In the final days of the 118th Congress, on December 21, 2024, the Senate voted 76-20 to repeal two controversial federal rules that reduced or eliminated Social Security benefits for millions of public-sector employees, including many police, firefighters, teachers, and postal workers. The bill now goes to President Biden for his signature.

The Social Security Fairness Act repeals two federal policies—the Windfall Elimination Provision (WEP) and the Government Pension Offset (GPO) rule—that reduce Social Security payments for nearly 3 million retirees. The legislation repeals the WEP and GPO reductions for Social Security benefits payable after December 2023. As a result of the repeal, some public sector retirees could see their Social Security benefits increase in the future, and some spouses and survivors who had been denied Social Security benefits because of their public pensions could become newly entitled to Social Security benefits.

The Senate votes came after the House of Representatives overwhelmingly approved the bill on a bipartisan vote of 327-75 in November. 

The Congressional Budget Office estimates that the Social Security Fairness Act would cost about $196 billion over the next 10 years and could accelerate the exhaustion of the Social Security trust funds by several months. If Congress does not take action before then, the combined Social Security retirement, survivor, and disability trust funds are projected to run dry within the next 10 years. If the trust funds are exhausted, all Social Security recipients could see their benefits cut by about 20%.

The WEP and GPO were created more than 40 years ago and apply to people with public pensions based on work where they didn’t pay Social Security payroll taxes. The two provisions affect about 28% of state and local government employees covered by alternative retirement systems. They also apply to federal employees hired before 1984, covered by the Civil Service Retirement System. Opponents have been trying to repeal these two provisions for decades. 

The WEP reduces Social Security benefits for individuals who have worked long enough in covered employment—at least 10 years—to earn a Social Security benefit but who also receive pensions from public sector jobs where they didn’t pay Social Security taxes. It affects state and local public-sector workers, including teachers in about a dozen states, public safety officers such as police, firefighters, and emergency services personnel in many more states, and postal workers nationwide. 

The Congressional Research Service estimates that about 2.1 million people are affected by the WEP rules. These rules can reduce, but not eliminate, Social Security benefits for public-sector workers who have also worked long enough in private-sector employment to be eligible for a Social Security retirement benefit. With annual reduction limits, Social Security benefits can be reduced by up to half the amount of non-covered pensions.

The GPO reduces Social Security benefits for spouses, widows, and widowers who receive government pensions based on work where they did not pay Social Security payroll taxes and who try to claim Social Security spousal or survivor benefits. The GPO reduces any potential Social Security spousal or survivor benefits by two-thirds of the non-covered public pensions with no annual dollar limits. In many cases, the GPO reductions can wipe out a Social Security spousal or survivor benefit. The Congressional Research Service estimates that the GPO affects about 800,000 individuals.