Will the Social Security Fairness Act Bankrupt SSA Trust Funds?

President Joe Biden signed the Social Security Fairness Act on 5th January and it is a step that removes the Windfall Elimination Provision (WEP) and Government Pension Offset (GPO). This landmark decision brings higher Social Security payments to millions of retirees but also raises concerns about the program’s future.

check out our related article on Will the Social Security Fairness Act add an Extra $360 in benefits to you?

How Does This Change Impact Retirees?

The new law restores full Social Security benefits to public sector workers who were previously affected by the WEP and GPO rules. These provisions had reduced benefits for individuals who worked in jobs not covered by Social Security but later earned Social Security benefits through other employment. With the changes:

  • Retirees affected by WEP and GPO will see an average increase of $360 per month.
  • Approximately 2.8 million Americans will benefit from these adjustments.

The Cost of the Act

While the Social Security Fairness Act has been celebrated by many critics are wary of its $196 billion price tag over the next decade. Social Security is already projected to face insolvency by 2038 and this law could accelerate that timeline. Experts estimate that the changes will push the insolvency date forward by about six months.

Table: Key Impacts of the Social Security Fairness Act

AspectDetails
Benefit Increase$360 per month for 2.8 million retirees
Cost Over 10 Years$196 billion
Social Security InsolvencyDate moved up by six months
Coverage RestoredPublic sector retirees impacted by WEP and GPO

What Experts Are Saying

Jeffrey Liebman, Harvard Economist

Liebman criticizes the Act as a poorly crafted piece of legislation suggesting the $200 billion could be better spent supporting public sector workers or improving Social Security equity.

Sylvester J. Schieber, Former Social Security Advisory Board Chairman

Schieber warns the Act increases spending without raising revenue shortening the life of the trust fund. He argues it unfairly benefits workers with minimal contributions to Social Security.

Olivia S. Mitchell, Pension Research Expert

Mitchell highlights that Social Security’s insolvency issue remains unresolved. While the Act provides benefits for some, she warns it fails to address the larger problem of funding future benefits.

Is the Act Truly Fair?

Critics argue that the Act’s name is misleading. Instead of promoting fairness they say it creates imbalances:

  • Double Benefits: Retirees can now collect both government pensions and full Social Security benefits, something not allowed for those fully covered by Social Security.
  • Higher Costs: These changes benefit higher-income retirees the most, further straining the system.

For instance under the new rules a public sector retiree can receive both a government pension and full spousal or survivor benefits from Social Security. Previously the GPO and WEP prevented such double dipping. This adjustment could lead to payments far exceeding contributions.

A Balanced Perspective

While the Social Security Fairness Act offers immediate financial relief for millions of retirees its long term consequences raise questions. Lawmakers must now address how to ensure the program remains solvent for future generations.

If you’re interested in related Social Security reforms, don’t miss our detailed coverage on Social Security Payments Increase in 2025 – Biden signed the Social Security Fairness Act into law

FAQs

1. What is the Social Security Fairness Act?

The Act eliminates the WEP and GPO, which previously reduced Social Security benefits for public sector retirees.

2. How much will retirees gain?

On average, retirees affected by the Act will receive $360 more per month.

3. Will this bankrupt Social Security?

No, but it will push the insolvency date forward by about six months.

4. Who benefits the most?

Public sector retirees, especially those with higher incomes and government pensions, will benefit significantly.

4. Why is the Act controversial?

Critics argue it provides benefits to retirees who did not fully contribute to Social Security while increasing the program’s financial strain.

Final Thoughts

The Social Security Fairness Act is a significant step toward providing relief for public sector retirees, but it comes at a cost. While millions will benefit in the short term, the financial burden on Social Security’s trust funds cannot be ignored. To truly secure the program’s future, comprehensive reforms addressing funding gaps must follow. For now, the Act remains a testament to the challenges of balancing fairness and sustainability.

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