpayer-financed budgets.
On behalf of SERS' 180,000 members and retirees, and the hundreds
of thousands of other public pension plan members and retirees
nationally, I urge the members of this Subcommittee to recommend that
the GPO be repealed or modified as soon as possible.
Thank you for the opportunity to be a voice for so many hard-
working public school employees in Ohio who have lost, or will lose,
critical purchasing power in retirement through application of the GPO.
I would be pleased to provide any further information or testimony as
members consider reform in this area.

Statement of Joyce Schwab, Cincinnati, Ohio
I worked to hard for my SS. I have for 28 years paid into it, and I
only have been working for the state for 15 years. I need both to live
on when I retire which, if I get both, will still only be about
1,500.00 a month before taxes. Excuse me, where is the windfall?

Statement of Suzanne Shaw, Penobscot, Maine
Thank you for giving me this opportunity to write to you.
My name is Sue Shaw and I am writing to you today as a retired
teacher. A retired teacher who, in 4 years when I reach the age to
receive the Social Security (SS) benefit that the government has
collected the taxes for and has to promised me, will see that benefit
either severely reduced or totally eliminated. Because I have not only
worked under SS for the required 40 quarters but also have a spouse who
contributed to SS for almost 50 years, I will be subject to both the
Government Pension Offset (GPO) and the Windfall Elimination Provision
(WEP). I fully realize that everyone is limited to one SS benefit--
instead a complete benefit however, since I chose to be a teacher for
37 years in Maine, I will be eligible to receive not a penny of my
husband's earned benefit (GPO) and only 40% of my own (WEP).
One of the arguments I hear is that SS is slanted toward the low
wage earners. As I say in the following paragraphs, that is what I
thought I was! That is why I was working two jobs and during vacations
from school! When you are young and poor, that is what you do--you work
extra jobs! When you are old and the benefits that you supposedly
earned when you were doing that extra work are denied to you--what do
you do then?
Just like Everyone Else . . .
I am so tired of people acting as though we who are fighting the
Social Security Offset of the Windfall Elimination Provision are trying
to steal something. I am tired of hearing people tell me that Social
Security (SS) needs to be preserved for current recipients and for
those who will be retiring in the future, as though we are some type of
an unfunded liability. As though we are asking for something that has
not been paid for.
I am tired of people who do not understand anything except that
they are afraid someone is trying to steal SS retirement money. I am
tired of being told that the government cannot afford to pay us 100% of
our earned SS benefits.
And hundreds of thousands of workers are tired of being forced to
pay into a system from which they will not be able to realize fair
benefits.
People who are penalized by the Windfall Elimination Provision
(WEP) have paid into the SS system exactly the same as everyone else.
Exactly the same formula was used for withholding SS tax from our
private sector work. For every penny we earned, we paid a portion of
that penny into SS, just like everyone else.
Social Security says that in order for an individual to receive a
benefit, they must first earn ``40 quarters'' which means a minimum of
10 years working time. Just like everyone else, those of us who are
trapped by the WEP have earned those forty quarters--and in many cases
well over that number. We are NOT asking for benefits for non-covered
work--we simply want the same SS benefits for the same quarters and
contributions as everyone else!
The government tells us that SS is meant to be a safety net for
those at the low end of the income scale. Those of us who worked full
time at one job and evenings and weekends at another thought we fit
that description!
We were low paid--so we worked an extra job. We climbed the ladder
of advancement and crossed private/public sector lines. We relocated to
follow family or opportunity. We opened a small business on the side.
We worked . . . and now we will have to continue to work, because the
retirement benefits we were promised for the payments we made will not
be forthcoming due to the WEP.
Just like everyone else, we paid 100% of the required tax into SS.
But--UNLIKE everyone else, we will NOT receive a 100% benefit! Because
we receive a ``public pension'' for part of our work history, our
benefit for work under SS is offset. UNLIKE everyone else, our earned
SS benefit could be well less than half of what was promised by the
government.
Unlike those with a 401K, our public pension will cause our SS
benefit to be slashed. Unlike a private sector pension from an
employer, our public pension will cause our SS benefit to be reduced by
thousands of dollars.
Public pensions and SS are different systems--different forms of
government (state/federal) oversee them, different taxes and
contributions support them, and they have different vesting and
benefits schedules. To receive both SS and a public pension is NOT
double dipping--it is receiving different benefits for different paid
taxes for different work under different employers. It is paying in
twice--and working twice. Benefits should be paid twice--once from each
employer--both at the 100% level!
All we are asking for is the SS benefit we earned. The SS benefit
promised when we paid SS taxes on every penny earned for year after
year after year . . . just like everyone else.
The Widows of America . . .
Imagine this--you are a recently retired state health care
professional. While your children were young, you worked part time
occasionally, but spent a lot of time at home, raising your family.
When they were through with school, you took your turn at college, and
at mid-life began the career you had always dreamed of. You worked for
20 more years, and now, you and your husband are looking toward a well-
deserved retirement. A relatively common, uncomplicated scenario.
But then, as happens all too often, tragedy strikes and your
beloved husband unexpectedly dies. Your world collapses, and things
turn upside down as you bury your life-partner. As time passes, there
is business that needs to be seen to, and you begin to deal with the
paper work that death creates. You go down to the Social Security
offices, and a bleak picture becomes even more so, and the future
becomes not only lonely, but also frightening, because you find that
there will not be enough money to live on. Social Security says you can
not have any of your deceased husband's benefit. You will be living on
only your public pension from your relatively short career.
Melodramatic? Overdone? No--commonplace. Every day, all across the
country, widows (and, of course, widowers) find that, when they go to
SS after the death of their spouses, there will be either severely
reduced survivor benefits, or none at all. These surviving spouses find
that they are denied the benefits earned for them by the work record of
the deceased simply because they (the survivors) have a public pension.
This law that devastates the income of so many of America's elderly
widows is the Government Pension Offset (GPO). Passed in the early
80's, it was designed to keep those with high incomes from doing what
was perceived as ``double dipping'' or getting two top-level government
retirement benefits. As conceived, the law had good points. In
practice, however, it is extremely flawed. What the GPO does is give a
secure retirement the kiss of death for low and middle income public
employees who, along with their spouses, have worked, paid their bills,
and paid their taxes for many long years. What the GPO does, in fact,
is put the income of many of these retirees at the poverty level upon
the death of a spouse. What the GPO does is see to it that all too
often, when the spouse dies, the benefit dies also.
These retired public employees--postal workers, clerical staff in
the state offices, police, firefighters, Department of Transportation
workers, secretaries, teachers, guidance counselors, bus drivers, game
wardens, public utility workers, federal employees, custodians, state
health workers, prison employees, air traffic controllers, and many
more, have retirement income stolen by the GPO. The loss of this
income, which had been earned for them by their spouses, makes many of
these dedicated individuals eligible for public assistance programs.
They become eligible for heating assistance, housing assistance, food
stamps, and health care. Programs that, in fact, end up costing the
government more money than it would to simply give the workers their
earned benefits in the first place.
These people do not WANT assistance--they want the money from the
benefits that SS promised when SS taxes were taken from paychecks. As
one worker put it . . . ``It's all tax money . . . it's just how you
get it! It would be cheaper for the government to keep me off of the
`dole' if it can!'' These widows can find themselves living on less
than $25 a day--many times much less, simply because they had the
misfortune to choose to work in the public sector. As Marti Flint said
in the January 8th 2003 CBS Evening News ``Eye on America'' segment on
SS--``the only thing I did wrong was to go to work in a school!''
The encouraging of workers to embrace ``2nd careers'' . . .
President Bush encourages the military to turn to a 2nd career in
the classroom in his ``Troops to Teachers'' program. One has to wonder
if the military personnel who walk into classrooms after 20 years in
uniform realize that they could possibly, with the opening of that
classroom door be closing another! They could easily be closing a door
on a large portion of their SS benefits. Military pensions and SS paid
while in the military are exempt from the Windfall Elimination
Provision (WEP). But the WEP says a public pension from non-SS-covered
work cancels out that exemption when a state pension from non-covered
work is thrown into the formula!
People from the private sector are urged to step to the front of
the classroom and ``make a difference'' as a public servant. Public
workers begin small businesses on the side, or in the case of teachers
or other school personnel, work summers and vacations to help make ends
meet. Whatever the scenario, when an individual's work history
straddles the public sector/private sector line, it is like having one
foot on the boat and one foot on the dock. If their public sector work
is in non-SS-covered employment, these individuals are going to take a
soaking!
Unlike the person with one foot on the dock and one on the boat,
however, the vast majority of those affected by the WEP do not even
suspect that disaster is imminent! They think they have planned ahead!
They had paid in good faith into one system for retirement, and then
into another! They had paid the taxes and expected the benefits. They
expected promises made by the government to be kept! What a nasty shock
to discover, often not until the very edge of retirement, that 100% of
that promised benefit will not be forthcoming.
It has been said that elimination of the Offsets would cost too
much and would cause depletion of the SS account that much sooner.
Whose money is being held so tightly in the governmental fist? If a
state worker knows that they are only going to receive 40% of their SS
from other jobs, will the government let them only pay in 40% of the
tax rate? Because the government is going to be operating at a deficit,
do congressional workers refuse their paychecks? Probably not.
So--here is the public worker, retired and needing more income
because the WEP has significantly reduced planned on retirement
benefits. Being a cheerful, energetic soul, a post-retirement job is
decided on as being the answer, and off to Wal-Mart our retiree goes.
Unfortunately, that happy little retiree is now paying even more money
into the Social Security system. Money that is, of course, at some
point in the future going to be denied as a benefit. Our retiree is
caught between a rock and a hard place by the WEP.
Most retirement plans tout the Social Security Administration's
``three-legged stool of retirement''--pension, SS and savings. The
public workers affected by the Offsets had earned their SS
``quarters,'' had a public pension, and had saved. They had, in fact,
planned for their future. Unfortunately for them, however, the WEP cut
off one of the legs and the stool fell over!
Heroes need a hand . . .
These laws, The Government Pension Offset and the Windfall
Elimination Provision, are undermining the financial quality of life
for America's Heroes. The very people who dedicate their lives to
serving the public from one side of the country to the other, the
firefighters, the police, the teachers and the other public workers are
finding that their reward for that life of service is a slap in the
face from the federal government. Over 75% of the nation's emergency
responders are affected by these laws, and almost half of the teachers.
They are finding that they cannot collect benefits earned for them
on a spousal work record under SS (the GPO), and they are finding that
benefits from work that they did with their own hands is denied them
also (WEP).
These laws, the GPO and the WEP, have been like dirty little
secrets that no one talked about in polite company. No one discovered
them until the day they went down to SS to begin collecting a benefit .
. . and what could be done then? No one explained to people changing
careers that if they crossed the line between covered and non-covered
SS work that they were putting their retirement income at risk. No one
pointed out the fine print on the SS form that gives approximated
retirement income, which warns . . . ``income from non-covered work may
affect benefits.'' No one today is telling the young people who are
becoming the teachers of tomorrow that they need to consider these laws
when deciding where to teach. The GPO and the WEP were virtually
unknown just a few short years ago. But as with any secret, tell a few
people, and soon everyone knows! We have been saying in loud voices all
across the country . . . ``HEY_LISTEN UP_THESE LAWS APPLY TO YOU!''
A new twist . . .
There is an argument in favor of elimination of these laws from the
state budget point of view. State budgets are in big trouble. There is
not enough money coming in, to simplify the matter. But--there is a
simple solution that would increase the cash flow into some of these
economically strapped states, and that would, as President Bush says,
``stimulate the economy.'' This stimulation would, in turn, help the
state budgets because people would be spending this money and then
paying sales tax on what they buy. More business would mean a need for
more employees, which means more jobs.
If a one-time tax break payment of several hundred dollars is
supposed to help the economy, how much more help could be given by
allowing these earned benefits to be paid month after month? If
``stimulation of the economy'' is the desired result, how much better
it would be to eliminate the Social Security Offset laws than to simply
give a one time tax reduction of a few hundred dollars!
I am a retired Physical Education teacher, and over the 37 years
that I taught, one of the things that was crystal clear was ``you do
NOT change the rules in the middle of the game.'' Back in the early
'80s, a well-meaning Congress changed the rules in the middle of our
game. As a result, we are in a 7th inning slump. But we have high hopes
for a comeback.
There is no `right way to do the wrong thing' . . .
Now, with hope in our hearts, we ask that Congress realize the
unfairness of these laws and the necessity of voting to eliminate them
by passing H.R. 594 and S. 349. We ask that Congress not settle for
less than ``the Social Security Fairness Act of 2003.'' We ask that
Congress do this because it is simply the right thing to do.

Statement of Don Sillings, Huntington Beach, California
While I'm not retired, I do have a horror story about the Windfall
provisions of social security. Currently, I teach part-time at two
schools, the California State University, Long Beach--American Language
Institute and at Santa Ana College--School of Continuing Education. I
do not qualify for retirement benefits in either position. However, I
am not paying into Social Security either. This is after working about
30 years in non-teaching positions in which I did contribute to social
security. When I became aware of the situation (one year after I
started these jobs), I visited the social security office for
information. As it turns out, under current law, I will have about 10
years of zero contributions averaged into my earnings calculations
(greatly reducing my monthly benefit). At the same time, I will not
receive any retirement benefit from these two retirement systems (CAL
STRS and CAL PERS). Instead, I will have what comes from a pretax
payroll deduction that is being ``invested'' in my behalf (I have no
control over the deduction or the investments).
I am terribly frightened for my future. Because I am working part-
time (full-time positions being rare in my specialty), I receive a
lower wage (about half as much) than a full-time employee does.
Therefore, I am not able to invest privately toward my retirement.

Statement of June Burlingame Smith, San Pedro, California
I strongly support legislation to eliminate both the Government
Pension Offset and Windfall Elimination Provisions of the Social
Security Act.
My name is June Burlingame Smith, and I am a professor of English
at Harbor College in Wilmington, California. I have been employed full
time by the college since 1989, so I only have sixteen years credit
towards my own state pension. In another month, I will be 68 years old.
I would like to retire, but find myself in a financial bind because of
both the GPO and WEP provisions of the social security changes several
years ago, long after my husband and I both started paying into social
security. Here is my dilemma.
I turned 65 on June 1, 2000, and because I am a widow whose husband
was eligible for social security benefits, and because my benefits as a
widow are greater than from my own social security contributions, I
chose to receive my stipend as a widow. Currently, I receive a regular
monthly social security check based on my husband's income. I am
working full time; however, when I retire and start taking my own
government pension, I will lose a substantial portion of the check I am
now receiving under the WEP and the GPO. Switching to my own social
security fund will not solve the problem because it is substantially
smaller to begin with, and it, too, will be decimated under the GPO
regulations. So, I am greatly harmed by these two social security
provisions.
When the children were in junior and senior high schools, I
returned to college and earned a second masters degree so that I could
teach in the community college system. I worked as a teacher's
assistant during graduate school and also worked full time for the
California State University Chancellor's Office for one year. I had
become a regularly employed ``re-entry woman'' and eventually was
offered a full time position teaching in a community college.
I had worked in private industry as well as in a school district
and had contributed systematically to social security before my
children were born. While I was home raising the children, I did
independent contract work with the Los Angeles Unified School District
and CSU Dominguez Hills Conservatory and taught privately in our home.
My contributions to social security during this time were vastly
reduced, but I contributed whenever and whatever I was allowed.
By accepting the position with the Los Angeles Community Colleges,
I automatically became a part of the State Teachers Retirement System
which does not allow me to contribute to Social Security. I had no
choice in these options. At the time of my employment, I was not aware
of the GPO or WEP provisions of Social Security; they were not in
effect at the time my husband and I planned our retirement strategy.
But when my husband died very suddenly several years ago, I immediately
became aware of both the GPO and WEP constrictions, and at this late
stage in life, I could not do very much about choosing another pension
strategy.
Today, as long as I don't take my own retirement under STRS, I can
also collect my full social security. However, when I retire, the
social security benefits now given to me as a widow will be reduced
under the WEP and GPO. I will lose more than half of my current social
security. The dollar amount will vary according to what the benefits
and my pension are at the time, but the reduction is very substantial.
The irony of all this is that for twenty-five years, my husband paid
into social security, at times strapping us for badly needed income
during the children's early years, so that we could count those
benefits as a part of our overall retirement. We made that decision
objectively, based on the rules of social security at the time. Now,
however, that plan for an orderly retirement has been seriously eroded
because the social security rules have changed. Such fickleness makes
it extremely difficult for conscientious families to plan for a
meaningful retirement. And because the state of California is a
community property state, I have also contributed to social security
through my husband's paycheck for twenty-five years.
The offset rules for STRS also punish those of us who choose to
teach or work in the public sector after working in the private sector
earlier in life but there is not such restriction on people receiving
private pensions. If I had ordered my career so as to end up working in
the private sector instead of the other way around, I wouldn't have
this dilemma. At the very least, workers should be able to contribute,
or continue to contribute, towards social security if they so wish. If
a public agency proscribes that choice, then the individual should not
be punished for having contributed in the past. And certainly, those of
us who began their retirement plans many years ago under another set of
rules, should not be punished for following those rules. Otherwise,
people like me may opt not to join the public sector in mid-life.
Thank you for considering my predicament. I know there are many
thousands of other conscientious people who are also caught in this
same conundrum. At some point, I figure when I'm 76 years old, I'll be
able to retire without social security as an important factor. For the
foreseeable future, however, I will continue to teach as long as my
health and mind allow.

State University Annuitants Association
Chicago, Illinois 60607
May 12, 2003

Subcommittee on Social Security
Ways and Means Committee
1102 LHOB
Washington, DC 20515

Dear Representative Shaw,

I am writing to you in support of passage of H.R. 594 that amends
the Social Security Act that repeal the Government Pension Offset and
Windfall Elimination Provisions. This issue has been a priority for our
members for four years now. We are very pleased that 12 Illinois
Congressmen currently support passage of this bill. We continue to work
with the remaining Illinois Congressmen about sponsorship. We have
bipartisan support for this issue.
We believe the offset and windfall penalties are a form of work
discrimination. First of all, many of our members have public and
private sector work experiences. They plan on receiving partial
retirement benefits from both work sectors. These are folks that
actually worked and paid social security taxes and made contributions
to Social Security the public system they are members of. Second, many
members work on a nine-month contract at an institution of higher
education and thus have summers available for other employment. Many
hold a summer job within the private sector. They too, pay social
security taxes on wages earned. Third, many members have to hold a
part-time job to make all of the ends meet. They also pay Social
Security taxes on wages earned. In short, these members have been
employed 30-40 years, contributed to retirement funds and then are
penalized for hard work.
We believe this is unfair and discriminatory. These penalties are
directed toward widows, lower income men and women that have worked
hard to build the educational system in Illinois. SUAA represents more
than 120,000 members of the State Universities Retirement System, a
public retirement system for 12 state universities and 50 community
colleges in Illinois.

Sincerely,
Robert A. Harper
President
University of Illinois at Chicago Chapter

Roslyn Hoffman
Associate Vice Chancellor, Retired
University of Illinois at Chicago Chapter

Statement of Denise Sullivan, West Frankfort, Illinois
Would you consider people like myself in the position of working
for (just enough money to make ends meet for the family, not enough to
have a savings acct, CD's or even any investments) because of simple
living expenses many years paying in social security, then at age 49 or
older get a state job for 11.20 per hour and a chance to get a small
pension at retirement because we did not have the job at an earlier age
with many years to work up to get a good pension, ours will be smaller
that many social security checks. So, please tell us why can't we get
our social security that we worked for like everyone else?
Thank you.

Statement of James Sutera, Chicago, Illinois
Thank you for giving me this opportunity to write to you.
My name is James Sutera and I have a situation to explain that I
have a problem with. First, I would like you to know that my
nationality is Italian and Croatian and I have learned from my
grandparents that hard work is the only way to get ahead. When they
came to this country with nothing, they didn't have the so-called
politically correct system that is in place now. In other words, when
they made any phone calls looking for any type of service, there was no
punch 2 for Italian and punch 3 for Croatian. Like all immigrants that
came back then, that built our country, they learned the language and
became citizens because they where proud of their new life here and
wanted to do everything the American way. During the depression, they
had a thing called ``script,'' which we call welfare now, but the only
difference is that you had to perform some type of work to earn it.
Things have certainly changed! Now when I go to the grocery store, I
see people with there using ``script,'' with shopping carts loaded,
dressed better than me and driving away in a better vehicle than I
have. Illegals may, in the future have more opportunity than me, from
what I am hearing. What is happening to the American Way of doing
things? Well, let me get on with my real story.
I joined the Army in 1969 because I thought it was the right thing
to do with Vietnam going on. I didn't go there, but my intentions were
patriotic and I did my tour of duty and was honorably discharged in
1971. I went to work driving a truck when I came home and did that
until 1986 when I got called to be a Chicago Firefighter. When I got
out of the fire academy, which was about 3 months, I went back to my
old job and asked if I could work there on all my days off and they
agreed to take me back. Between the firefighter job and the truck
driving job I was only off about 5 to 6 days a month. It was hard but I
did it because of what my grandparents told me years before. I drove
that truck until March 1998 and then I had 25 years vested in the truck
drivers union so I qualified for a pension. After that I worked as a
carpenter when I could find work and right now I am looking to do
something else on the side to earn extra money. All along I am proud of
myself and what I have accomplished. Thinking, well--here I am with 2
pensions when I retire and social security, all that I worked for and
earned, the American Way.
Nobody gave me nothing and I paid my taxes and social security just
like any good citizen would but now here I am--going to be penalized
for doing the right thing and I can't believe it.
I just don't think it is fair at all.
I live in Chicago and it has always been a political city so you
are more apt to pay attention to the goings on of politics than the
average person. I read about the multiple pensions politicians get
often and I don't favor that, but that's politics. If that's how it is
and they earned it, well who am I to say they shouldn't receive it.
Now I think I have earned what I worked for and they want to take
it away and it just isn't fair. I only hope that the politicians think
of the many people like me who did the right thing and worked hard. We
only want a fair shake and the retirement we deserve.
IT'S THE AMERICAN WAY!

Statement of Dana Szakatits, Sterling, Illinois
I am very concerned that my SS will be reduced or eliminated. I
chose to stay home with my children when they were young, however, I
did work some part-time teaching jobs in IN and paid into SS. I have
been teaching full time in IL for 14 years now. To be able to receive
full teacher retirement I would have to teach until I am 74 years old!!
I do not qualify for a great deal of SS, but I need this to supplement
the partial retirement I will receive. I paid into SS, therefore, I
should receive the money for which I ``qualify.''

Statement of Patricia Hall Taniashvili, Surry, Maine
Thank you for giving me this opportunity to write to you.
My name is Patricia Hall Taniashvili. I am presently a teacher at
Ellsworth High School in Ellsworth, Maine; I am sixty years old, and
cannot even consider retirement due to the financial constraints
imposed upon me by the GPO/WEP laws. Because of these laws, I am not
permitted to collect the full Social Security pension to which I am
entitled, having paid into the system for my entire working life.
I got my first job in the summer of 1960, working as a proofreader
in a newspaper office in coastal North Carolina. Social Security taxes
were deducted from my paycheck at that time.
After I received my B.A. degree in 1964, I taught Freshman
Composition at Valparaiso University in Valparaiso, Indiana for a year.
Social Security taxes were deducted from my paycheck at that time.
From the fall of 1965 until the spring of 1968, I taught English
(to all students) at Washington County High School in Valparaiso.
Social Security taxes were deducted from my paycheck at that time.
After my two children were born, I returned to teaching at Hobart
Junior High School in Hobart, Indiana, where I taught English and
French from 1974-1979. Social Security taxes were deducted from my
paycheck at that time.
In 1980 I moved to Maine, and taught English and French at Calais
High School in Calais until the spring of 1989. In order to supplement
my low salary, I worked during the summers at the tourist information
office there. Social Security taxes were deducted from that paycheck at
that time.
In 1989 I moved to Lamoine, Maine, and taught English for a year
and a half at Sumner High School in Gouldsboro.
I spent 1991 teaching English as a foreign language in Tbilisi,
Republic of Georgia; at that time Georgia was a member of the U.S.S.R.
In early 1992 I returned to Maine, and began teaching French and
Spanish at Ellsworth High School in Ellsworth, Maine, where I am still
employed. Once again, in order to supplement my inadequate teaching
salary, I started working during the summers at Kneisel Hall (a chamber
music school and concert series) in Blue Hill. Social Security taxes
were deducted from that paycheck during that time.
I don't know when I will be able to retire. My Maine State Teachers
Retirement pension will not cover my living expenses, especially since
I do not own a house and must pay rent every month. I estimate that my
Maine State Teachers Retirement pension will be approximately $20,640 a
year. Our health insurance cost will be well over $700 a month out of
my $1,720 a month. This leaves me with $1,000 or less per month BEFORE
taxes. Thanks to the Windfall Elimination provision, my full Social
Security pension to which I am entitled will be reduced to only
approximately $178 a month at age 62, approximately $293 at 65 and 10
months, or $495 at age 70. My small Maine State Teachers Pension and my
truncated Social Security pension together are simply not enough for me
to live on.
If I had stayed in Indiana to teach, I would have my Indiana
teachers' retirement pension plus the full Social Security pension to
which I am entitled. Why am I being discriminated against because I
moved to Maine? What have I done to have my Social Security pension
cut?
The final insult and irony is that after I retire from teaching, I
will have to once again supplement my income by working at a part-time
job--from which Social Security taxes will be deducted. I will never be
permitted to collect the full benefit to which I am entitled from this
work.
For all of my working life, I have accepted the low pay given to
teachers because I love teaching and I love the kids I work with. Now I
am faced with the fear that I will have to keep working for an
indefinite time, because I can't afford to retire, even though I'd like
to plan on it. Another fear that I have is that I will get sick and not
be able to work, yet not be able to afford not to.
The GPO/WEP has put me in an untenable position financially and
personally. The elimination of a portion of my Social Security pension
is unfair and immoral. The repeal of this law would make a huge
difference to me.

Statement of Larry Taylor, Dixon, Illinois
I am writing regarding a testimony for the House Ways and Means
subcommittee on Social Security. I'm one of those citizens very upset
with the social security regulation that does not allow one to collect
full benefits because of the ``so called'' two government agency
restriction. I have been in education for the past forty-five years and
I am still teaching part time. I worked as summer school director in
our school system so that I could contribute to social security for
over twenty-five years (and qualify for full benefits). My intention
was to collect social security benefits when I retired so I could pay
for my health insurance benefits. Bad news. Even though I planned ahead
the following happened. In President Ronald Reagan's tenure, a new law
was passed prohibiting an individual from getting full benefits from
social security if they worked for another government agency. I had
saved and planned ahead for my retirement and was counting on social
security funds as part of my retirement. Guess what? I am now forced to
work part time to take care of my health care expenses. Currently, I
only get one fourth the money I am entitled to under the current
regulation (cannot collect full benefits if employed by another
government agency). The one fourth amount is $91 per month, and since I
am sixty five, social security takes out $55 per month for Medicare.
This gives me a net $36 per month from social security. Does this sound
right???? It is time someone took time to look at the government
regulation controlling social security and made this fair for the
working people of the United States of America.
Thank you for your valuable time in reading my testimony.

Statement of Tom Pritchard, Texas Retired Teachers Association, Austin,
Texas
The Texas Retired Teachers Association is calling for the repeal of
both the Government Pension Offset (GPO) and Windfall Elimination
Provision (WEP) of the Social Security Law. These Social Security
provisions reduce or eliminate income for individuals who have chosen
to serve their communities, state or country in public jobs. A non-
public employee with a private pension will keep his/her full Social
Security benefit.
The GPO and WEP also impact individuals who make mid-life changes
from the private sector and the public sector--i.e., military retirees.
In Texas there is a shortage of 40,000 certified teachers. If the GPO
and WEP provisions were repealed, individuals who make career changes
in mid-life could be attracted to the teaching profession. Individuals
who make mid-career changes and choose to become teachers are
desperately needed to solve the current teacher shortage. Under the
current law (WEP) individuals will be better off financially in their
retirement years if they work as a greeter at Wal-Mart or flip
hamburgers at McDonald's.
There are many women impacted by the GPO who entered the teaching
profession, then stopped to raise a family, and later in their lives
returned to teaching. These individuals generally accumulate 15 to 20
years in a teacher retirement fund. Upon their retirement from a
teacher retirement system they generally forfeit their spousal Social
Security benefits. The spouses of these individuals probably had
contributed to Social Security their whole adult lives and probably the
maximum amount; and anticipated that their spouses would benefit from
their contributions to Social Security. These individuals cannot
survive on a half teacher retirement; therefore, retirement is
something they will never experience.
The repeal of the GPO and WEP would greatly benefit thousands of
public servants now being penalized for their lives' work. These are
hard times for seniors living on fixed incomes. The cost of health
insurance, prescription drugs and general cost-of-living expenses
continue to increase.
Thank you for taking the time to conduct the hearing on May 1.

Statement of Bettye D. Thompson, Macomb, Illinois
I am writing to you in support of passage of H.R. 594 that amends
the Social Security Act that repeal the Government Pension Offset and
Windfall Elimination Provisions. When I retired, I was told that since
I had a state pension, I could not collect from my former husband's SS
benefits. We were married for 29 years and I had counted on those
benefits in my retirement planning.
Primarily, I worked very few years under SS in my own name.
Basically, I was a homemaker and cared for my husband and 4 children.
Our marriage ended in divorce. When I was nearing age 50, I was hired
to teach at Western IL University. We were not given the choice of
paying into SS nor did I have the opportunity to work enough years to
qualify for an adequate pension. I have lost out on approximately
$1,060.00 per month from my former husband's SS benefit since I retired
on Jan. 1, l996. This seems unjust and discriminatory to penalize
teachers under this law. Receiving the above benefits would greatly
enhance the quality of my life. I urge your committee eliminate the
penalties in this law.
Thank you for your consideration.

Boynton Beach, Florida 33437
April 27, 2003

Representative E. Clay Shaw
Chairman, Subcommittee on Social Security
Committee on Ways & Means
United States House of Representatives
Room B-316 Rayburn House Office Building
Washington, DC 20515-6100

Dear Representative Shaw:

I am writing to urgently ask for your support in repealing two very
unjust social security provisions affecting retired educators and other
public employees in only fourteen states. I was married to a man who
had served in the army overseas for about five years and was awarded
the Bronze Star. We were married for twenty eight years during which
social security payments were made religiously in the same way as those
made by couples who, upon reaching retirement age, receive all earned
benefits. Our payments were made just as those made by couples in which
a spouse died and the widow, who may have never worked, receives full
benefits. Many proponents of this current plan see these individuals as
deserving dependent survivors. I was in the same ``dependent'' position
as these individuals for those twenty eight years while raising a
family. To what should I be entitled for those years of both payments
and a ``dependent'' lifestyle, as the others who are seen as being
deserving? My husband became ill and died at a relatively early age and
was not able to obtain any (other than a small G.I. policy) life
insurance because of his dire diagnosis.
Because I went to work for a school system later in life I have
been penalized by having all of my marital earned benefits offset. What
were the twenty eight years of payment for? And what about the promises
of our government and social security? It should be apparent that
entering the school system later in life did not allow me to build up a
substantial amount to be received from the teacher's retirement pension
as did those who put in all or most of their work years in that system.
Many of these individuals may never have contributed to social
security, and so, are not affected. But those of us who have, are not
being treated in a just manner. My husband and I counted on my social
security benefits as a significant part of my retirement plan. (I
received no benefits from social security for my children because of
their ages.) Gwendolyn King and others have identified the ``three
legged stool'' to be considered for retirement planning (social
security; pensions; and savings). One of my ``legs'' has been knocked
away. I don't know many American citizens who would feel fairly treated
when having paid for something for years, with a clear promise of later
benefits, having those benefits eliminated because of other benefits
earned through additional, and often very hard work. Saying that it is
too expensive is not an adequate answer in terms of fairness and our
nation's ideals.
How do Congressmen and women receive both? And how do persons
employed in private settings receive both? Although some individuals in
public service may never have contributed to social security, I
contributed to both (marital, and on my own work). I was employed for
some time before the school job, and there were significant time
periods when I worked both for the school and in other part time
positions (which had me paying into social security as well as into the
teacher's retirement system at the same time). Is this to be considered
a windfall? The full amount of required social security payments were
made on my own work record, and was collected by the government. When I
retired, I received an added punishment for working in a public school.
I would now only receive forty percent of what my own social security
earnings should have been because I worked and earned benefits through
the school system. Social Security (Old Age and Survivors INSURANCE)
was an agreement between the United States government and employees.
People would establish eligibility by work and contributions (i.e.
F.I.C.A. FEDERAL INSURANCE CONTRIBUTIONS ACT). It was an earned right.
Daniel Patrick Moynihan had said that social security is not an
entitlement because one was able to survive until age 65-62 . . . this
is not the idea behind social security . . . it was envisioned from the
beginning as a social insurance program. As Bill Archer noted that
social security has never been an entitlement program but an ``earned
right'' program and it is Congress's job to do whatever is necessary to
deliver it. Carolyn Weaver (1999) said that social security presently
pays the largest benefits to the highest income workers and it is both
fair and appropriate that people who work and earn more get more under
a retirement savings program. In AARP (1999) ``Social Security is
designed to be the foundation on which to build a secure retirement . .
. is most likely an important part of your retirement plan . . . and
you can count on that benefit amount regardless of what happens to
you.'' . . . And Robert Ball said . . . those who are eligible should
get it, regardless of other income.
I can't understand either the rationale or the ethicacy involved in
the fourteen state only social security offset and windfall provisions;
and neither can anyone with whom I have spoken. All have been
incredulous and quite obviously thrilled not to find themselves in such
a situation. Most friends can't face me and avoid eye contact because
they are aware that each is benefiting, and I, who most likely have
contributed as much or more, am being handled in a discriminatory
manner. I know tremendously wealthy individuals receiving full benefits
which are used for little ``extras.'' I retired in 2000 at age 70 and
had, as prescribed by the school district, notified them two years
before retirement. It was in 2000 that the law changed allowing
individuals to work and earn whatever they could and still receive
social security benefits if age eligible. There was no grandfathering
in as there was grandfathering in on the offset provision. (Therefore I
never received the payments from age 65-70 as people have done since I
retired). Many individuals receive generous tax benefits for charitable
contributions. At least, why wouldn't I and others in my position, be
entitled to credits for this forced support of the social security
system?
I am not a greedy person, but find myself periodically, but
continually, depressed and enraged about the treatment I am receiving
from my country. Please support fairness and repeal these unreasonable
laws.

Sincerely,
Deborah Tucker

Statement of Nancy M. Turco, Westerly, Rhode Island
Thank you for giving me this opportunity to write to you.
My name is Nancy Turco and I am writing to you as a member of the
National Education Association, and as someone who will be affected by
the Government Pension Offset (GPO) and the Windfall Elimination
Provision (WEP).
I live in Westerly, Rhode Island and have lived here all my life. I
am married 42 years this coming September. We have three daughters
living in Virginia, Texas, and New York and all three are employed as
professional women. My husband has recently retired and will be working
part time. I had hoped to retire after this current school year because
I will be 65 at the end of August. However, I have decided to continue
working because my social security retirement income will be
considerably reduced because of the Windfall Elimination Provision.
I started my work life, as many others do, during high school
summers. My four years of college required summer time hospital
educational experience. In 1960 I graduated from Salve Regina
University with a BS degree, and I have always maintained my RN in the
State of Rhode Island since that time.
My nursing career has been varied and offered many opportunities. I
have always sought to expand, learn, and keep abreast of all nursing
and medical knowledge. I obtained a variety of nursing certifications
including intravenous therapy, defibrillation, intensive care, and
infection control. Throughout my career I worked all shifts: evenings,
nights, and daytime. Nursing also requires work on weekends and
holidays. This is not done easily when a person is married and has
children. That is what the profession requires, so it was done. Two
career positions I especially enjoyed were Head Nurse of a Medical Unit
in the hospital and Director of Nursing in a newly opened Nursing Home.
During all these years of employment at nursing homes and hospitals
social security was deducted from my salary. I have paid Social
Security 27 years.
In 1989 I began employment with the school department. This was a
career change and a challenge for me to meet the health needs of high
school students, teach prevention of illness and injury, and promote
fitness and a healthy lifestyle. I completed the State of Rhode Island
teacher certification process and also graduated from Rhode Island
College with a Master of Education in Health. When I was hired, I was
aware that I would not be employed with the school system for a
sufficient number of years to earn a full teacher pension, which would
require my working to about age 78. Although I am in good health,
working to age 78 would be a challenge in a large school with over
1,200+ students and staff. I don't think I can do this. I had planned
that for retirement I would have earned some teacher pension plus my
years of social security payment and my retirement would be on a solid
base. About two years ago I became aware of the unbelievable
information about the GPO and WEP amendments to the Social Security
Act. I can not understand why people who have never been employed or
contributed to the social security system are able to collect social
security. Yet, I will be unable to collect the amount that I have
rightly earned by diligent work in my community as a registered nurse
and a school nurse teacher and by my years of payroll contribution to
this social security system.
Approval of the Social Security Fairness Act will help to stimulate
the economy, which is what President George Bush is trying to do.
People who have earned and worked for these funds would receive those
needed dollars. It would be a great help to the economy and to the
living standards of people affected by the GPO and the WEP.
Approval of the Social Security Fairness Act will also assist First
Lady Laura Bush with her endeavor to promote Troops to Teachers. The
GPO and WEP are presently having a negative affect on the Troops to
Teachers program in many states at a time when teachers are desperately
needed.
Please support the Social Security Fairness Act and repeal the GPO
and WEP, and support H.R. 594.

Statement of Roy Tully, Twin County Retired School Personnel
Association, Winnie, Texas
The Government Pension Offset (GPO) and Windfall Elimination
Provision (WEP) unfairly reduces the retirement benefits of public
school employees in Texas and many other states.
I am contacting you on behalf of Twin County Retired School
Personnel Association; an organization of retired educators in Texas.
As a retired school administrator and president of this group, I
represent 137 retired school personnel in Southeast Texas. Many of our
members have lost retirement benefits, which they and/or their spouse
had counted on for security in their retirement years, due to these
provisions.
We urge you to support legislation (H.R. 594) that totally repeals
unfair limitations of benefits earned by these public employees. They
have worked hard, paying into the system, and cannot afford this loss
of benefits.
Your consideration in this matter would be greatly appreciated.

Statement of Theresa ``Bianca'' Urbanski, Crest Hill, Illinois
Currently, I am a Guidance Counselor at Lockport Township High
School. I also have experience teaching special education in low income
and inner city high schools.
Prior to entering the education field, I was working in the
business world and paying into social security. I am a single person
with no other income. I decided to leave the business world and teach.
I never realized this move would jeopardize my social security money
when I retired.
What is bad is because I did work in the business world for years I
do not have an opportunity to put in the full amount of years to
receive a full teachers pension. I will not receive a full teachers
pension either. Since I have never married, I will not receive any
spouse benefits.
I am not someone who only worked a few hours after school or a few
summers here or there. I believe that I should receive full social
security benefits. I find it appalling that teachers are bearing this
burden. Teachers who changed careers should not be penalized from
receiving full social security benefits.
If you need any further information from me please do not hesitate
to contact me.

Statement of Margaret Ann Vincent, Santa Ana, California
Thank you for giving me this opportunity to write to you. I would
like to relate how the GPO and WEP affect me as it now stands.
I began teaching in the state of Minnesota at the age of eighteen
in 1956 on a two-year provisional. At that time I did not pay into
social security or a state retirement fund as these programs were not
in effect for teachers. I then moved to California in 1957 and
proceeded to teach and work in a drug store for minimum wages, another
thirty-six hours a week, in addition to a full time teaching position
and raising three children. This allowed me to earn about thirty
quarters in the Social Security system. My husband decides that in 1972
we should go back to Minnesota and he persuaded me to take out my
California retirement, which amounted to $6,000.00. In 1979, after a
long separation I was divorced from my first husband. I was able to
continue teaching as my only source of income.
In 1981 I was introduced to my future husband and married in 1983.
At that time I continued teaching and worked for a company to complete
my forty quarters of social security in my own name. The amount that I
would receive from my account before GPO and WEP is $150.00 per month
according to my current statements.
Realizing that my new husband and myself did not have a lot of time
to build our life together we decided to open a business. In order to
facilitate this in the most expedient way, he moved into my home, using
a room for an office and my garage as a storage area while we opened a
warehouse and machine shop and built a business dealing in electrical
parts for DC current used in basic metal production. My stable income
generated the basis of this new venture. As in all business there were
periods of success and very slow months where again my salary held it
all together. Since my husband was self-employed he paid the max on
Social Security.
March 3, 1995, after complaining about a stomach pain since
December 1994 and being told he had an ulcer, he was diagnosed with
pancreatic cancer. He died March 18, 1995. He did not leave a will as
he was told that he had about six months to live and being in total
shock from the diagnosis he did not accept the fact and did not
complete any legal business. I was left with all bills for the business
plus cars and other medical, burial and probate costs. I could not
continue the business as I have no knowledge of all the parts, where
they go and what they are for. His skill is similar to a dentist or a
doctor. He was the source of the knowledge and what was needed.
I mortgaged my home for $100,000 to pay off his debts. My
California STRS would give me $1,500.00 a month to live on if I taught
to 65. Since that would not be adequate, I have replaced the $6,000.00
that I so foolishly allowed my first husband into talking me to take
out to the replacement cost of $60,000. I also went back to school to
get my Masters to continue teaching to support myself.
I just turned 65 and am able to receive my husband's social
security as long as I work. My current debt for his business bills and
my education has put me into long-term debt that I am struggling with.
I am not asking for a handout. I just want the money that has been paid
in by my husband and myself. This is only fair.
Therefore I am petitioning you to lobby to change this most unfair
act of the GPO and WEP. I also feel that this information needs to be
presented to the public, and all parties who are interested into going
into public education in the states that their social security payments
are in jeopardy because of these blatant laws of injustice.

Statement of Lynne Walters, Auburn, Maine
Thank you for giving me this opportunity to write to you. My name
is Lynne Walters. I live and work in the state of Maine.
As a teacher who is currently teaching in Maine and formerly taught
for years in Pennsylvania, I will, in retirement, not be receiving any
pension for my years in PA from Pennsylvania State Retirement System. I
will also be losing most of my earned Social Security from those years
as well because of the Windfall Elimination Provision (WEP). As a
recent widow, I will be receiving NONE of my late husband's Social
Security benefits because of the Government Pension Offset (GPO). I'm
being penalized in several different ways.
My husband started working at the age of 15 in PA where we both
paid into Social Security. After a number of years, we moved to ME; my
husband continued to pay into Social Security for a total of 50 years
until he passed away in March of 2001. We found out shortly before his
death that I would not be able to receive any benefits at my retirement
based upon his contributions.
We have always heard that retirement is a three-legged stool
comprised of savings, pensions and Social Security. Now we find that
one of these legs is being taken away from us.
One of the arguments I have heard is that we would be ``double-
dipping'' if we received our earned Social Security. There are people
who have been in the military, had second and even third careers,
receive pensions for all, plus full Social Security. Since they earned
their pensions and Social Security, this is never referred to as
``double-dipping.''
I had an opportunity to speak with a congressional aide from
another state who told me it wouldn't be fair for me, as a widow, to
receive my husband's benefits. I would then be getting more than a
widow who has never worked outside her home. I do not understand why
widows who have worked outside the home should be penalized because
they chose to work (for the state of ME). How can legislators determine
whether or not I need the safety net of Social Security along with
whatever
pension I have earned in Maine? Everyone's needs are different.
There should be no
discrimination against those who made a decision to work and bring in ex
tra income.
This same congressional aide seemed to feel that if the GPO and the
WEP were repealed, the social security system would become bankrupt.
The implication was that paying the public employees their full
benefits would destroy the Social Security system. I don't feel that
this is an appropriate response to men and women who have worked in the
public sector for much of their careers (and often at very low wages).
This situation is one that shows great inequity among people who
live and work in various states. Why should public workers be penalized
when they move and work in a state in which they are not allowed to
contribute to Social Security? Why should public employees be penalized
when they work at a second job to earn additional money for their
families, pay full Social Security on those wages, then be denied full
benefits based on those same wages? How about people who change to
teaching, for example, in mid-career and work in an affected state?
(Laura Bush has made a concerted effort to encourage career changes in
order to get many more teachers, yet they will lose a great deal of
their financial security.) Why are public employees who have paid into
Social Security not able to realize the full benefits of those
contributions? With the offsets in place, the people who will benefit
from
our contributions are other current and future Social Security recipient
s. Is that fair?
As teachers, we have paid our taxes and paid into Social Security.
The offsets are an insult to people who have worked hard all of their
lives in public service. We have had low-paying jobs, and since our
salaries determine the amount of our pension, we therefore have low
pensions. Then, we are further penalized by the offsets to our Social
Security (WEP) or our spouse's (GPO). We have earned the right to
retire and expect the same treatment that others in our nation receive.
Please help all of us who are caught in this terrible predicament.
Please eliminate the WEP and the GPO by voting for H.R. 594.

Statement of Crystal Ward, Lewiston, Maine
Thank you for giving me the opportunity to write to you on the GPO/
WEP issue. My name is Crystal Ward and I am from Lewiston, Maine. Maine
is one of the States that is adversely effected by the current laws. As
the Social Studies Department Head at Lewiston High School I have a
teacher who is retiring this year at age 74--yes it is 74!!.
This wonderful woman had to continue working long after the death
of her husband because of the GPO/WEP. She had started her career after
her children were raised. She worked several different jobs paying
Social Security and worked hard to earn her Masters Degree in
Education. With 20 years into the Maine Retirement System she tried to
retire but found out she would lose $600.00/month she had been
receiving at the death of her husband and she would lose another $200/
month in her own Social Security benefit. The amount left would put her
at the poverty level!!!!!!!!.
The current laws are totally inequitable to the hard working
Americans who paid into a retirement system and are told they will not
be allowed to draw out the full amount they deserve. For some reason it
is believed these people are ``double dipping'' and that they should
not be allowed to do that. But many other people pay into two or three
different kinds of retirement systems and the government does not take
away money from them, only people who pay into two GOVERNMENT systems
must pay a penalty. WHY??? IF YOU PAY INTO TWO SYSTEMS YOU SHOULD BE
ABLE TO DRAW YOUR FAIR SHARE FROM BOTH SYSTEMS.
If the USA can afford to pay $80 billion to bring freedom to Iraq--
they can afford to pay for the hard working AMERICAN education
employees, firefighters, policemen who have paid into Social Security.
If you can afford to cut $350 billion you can afford to pay to get rid
of the GPO/WEP. We have the money!!!!

Statement of Donna Wasneski, Grand Junction, Colorado
I am very disappointed that just because I chose to be a teacher I
will not be able to collect as much of the social security widow's
benefit as I would have in a private sector job. The fact that only
certain jobs suffer this fate is awful. Please allow me to collect the
funds my late husband had planned for me in full.

Statement of Keith L. Weidkamp, Granite Bay, California
In my high school and college I worked both full and part-time
social security jobs to get myself through college. After graduating I
started what is currently a 40-year teaching career in 1963 in
California. In 1983 I began part-time and full-time summer work as an
author for two national publishing companies. We have become involved
in writing material for use in the study of accounting principles. This
employment is considered self-employment income and while the amounts
that I earned were modest, the tax consequences including 15+ percent
of social security took more than half of every dollar that I was able
to make. This year as an example I will contribute an additional $3,000
to my social security account.
As a result of the current social security tax law, I will qualify,
if I continue to do this work for another two years, for a social
security benefit of about $500.00 per month.
My wife will also qualify for a similar benefit in 4 years. Coupled
with my teacher retirement, we will be able to maintain most of our
modest standard of living we have enjoyed during my working years.
However, the law will allow me only about 40 percent of my benefit, or
$200.00 per month, and when I die, my social security will stop
entirely, and my wife will have her benefit reduced significantly. With
this happening and with any modest inflation over the next 20 years she
and possibly myself will have outlived the benefits that we have worked
for. While it has been difficult to pay the heavy self-employment tax
over the last 20 years, why the law would take away what my wife has
worked for makes no sense to me. My real worry is what might happen
financially for my wife after I am gone.
It is my sincere hope that the committee will see fit to right the
wrong that was created when the law was changed back in the 80's. Allow
those of us who paid for our retirement years, not be robbed of what we
worked for. We have earned the right to finish out our lives without
fear or anxiety about our financial future.
I appreciate the opportunity to present this statement to the
committee. If every teacher had 50 years of service to use to calculate
their teacher retirement, they would have no financial problem to deal
with. However, most teachers have 25-35 years of modest income and
retire at about 50 to 60 percent of that annual income. There are many
teachers that I know who are really hurting financially trying to
survive with their small retirement income.

South Burlington, Vermont 05403
May 6, 2003

The Honorable E. Clay Shaw, Jr., Chairman
Subcommittee on Social Security
Committee on Ways and Means
United States House of Representatives
Room B-316 Rayburn House Office Building
Washington, D.C. 20515-6100

Dear Representative Shaw:

I realize I should have written to you in a more timely fashion,
but both my husband and I have been experiencing health problems, which
now are hopefully resolved.
For 21 years, we lived in Normal, Illinois, and for 17 of those
years, my husband was first a department chairman and then a professor
at Illinois State University, while for 11 years, I was a Civil Service
employee at ISU's Milner Library. In 1996, several years into our
retirements, we moved to Vermont, where I have a lot of family.
When my husband was hired by ISU in 1974, he was not allowed to
continue paying Social Security but was told that the state retirement
system would take care of him. I believe that starting in 1984 or 1985
hirees could make the decision, whether they wanted SS or not. I began
at Milner in 1979. I did not have a choice either. Because my husband
had taught at various private and public colleges and universities on
his way up the academic ladder, he had quite a bit invested in SS, but
as you know, he gets the minimum amount in retirement. He should be
getting the total amount, as he earned it outside of Illinois. There is
no double-dipping in his case. What is of interest is that the public
institutions for which my husband taught did indeed allow SS, while ISU
did not.
Because I only worked 11 years at Milner Library at ISU until
retirement (I am 8 years younger than my husband), I did not have
enough quarters in SS to qualify for even the minimum benefits. At age
65, I hitched onto my husband's SS in order to receive Medicare
benefits. To my great surprise, after visiting the local SS office and
also receiving a letter with the details of my benefits, one year I
received a letter that I owed SS for over-paid benefits. Because the
State of Illinois has a built-in 3% pension increase each year, so far,
that impacts on the SS I receive. SS will not accept my figure each
year--and I have gotten it from the State of Illinois--as it is not
official, and that figure doesn't come in the mail until well into
February. Each year the amount goes down (I am at $56 per month at the
moment), and if I live long enough, I will not receive anything and
will have to pay Medicare out of my own pocket. I also am not sure what
I will receive, should my husband predecease me, although our son feels
that it would be about $200 per month because of the WEP and GPO
offsets, if I am lucky.
Why Congress is allowed to double-dip is very curious indeed, but
as the local SS office told us, Congress wrote the laws to suit
themselves and not to help their constituents. Nobody told us what was
ahead for us, when we were hired by ISU. We simply would not have left
his previous university. It's as simple as that. I have written to the
Vermont Congressional delegation but have had no replies to date. (They
were in recess at the time and perhaps have not had a chance to
respond, although all three are very good about keeping in touch. Also
their local offices are very sympathetic and helpful.)
We are affected by both the WEP and GPO Social Security offsets. I
do not hold out much hope that H.R. 594 will be given more than the
hearing I saw on television, but I would like these offsets ELIMINATED,
totally. Too many of us had no idea what they were and how they would
affect us in our later years after retirement. Please do what you can
to help. I would like to add that we are intelligent people from whom
the bitter truth was hidden for hiring reasons, we are sure.

Sincerely yours,
Helga N. Whitcomb

Richard O. Whitcomb

Joliet, Illinois 60432
April 24, 2003

Representative E. Clay Shaw, Jr.
Chairman, Subcommittee on Social Security
United States House of Representatives
Room B-316 Rayburn House Office Building
Washington, DC 20515-6100

Dear Representative Shaw:

I am a high school business education teacher who worked her way
through college. I worked many different, and sometimes unpleasant,
menial jobs putting myself through college. When I finished college, I
had enough quarters to qualify for Social Security. From time to time
throughout my teaching career, I have worked in the private sector
during summer breaks to earn extra income.
The Government Pension Offset (GOP) and the Windfall Elimination
Provision (WEP) reduce or eliminate Social Security benefits. I am a
single person and I need all the benefits I can get. I have been
working since I was 13 years old. I would like to be able to retire at
57 years of age with 34 years of public service as a teacher. Whenever
I do retire, I would like to be able to support myself comfortably with
my retirement benefits.
I, like everyone else in this situation, only want what is due me
from Social Security and from the Teachers' Retirement System. I'm not
asking for a freebie or a handout. I am not asking for more than what I
actually earned. I am asking specifically to be granted all the
retirement benefits that are rightfully mine.
Thank you for doing all that you can to support retirees who
receive pensions for non-Social Security covered employment to fully
receive ALL that is due us from both Social Security and our public
service employment.

Blessings,
Emma J. Williamson

Statement of Beatrice D. Willis, Winnie, Texas
I was a public school employee in Texas as a teachers' aide and
secretary for twenty years. I paid into a Teacher Retirement Fund but
was not required to contribute to Social Security. I am seventy-one
years of age. When I was sixty-seven, I retired from my last position
with a Texas State Agency after working twelve years there. During my
working years my employers and I both contributed for sixteen years to
the Social Security tax fund for my benefits.
When I was ready to retire and went to register for Medicare and
Social Security, I was devastated to learn that my Social Security
benefits would be reduced by forty percent because I received a small
teachers' retirement check. This was due to the WINDFALL ELIMINATION
PROVISION (WEP) in the Social Security Laws.
The forty percent I was penalized is money I earned and worked hard
for. I was not a high-wage earner at the school system. I receive a
small annuity from the Teacher Retirement System because of what I
contributed there. I worked other places to supplement my retirement
and am not being treated fairly.
PLEASE consider how this law is penalizing people for working to
make a living and help us. So many people who have been hurt by this
unfair law need your help.
Thank you for your consideration.

Statement of Martin C. Wolf, Bishop, California
When I retired in 1995, from Los Angeles College West, after 28
years of instructing, I thought I was entitled to full Social Security
benefits, if my spouse passed away. Well she did, and I was wrong. I
should have been entitled to a major percentage of hers, or mine
whichever was more. To my surprise I was told by Social Security that
the benefits were a ``windfall,'' part of hers was not an option, and
my social security is minimal. In our family with five children, we
needed two incomes, and we both sacrificed with contributions to Social
Security. It is only fair that I should receive, and should have
received that benefit like other taxpayers. This policy, however
formulated, is wrong and should be changed.
Educators are not highly paid. They are dedicated professionals who
have a passion for teaching. Quite frankly the concept that I would
receive a ``windfall'' is total nonsense. The policy that is now in
effect regarding WEP & GPO penalizes and discourages educators.
I cannot fathom how my teaching retirement and Social Security
amount to a windfall. It's time these policies were rectified for
myself and for all teachers past and present.
Thank you for your kind and careful consideration.

Rocklin, California 95765
April 28, 2003

Representative E. Clay Shaw, Jr.
Chairman, Subcommittee on Social Security
The Committee on Ways and Means
United States House of Representatives
Room B-316 Rayburn House Office Building
Washington, DC 20515-6100

Thank you for giving me this opportunity to write to you concerning
the Social Security Windfall Elimination and Pension Offset provisions.
My name is Ralph Wright, and I am a teacher at Granite Bay High
School, Granite Bay, California 95746. I have been a teacher for 17
years, entering the profession mid-career. Because of the number of
years, when I retire, the California State Retirement system will only
pay me approximately $1,300 (before taxes) every month. This amount of
money does not even come close to covering my house and utility
payments, and I will have to depend on Social Security to make up the
difference so that my wife and I can live. I paid all my quarters
before I returned to teaching in 1987.
A normal Social Security payment would be enough for my needs. But
to have my SS benefit cut by 60 percent will place an undue hardship on
my life. We may be forced to sell our home. The ``golden years'' which
we should be able to enjoy will not be there, and I may have to have a
part-time job to make up the difference.
Had I been in the California retirement system for a full teaching
career, I would have received enough retirement money to meet my needs.
But the present law is severely penalizing me and all others like me
who do not have that many years in teaching. I have paid into the SS
system; I should be able to enjoy the fruits of this money.
And since my wife only draws $141.00 a month in the teacher's
retirement system (for teaching many years ago), she can plan on losing
most of her Social Security when she makes her first SS claim. If I
die, she, as my widow, can plan on receiving none of my Social
Security. That is not fair at all.
I urge the committee to recommend that H.R. 594 be passed by both
houses of Congress and sent to the President for his signature. To not
do this is to condemn a huge number of people to poverty--something
that the original authors of the present law never dreamed would happen
nor, I am sure, planned for. Please help us. The repeal of the Windfall
and Offset Provisions is just as important as any other piece of
legislation this year, including tax cuts!

Sincerely,
Ralph E. Wright

Statement of Claude M. Wyatt, Santa Anna, Texas
Sir, I wish to comment on the GPO/WEP hearings that were conducted
on May 1, 2003. The GPO/WEP penalizes the surviving spouse of a worker
that did not work in a situation that paid into a ``government''
pension plan. Since a married couple is considered to be ``one'' in
income and has to pay taxes as such, they should be considered as one
in retirement. It is very unfair to penalize the surviving spouse due
to the fact that the survivor paid into a government pension plan,
without choice in most situations. That tells American citizens that
the work that they perform during their life will not help to insure
that their surviving spouse will be able to have some of the rewards
that they worked for to insure that their survivor will be able to live
with some modem of security and dignity in their retirement years. I
urge you to please vote to repeal the unfair, unjust GPO/WEP and allow
retiring Americans the benefits that their spouses worked for and allow
them the full benefits that they are entitled to as an American. Thank
you.