Two Republicans From Texas Have a Plan to Tame Windfall Penalty

By Stephen Barr
Tuesday, May 3, 2005; B02

Two Texas Republicans have introduced legislation to modify a Social Security provision that retired federal employees, law enforcement officers and teachers consider onerous.

Bills sponsored by Sen. Kay Bailey Hutchison and Rep. Kevin Brady would change the formula for calculating the Social Security benefits of those who spent most of their working careers in a retirement program that does not include Social Security, such as the Civil Service Retirement System and some state and local retirement systems.

The so-called windfall elimination provision reduces the Social Security benefits of those who have fewer than 30 years of "substantial" Social Security earnings and who also draw a pension from another retirement system. The maximum reduction works out to about $300 a month.

"The windfall elimination provision unfairly discriminates against public servants who've earned two pensions," Brady said in a statement. "If you've earned two pensions, you should be able to collect two pensions. It's your hard earned money and you deserve to keep it."

Hutchison said the legislation would "help us fulfill our commitment to America's seniors."

In her statement, Hutchison said the legislation would direct the Social Security Administration to develop a process that would incorporate an affected person's entire earnings history into the calculation of a Social Security benefit. She said the change would base benefits on the actual earnings history, not what she called an arbitrary formula using years of earnings under Social Security.

Other members of Congress have introduced bills to abolish or modify the windfall elimination provision. Rep. Barney Frank (D-Mass.), for instance, would apply the reduction only to combined benefits above $2,500 a month. Sen. Dianne Feinstein (D-Calif.) and Rep. Howard P. "Buck" McKeon (R-Calif.) would repeal the windfall provision.

Repeal of the provision is a longtime priority of the National Active and Retired Federal Employees Association, known as NARFE.

Dan Adcock , the group's assistant legislative director, said NARFE is pleased that Hutchison and Brady have introduced their bills, but he said the group will seek clarification that their approach would not put some federal retirees at risk of benefit reductions. The bill might subject some retirees with more than 30 years of substantial Social Security earnings to the windfall elimination provision.

Under the provision, Social Security-covered earnings above a dollar limit ($16,725 this year) are considered substantial.

Benefits of about 758,000 Americans are reduced by the windfall elimination provision, according to a recent congressional estimate. Although CSRS employees do not pay into Social Security, many of them take jobs covered by Social Security before or after their federal careers, or they have outside employment, allowing them to build years of Social Security credits.

Congress has put off dealing with the provision in recent years, despite retiree complaints, because key lawmakers wanted to consider modification or repeal as part of a larger Social Security overhaul. The president's current plan to revamp Social Security might provide an opening for more debate on the windfall issue.

But the cost of making any change could prove to be a barrier. Two years ago, the Social Security Administration estimated that repealing the provision would cost $29.7 billion over the first 10 years and would increase the long-range costs of Social Security.

Brady said the bill has been endorsed by the National Education Association, the Fraternal Order of Police, Federally Employed Women and the Association of Texas Professional Educators.


Pete Brown , executive director of the Naval Sea Systems Command, is retiring today after more than 24 years with the Navy. He is a member of the Senior Executive Service, and he served as the first program officer for the new National Security Personnel System. The 1966 graduate of MIT spent 15 years in the private sector before joining the government.

Satya D. Dubey , associate office director, office of biostatistics, Center for Drug Evaluation and Research at the Food and Drug Administration, retired April 2 after more than 32 years of federal service. He was awarded the FDA Distinguished Career Service Award.