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

March 22, 2016

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

Remarks as prepared for delivery:

“Good morning and welcome to today’s hearing on ensuring equal treatment of all workers who receive Social Security benefits.

“I’d like to welcome to the Subcommittee Mr. Smith of Nebraska—who joins us again after working on the Subcommittee in the 112th Congress—as well as Mr. Rice of South Carolina. We are glad to have you both on board.

“Hardworking Americans who have paid into Social Security should have their benefits calculated fairly. And they deserve to know how much they can expect to receive from Social Security. But unfortunately for many of our teachers, firefighters, police officers, and others, that’s not the case.

“When Social Security was created in 1935, some state and local governments already had a retirement program in place and the law allowed those governments and workers to keep their separate programs and not participate in Social Security.

“In fact in Texas, many firefighters, police officers, and teachers do not participate in Social Security because they have an alternative retirement program. However, many of these good folks have had other jobs – either in the summer when school is out or working for a different employer – where they paid into Social Security.

“And so if there is an issue I regularly hear about when it comes to Social Security it is the Windfall Eliminate Provision or WEP.

“Take for example, Janice from Plano, who recently wrote into me. She has worked for 31 years as a teacher. In the summers, Janice also worked in the private sector, paying Social Security taxes on those earnings. Because Janice has some earnings that weren’t subject to payroll taxes and others that were, she is subject to the Windfall Elimination Provision or WEP. And she very much wants us to address this.

“So now what is WEP exactly? When did it come about? And what can we do about it?

“Simply put WEP uses a slightly different benefit formula than the regular Social Security formula. But that slight difference can have a meaningful impact on benefits.

“WEP came about as part of the Social Security reform effort in 1983. The idea behind WEP was to ensure that workers who pay into a separate retirement system are treated similarly to other workers with respect to Social Security benefits. Both the House and Senate wanted to modify the benefit formula for those workers who spent part of their careers not paying Social Security taxes. I guess it should come as no surprise that the House and Senate didn’t agree on the numbers. The Senate took a more aggressive approach than the House. As tends to happen here they ended up somewhere in the middle. Ever since the WEP was put into place, those public servants have pointed out just how arbitrary it is. And they are right.

“On top of that, right now the WEP and the Government Pension Offset or GPO make it really hard for our firefighters, police officers, and teachers to plan for retirement. As we will hear today, the Social Security Statement that is required by law shows them the wrong number. Their statements give them the amount of Social Security benefits they would receive if the WEP and GPO didn’t exist. These workers, just like every other American, have a right to know what their Social Security benefits will be so they can best prepare for their retirements.

“Bottom-line: It’s time to replace the WEP and GPO with an approach that treats all workers fairly.

“And so that is what Chairman Brady and Representative Neal are trying to do. They have introduced a bill that does just that for the WEP. I am a proud cosponsor of their bill. The President included a similar proposal for WEP and GPO in his budget this year.

“Some folks may call for full repeal of the WEP and GPO. While these provisions aren’t fair, getting rid of them wouldn’t be fair either. Public employees who are eligible for Social Security should be treated just like everyone else – no better and no worse. And just as importantly at a time when Social Security is already in trouble doing so would only worsen its financial standing.

“Today we are going to hear from one panel of witnesses. Our witnesses will provide background on the WEP and GPO, discuss the problems with the current approach, including their own front line experiences, and talk about ways we can finally fix it.

“I thank each of our witnesses for being here today and look forward to hearing your testimony.”