Biden signs 'historic' bill to boost social security payments, says 'retirees deserve economic security'

Just weeks before leaving the White House, US President Joe Biden signed into law a measure which intends to boost social security payments for current and former public employees. The White House called it the first expansion of such benefits in 20 years and said that the law would bring relief to teachers, firefighters, police officers and other public service workers in the country.

“The bill I’m signing today is about a simple proposition: Americans who have worked hard all their lives … should be able to retire with economic security and dignity,” Biden said before signing the legislation. “That’s the entire purpose of the social security system crafted by Franklin Delano Roosevelt nearly 90 years ago," he added.

Last month, the US Senate voted to approve the Social Security Fairness Act, which many claim would help in reducing decades-old disparity. However, some of the critics of the bill said that the provision would put a significant strain on Social Security trust funds, which are currently facing a looming insolvency crisis.

About the bill

The legislation rescinds two provisions. They are the windfall elimination provision and the government pension offset – which limit social security benefits for recipients if they get retirement payments from other sources.

In December 2023, the Congressional Research Service estimated that 745,679 people had their benefits reduced by government pension offset. Meanwhile, about 2.1 million people, or about 3 per cent of all beneficiaries, were affected by the windfall elimination provision.

In September, the Congressional Budget Office estimated that removing the windfall elimination provision would boost monthly payments to the affected beneficiaries by an average of $360 by December 2025. Eliminating the government pension offset on the other hand would increase monthly benefits in December 2025 by an average of $700 for 380,000 recipients getting benefits based on living spouses, according to the CBO.

Hence, there would be an average increase of $1,190 for 390,000 or surviving spouses getting a widow or widower benefit. These amounts are expected to be increased over time with social security’s frequent cost of living adjustments.

The move is being lauded by people in the public service. “We are excited to see the change – we’ve righted a 40-year wrong. The policy was far more egregious for surviving spouses of firefighters who paid their own quotas into social security but were victimized by the government pension system," said Edward Kelly, President of the International Association of Fire Fighters.

“Now firefighters who get paid very little can now afford to actually retire,” he added. It is pertinent to note that the changes were proposed by Ohio Senator Sherrod Brown for hears. However, he lost his re-election bid in this year’s November poll. Despite not being in the scene, his contribution was not forgotten.

Lee Saunders, President of the American Federation of State, County and Municipal Employees labour union, thanked Brown for his advocacy in the matter. “Over two million public service workers will finally be able to access the social security benefits they spent their careers paying into,” Saunders said in a statement. “Many will finally be able to enjoy retirement after a lifetime of service," he added.

With inputs from agencies.