On Jan. 5, President Biden signed the Social Security Fairness Act, ensuring Americans receive further Social Security benefits that they are entitled to. American citizens who work in a public sector job or receive a pension through a form of public employment will be directly affected by the implementation of this act. Although a great portion of the country will benefit from this, it will also be costly to the economy.
For years, members of the American Postal Workers Union have been advocating for the removal of outdated Social Security laws that punish retired citizens by reducing their benefits. This reduction happens even though these retirees meet all requirements. Now, with the implication of this new legislation, past laws that reduced government pensions for retirees are being overwritten.
“As the cost of living continues to rise and expenses become more demanding, it is a privilege to have access to Social Security. I think it’s a good thing that pensions are being raised to assist older people who may not have strong support systems, especially if their children live in different states or even different countries. Providing them with more money helps foster more financial independence for them,” sophomore Nathaniel Woods said.
As Biden initiated the Social Security Fairness Act, he spontaneously removed the Windfall Elimination Provision, a law reducing retirement benefits. This law withheld pensions that were not covered, making it so that they received lower Social Security benefits. Although there were ways of avoiding the reductions made by the WEP, it significantly reduced benefits for many Americans, causing many groups to act against this law and other laws with similar effects.
“I believe it’s important to set aside money for retired people. Some people may think that everyone deserves the money they earn based on their work, but not everyone has the same opportunities. Saving a bit of money for the older generation would be beneficial and could positively impact everyone,” sophomore Stella Gonzalez said.
Another act annulled by Biden upon the introduction of the Social Security Fairness Act was the Government Pension Offset. This law previously reduced up to two-thirds of a person’s government pension based on their Social Security benefits. This law has been affecting American citizens since the late 1900s, causing significant reduction to their pension. With the replacement of this law, Americans will be able to receive larger amounts from their pensions regardless of their Social Security.
“I believe the law is beneficial because it relieves peoples’ concerns about how much money they will have as they live in retirement. With this support, people can live in a more comfortable situation, knowing that they are protected by the law and the new rules in place,” Sophia Artunduaga said.
Retired Americans throughout the country will benefit from the Act when they see their pension increase. This will provide citizens nationwide with more money to spend on necessities, such as meals for their families, medical bills and living expenses.
Although this new law aids much of the country, some also see that there are some downsides to consider. The Congressional Budget Office predicted it will cost over 196 billion dollars over the next ten years, making the act incredibly costly. Additionally, the 4.1 million Americans that are predicted to retire in 2025 will increase the number of Americans receiving Social Security.
“I personally think removing the laws was a good change, but I believe it will come with negative economic effects. Although it’s beneficial for retired people to receive more money, it will cost the government more to sustain this increase in prices. This could lead to rising costs for many essential goods, making the cost of living more expensive,” sophomore Abel Fernandez said.
The initiation of the Social Security Fairness Act represents a step toward financial fairness for retirees, abolishing both the WEP and GPO. Over 2.1 million retirees on Social Security will receive an average increase of $360 per month. Although costly, this assures full Social Security benefits to public workers nationwide. The economy and taxpayers will begin to experience the true financial effects of the law in later years as more workers retire and the cost of Social Security increases.