[Congressional Record (Bound Edition), Volume 150 (2004), Part 2]
[Extensions of Remarks]
[Pages 2164-2165]
[From the U.S. Government Publishing Office, www.gpo.gov]




                       TEXAS TEACHER GPO LOOPHOLE

                                 ______
                                 

                            HON. SAM JOHNSON

                                of texas

                    in the house of representatives

                      Wednesday, February 11, 2004

  Mr. SAM JOHNSON of Texas. Mr. Speaker, I rise in support of equality 
in Social Security law for all working Americans. Today we're having 
the final round of debate on a bill that will bring about fairness and 
equity to a system under scrutiny. While this bill covers many other 
topics, for Texans, this bill is about closing an unjust loophole.
  For 95 percent of America's working husbands and wives, there is a 
rule that says people may collect only the higher of spousal benefits 
or retirement benefits, but they cannot collect both. . . . That is--
unless you're in the Texas Teacher Retirement System. The Texas Teacher 
Retirement System is a substitute for Social Security, their version of 
the dual entitlement rule is called the Government Pension Offset.
  The dual entitlement rule applies whether a married couple works in 
jobs such as a nurse and a small business owner, a Social Security 
covered teacher and an accountant, or a lawyer and an electrical 
engineer, they both pay into Social Security and are both subject to 
this rule. The husband and wife are each able to collect either their 
retirement benefits earned through their own hard work or they are able 
to collect spousal benefits--whichever is higher. They cannot collect 
both.
  It is very possible that if one spouse earns significantly less than 
the other, for example, that nurse and small-business owner, then the 
nurse is going to have higher spousal benefits than her own retirement 
benefits. In that case, the nurse will collect the higher spousal 
benefit, but may end up asking herself why she had to pay Social 
Security taxes all those years instead of just staying home.
  If a retirement benefit is $600 per month for the nurse--but her 
spousal benefit is $800 . . . she would collect $800--but not $1,400. 
For Texas teachers making use of their ``last day of work'' loophole, 
they collect spousal benefits, just like that nurse--and then they 
collect their retirement. By working just one last day in a school 
district and paying as little as $3 into Social Security, a teacher can 
then qualify to receive full Social Security spousal benefits on top of 
her retirement benefits.
  Many teachers in Texas have questioned the system because they want 
both Social Security spousal benefits and their Texas teacher 
retirement. Again, the Texas Teacher Retirement System is a substitute 
for Social Security; you can do one or the other, but not both. And no 
one else can do both.
  I want teachers to understand that the Government Pension Offset 
(GPO) only reduces their spousal benefit by two-thirds of their state 
retirement benefits rather than dollar for dollar as is the case for 
all other working spouses. That's right! Anyone subject to GPO gets a 
better deal and more bang for their buck than 95 percent of the 
American public. They get one-third more of their spousal benefits than 
any other working Americans.
  The ``loophole'' that is being closed here today is one small part of 
the government pension offset meant to encourage entire school 
districts to join the Social Security system. The unique situation for 
Texas teachers is that only about 50 Texas school districts participate 
in Social Security and the other 1,000 school districts participate in 
the Texas Teacher Retirement System, which again, is a substitute for 
Social Security coverage.
  We're closing this loophole in the law to create integrity and 
maintain fairness in the system and to prevent further erosion of the 
Social Security trust fund. This new law will also require people to 
sign a notice acknowledging that employment in a job not covered by 
Social Security will have an affect upon possible future Social 
Security benefits.
  It's just sad when constituents who are teachers tell me that they 
had no idea that a teaching job not covered by Social Security would 
have an effect upon possible Social Security benefits in the future. 
It's important we correct that.
  Finally, one more area that has caused great confusion is regarding 
the annual benefit statements we all receive from the Social Security 
Administration telling us about our expected future benefits from 
Social Security. The IRS and SSA will begin collecting information 
necessary to more accurately reflect on these statements the offsets 
from jobs not covered by Social Security.

[[Page 2165]]

  I am pro-teacher and in Texas they have a great state retirement 
system. But we cannot give special treatment to this small slice of the 
American population. It's just not fair--especially when it comes to 
Social Security and retirement savings. Today we are just making the 
two systems apply fairly to all Americans. It's the right thing to do.