[Congressional Record Volume 145, Number 47 (Wednesday, March 24, 1999)]
[House]
[Pages H1671-H1672]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                    GOVERNMENT PENSION OFFSET REFORM

  The SPEAKER pro tempore. Under a previous order of the House, the 
gentleman from Louisiana (Mr. Jefferson) is recognized for 5 minutes.
  Mr. JEFFERSON. Mr. Speaker, I am pleased to have the opportunity to 
provide this statement regarding the Government Pension Offset Reform 
legislation that I introduced today.
  Pension offset reform is an important issue to me. 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 many of my colleagues 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 1960s and the 1970s many public employees opted to join in.
  Some local governments chose to remain out of the system. Their 
employees and spouses planned for their 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 the noncovered payroll.
  Many of the State and local government employees that are covered by 
government pensions are or will be unfairly affected by the pension 
offset. As Members may be aware, the pension offset was originally 
enacted in response to the perceived abuses to the Social Security 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 the Social Security system 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 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 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

[[Page H1672]]

generally receive lower pension benefits. These public service 
employees include secretaries, school cafeteria workers, teachers' 
aids, and others who receive low wages as government employees. The 
pension offset as applied to this group is punitive, unfairly harsh and 
bad policy.
  Government pensions were tailored to reduce benefits that were equal 
to many combined private pension-Social Security policies in the 
private sector for upper level government workers. However, this was 
not true for lower income workers, such as employees who work as 
secretaries, school cafeteria workers, teachers' aids, 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. 
Two-thirds 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 plus $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 be subject to the offset as well. But 
this 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 and surviving spouses earning 
private pensions are not subject to the offset at all. If retirees on 
private pensions do not have Social Security benefits subject to 
offset, why should retirees who work in the public service system?
  Mr. Speaker, 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 paraprofessionals, 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. 
During the 105th Congress I introduced the Government Pension Offset 
Repeal bill, H.R. 273. Thanks to the grassroots support for it, it 
received 183 votes. Today we introduced this bill with 119 cosponsors 
already, and I look forward with my colleagues to gaining passage of 
this important reform legislation.

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