President Biden made a historic move on Sunday by signing legislation that will expand Social Security benefits for millions of retired Americans, including essential workers such as firefighters, police officers, and teachers. The President emphasized the importance of ensuring economic security and dignity for those who have worked hard all their lives. The Social Security Fairness Act, which was signed at a gathering in the White House, is expected to provide an average monthly increase of $360 to over 2.5 million Social Security recipients.
In his speech, President Biden highlighted the significance of this legislation for middle-class households, drawing on his own upbringing and the struggles faced by many Americans. The beneficiaries of this act will also receive a lump sum payment in the thousands of dollars to compensate for the shortfall in benefits they should have received in 2024.
The Social Security Fairness Act marks a significant shift in federal policies that previously limited the full benefits available to employees with public pensions. It also addressed the reduction in benefits for the surviving spouses and family members of these workers. By eliminating these barriers, the new law aims to provide much-needed relief to retirees who have been impacted by these restrictions.
A White House spokesperson praised President Biden for being the first president in over two decades to expand Social Security benefits. The spokesperson noted that the legislation signed by the President will result in hundreds of dollars in additional monthly benefits for millions of Americans. The timing of the bill’s passage was crucial, with Mr. Biden signing it just weeks before the end of his presidency, following a decisive Senate vote on December 21.
The journey to enhance Social Security payments for public pension recipients has been long and arduous, spanning several decades. The Senate’s initial hearings on the policies took place in 2003, highlighting the bipartisan support for reform in this area. Despite facing objections from some Republicans over its cost, the Social Security Fairness Act ultimately garnered enough support to pass both the Senate and the House.
According to the Congressional Budget Office, the new law is projected to add an estimated $195 billion to the federal deficit over a decade. However, the benefits provided by the legislation far outweigh the financial implications, as eligible recipients will receive retroactive payments dating back to December 2023. This means that those who were previously only receiving partial benefits will now be entitled to a full payment from a year ago.
The specific policies repealed by the Social Security Fairness Act, namely the Windfall Elimination Provision (WEP) and the Government Pension Offset (GPO), had been long-standing obstacles for 2.5 million retirees. General President Edward Kelly of the International Association of Fire Fighters praised the legislation for restoring the promise of full Social Security benefits to retired firefighters and emergency medical workers. The repeal of these provisions is expected to increase monthly payments significantly for affected recipients by December 2025.
The Congressional Budget Office’s estimates indicate that eliminating the WEP will result in an average $360 increase in monthly payments for affected Social Security recipients by December 2025. Additionally, scrapping the GPO is projected to raise monthly benefits by an average of $700 for 380,000 recipients with benefits based on living spouses. Surviving spouses receiving widow or widower benefits are expected to see an average increase of $1,190.
President Biden reiterated the importance of rectifying the injustices caused by the previous laws that denied millions of Americans access to their full Social Security benefits. By signing the Social Security Fairness Act into law, he has taken a significant step towards ensuring economic security and dignity for retired Americans across the country.
The Associated Press contributed to this report.
Kate Gibson, a reporter for CBS MoneyWatch in New York, covers business and consumer finance.
