Did You Know 40 Percent of Teachers Lack Social Security Benefits?
Why universal coverage would be good for teachers and other education employees
Something strange happened on Tuesday night. No, I don’t mean the election.
I’m talking about an unusual legislative maneuver orchestrated by members of the House Freedom Caucus. As reported by Roll Call, outgoing Virginia Representative Bob Good stood before a nearly empty House chamber and made a motion of unanimous consent to “lay on the table” and effectively delay a bill to repeal two wonky Social Security provisions called the Windfall Elimination Provision (WEP) and the Government Pension Offset (GPO). Those provisions reduce Social Security benefits for some retired teachers, principals, superintendents, police officers, firefighters, and other state and local workers.
The bill in question has 330 co-sponsors in the House. (A similar Senate bill has 62 co-sponsors.) So why are Good and the House Freedom Caucus trying to stop this bi-partisan legislation from moving forward?
And why do I agree with them?
Their motivation seems to be mainly financial: It would cost an estimated $196 billion over 10 years. That’s a lot of money, but even worse than the total is where the money would come from and its effects on everybody else. Rather than coming out of the Treasury, like most federal expenditures, the money would be paid out as higher Social Security benefits. That, in turn, would cause Social Security to run out of money six months earlier than currently projected. That’s a big deal. Social Security is currently projected to run out of funds just 9 years from now. If or when that happens, benefits would have to be cut by 21%.
To put it bluntly, I think Congress should be working to shore up Social Security, not speeding up its demise.
But there’s one more reason to oppose the bill: Namely, there’s a better option.
As I lay out in a new piece at The 74, the bill in question would repeal two provisions that affect state and local government workers who split their careers in and out of Social Security. The story here is long and technical. Back when Social Security was created, it didn’t originally cover state and local government workers. Later, Congress let states decide whether they wanted to participate, and some states opted not to.
Today, about 40% of teachers and other education employees and 25% of all state and local government workers—including police officers, firefighters, and other employees—are not covered by Social Security. They don’t pay taxes into the program, and they don’t receive benefits for those years of service.
This trade works fine for people who stay in those non-covered positions for their whole careers. If you teach in California for 30 or 35 years, you’re going to get a pretty good pension at the end of it, and you don’t really need Social Security. But that’s a small minority of people. The vast majority of teachers, let alone other education employees like teaching assistants or bus drivers or cafeteria workers, would be better off with the protections offered by Social Security.
For a more detailed example of how this works for an individual employee, and why I support universal Social Security coverage as a solution to this problem, check out my full piece in The 74.