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HEARING: Chairman Brady Opening Statement at Hearing on Social Security and Public Servants: Ensuring Equal Treatment

March 22, 2016

WASHINGTON, D.C.- Today, House Ways and Means Committee Chairman Kevin Brady (R-TX) delivered the following opening statement during a hearing on Social Security and Public Servants: Ensuring Equal Treatment.

Remarks as prepared for delivery:

“Thank you Mr. Chairman, I’m so grateful to have the opportunity to talk today about how we are working to help America’s teachers, police officers, firefighters and other public servants.

“As you know, Social Security benefits are based on a worker’s earnings. The benefit formula is designed so that lower lifetime earners receive a higher replacement rate than higher lifetime earners.

“However, for some workers, Social Security’s formula doesn’t work well. Some teachers, firefighters, police offices, and others work in jobs where they do not pay Social Security taxes. This causes their average lifetime earnings to appear lower to Social Security than they actually are, because all those years when they didn’t pay Social Security taxes count as zeros.

“The Windfall Elimination Provision or WEP tries to correct this problem, but unfortunately its one-size-fits-all approach is just unfair. This isn’t just a Texas problem- it affects people in Massachusetts, California, Ohio, Illinois, Louisiana, and frankly, all over the country. We all hear often from constituents whose benefits are reduced by the WEP asking when Congress is going to address this problem.

“Since 2004, I have worked to repeal the WEP and replace it with a formula that treats our firefighters, police officers, teachers, and other affected workers fairly. One that looks at all earnings and bases Social Security benefits on the proportion of earnings that was subject to Social Security taxes.

“Most recently, I’ve partnered with Representative Neal to introduce H.R. 711, the Equal Treatment of Public Servants Act of 2015.

“We’ve worked with many organizations representing teachers, firefighters, police officers and other retirees who have their benefits unfairly reduced by the WEP. Many of them are in the audience today. Specifically, I’d like to thank the Association of Texas Professional Educators, Texas Retired Teachers Association, Mass Retirees, and the Ohio Public Employees Retirement System for all their work on this issue.

“Rep. Neal and I have received overwhelming support from the noncovered worker community, including groups such as the Fraternal Order of Police, California Public Employees’ Retirement System, National Active and Retired Federal Employees Association, and many others. I ask unanimous consent to place these letters into the record.

“For new retirees, our bill repeals the WEP and replaces it with a formula that is fair. Our solution takes into account all earnings and reflects how much of a person’s earnings were subject to Social Security payroll taxes.

“Under our approach, two workers with the same lifetime earnings – one who has spent an entire career in Social Security covered employment and another who has worked in both covered and noncovered work – will receive a Social Security benefit that is calculated the same way. No more unfair formula for teachers, firefighters and police officers. Instead, we use the same benefit formula for everyone, looking at all earnings. And if some of those earnings aren’t from Social Security covered employment, we adjust benefits to reflect the proportion that are.

“But it’s not enough to fix the WEP for future beneficiaries. We have to provide some relief to current seniors already affected by the WEP. These individuals will have their monthly benefits increased using the savings from this bill.

“Finally, this bill makes sure that everyone is treated fairly by requiring Social Security to make sure that those current retirees who should be subject to the WEP have their benefits adjusted correctly.

“At this time, I would like to yield to the gentleman from Massachusetts.

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“I thank my colleague from Massachusetts for his work on this important issue and all my Committee colleagues for their support. As Speaker Ryan has said, here in the House, we are returning to regular order. Today is an important step in the process, having a hearing to talk about a problem and some ways to fix it. I have had a chance to review the excellent testimony the witnesses have submitted and I look forward to advancing this bill in the weeks ahead.”