[Congressional Record Volume 145, Number 48 (Thursday, March 25, 1999)]
[Senate]
[Page S3444]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Ms. MIKULSKI (for herself, Mr. Sarbanes, Ms. Snowe, Mr. Dodd, 
        Mr. Harkin, Mr. Hollings, Mr. Inouye, Ms. Landrieu, and Mr. 
        Reid):
  S. 717. A bill to amend title II of the Social Security Act to 
provide that the reductions in social security benefits which are 
required in the case of spouses and surviving spouses who are also 
receiving certain Government pensions shall be equal to the amount by 
which two-thirds of the total amount of the combined monthly benefit 
(before reduction) and monthly pension exceeds $1,200, adjusted for 
inflation; to the Committee on Finance.


                  Government Pension Offset Reform Act

 Ms. MIKULSKI. Mr. President, today, I am introducing a bill to 
modify a harsh and heartless rule of government that is unfair and 
prevents current workers from enjoying the benefits of their hard work 
in their retirement. This legislation is very important to me, very 
important to my constituents in Maryland, and very important to 
government workers and retirees across the nation. I want the middle 
class of this Nation to know that if you worked hard to become middle 
class you should stay middle class when you retire.
  Under current law, there is something called the Pension Offset law. 
This is a harsh and unfair policy. Let me tell you why.
  If you are a retired government worker, and you qualify for a spousal 
Social Security benefit based on your spouse's employment record, you 
may not receive what you qualify for. Because the Pension Offset law 
reduces or entirely eliminates a Social Security spousal benefit when 
the surviving spouse is eligible for a pension from a local, state or 
federal government job that was not covered by Social Security.
  This policy only applies to government workers, not private sector 
workers. Let me give you an example of two women, Helen and her sister 
Phyllis.
  Helen is a retired Social Security benefits counselor who lives in 
Woodlawn, Maryland. Helen currently earns $600 a month from her federal 
government pension. She's also entitled to a $645 a month spousal 
benefit from Social Security based on her deceased husband's hard work 
as an auto mechanic. That's a combined monthly benefit of $1,245.
  Phyllis is a retired bank teller also in Woodlawn, Maryland. She 
currently earns a pension of $600 a month from the bank. Like Helen, 
Phyllis is also entitled to a $645 a month spousal benefit from Social 
Security based on her husband's employment. He was an auto-mechanic, 
too. In fact, he worked at the same shop as Helen's husband.
  So, Phyllis is entitled to a total of $1,245 a month, the same as 
Helen. But, because of the Pension Offset law, Helen's spousal benefit 
is reduced by \2/3\ of her government pension, or $400. So instead of 
$1,245 per month, she will only receive $845 per month.
  This reduction in benefits only happens to Helen because she worked 
for the government. Phyllis will receive her full benefits because her 
pension is a private sector pension. I don't think that's right, and 
that's why I'm introducing this legislation.

  The crucial thing about the Mikulski Modification is that it 
guarantees a minimum benefit of $1,200. So, with the Mikulski 
Modification to the Pension Offset, Helen is guaranteed at least $1,200 
per month.
  Let me tell you how it works. Helen's spousal benefit will be reduced 
only by 2/3 of the amount her combined monthly benefit exceeds $1,200. 
In her case, the amount of the offset would be 2/3 of $45, or $30. 
That's a big difference from $400, and I think people like our federal 
workers, teachers and our firefighters deserve that big difference.
  Why should earning a government pension penalize the surviving 
spouse? If a deceased spouse had a job covered by Social Security and 
paid into the Social Security system, that spouse expected his earned 
Social Security benefits would be there for his surviving spouse.
  Most working men believe this and many working women are counting on 
their spousal benefits. But because of this harsh and heartless policy, 
the spousal benefits will not be there, your spouse will not benefit 
from your hard work, and, chances are, you won't find out about it 
until your loved one is gone and you really need the money.
  The Mikulski modification guarantees that the spouse will at least 
receive $1,200 in combined benefits. That Helen will receive the same 
amount as Phyllis.
  I'm introducing this legislation, because these survivors deserve 
better than the reduced monthly benefits that the Pension Offset 
currently allows. They deserve to be rewarded for their hard work, not 
penalized for it.
  Many workers affected by this Offset policy are women, or clerical 
workers and bus drivers who are currently working and looking forward 
to a deserved retirement. These are people who worked hard as federal 
employees, school teachers, or firefighters.
  Frankly, I would repeal this policy all together. But, I realize that 
budget considerations make that unlikely. As a compromise, I hope we 
can agree that retirees who work hard should not have this offset 
applied until their combined monthly benefit exceeds $1,200.
  In the few cases where retirees might have their benefits reduced by 
this policy change, my legislation will calculate their pension offset 
by the current method. I also have a provision in this legislation to 
index the minimum amount of $1,200 to inflation so retirees will see 
their minimum benefits increase as the cost of living increases.

  I believe that people who work hard and play by the rules should not 
be penalized by arcane, legislative technicalities. That's why I'm 
introducing this bill today.
  Representative William Jefferson of Louisiana has introduced similar 
legislation in the House. I look forward to working with him to modify 
the harsh Pension Offset rule.
  If the federal government is going to force government workers and 
retirees in Maryland and across the country to give up a portion of 
their spousal benefits, the retirees should at least receive a fair 
portion of their benefits.
  I want to urge my Senate colleagues to join me in this effort and 
support my legislation to modify the Government Pension Offset.
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