By Bo Erickson
WASHINGTON (Reuters) – The U.S. Congress earlier on Saturday passed a measure to increase Social Security pension payments for some retirees who earn pensions – such as former police officers and firefighters – that critics warned would further weaken the system's funding.
The Senate in a bipartisan vote of 76-20 overnight approved the Social Security Act, which will repeal twenty-year-old benefits that could reduce benefits for people who receive pensions.
The House of Representatives last month approved the bill in a 327-75 vote, which means the Senate's approval sends it to Democratic President Joe Biden to sign into law. The White House did not immediately respond to a question about whether Biden intends to do so.
The bill would reverse a decades-old change in the program that limited federal benefits to high-wage workers who receive pensions. Over time, growing numbers of municipal workers such as firefighters and postal workers also saw their pay cut.
Most Americans do not participate in retirement plans, which pay a defined benefit, and instead rely on savings and Social Security. One in ten American private sector workers have retirement plans, according to Labor Department data.
The new provisions affect about 3% of Social Security beneficiaries – a total of more than 2.5 million Americans – and workers and retirees who are affected by these provisions are important sectors of lawmakers and their powerful lobbying groups that pushed for the reform of the law.
Some of them could receive hundreds of dollars more per month in federal benefits because of the bill, pension experts said.
Some federal budget experts have warned that the change could hurt the already fragile system's budget, which is estimated to cost $196 billion over the next decade, according to an analysis by the non-governmental Congressional Budget Office.
Emerson (NYSE: ) Sprick, associate director of economic policy at the Bipartisan Policy Center, said in an interview, “the fact that there is so much support in Congress that is exactly the opposite of what policy researchers agree is very troubling.”
Instead of scrapping the current formulas for determining retirement benefits for these workers, the reform was floated, with more accurate communication from the Social Security Administration about how much these public sector workers should expect.
The Committee for a Responsible Federal Budget, a nonpartisan fiscal think tank, also warns of additional costs that will affect the future of the program.
“We are running to our death,” the group's president, Maya MacGuineas, said in a statement.
“It's really shocking that at a time when we're only nine years away from the nation's largest trust fund program being completely depleted, lawmakers are about to consider speeding that up by six months.”
Republican Senator Ted Cruz on the Senate floor Wednesday said the bill as written would “throw grandmothers over a cliff”.
“Every senator who votes to put $200 billion in spending on the Social Security Trust Fund, chooses to sacrifice the interest of the elderly who paid into Social Security and received those benefits,” he said.
Supporters of the bill say the future of Social Security could be considered in the future.
Asked about the impact of the resolution on the legislation, Senator Michael Bennet, a sponsor of the bill, told Reuters: “These are long-term issues that we need to find a way to address together.”