```

[House Hearing, 108 Congress]
[From the U.S. Government Publishing Office]

 
       H.R. 4391, THE ``PUBLIC SERVANT RETIREMENT PROTECTION ACT''

=======================================================================

                                HEARING

                               before the

                    SUBCOMMITTEE ON SOCIAL SECURITY

                                 of the

                      COMMITTEE ON WAYS AND MEANS
                     U.S. HOUSE OF REPRESENTATIVES

                      ONE HUNDRED EIGHTH CONGRESS

                             SECOND SESSION

                               __________

                             JULY 20, 2004

                               __________

                           Serial No. 108-65

                               __________

         Printed for the use of the Committee on Ways and Means

                 U.S. GOVERNMENT PRINTING OFFICE

99-683                 WASHINGTON : 2005
_________________________________________________________________
For sale by the Superintendent of Documents, U.S. Government 
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                      COMMITTEE ON WAYS AND MEANS

                   BILL THOMAS, California, Chairman

PHILIP M. CRANE, Illinois            CHARLES B. RANGEL, New York
E. CLAY SHAW, JR., Florida           FORTNEY PETE STARK, California
NANCY L. JOHNSON, Connecticut        ROBERT T. MATSUI, California
AMO HOUGHTON, New York               SANDER M. LEVIN, Michigan
WALLY HERGER, California             BENJAMIN L. CARDIN, Maryland
JIM McCRERY, Louisiana               JIM McDERMOTT, Washington
DAVE CAMP, Michigan                  GERALD D. KLECZKA, Wisconsin
JIM RAMSTAD, Minnesota               JOHN LEWIS, Georgia
JIM NUSSLE, Iowa                     RICHARD E. NEAL, Massachusetts
SAM JOHNSON, Texas                   MICHAEL R. McNULTY, New York
JENNIFER DUNN, Washington            WILLIAM J. JEFFERSON, Louisiana
MAC COLLINS, Georgia                 JOHN S. TANNER, Tennessee
ROB PORTMAN, Ohio                    XAVIER BECERRA, California
PHIL ENGLISH, Pennsylvania           LLOYD DOGGETT, Texas
J.D. HAYWORTH, Arizona               EARL POMEROY, North Dakota
JERRY WELLER, Illinois               MAX SANDLIN, Texas
KENNY C. HULSHOF, Missouri           STEPHANIE TUBBS JONES, Ohio
SCOTT McINNIS, Colorado
RON LEWIS, Kentucky
MARK FOLEY, Florida
KEVIN BRADY, Texas
PAUL RYAN, Wisconsin
ERIC CANTOR, Virginia

                    Allison H. Giles, Chief of Staff

                  Janice Mays, Minority Chief Counsel

                                 ______

                    SUBCOMMITTEE ON SOCIAL SECURITY

                  E. CLAY SHAW, JR., Florida, Chairman

SAM JOHNSON, Texas                   ROBERT T. MATSUI, California
MAC COLLINS, Georgia                 BENJAMIN L. CARDIN, Maryland
J.D. HAYWORTH, Arizona               EARL POMEROY, North Dakota
KENNY C. HULSHOF, Missouri           XAVIER BECERRA, California
RON LEWIS, Kentucky                  STEPHANIE TUBBS JONES, Ohio
KEVIN BRADY, Texas
PAUL RYAN, Wisconsin

Pursuant to clause 2(e)(4) of Rule XI of the Rules of the House, public 
hearing records of the Committee on Ways and Means are also published 
in electronic form. The printed hearing record remains the official 
version. Because electronic submissions are used to prepare both 
printed and electronic versions of the hearing record, the process of 
converting between various electronic formats may introduce 
unintentional errors or omissions. Such occurrences are inherent in the 
current publication process and should diminish as the process is 
further refined.

                            C O N T E N T S

                               __________
                                                                   Page

Advisories announcing hearing....................................     2

                               WITNESSES

Social Security Administration, Martin H. Gerry, Deputy 
  Commissioner, Disability and Income Security Programs..........     9

                                 ______

Association of Texas Professional Educators, Randall Iglehart....    30
California Retired Teachers Association, George Avak.............    36
Grand Lodge Fraternal Order of Police, Chuck Canterbury..........    33
Nevada State Education Association, Terry Hickman, on behalf of 
  National Education Association.................................    26

                       SUBMISSIONS FOR THE RECORD

Alberti, Jeanne M., Harvard, MA, statement.......................    56
Bates, Judy A., Midlothian, TX, letter...........................    57
Berman, Hon. Howard L., a Representative in Congress from the 
  State of California, statement.................................    57
Bishop, Carolyn J., Belmont, MA, statement.......................    58
Blackwell, Martha E., Sunnyvale, CA, statement...................    59
Bovee, Charlene, Long Beach, CA, statement.......................    59
Bowers, Richard Kirk, Spring Branch, TX, statement...............    59
Bracken, Maurice A., Brookfield, MA, statement...................    59
Brandwein, Janet, Newton Center, MA, statement...................    60
Buccola, Dennis, E., Rock Falls, IL, statement...................    60
California Federation of Teachers, Sacramento, CA, Judith 
  Michaels, 
  statement......................................................    61
California State Teachers' Retirement Systems, Gary Lynes, 
  Sacramento, CA, statement......................................    61
Cannon, Robert Arthur, Rockport, MA, statement...................    63
Carbone, Henry L., Fort Kent, ME, statement......................    63
Castro, Margaret Ann, Cypress, TX, statement.....................    64
Clary, Jeff, Spring, TX, statement...............................    64
Colorado Public Employees' Retirement Association, Robert Gray, 
  statement......................................................    65
Cook, Patricia E., Braintree, MA, letter.........................    66
Cook, Tracey, Lisle, IL, statement...............................    67
Cournia, Audrey, Sparks, NV, statement...........................    68
Cyr, Paul A., Greene, ME, statement..............................    68
Desmarais, Therese K., Rockport, MA, statement...................    69
Devereaux, Alfred E., Lenox, MA, statement.......................    70
DeSotell, Katie, Aurora, IL, statement...........................    71
Dyer, Jeanne, Foxboro, MA, letter................................    71
Fay, Paula Emerson, Cotuit, MA, letter...........................    72
Federally Employed Women, Patricia Wolfe, statement..............    72
Flick, Wayne, Grand Junction, CO, statement......................    75
Garrett, Gerald R., Moses Lake, WA, statement....................    75
Gray, Robert, Colorado Public Employees' Retirement Association, 
  statement......................................................    65
Hamdorf, Ken, Seal Beach, CA, statement..........................    76
Hatford, Wane V., Palm Springs, CA, statement....................    76
Hayes, James C., Las Vegas, NV, statement........................    77
Hedden, Karen, Wells, NV, statement..............................    77
Herzberg, James, Katy, TX, statement.............................    77
Hudson, Robert A., Colorado Springs, CO, statement...............    78
Jacobson, Linda B., Northbrook, IL, statement....................    78
Jones, Sheri, San Antonio, TX, statement.........................    80
Joyce, Barbara C., Sparks, NV, statement.........................    80
Joyner, D.R., Lufkin, TX, statement..............................    81
Keegan, James H., Belmont, MA, statement.........................    82
Kimber, Gary, Elko, NV, letter...................................    82
Kush, Ralph, Sylmar, CA, statement...............................    83
Langford, Deborah, Spring, TX, statement.........................    83
Larson, Paul E., Fallbrook, CA, statement........................    84
LeCompte, Don, Chula Vista, CA, statement........................    84
Lenarsky, Jane, Natick, MA, letter...............................    85
London, Harold N., Northbrook, IL, statement.....................    86
Lynes, Gary, California State Teachers' Retirement Systems, 
  Sacramento, CA, statement......................................    61
Makler, Linda and Fred, Ballwin, MO, statement...................    86
Mathison, William A., East Longmeadow, MA, statement.............    86
McKeon, Hon. Howard P. ``Buck,'' a Representative in Congress 
  from the State of California, statement........................    87
McLemore, Sandra L., Houston, TX, letter.........................    87
McNay, Valerie J., Las Vegas, NV, statement......................    89
Meehan, Elsie Lynn, Salisbury, CT, statement.....................    90
Michaels, Judith, California Federation of Teachers, Sacramento, 
  CA, 
  statement......................................................    61
Moore, Mary Ann, San Antonio, TX, statement......................    91
Munoz, Robert R., Sparks, NV, letter.............................    91
Montague, Sally P., Point Blank, TX, letter......................    91
National Association of Postmasters of the United States, Wally 
  Olihovik, statement............................................    92
National Treasury Employees Union, Colleen M. Kelley, statement..    93
Newman, Constance G., Acton, ME, statement.......................    94
Newman, Francis A., Acton, ME, statement.........................    95
Nimerowski, Joan, Andover, MA, statement.........................    95
Oldebeken, Jim, Gladstone, MO, statement.........................    96
Olihovik, Wally, National Association of Postmasters of the 
  United States, statement.......................................    92
Orzechowski, Edward W., Palmer, MA, letter.......................    96
Pickett, Jane K., Worcester, MA, statement.......................    97
Pond, Richard, Rochester, MA, statement..........................    97
Porter, Hon. Jon C., a Representative in Congress from the State 
  of Nevada, statement...........................................    97
Pratt, Mary Ellen, Carver, MA, letter............................    98
Retired Educators Coalition for Social Security Fairness, 
  statement......................................................    98
Roberts, Cecil Ralph, Farmers Branch, TX, letter.................    99
Rosenbaum, Noel R., El Paso, TX, statement.......................   100
San Jacinto College, Houston, TX, statement......................   100
School Employee Retirement Systems of Ohio, Columbus, OH, James 
  R. Winfree, letter.............................................   100
Sherrill, Vashti E., Bakersfield, CA, statement..................   101
Shipman, Karin, Houston, TX, statement...........................   102
Shultz, Glenn P., Las Vegas, NV, statement.......................   102
Sowder, Mary, Henderson, NV, statement...........................   102
Stek, Barbara W., Anchorage, AK, statement.......................   103
Sterrett, Frank W., Bridgewater, MA, statement...................   103
Terrell, Juanita, Mont Belvieu, TX, statement....................   104
Texas Classroom Teachers Association, Austin, TX, Shelby Patrick, 
  statement......................................................   105
Texas Federation of Teachers, Austin, TX, Eric Hartman, statement   105
Tutor, Tom, Islesboro, ME, statement.............................   107
Vinci, Gertrude M., Reno, NV, statement..........................   107
Wasneski, Donna, Grand Junction, Colorado, statement.............   108
Willard, Jean K., Spring Branch, TX, statement...................   108
Willard, Kirt, Pleasanton, CA, statement.........................   108
Wilson, Sandra, Aurora, IL, statement............................   109
Wolfe, John G., Toledo, OH, statement............................   109
Wolfe, Mary E., Toledo, OH, statement............................   110
Wolfe, Patricia, Federally Employed Women, statement.............    72
Winfree, James R., School Employee Retirement Systems of Ohio, 
  Columbus, OH, letter...........................................   101
Zimmerman, Pete, Mission Viejo, CA, statement....................   111

      H.R. 4391, THE ``PUBLIC SERVANT RETIREMENT PROTECTION ACT''

                              ----------                              

                         TUESDAY, JULY 20, 2004

             U.S. House of Representatives,
                       Committee on Ways and Means,
                           Subcommittee on Social Security,
                                                    Washington, DC.
    The Subcommittee met, pursuant to notice, at 10:36 a.m., in 
room B-318, Rayburn House Office Building, Hon. E. Clay Shaw, 
Jr. (Chairman of the Subcommittee) presiding.
    [The advisory and revised advisory announcing the hearing 
follow:]

ADVISORY

FROM THE 
COMMITTEE
 ON WAYS 
AND 
MEANS

                    SUBCOMMITTEE ON SOCIAL SECURITY

                                                CONTACT: (202) 225-1721
FOR IMMEDIATE RELEASE
July 20, 2004
SS-10

 Shaw Announces Hearing on H.R. 4391, the ``Public Servant Retirement 
                            Protection Act''

    Congressman E. Clay Shaw, Jr. (R-FL), Chairman, Subcommittee on 
Social Security of the Committee on Ways and Means today announced that 
the Subcommittee will hold a hearing on H.R. 4391, the ``Public Servant 
Retirement Protection Act'' (PSRPA). The hearing will take place on 
Tuesday, July 20, 2004, in room B-318 Rayburn House Office Building, 
beginning at 10:00 a.m.
      
    In view of the limited time available to hear witnesses, oral 
testimony at this hearing will be from invited witnesses only. However, 
any individual or organization not scheduled for an oral appearance may 
submit a written statement for consideration by the Subcommittee and 
for inclusion in the printed record of the hearing.
      

BACKGROUND:

      
    Two Social Security provisions, the Government Pension Offset (GPO) 
and the Windfall Elimination Provision (WEP), potentially affect about 
7 million Federal, State, and local government employees. While these 
provisions were intended to help equalize, not penalize, the treatment 
of workers, many of those affected believe the provisions are unfair. 
Alternatively, some have suggested that requiring all government 
employees to pay Social Security taxes would ensure equal treatment of 
both government and private-sector employees, and would eventually 
eliminate the need for the GPO and WEP. Legislative proposals have been 
introduced in the 108th Congress and previous congresses to modify or 
repeal the GPO and WEP.
      
    At a hearing in May 2003, the Subcommittee examined why the GPO and 
the WEP were enacted, how they work, and options for modification or 
repeal of these provisions. Implications of mandatory coverage of such 
employees were also examined. In addition, the Subcommittee examined 
how modifications to current law would affect beneficiaries, the 
budget, and Social Security's long-term financing.
      
    Since then, on May 19, 2004, Rep. Kevin Brady (R-TX), along with 
Chairman Shaw, and Reps. Howard L. Berman (D-CA), Howard P. ``Buck'' 
McKeon (R-CA), Sam Johnson (R-TX), and Michael H. Michaud (D-ME), as 
well as other Members of the Subcommittee, introduced H.R. 4391, the 
PSRPA. The PSRPA repeals the WEP and replaces it with a new benefit 
calculation.
      
    Created in 1983, the WEP modifies the Social Security benefit 
formula so that employees who pay into a government pension system or 
other retirement program in lieu of Social Security for some jobs in 
their career do not receive benefits that are relatively more generous 
than those of workers with equal earnings who paid Social Security 
taxes for all jobs in their career.
      
    Under the PSRPA, Social Security benefits would first be calculated 
as if all the worker's earnings were subject to Social Security taxes, 
using the standard benefit formula. To ensure Social Security benefits 
are based only on Social Security-covered wages, the benefit that is 
actually paid would be adjusted to reflect the proportion of the 
worker's earnings that were subject to Social Security taxes.
      
    In announcing the hearing, Chairman Shaw stated, ``The hard work 
and dedication of our Nation's public servants is deeply appreciated by 
all Americans. Teachers, police officers, firefighters, other public 
employees, and all workers deserve fair treatment under Social 
Security. This hearing provides an opportunity to understand how the 
Public Servant Retirement Protection Act' ensures equitable treatment 
of public servants and how it would affect Social Security's long-term 
financing.''

FOCUS OF THE HEARING:

    The Subcommittee will examine the WEP under current law and how the 
PSRPAwould affect current and future beneficiaries, and Social 
Security's long-term financing.

DETAILS FOR SUBMISSION OF WRITTEN COMMENTS:

    Please Note: Any person(s) and/or organization(s) wishing to submit 
for the hearing record must follow the appropriate link on the hearing 
page of the Committee website and complete the informational forms. 
From the Committee homepage, http://waysandmeans.house.gov, select 
``108th Congress'' from the menu entitled, ``Hearing Archives'' (http:/
/waysandmeans.house.gov/Hearings.asp?congress=16). Select the hearing 
for which you would like to submit, and click on the link entitled, 
``Click here to provide a submission for the record.'' Once you have 
followed the online instructions, completing all informational forms 
and clicking ``submit'' on the final page, an email will be sent to the 
address which you supply confirming your interest in providing a 
submission for the record. You MUST REPLY to the email and ATTACH your 
submission as a Word or WordPerfect document, in compliance with the 
formatting requirements listed below, by close of business, Tuesday, 
August 3, 2004. Finally, please note that due to the change in House 
mail policy, the U.S. Capitol Police will refuse sealed-package 
deliveries to all House Office Buildings. For questions, or if you 
encounter technical problems, please call (202) 225-1721.

FORMATTING REQUIREMENTS:

    The Committee relies on electronic submissions for printing the 
official hearing record. As always, submissions will be included in the 
record according to the discretion of the Committee. The Committee will 
not alter the content of your submission, but we reserve the right to 
format it according to our guidelines. Any submission provided to the 
Committee by a witness, any supplementary materials submitted for the 
printed record, and any written comments in response to a request for 
written comments must conform to the guidelines listed below. Any 
submission or supplementary item not in compliance with these 
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files for review and use by the Committee.

    1. All submissions and supplementary materials must be provided in 
Word or WordPerfect format and MUST NOT exceed a total of 10 pages, 
including attachments. Witnesses and submitters are advised that the 
Committee relies on electronic submissions for printing the official 
hearing record.

    2. Copies of whole documents submitted as exhibit material will not 
be accepted for printing. Instead, exhibit material should be 
referenced and quoted or paraphrased. All exhibit material not meeting 
these specifications will be maintained in the Committee files for 
review and use by the Committee.

    3. All submissions must include a list of all clients, persons, 
and/or organizations on whose behalf the witness appears. A 
supplemental sheet must accompany each submission listing the name, 
company, address, telephone and fax numbers of each witness.

    Note: All Committee advisories and news releases are available on 
the World Wide Web at http://waysandmeans.house.gov.

    The Committee seeks to make its facilities accessible to persons 
with disabilities. If you are in need of special accommodations, please 
call 202-225-1721 or 202-226-3411 TTD/TTY in advance of the event (four 
business days notice is requested). Questions with regard to special 
accommodation needs in general (including availability of Committee 
materials in alternative formats) may be directed to the Committee as 
noted above.

                                 

ADVISORY

FROM THE 
COMMITTEE
 ON WAYS 
AND 
MEANS

                    SUBCOMMITTEE ON SOCIAL SECURITY

                                                CONTACT: (202) 225-9263
FOR IMMEDIATE RELEASE
July 19, 2004
SS-10-Revised

     Change in Time for Hearing on H.R. 4391, the ``Public Servant 
                      Retirement Protection Act''

    Congressman E. Clay Shaw, Jr. (R-FL), Chairman, Subcommittee on 
Social Security of the Committee on Ways and Means, today announced 
that the Subcommittee hearing on H.R. 4391, the ``Public Servant 
Retirement Protection Act,'' previously scheduled for 10:00 a.m. on 
Tuesday, July 20, 2004, in room B-318 Rayburn House Office Building, 
will now begin at 10:00 a.m. or immediately following the completion of 
the full Committee markup of H.R. 4842, the `` United States-Morocco 
Free Trade Agreement Implementation Act,'' in the main Committee 
hearing room, 1100 Longworth House Office Building.

    All other details for the hearing remain the same. (See Social 
Security Advisory No. SS-10, dated July 13, 2004.)

                                 

    Chairman SHAW. Good morning. The dedicated service of our 
Nation's hardworking teachers, police officers, firefighters, 
and other public employees is deeply appreciated by all 
Americans. They have earned and deserved fair treatment under 
Social Security. Toward that end, today's hearing will give us 
an opportunity to understand how H.R. 4391, the ``Public 
Servant Retirement Protection Act,'' will ensure fair treatment 
of government employees and how it will affect Social 
Security's long term financing.
    This is a bipartisan bill. It was introduced by 
Representative Brady, by myself, and by Representatives 
Johnson, McKeon, Berman, and Michaud. It is cosponsored by 
seven Subcommittee Members. The Subcommittee has long been 
concerned with the effect of the WEP (WEP), which currently 
affects about 760,000 beneficiaries. As the Social Security 
Administration (SSA) has said in public testimony numerous 
times, the WEP was intended to help equalize, not penalize, 
government employees.
    Nevertheless, many of those affected believe the provision 
unfairly punished them for their government service. The WEP 
adjusts benefits for workers who did not pay Social Security 
taxes in some of their jobs to ensure they do not receive a 
relatively more generous benefit that was intended only for 
low-wage workers. However, analysis of the WEP has shown that 
this broad-brush approach does not accurately adjust the 
benefits in many cases, especially for low-wage workers.
    To address this inequity, H.R. 4391 would eliminate the 
current arbitrary formula and would calculate benefits just 
like all other workers, assuming all wages were subject to 
Social Security taxes using the standard benefit formula. 
Second, to make sure the Social Security benefit is based only 
on Social Security-covered wages, the benefit would be 
multiplied by the percentage of earnings subject to Social 
Security taxes. This formula would ensure that government 
employees receive benefits that replace the same amount of 
wages under Social Security as every other worker in America. 
No more, no less.
    In my home State of Florida, more than 44,000 beneficiaries 
have their benefits reduced because of the WEP. Firefighters, 
police officers, and other public servants in my district have 
told me about the effect of the WEP on their retirement 
security and their concern about the provision. I have 
discussed H.R. 4391 with them and, like many of our witnesses 
today, they have agreed that this legislation is fair and have 
pledged their support. I thank our witnesses for joining us and 
I look forward to hearing their views about the effect of this 
bill on workers' benefits and Social Security finances. Now I 
would yield to Mr. Pomeroy.
    Mr. POMEROY. Thank you, Mr. Chairman. Over 7 million public 
servants are not covered by Social Security and potentially, 
therefore, subject to the GPO (GPO), and the WEP. The WEP and 
GPO are widely acknowledged as blunt instruments. It comes as a 
surprise to public servants about to retire, and they leave 
workers without enough time to adjust their retirement planning 
accordingly. In 2004 alone, some 850,000 Social Security 
beneficiaries will have their benefits reduced due to the WEP. 
Another 400,000 beneficiaries will have their benefits reduced 
by GPO. Those two provisions are unpredictable, often unfair. 
Congress has demonstrated broad bipartisan support for full 
repeal of both. Rather than a full repeal, today's hearing is a 
more limited proposal. It pertains only to the WEP and it 
modifies, rather than limits, the benefit reduction formula. It 
does offer a formula that improves on current law; however, the 
approach does leave questions unanswered.
    The SSA have the wage data necessary to implement this new 
formula? What do we do about the GPO? Where will offsets be 
found? Also, if offsets are going to be found within Social 
Security to accommodate the additional costs of H.R. 4391, do 
they involve reducing benefits or increasing the Federal 
Insurance Contributions Act taxes? Finally, what do we tell 
beneficiaries who will be worse off, not better, under the new 
formula? Mr. Chairman, I am hopeful that the answers to these 
questions and any others that my colleagues will have will be 
answered in the course of today's hearing. I would yield back. 
Are you going to go across the panel, Mr. Chairman?
    Chairman SHAW. I have agreed to allow Mr. Sandlin to make 
an opening statement. We also have two other Members from our 
side from Texas, so I will allow them each to make a short 
opening statement for fairness--I know this is a Texas issue, 
and one that they are very concerned about. I will now 
recognize the gentleman from Texas, Mr. Johnson.
    Mr. JOHNSON. Thank you, Mr. Chairman. I appreciate you 
holding this important hearing. Thank you specifically for 
inviting the Association of Texas Professional Educators 
(ATPE), who supports this legislation. I look forward to 
hearing their statements.
    There are two offset formulas under Social Security. One of 
them was the GPO, which dealt with spousal benefits, and the 
teacher loophole was a GPO problem that was closed by law. The 
other offset is the WEP, which deals with workers' own 
retirement benefits. It is an arbitrary formula meant to 
prevent a teacher or other government work, such as police or 
fire, from benefiting as a windfall from the progressive 
benefit formula under Social Security.
    The current formula hacks at benefits to reach a less than 
perfect Social Security retirement benefit, and the bill 
introduced by Representative Brady and others, H.R. 4391, the 
Public Servant Retirement Protection Act, of which we are all 
cosponsors, would require the SSA to calculate benefits based 
on total actual income. Thank you for yielding the time, Mr. 
Speaker--Chairman.
    Chairman SHAW. Thank you, Sam. Mr. Sandlin?
    Mr. SANDLIN. Thank you, Mr. Chairman and Mr. Pomeroy, 
distinguished Members of the Subcommittee. Thank you for the 
opportunity to testify today on the WEP. I am pleased that the 
Subcommittee has convened a hearing to discuss the unfair 
impact of the current WEP's benefits calculation on our 
Nation's hardworking Federal, State, and local government 
employees. As a Member of the House Committee on Ways and 
Means, I am proud to lead the fight to alleviate the disparate 
treatment of our public employees.
    As my colleagues know, I have introduced legislation in the 
past to eliminate the WEP. Today I come to encourage fairness 
and to reiterate my support for H.R. 594 and S. 349, the 
``Social Security Fairness Act,'' which eliminates the WEP and 
the GPO. Rather than simply discuss amending the method by 
which the WEP is calculated, I am hopeful that our public 
debate today on the importance of restoring equity to the 
Social Security benefits for our retired government employees 
will result in H.R. 594 being brought to the floor of the House 
for a vote.
    Both the WEP and the GPO need to be repealed. Years ago, 
Congress enacted the GPO and the WEP, which hurt our public 
employees. The WEP reduces the Social Security benefits of 
persons who split their careers between Social Security benefit 
work and work not covered by Social Security. The GPO reduces 
teachers' and other public employees' Social Security spousal 
or survivor benefits by two-thirds of their public pension. The 
National Education Association (NEA) has testified before 
Congress that 9 out of 10 public employees affected by the GPO 
will lose their entire spousal benefit. That is undeserved.
    Until this year, Texas teachers have been able to escape 
the application of the GPO through use of the last-day rule, 
which granted teachers a reprieve if they worked their last day 
in Social Security-covered employment. The passage of H.R. 743, 
the so-called but misnamed ``Social Security Protection Act'', 
ended this practice July 1. It is a testament to Texas that we 
had thus far protected our teachers' full earned spousal Social 
Security benefits. It is a travesty that these earned benefits 
were effectively taken from our teachers this year by the U.S. 
Congress.
    The vitriolic debate over our teachers' benefits, fueled on 
by many Members of the Congress, included incredulous 
accusations that our teachers were gaming the system. Let me be 
clear. The work our teachers, firemen, policemen, and other 
government employees do, strengthens the foundation of our 
Nation every single day. More often than not, these people 
accept considerably smaller paychecks in order to serve their 
communities and to educate our children. A recent national 
survey noted that the average teacher salary in Texas is 
$39,972, making Texas 30th in the Nation for teacher pay.
    The effect of the GPO and WEP on our educational system in 
Texas can only continue to hurt our already crippling teacher 
shortage. The Texas Workforce Commission projects that Texas 
will need over 82,000 new teachers by 2008. The Texas State 
Teachers Association noted that last year more than 53,000 
classrooms were staffed with insufficiently certified teachers. 
Some claim the GPO and the WEP provisions are not particularly 
onerous to many of affected retirees because the provision 
generally affects only those who are well off and have a 
generous government pension. I assure the Members of this 
Subcommittee that my mother knows from personal experience how 
false this assertion is. She spent all her life in public 
teaching and planned her retirement carefully. To have had her 
Social Security benefits arbitrarily and unexpectedly reduced 
and stolen was more than just an insult; it was a serious blow 
to her standard of living in her retirement years.
    Some will characterize amending the WEP formula today as a 
good first step. I think it is a step too short. More 
accurately, it is a stumble characterized as a dance. Those who 
criticized our teachers and public servants on the floor of the 
House, those who voted against what was obnoxiously called a 
loophole now want to gallop in on what they think is a white 
horse and tell teachers they should be happy with less than 
half a loaf. Although they are still hanging teachers, they 
believe teachers should be happy because they are getting hung 
with a new rope. Isn't that special?
    This year it is projected that over 850,000 public servants 
will have their retirement benefits slashed by the WEP, and 
400,000 will have their retirement benefits slashed by the GPO. 
Congressman Jim Turner filed a discharge petition on March 10, 
2004, to bring H.R. 594 to the floor. As of today, 192 Members 
of Congress have signed this important discharge petition to 
compel and up or down vote on H.R. 594, a bill with 300 
cosponsors. We only need 26 more Members of Congress to step up 
to the plate for public employees. The time to act is now. Mr. 
Chairman, it is time to fish or cut bait.
    Mr. Chairman, as Congress moves forward with reform of the 
Social Security system, I urge you and the Members of the 
Subcommittee to remember our retired Federal, State, and local 
government employees. They deserve much better from us. They 
have earned that much. Thank you for your consideration.
    Chairman SHAW. Sir, I would like to make just a brief 
comment. You refer to this piece of legislation as a stumble. 
Well, it may be in the grand scheme of things, but I would like 
to point out it is a $7 billion stumble. Mr. Brady?
    Mr. BRADY. Well, now that the press conference is over, we 
can move to the hearing on the issue today of the WEP. I want 
to thank Chairman Shaw for holding this. I want to thank the 
cosponsors' bipartisan way for working on this issue, and those 
testifying today, I think, have a real important message. Where 
I do agree with Max, my friend from Texas, is that there must 
be a better way to treat our teachers and firefighters and 
policemen when it comes to how much of their own Social 
Security they keep when they have earned two pensions--one 
within Social Security and one in the Social Security 
substitute. It seemed to me the more that we worked on this 
issue--and all of you are far more experienced than I--is that 
the WEP formula just seems to have grown arbitrary over the 
years and not reflective of the real world today.
    The WEP today pretends everyone is wealthy. Repeal of the 
windfall pretends everyone is poor. Let's stop pretending. 
Let's provide equal treatment for everyone in Social Security 
based on a complete and accurate work record, their own 
complete and accurate work record. From a policy standpoint, I 
can't imagine what is more fair than equal treatment. As a 
teacher, I would want to be graded on my own work and not on 
the class average, which is what happens today. I think that it 
is important that we not pretend any longer that a $30,000 
teacher in Texas, a $50,000 firefighter in California, and a 
$150,000 administrator in Florida, all have earned the same 
amount over their non-covered years. It didn't happen, so let's 
not pretend that any further.
    What this bill does is applies the same Social Security 
formula that all Americans receive for the actual time and 
proportioned years that people paid in. The result is--and this 
has been the hard part--the result is that we replace the same 
amount of wages for everyone within Social Security. That has 
been, I think, the elusive solution. I am not saying this is 
perfect, but what we are looking to do is find a way to help 
teachers, police officers, and firefighters while being fair to 
everyone else in Social Security. This is the balance we have 
sought in this bill, Mr. Chairman, and in testimony and the 
improvements, I think, from other Members, we are always 
looking for ways to make it just as good a bill as possible. I 
appreciate the chance for this hearing today.
    Chairman SHAW. Thank you. Now we will go back to regular--
--
    Ms. TUBBS JONES. Mr. Chairman? Do I have a chance to say 
something real quickly, please?
    Chairman SHAW. Well, I don't know how many opening 
statements we are having. Let's get to the witnesses, and 
anything that is brought out, you will be certainly given time, 
as all the Members of the Committee will be.
    Ms. TUBBS JONES. A very polite way to say no. Thank you, 
Mr. Chairman.
    Chairman SHAW. Our first witness, Mr. Martin Gerry, who is 
the Deputy Commissioner of Disability and Income Security 
Programs at the SSA. Welcome back to the Committee. We have 
your full statement, which will be made a part of the record, 
and you may proceed as you see fit.

 STATEMENT OF MARTIN H. GERRY, DEPUTY COMMISSIONER, DISABILITY 
  AND INCOME SECURITY PROGRAMS, SOCIAL SECURITY ADMINISTRATION

    Mr. GERRY. Thank you, Mr. Chairman. I want to very much 
thank the Subcommittee for inviting me to appear before you 
today. It is a pleasure particularly to appear before this 
Subcommittee, as it always has been so supportive of the SSA 
and its programs. I am also pleased to have an opportunity to 
discuss the WEP, or WEP, which I believe is an extremely 
complicated provision and not well understood. I know that is 
one of the goals of the hearing today.
    First, let me begin by commending Congressman Brady and the 
other cosponsors of H.R. 4391, for what I believe is their very 
thoughtful approach to possible changes to the way the WEP is 
calculated. These changes are intended to better target the 
effect of the offset so that the amount of the resulting 
reduction in benefits more closely approximates the individual 
facts in each case.
    Before I discuss H.R. 4391 and other approaches to 
modifying the WEP, I would like to take just a moment to give 
some background on the provision. As you know, Mr. Chairman, 
the Social Security amendments 1983 included the WEP as a means 
to eliminate what Congress viewed as windfall Social Security 
benefit for workers who also received pensions from employment 
not covered by Social Security. The WEP primarily affects 
government workers. Before WEP, some of these workers were 
treated as low lifetime earners for Social Security benefit 
purposes, and received the advantage of the weighted Social 
Security benefit formula in addition to their other government 
pension. WEP was intended to eliminate this advantage by using 
a different, less heavily weighted Social Security benefit 
formula.
    A number of bills have been introduced that would change 
WEP, and these proposals include eliminating it entirely, 
providing higher Social Security benefits for government 
workers whose pensions from non-covered employment and their 
Social Security benefits are below certain levels, and by 
replacing the WEP benefit formula with an alternative 
computation. This last approach is embodied in the H.R. 4391. 
Under this bill, as introduced by Congressman Brady, a 
hypothetical primary benefit would first be computed based on 
all of the workers' covered and non-covered earnings after 
1950. This hypothetical benefit would then be multiplied by the 
proportion of the worker's total earnings that were covered 
under Social Security to get a benefit level.
    The bill would also guarantee that workers with a 
government pension based on non-covered earnings would receive 
no less than the benefit under the present WEP provision. The 
bill would apply to beneficiaries already on the rolls, as well 
as to future beneficiaries. Unfortunately, the data needed to 
make many of these calculations will not be available for all 
cases, making it difficult for the SSA to equitably administer 
the provisions of the bill. The SSA only has records of non-
covered earnings beginning in 1978, when it began receiving 
Form W-2 information from employers, some of these records are 
incomplete. Certainly we have significant problems with the 
data up to at least 1983.
    It is questionable whether earnings before 1978 would be 
available from other sources. The non-covered earnings are 
needed for as many as 30 years ago, and employers are only 
required to keep records for 4 years. Many workers also may 
lack good records of their non-covered earnings prior to 1978, 
and providing information on those earnings could only serve to 
lower the benefits payable under the bill.
    The bill gives the Commissioner of SSA the responsibility 
for developing a method for determining the amount of non-
covered wages used to calculate the worker's pension. We 
understand that the intent is to permit SSA to deem non-covered 
earnings to a worker's earnings record when such earnings are 
not available. It is not clear to us how we could do this. 
Possibilities include, one, using the average earnings amount 
for the specific position held by the employee for that year; 
or two, calculating a deemed earnings amount based on the other 
years of earnings for which the SSA does have records, and 
using that as a reference point. Both of these approaches 
present substantial problems and potentially significant costs, 
and I have outlined the reasons for both the problems and the 
costs in my written testimony.
    We are also concerned about taking on the workload of 
recomputing benefits for all current beneficiaries affected by 
the WEP to determine if they would receive higher benefits 
under the change. This would require that the SSA review 
benefits of up to 680,000 retired and disabled workers. In 
addition, the bill also provides that current workers be 
guaranteed present law benefits if higher. Consequently, the 
SSA would need to maintain two alternative WEP calculations for 
many decades if we are going to carry out that provision for 
everyone who is now affected.
    In closing, let me again commend Congressman Brady for 
taking on such a complex issue, and thank the Chair and the 
Subcommittee for giving me this opportunity to discuss the WEP. 
As always, we would welcome the opportunity to continue to 
provide assistance and additional information to the Members of 
the Committee. I would be glad to answer any questions that you 
might have.
    [The prepared statement of Mr. Gerry follows:]
   Statement of Martin H. Gerry, Deputy Commissioner, Disability and 
        Income Security Programs, Social Security Administration
    Thank you for inviting me to discuss the Windfall Elimination 
Provision, or WEP, and proposals that would modify or eliminate the 
current formula, and, specifically H.R. 4391, the Public Servant 
Retirement Protection Act. This bill would replace the current WEP 
benefit formula with a formula that would take into account a worker's 
non-covered earnings as well as covered earnings. The proposed 
modifications to the WEP raise a number of technical issues that should 
be considered.
    The WEP is not well understood, so today, I would like to take some 
time to describe the purpose of this provision, how it works, and 
issues that should be evaluated when considering legislative changes to 
this provision. I will also discuss SSA's efforts to educate 
individuals about the impact that a pension from non-covered work can 
have on their Social Security benefits.
GPO Provision
    However, before I discuss the WEP, I would like to briefly discuss 
the government pension offset (GPO) provision. The GPO also affects 
workers who receive pensions based on employment not covered by Social 
Security and is often confused with the WEP. For ease of discussion, 
when referring to government employment, I am referring to all levels 
of Federal or State government employment that is not covered by Social 
Security.
    The GPO affects government retirees who are eligible for both:

      A pension based on their own work in a Federal, State, or 
local government job that was not covered by Social Security, and
      A Social Security spouse's or surviving spouse's benefit 
based on their husband's or wife's work in covered employment.

    Under the GPO, a person's Social Security spouse's or surviving 
spouse's benefit is reduced by an amount equal to two-thirds of the 
amount of the person's government pension based on work not covered by 
Social Security. As of December 2003, about 390,000 beneficiaries had 
their benefits fully or partially offset due to the GPO.
    In enacting the GPO, Congress intended to assure that when 
determining the amount of a spousal benefit (e.g., wife's, husband's, 
widow's, widower's), individuals working in non-covered employment 
would be treated in the same manner as those who work in covered 
employment. The GPO provision removed an advantage that some government 
workers had before the GPO was enacted. Before GPO, a person who worked 
in a government job that was not covered under Social Security could 
receive, in addition to a government pension based on his or her own 
earnings, a full Social Security spouse's or surviving spouse's 
benefit.
    However, a person who works in a job that is covered under Social 
Security is subject to an offset under the dual entitlement provision. 
This provision, which has applied since 1940 when benefits were first 
payable to a worker's family members, requires that Social Security 
benefits payable to a person as a spouse or surviving spouse be offset 
by the amount of that person's own Social Security benefit. Thus, 
dually entitled beneficiaries receive the equivalent of their own 
worker's benefit or the spouse's/surviving spouse's benefit, whichever 
is higher.
    The GPO acts as a surrogate for the dual-entitlement offset for 
workers receiving a government pension based on work not covered under 
Social Security because, if that work had been covered, any spouse's or 
surviving spouse's benefit would have been reduced by the person's own 
Social Security worker's benefit. The result of the GPO is that spouses 
and surviving spouses are treated similarly, regardless of whether 
their jobs are covered under Social Security or not.
Windfall Elimination Provision
    I would now like to discuss the WEP provision. The Social Security 
Amendments of 1983 (P.L. 98-21) included the WEP provision as a means 
to eliminate ``windfall'' Social Security benefits for retired and 
disabled workers receiving pensions from employment not covered by 
Social Security. Generally, while the WEP applies to any pension based 
on non-covered employment, it primarily affects government workers. 
(The WEP does not affect the Social Security benefits payable to 
survivors of workers who received pensions based on non-covered 
employment.)
    The purpose of the WEP was to remove an unintended advantage that 
the weighting in the regular Social Security benefit formula would 
otherwise provide for persons who have substantial pensions from non-
covered employment. This weighting is intended to help workers who 
spent their lives in low-paying jobs by providing them with a benefit 
that is relatively higher in relation to their prior earnings than the 
benefit that is provided for higher-paid workers.
    However, because benefits are based on average earnings in 
employment covered by Social Security over a working lifetime (35 years 
for retired workers), a worker who has spent part of his or her career 
in employment not covered by Social Security appears to have lower 
average lifetime earnings than he or she actually had. (In determining 
average earnings for Social Security benefit purposes, years with no 
covered earnings are counted as years of zero earnings, as if the 
person had not worked at all.) Without the WEP, such a worker would be 
treated as a low-lifetime earner for Social Security benefit purposes 
and inappropriately receive the advantage of the weighted benefit 
formula. The WEP eliminates this potential ``windfall'' by providing 
for a different, less heavily weighted benefit formula to compute 
benefits for such persons.
Computation of the WEP Benefit
    Under the regular (non-WEP) benefit computation rules, a three-step 
weighted benefit formula is applied to a worker's average indexed 
monthly earnings (AIME) to determine his or her primary insurance 
amount (PIA). The PIA is the monthly benefit amount payable to a 
retired worker first entitled at the full retirement age or a disabled 
worker. The PIA formula applicable to workers who reach age 62 or 
become disabled in 2004 is:

    90 percent of the first $612 of AIME, plus
    32 percent of the next $3,077 of AIME, plus
    15 percent of AIME above $3,689.

    Under the WEP computation, the 90-percent factor applied to a 
worker's average earnings in the first band of the Social Security 
benefit formula generally is replaced by a factor of 40 percent for 
workers who are receiving a pension from non-covered employment.
    (Under both scenarios, the 32 and 15 percent factors are the same.)
    For a worker first eligible in 2004, the maximum WEP reduction is 
$306 per month. Unlike the GPO, the WEP can never eliminate a person's 
Social Security benefit.
    WEP does not apply to workers who have 30 or more years of 
substantial earnings under Social Security at all. For workers who have 
21-29 years of substantial covered earnings under Social Security, the 
reduction under the WEP is phased out gradually.
    The WEP provision includes a guarantee designed to help protect 
workers with relatively low pensions based on non-covered employment. 
This guarantee provides that the reduction in Social Security benefits 
can never exceed one-half the amount of the pension based on non-
covered work.
Educating the Public
    As you can see, the WEP and GPO provisions are complicated and 
consequently, there have been misunderstandings about who is affected. 
In order to lessen this confusion, SSA has made revisions to the Social 
Security Statement that highlight and make clearer that the WEP and GPO 
may affect a worker's future Social Security benefit if he or she 
receives a pension based on non-covered employment. The Statement 
refers individuals to SSA publications that explain how benefits can be 
affected by the WEP and GPO. It also refers individuals to an SSA 
website, which was recently revised to make sure that there is ample 
information and links to fact sheets that explain the impact of the GPO 
and WEP. The website includes a benefit calculator that allows workers 
to estimate the effects that WEP may have on their monthly benefit.
    Additionally, SSA offices nationwide provide pre-retirement 
seminars to employees who request them. If government employees request 
the seminar, we inform them of the potential impact that WEP and GPO 
may have on their monthly Social Security benefit.
    As you know, the Social Security Protection Act of 2004 provides 
that all Social Security Statements issued after December 31, 2006 will 
contain language to explain the maximum potential effects of the WEP 
and GPO to any person whose records indicate that they may be subject 
to those provisions. We are currently examining ways to use our 
administrative records of non-covered earnings to identify individuals 
whose benefits are likely to be affected by the GPO or WEP.
Legislation Affecting WEP
    A number of bills have been introduced that would change the WEP. 
These proposals include:

      eliminating the WEP entirely;
      providing higher Social Security benefits for government 
workers whose pensions from non-covered employment, in combination with 
their Social Security benefits, are below certain levels; and
      replacing the WEP benefit formula with an alternative 
computation.

    Each of these approaches raises issues that I would like to 
discuss. Let me start with the elimination of the WEP. If the WEP did 
not apply, approximately 680,000 retired and disabled workers would see 
their benefits increase. It is estimated that elimination of the WEP 
would have a 5-year cost of $10.8 billion and a 10-year cost of $29.7 
billion. The long-range cost would be significant--estimated to be 0.06 
percent of taxable payroll.
    The second type of proposal that has been introduced would provide 
less of a WEP reduction, or no WEP reduction, if the combined amount of 
the worker's non-covered pension and Social Security benefits is below 
a certain threshold. Representative Frank has introduced two such 
bills. H.R. 4234, the more recently introduced bill, would exempt an 
individual from WEP if his or her combined benefits were less than 
$2,500 per month when he or she is first eligible for both Social 
Security and a non-covered pension. Workers with combined amounts of 
$3,334 or higher would be fully subject to the WEP in the same manner 
as under current law. And for those whose combined amounts are between 
$2,500 and $3,334 per month, the WEP would be phased in. This change is 
estimated to have a 5-year cost of $7.8 billion; the 10-year cost would 
be $18.7 billion; and the long range cost would be 0.01 percent of 
taxable payroll.
    Because the threshold amounts of $2,500 and $3,334 are not indexed 
for future years, over time, more workers would have combined amounts 
exceeding $3,334 and thus would be fully subject to the WEP because 
their non-covered pensions and their Social Security rates will rise in 
nominal dollars. It is not clear if this effect is intended. Also, 
because of the link between the application of the WEP and a dollar 
amount of the person's monthly income from Social Security and the 
government pension, some have said that this change would be 
introducing a form of ``means test'' for Social Security benefits.
    The third type of bill that has been introduced would replace the 
current WEP formula with an alternative computation. This is the 
approach embodied in H.R. 4391, as introduced by Representative Brady. 
Under this bill, a hypothetical primary benefit would first be computed 
based on all of the worker's covered and non-covered earnings after 
1950. This hypothetical benefit would then be multiplied by the 
proportion of the worker's total earnings that were covered under 
Social Security to obtain the primary benefit payable to the worker.
    The bill also includes a guarantee provision that would ensure that 
workers whose government pension is based on non-covered earnings in 
the year of enactment or earlier would receive no less than the benefit 
under the present law WEP provision. The bill would apply to 
beneficiaries already on the rolls, as well as to future beneficiaries.
    I would like to commend Representative Brady and the co-sponsors of 
this bill for the thoughtful approach developed for eliminating the 
``windfall'' that would otherwise accrue to workers with pensions from 
non-covered employment.
    However, SSA has a number of concerns with the bill. The primary 
issue is that the computation would consider non-covered earnings after 
1950, but SSA only has records of non-covered earnings beginning in 
1978, when it began receiving Form W-2 information from employers, and 
some of these records are incomplete--particularly for the years soon 
after SSA began collecting this earnings information.
    An analysis of the records of individuals with non-covered earnings 
indicated that there are many individuals who have gaps in their non-
covered earnings patterns. It appears likely that, in many cases, those 
individuals remained in non-covered employment during those ``gaps.'' 
An evaluation of the largest 155 non-covered Federal and State/local 
government employers showed that for about 30 percent of these 
employers there was either a complete gap for one year or more, or for 
one year or more there were substantially lower non-covered earnings 
posted relative to a surrounding year.

      Of the 47 employers that seemed to have a problem, 32 had 
a problem in one of the years in the period 1984-1986.
      For only 4 of the 47 employers, the ``gap year'' was for 
1990 or later.

    In addition, although State and local governments were supposed to 
file Forms W-2 for non-covered earnings for the years 1978-81, 
compliance for this period was generally inconsistent with regard to 
State and local entities because there were no enforcement activities.
    With respect to a worker's non-covered earnings for years before 
1978, it is questionable whether information about these earnings would 
still be available. The earnings in question would be for periods that 
are 27 or more years ago and employers are only required to keep 
records for the last 4 years. It would be a substantial workload for 
SSA to try to develop this information which would be needed to 
calculate the Social Security benefit under the bill. In addition, it 
could be quite burdensome for the government employers to access this 
information--if it still exists.
    Further, there could be questions concerning willingness to 
cooperate, particularly when the agency needed records the employee 
might have, because including additional non-covered earnings in the 
computation could only serve to lower his or her benefit amount payable 
under the bill. Conversely, the benefit would be higher without such 
earnings. For example, a worker whose non-covered earnings were 
entirely before 1978 would fully avoid the WEP reduction under the 
proposed computation if those earnings were not counted. Counting such 
pre-1978 non-covered earnings in some cases but not others, based on 
availability, would not be equitable.
    As indicated previously, the bill would be effective for those on 
the rolls, necessitating a recomputation of benefits for all current 
beneficiaries affected by the WEP in order to determine if they would 
receive higher benefits under the change. This would require SSA to 
review the benefits of up to 680,000 retired and disabled workers 
currently affected by the WEP to determine if their monthly benefits 
should be adjusted.
    If the worker had non-covered earnings before 1978, these reviews 
would require SSA to attempt to obtain information from the former 
employer regarding those earnings. Because of the large volume of 
recomputations required and associated manual actions, the workload 
impact on SSA would be substantial--and would create delays in other 
workloads. We estimate that implementation of H.R. 4391, including 
development of pre-1978 non-covered earnings (when available), would 
require more than 2,600 workyears ($190 million) over 5 years. Further, 
the necessary systems changes would be significant and would require at 
least 18 months to implement.
    The bill appears to recognize the problem associated with obtaining 
pre-1978 non-covered earnings. Although the effect of the bill language 
is not clear, it gives the Commissioner of SSA the responsibility for 
developing a ``method'' for determining the amount of non-covered wages 
used to determine the worker's pension. The Commissioner would have 
some latitude in determining what is reasonable, but the non-covered 
wage amounts determined for the year in question must be derived from 
employment records or from other information received by SSA.
    We believe that the intent of this special language in the bill is 
to permit SSA to ``deem'' non-covered earnings to a worker's earnings 
record when such earnings are not available. It is not clear exactly 
how this would be done. Possibilities might include using the average 
earnings amount for the specific position held by the employee that 
year. Under this approach, SSA would need to verify the job position 
(e.g., janitor, teacher, bus driver) for each worker for each year in 
question. There would also be an issue of how to compute the average. 
That is, would the average earnings amount be based on the average at 
the State level for that position or at the level of the specific 
employing entity? (There are over 2,300 State and local government 
entities.) There is also a question of whether such historical average 
earnings data would be available for the myriad of different positions 
employed by State and local governments.
    Another possibility might be to calculate a deemed earnings amount 
based on years of earnings that SSA does have on its records for the 
individual. However, because a worker's pre-1978 earnings would often 
be early in a person's career, the subsequent earnings used to compute 
the average would likely be higher than the actual amount of pre-1978 
earnings. Therefore, the person's actual pre-1978 earnings would be 
lower than the deemed amounts assigned to those years. Because 
inclusion of additional non-covered earnings could only lower the 
Social Security benefit payable, the worker may well object if he or 
she believes that the deemed earnings amounts are too high--even if he 
or she does not have proof otherwise.
    An additional point is that the bill provides for individuals to be 
guaranteed present law, if higher, for many years into the future. 
Thus, a worker who just recently became employed in a non-covered job 
at, say, age 22, would be allowed to retain the present-law WEP rules, 
if a higher benefit would result, 40 years in the future when he or she 
claimed Social Security benefits. Consequently, SSA would need to 
maintain two alternative WEP calculations for many decades to come.
    SSA's Office of the Chief Actuary estimates that enactment of H.R. 
4391 would increase program costs by $2.6 billion over the first 5 
years; the 10-year cost would be $7.0 billion. The long-range cost of 
the program would increase by 0.01 percent of taxable payroll. These 
cost estimates assume that only the available non-covered earnings data 
on SSA's records, for years 1978 and later, would be used in 
calculating the proposed benefit. The actuaries used this assumption 
because they believed that the availability of non-covered data for 
years before 1978 would be problematic for at least some, if not many, 
non-covered workers. To the extent that workers' pre-1978 non-covered 
earnings are available and could be included in the proposed benefit 
computation, the cost of the bill would be somewhat lower.
Conclusion
    H.R. 4391 proposes significant changes to the manner in which the 
WEP is calculated. These changes are intended to better target the 
effect of the offset so that the amount of the resulting reduction in 
benefits more closely approximates the individual facts in each case. 
Unfortunately, the data needed for these calculations--much of it wages 
paid to individuals as many as 30 or more years ago--will not be 
readily available for all cases, making it difficult for SSA to 
equitably administer the provisions of the bill. In addition, the 
workloads that would be generated by passage of such legislation would 
be tremendous and take years for SSA to complete.
    I want to again thank the Chairman and the Subcommittee for giving 
me this opportunity to discuss the WEP and GPO provisions and to share 
SSA's analysis on legislation before the Congress. As always, SSA would 
welcome the opportunity to provide assistance to the Members and is 
more than willing to work with you to provide any additional 
information you request. I would be glad to answer any questions you 
might have concerning the WEP and GPO provisions.

                                 

    Chairman SHAW. Thank you. Mr. Johnson?
    Mr. JOHNSON. Thank you, Mr. Chairman. Thank you for being 
here, Mr. Gerry. Tell me, would workers, in your opinion, be 
treated more fairly under this bill, in your view?
    Mr. GERRY. Well, it is clear to me that that is the goal of 
the bill. Part of the problem in answering your question is how 
we would practically implement the bill. As I have looked at 
the problems that we have, in particular with pre-1978 data, it 
isn't clear to me that we would eliminate many of the fairness 
problems. We might create new fairness problems, depending on 
how we approach that. I think, as Congress considers the 
legislation, it would be very important for Congress to lay out 
clearly to the agency how we should resolve some of those 
issues. I mentioned in my oral statement a couple of different 
approaches that we might use. Each of those has implications, 
particularly for people who might have had much lower earnings 
earlier in their career, where an average either for the 
profession or for themselves would not accurately represent.
    Mr. JOHNSON. No, no, but it doesn't.
    Mr. GERRY. It could overstate their earnings.
    Mr. JOHNSON. That would give them more, not less. Isn't 
that true?
    Mr. GERRY. Well, it would give them a higher income level, 
which would give them a greater reduction in benefits. In other 
words, it would tend to inflate their non-covered earnings if 
indeed we had people whose early years were lower, by assuming 
the average, we would be raising, in effect, the amount that we 
would assign to those years. That would be the effect of it.
    Mr. JOHNSON. I know, but how would that affect their 
retirement?
    Mr. GERRY. Well, then that would, of course, increase the 
relative amount of earnings that would be imputed to the non-
covered side. That would, in effect, change the calculation of 
the benefit formula so that the Social Security portion of the 
wages would be lower, because of the imputed additional non-
covered earnings from these early years, and that would mute or 
soften the attempt to try to eliminate the WEP.
    I said in my statement it is complicated, and I think part 
of the reason is that anything that we would do in the formula 
that would overstate non-covered wages--unintentionally, would 
have the opposite effect of what I think the bill attempts to 
do, and that is the problem with using averages, especially for 
people who had a progressive increase over the years in their 
wages for their profession taking their later average, or the 
average, would tend to give you a higher number than what they 
would really have earned, for example, in their early years.
    Mr. JOHNSON. Yes, but that is why the bill gives you the 
authority to set up the system, so you can figure out how to do 
it.
    [Laughter.]
    I am not impressed that you say you can't do it. It seems 
to me you ought to be able to review 680,000 pretty quickly. 
You review every one of them every year, don't you?
    Mr. GERRY. Well, what we are talking about is re-computing 
every one of these cases.
    Mr. JOHNSON. Don't you re-compute every one every year?
    Mr. GERRY. We don't re-compute every one every year.
    Mr. JOHNSON. Well, you send us a form. Where do you get the 
numbers from?
    Mr. GERRY. When people apply for benefits, we are using 
information--unless that information changes, we wouldn't re-
compute that information every year. Basically, we make a 
calculation of the retirement benefit amount. Unless something 
changes with respect to the information, which would not 
normally be the case, we wouldn't re-compute it every year.
    Mr. JOHNSON. Salaries don't change on people every year?
    Mr. GERRY. Well, we are talking about people who are now 
retired.
    Mr. JOHNSON. Yes, I understand.
    Mr. GERRY. Whatever people are earning now wouldn't affect 
that retirement benefit, unless the earnings were high enough 
to be included in the computation.
    Mr. JOHNSON. Do you have the computer capability to do 
that?
    Mr. GERRY. We could develop the computer capability to do 
the additional re-computations. We can make changes in the 
system to do that, and I think it is definitely feasible. I 
think there is a significant cost, which I have outlined in my 
written testimony, to doing it. The re-computation estimates 
suggest it is something around 2,600 work years, which is a 
significant additional cost.
    Mr. JOHNSON. I find that a little hard to believe. Thank 
you very much. Thank you, Mr. Chairman.
    Chairman SHAW. Mr. Pomeroy?
    Mr. POMEROY. Thank you, Mr. Chairman. I think your 
testimony, Mr. Gerry, lays out that while simple in concept, 
implementation of this legislative proposal is anything but 
easy. Therefore, I take some exception to characterizing those 
that simply want to scrap WEP as not playing substantively on 
the topic matter. This is not a path that gets us to just 
calculating carefully the percentage of Social Security versus 
non-covered wages because we don't have that data. One of the 
things about the annual statement I get from SSA on my earnings 
history is that every bit of it back to my high school jobs 
were somehow captured in the system. It seemed like you would 
have 680,000 individuals, more than live in the entire State of 
North Dakota, to go back and figure out, well, what was 
covered, what did you do when you weren't covered, how long 
does that go back? I understand that in particular it is a 
problem for pre-1978, but is a daunting challenge, is that 
correct?
    Mr. GERRY. That is right. Although I would say that the 
data situation obviously gets better each year in that, at some 
point, we will reach a point where people retiring won't have 
pre-1978 earnings and wouldn't have the problem, so there is a 
time----
    Mr. POMEROY. That is correct, but you could be 45 and have 
pre-1978 earnings fairly conceivably in your earnings history.
    Mr. GERRY. Yes.
    Mr. POMEROY. We are talking about a population 45 and 
older. I think most of us think that is still a group that 
counts.
    Mr. GERRY. Right, and I just want to say, to be accurate, 
that I think that there are parts of the changes that would not 
be difficult for data after 1983 particularly. We have that 
information; we can make those calculations. When there are 
gaps, I think they are relatively easy.
    Mr. POMEROY. Mr. Gerry, it seems to me that all this 
wrestling around about what we ought to do to develop a new 
formula, I am still--I don't fully appreciate the problems with 
the existing WEP. Is it unfairly reducing benefits? Is it too 
blunt an instrument that tends to err on shorting what people 
ought to be paid? I need more information on that. What is your 
view?
    Mr. GERRY. Well, it is clear that when Congress created it, 
and I want to keep stressing that Congress created this, 
because I think that this was deliberated at some length. The 
agency has basically attempted to apply it. By picking the 40 
percent figure, there is an arbitrariness to that number. That 
certainly would mean that there are some people who are 
adversely affected by that number. There is no way around that. 
Now, any number would be arbitrary. Ninety is actually 
arbitrary, too. It is a question of----
    Mr. POMEROY. Do you have any notion on percentage that 
might be disadvantaged at the 40 number?
    Mr. GERRY. No, and in part for the same data reasons. I 
think the approach that H.R. 4391 takes is a perfectly sound 
approach to looking at the comparison. I think the logic of the 
bill is very obvious. If we could really do that, if we could 
really see what were covered earnings and what were not covered 
earnings and what is the percentage of reduction, that is a 
very logical strategy to me. I think that makes sense. It is 
the practical problem of doing it. The concern I think that we 
would have about that is to be sure that if we are going to 
have to take another arbitrary approach one way or the other, 
that Congress look at that question. I think it is good that we 
have tools to ferret out what Congress intends, but I think it 
would be very helpful to know specifically which way Congress 
intends us to go.
    That is what I am trying to say. I think we have worked 
very long with this and we want to continue to work with the 
Subcommittee on this because the approach seems--if we could 
carry it out, I think it would be very much improved over where 
we are. I think the data problems are going to lead us to one 
set of assumptions or another. In other words, what I am 
saying, Mr. Pomeroy, is I think there are several intermediate 
positions between leaving everything the way it is and 
completely eliminating the WEP. That is what I assume the 
Subcommittee is struggling with.
    Mr. POMEROY. We are. Is the SSA doing work internally on 
it?
    Mr. GERRY. We have been looking, really, at the proposals 
that have been coming from the Subcommittee and trying to think 
through the questions that you have raised. There is the pre-
1978 earnings question, which is obviously the number one 
practical problem. There does seem to be a limited number of 
things that could be done. I have laid them out in my written 
testimony.
    Mr. POMEROY. Some might suggest that the time to fix these 
issues, both of them, is in exchange for bringing these non-
covered systems into the system, so you bring public plans into 
Social Security. At that time, part of the quid pro quo is we 
fix this. Again, that is not necessarily my position. Some have 
discussed it in that context. I would just note, as my time has 
expired, that Congressman Gene Green sought to testify today. 
For reasons of the Chair, the Members were not participating. I 
want to underscore his interest in the issue, as my colleague 
Max Sandlin's, with whom I have talked about this issue many 
times. I thank the Chair and I yield back.
    Chairman SHAW. I think maybe we need a little clarification 
as to the problem that Mr. Gerry is talking about. Social 
Security benefits are figured using the 35 highest years of 
earnings. When Mr. Gerry says that he doesn't have anything 
prior to 1978, if you do the math, that is 26 years ago. You 
can see the problem of the gap that he is concerned about. Our 
jobs are to make the law; his job is to be able to make it 
work.
    [Laughter.]
    Mr. GERRY. Faithfully executed, Mr. Chairman.
    Chairman SHAW. With that, Mr. Hulshof.
    Mr. HULSHOF. Thank you, Mr. Chairman. I want to, at the 
outset, provide my unqualified, unequivocal support, Mr. Brady, 
for your bill. I am proud to be a cosponsor. To me, politics is 
the art of the possible. We can all talk about the barriers 
that would be in place and the challenges that we would have. I 
guess, Mr. Gerry, one of the things we could be--and it is 
appropriate that you point out how difficult it would be for 
your agency. I guess--because as Mr. Johnson pointed out, we 
want to give leeway to the SSA. I guess one of the other 
options would be that we, Congress, could be very proscriptive 
as far as what authority we would give you, and yet we would 
opt for the flexibility.
    I have to say to my friend from Texas, Mr. Sandlin, the so-
called incredulous claims that you, and I put quotations around 
it while you made that statement. The incredulous claims that 
you claim Members of Congress made regarding the Texas 
loophole, were based upon actual cases testified to by the 
Inspector General of the SSA. Don't shake your head, Mr. 
Sandlin. It happened here in this hearing.
    Mr. SANDLIN. Do you want to yield?
    Mr. HULSHOF. I recall--I will if I have time. I recall 
specifically the Inspector General talking about a teacher from 
Texas who drove 500 miles one way, was a janitor for a day, 
drove back 500 miles another way, and ended up having a 
significant windfall, and that was an actual case. I will yield 
to you to respond to that.
    Mr. SANDLIN. That is very interesting, and shows that you 
don't understand the issue. The teacher probably did that. Here 
is the thing, the teacher 500 miles one way and 500 miles back 
to claim a retirement benefit earned by a lifetime of work by 
the spouse. Not 1 day. It doesn't have anything to do with 500 
miles or 5,000 miles. It has to do with a spouse that works an 
entire lifetime, earns Social Security benefits, and has them 
taken away. If the teacher had been in any other profession--a 
doctor, a lawyer, a street sweeper, anything else, that offset 
would not have happened. I don't see it as unfair. It is to do 
what the law says, and now you have taken that away from them.
    Mr. HULSHOF. Reclaiming my time, Mr. Sandlin, and I have 
yielded you time to explain. I stand corrected--it was not the 
Inspector General, Mr. Chairman, it was the U.S. Government 
Accountability Office (GAO) in hearings that you have conducted 
that we participated in. Let me talk just a little bit about 
fairness and, Mr. Gerry, bring you into this because I want 
to--let's put this on the record and make sure that my 
information is accurate. In fact, in the next panel we have 
testimony that about one-third of teachers pay into a 
government employee pension plan that substitutes for Social 
Security. Is that a fairly accurate percentage?
    Mr. GERRY. I honestly don't know.
    Mr. HULSHOF. I believe the testimony we are going to have 
is roughly--is that right, Mr. Brady, that roughly a third of 
teachers pay into a substitute, two-thirds of teachers across 
the country pay into Social Security. Do you believe, Mr. 
Gerry, that Mr. Brady's bill, H.R. 4391, helps ensure that both 
groups of teachers are treated more equally as far as terms of 
how much of their Social Security taxed wages would be, 
benefits would be replaced?
    Mr. GERRY. I think, of course, I would like to answer yes, 
but part of the problem I have is with this question of how it 
will actually be administered and what Congress wants to do. 
Certainly that is its goal, and logically it should do that. 
For people--I would say that for individuals not affected by 
the pre-1978 earnings question, certainly I think that would be 
a reasonable conclusion to draw, that they would be more fairly 
and more individually affected. When you get to people with 
pre-1978 earnings, the problems that I have been identifying 
get to the very heart of the whole idea, which is making it 
specific to the individual. When you start assuming or 
assigning averages then you may get back to the same problem we 
have now.
    Mr. HULSHOF. Well, in conclusion I would say that perhaps a 
point of agreement that I could reach with my friend from Texas 
is that we understand this is an arbitrary line, that when WEP 
was created back in 1983, this was an arbitrary line, and it 
has taken us 21 years to get here. I would hope that it will 
not take us 21 years to get to a point where we could 
actually--where we can fix this. If we are talking about 
fairness, Mr. Chairman, my belief is that teachers who pay into 
a Social Security substitute and those that pay into Social 
Security should be treated on an equitable basis. I think 
complete repeal, as many have advocated, seems to suggest that 
some teachers deserve more generous Social Security benefits 
than others. I think ultimately we are trying to find that fair 
approach. Again, Mr. Brady, I commend you because I think your 
bill does just that. I yield back. Thank you, Mr. Chairman.
    Chairman SHAW. Mr. Becerra.
    Mr. BECERRA. Thank you, Mr. Chairman, and Mr. Gerry, thank 
you very much for being here again. You are right, this is a 
complicated issue, and I suspect that few people--maybe even 
those sitting in this room, but I suspect most sitting in this 
room are either affected by it or are here for a particular 
reason with regard to WEP and GPO. I suspect most people, if 
they happen to be watching this hearing, don't quite understand 
what is going on. In the 5 minutes that I have to ask you 
questions, I probably can't help you edify all those who are 
watching a great deal more.
    Let me ask this. When you mentioned that it would cost 
2,600 work years or that it would take 2,600 work years to 
recalculate or to try to give us a formula and be able to 
calculate the Social Security benefits for folks affected by 
WEP, what does that mean--and that is 2,600 work years over 5 
years. Does that mean something over 500 full time person 
working hours for 5 years?
    Mr. GERRY. Yes, it would. Well, that would be the average. 
This is assuming, now, that we take H.R. 4391 as it stands. 
That would include the work on the pre-1978 earnings. I just 
want to make that clear, because we have had some estimates, 
and some of them include pre-1978 earnings and some don't. I am 
including that.
    Mr. BECERRA. Let me make sure I try to focus. I am trying 
to make sure I understand this, 2600 work years over 5 years?
    Mr. GERRY. Right.
    Mr. BECERRA. That straight calculation would be 520 work 
years--or 520 people working 1 year for 5 years. Five hundred 
twenty.
    Mr. GERRY. Well, it is really 2,630 people working for a 
year. The elapsed time over which they would work is 5 years.
    Mr. BECERRA. Right, so 2,600 new--would they be exclusively 
working on this issue?
    Mr. GERRY. Yes. That is the amount of time it would take to 
make all the calculations.
    Mr. BECERRA. These 2,600 people would not be doing other 
SSA tasks.
    Mr. GERRY. Right.
    Mr. BECERRA. Like making sure benefits are paid to those 
Social Security recipients, making sure that problems with 
receipt of benefits are handled, problems for those who are 
survivors or disabled individuals, this 2,600 new people that 
we need for 5 years would simply be to try to get this bill up 
and running?
    Mr. GERRY. Well, whether they were new or existing that is 
what they would do for 5 years.
    Mr. BECERRA. Okay, well, if they are existing, then you are 
pulling them off of something else?
    Mr. GERRY. That is right.
    Mr. BECERRA. Let me make sure. To try to make sure that we 
continue to do all the functions that the SSA has today and do 
what this bill provides, we have to find moneys to pay 2,600 
additional people for the next 5 years.
    Mr. GERRY. I think it is a fair way to state it.
    Mr. BECERRA. Just trying to get a sense of what we are 
looking at doing, because as it is, I know we all in our own 
particular district offices get folks who have constant 
concerns about their existing benefits and getting their 
payment and so forth. I just wanted to make sure I understood 
that correctly. How can we calculate the salaries and payments 
into a non Social Security covered work before 1978? What is 
your best sense of how we can do that, aside from what you 
mentioned before, which is an average, take the average salary 
for that particular position?
    Mr. GERRY. The agency has looked at, and I know in one case 
communicated--three different approaches that I am aware of. 
One is to simply ignore pre-1978 earnings for everybody. That 
is an approach. It costs more money; it is much simpler to do. 
The work year estimates, for example, would drop to 740 from 
2,630 if we ignored these earnings. The amount of money that we 
would end up paying in benefits would be significantly higher.
    Mr. BECERRA. Let me stop you for a second. Are you saying 
that the 2,600 work year number that you have given us includes 
doing the work to calculate prior to 1978?
    Mr. GERRY. Yes.
    Mr. BECERRA. Okay, good.
    Mr. GERRY. As best we can estimate it.
    Mr. BECERRA. Thanks for that clarification.
    Mr. GERRY. Okay, so if we didn't do that, it would drop.
    Mr. BECERRA. How do you----
    Mr. GERRY. On the other hand, the cost, that is, the amount 
of money that we would pay out. One way of putting it is that 
establishing pre-1978 earnings, when they exist, always results 
in either the same or a lower. Not doing that has to result in 
significant increases in benefit amount program costs.
    Mr. BECERRA. How would you secure the participation or 
cooperation of workers in attempting to secure records for pre-
1978 work?
    Mr. GERRY. We would use our best efforts to ask people. If 
that is what Congress required us to do, we would have to use 
our best efforts to persuade people to voluntarily come forward 
and do that.
    Mr. BECERRA. You become not the SSA but the Internal 
Revenue Service (IRS), probably, in the minds of a lot of these 
folks, I suspect.
    Mr. GERRY. I am not sure how voluntary IRS participation 
is. Something like that. The second approach--you were asking 
me about the three, and I gave you the first one. The second 
approach, which I know has been outlined in a letter from the 
actuary, would be to have a situation where people would have a 
choice of either proving what their earnings were or staying 
with the existing rule. That would really get at the point you 
are making, which is it would put the option with the 
individual, who would then have an interest in trying to find 
all this data if they wanted to come in and take advantage of 
the different formula. That is another approach.
    Obviously, that would have significant administrative 
savings for us because, the burden would be on the worker to 
show us what the earnings were, rather than for us to go out 
and try to find that data. Now, it obviously means that for 
workers who don't have the data and have no way to get it, they 
really don't have that choice.
    The third approach is this assigned-average idea, that 
instead of either of the other two approaches, we would treat 
pre-1978 earnings by either looking at the years of work that 
we do have records of and assuming that the same level exists 
for the years we don't have records of. That would be one 
approach; or looking at the profession, like teachers, and--
take the Texas teachers situation--saying that in 1972 the 
average Texas teacher earned this amount of money and so we 
will assume that that is the amount of money the individual 
earned. Now, those are the only approaches that I know of. It 
is either, forget about the pre-1978 earnings, have this 
choice, or use some way of imputing a value when you don't have 
the data. I think that covers the options that I can see.
    Mr. BECERRA. I guess the one concern I would have in how we 
implement this--and I will end with this, Mr. Chairman--is that 
if we are projecting that this bill could cost about $10 
billion in order to try to provide some fairness to all those 
folks who have retired and are seeing this offset, we are going 
to have to--and the sponsors have said, they are going to find 
an offset to pay for this, I hope what we don't do is try to 
look within Social Security to try to find the offset, because 
it is already difficult to find $7 billion to continue to pay 
the benefits that people are entitled to and into the future. 
Thank you for your testimony. Mr. Chairman, I thank you for the 
time.
    Chairman SHAW. I want to tell all Members that the clock 
down in front of the witness is not working, but the clock in 
front of me is working, and you went 3 minutes over. Mr. Brady?
    Mr. BRADY. Thank you. Look, I think this is a good line of 
questioning. Two thoughts for Mr. Gerry. One, did you get a 
chance to see the Congressional Research Service (CRS) report 
on who would benefit from this bill that was released 
yesterday?
    Mr. GERRY. Yes.
    Mr. BRADY. What it says----
    Mr. GERRY. Well, I am sorry, Mr. Brady. I have heard about 
what was said. I haven't read it.
    Mr. BRADY. Okay. Just studying it, what it says, I have two 
points to make, really. One is on the costs. We will come to 
this. What CRS basically says is, running the estimates, that 
minimum-wage workers and low-wage workers will receive the 
greatest-percent increase in Social Security under this bill, 
compared to current law; that average-wage workers with up to 
27 years in that second job, their non substitute job, would 
also receive more than they do today; and that high-wage 
workers with up to 23 years of covered earnings would also 
receive benefits greater than they would today, which is a 
major part of the 750,000 people who are affected by the WEP.
    If you would take a look at those numbers and how CRS came 
to that, those are consistent with the numbers the Subcommittee 
has run in our offices. Any thoughts you have, because, again, 
everyone is individual. It is hard to do averages--which is the 
whole intent of this bill, by the way, but if you take a look 
at those computations and let us know any thoughts you have, 
that would be helpful.
    Second point on cost. One, I think, compared to the 
unfairness of it, I think the administrative costs are small 
compared to the unfairness of what people haven't received 
under the windfall provision. Two, the costs, the $190 million, 
the 2,600 work years, seem awfully high. Over the next 5 years 
what that works out to is $250,600 for each person affected by 
WEP. One, let this be my bid to do it for half of that for each 
of those workers; and second, it seems to me that we have and 
opportunity to allow workers to do their own computations. I 
know that since we have introduced the bill, we have had 
thousands of teachers contact us. A number of them pulled down 
your own computation worksheet to figure out, those born in 
1940, their own figures. I think providing people the option to 
reconstruct their work wages is a very viable option.
    The final point is it seems to me this problem gets smaller 
each year. Obviously, as more and more work records are 
absolutely accurate and very accessible, this becomes a small 
problem. You will have to re-calculate figures if WEP is 
repealed as well. What this does is--no question, I think the 
point you make is a good one. We have to do a lot of work to 
make sure it is accurate to each person. That is my point. I 
think it is worth doing work to make it accurate to each 
person, because most of these people in this room today think 
their Social Security really is based on their actual work 
record--not an average, or a formula, or some estimate. I think 
it is important that we work through this, any suggestions on 
more flexibility, any opportunities for working to have 
accurate records, any coordination with the IRS or the ability 
for a person to request their IRS records to complete their own 
work record, I think, would be very helpful. With that, I yield 
back, Mr. Chairman.
    Mr. GERRY. Let me just say, Mr. Brady, that we would be 
happy to look at the data and I would be happy to sit down and 
talk with you about it after we do. I would be happy at any 
point in time with any Members of the Committee to talk about 
how to do this. This is a difficult task, and I think a dialog 
from time to time between us would be good. I think we 
appreciate the goal that the bill is attempting to achieve, and 
perhaps together we can come up with some other strategies.
    The difficulty, as much as I agree with you that it 
probably makes sense to do the work, is whether, even if we do 
the work, we can still arrive at a number that is going to 
really represent the individual. Right now it still appears to 
me that we are going to reach a point where we need to decide 
and this is something I think Congress rather than the agency 
probably has to focus on. When in doubt, do we basically assume 
the average or do we assume up? In other words, is the goal to 
ensure that no one gets an unfairly low amount of pension or 
too large an offset? When we get to certain groups of cases, we 
may end up giving some people some amounts that might be higher 
than if we had all the individual data, in order to ensure that 
no one would get an amount that is too low.
    Mr. BRADY. I think, Mr. Gerry, to conclude, the goal is to 
get people the most accurate Social Security benefit based on 
their actual complete work records. I think we can do that for 
far less than has been estimated today for those beneficiaries. 
I look forward to working with you on that. Thanks.
    Chairman SHAW. I think it is important--just a point of 
clarification, for people outside of this room listening to 
these proceedings that it is important to point out that we do 
have complete records as to Social Security earnings. Nobody 
should think that they paid into Social Security and there is 
no record of that, because there certainly is. What Mr. Gerry 
is talking about is non Social Security wages. Why is that 
important? It is important because when you take the highest 35 
years of earnings to calculate whether someone is high-income 
or low-income, this can make a big difference. Particularly, 
most people prior to 1978, who are still in the workforce, made 
probably a lot less than they are making today. It would be to 
their advantage to have their average amount of earnings 
reduced because of the progressiveness within the system 
itself.
    I think when you bring out the point that you can ask 
people to supply you with that information, almost totally it 
would be to their advantage to do so. I think that probably 
would work. If we don't make an attempt to learn exactly what 
those wages were prior to 1978, it is probably going to--for 
most people, it will be unfair to them as to the benefits that 
they would receive. What we are trying to do, and our objective 
here under this bill, is to give people the benefits they paid 
for. It is plain and simple.
    Ms. TUBBS JONES. Mr. Chairman, thank you. I would like to 
also request unanimous consent to submit an opening statement 
for the record.
    Chairman SHAW. Without objection. All Members--and I didn't 
mean to cut you off on that--all Members by unanimous consent 
without objection can put whatever opening statements into the 
record they like. Now, I am talking about Members of this 
Committee.
    Ms. TUBBS JONES. Thanks, Mr. Chairman. How are you today, 
sir?
    Mr. GERRY. Fine, thank you, Ms. Tubbs Jones.
    Ms. TUBBS JONES. Good. You seem to propose three possible 
options. As we do on our tax forms, we have options of taking a 
deduction, we can take an itemized deduction, we can take a 
deduction that it is kind of general across-the-board, based on 
our income, and so forth. Have you contemplated the possibility 
of giving people one of these options on the way in which they 
would calculate their Social Security for purposes of looking 
at an offset?
    Mr. GERRY. Well, we have looked at each of those three 
categories, the ones that I mentioned, which would be 
completely ignoring pre-1978.
    Ms. TUBBS JONES. We don't have a lot of time, so I don't 
want you to go back through the three.
    Mr. GERRY. Yes, we have looked as best we can at what the 
implications would be of doing each. Now, we haven't done the 
calculations, but, and we wouldn't know, one of the options, 
remember, was a choice by the worker. It would have to be based 
on our estimate of the choices that would be made.
    Ms. TUBBS JONES. Understood. Do you see it as a possibility 
that there could be any of those options that a worker could 
choose which way you would calculate?
    Mr. GERRY. Well, I think the worker option--I want to 
separate that from what I would say is the Congress's option. 
The options that I was looking at were options that Congress 
could consider.
    Ms. TUBBS JONES. No, no, back up a minute. What I am saying 
is these are options that the Congress could consider, but one 
of the options that Congress could consider would be to allow 
the worker to submit information for purposes of a calculation.
    Mr. GERRY. That is right, and the proposal was to allow the 
worker to submit information, or go with the current WEP 
formula, so it would be a choice.
    Ms. TUBBS JONES. This is a significant issue for people 
across the country, not just in Texas but across-the-board, 
because I constantly have people coming into my congressional 
office saying, Congresswoman, why can't I get the wages of my 
husband? He didn't get them; I ought to be able to get them. I 
shouldn't be stuck with wages that are much lower, particularly 
when you begin to look at women who have been in the workforce 
and their salaries or their income have been probably 7 cents 
on the dollar of the income of men, and women tend to get 
penalized more often than men do, when you begin to calculate 
Social Security or the amount of money that they are going to 
receive on retirement. Is that a fact?
    Mr. GERRY. Well, what you are describing I think is the GPO 
problem, which is what happens to a spouse who has----
    Ms. TUBBS JONES. That is why we are here.
    Mr. GERRY. Well.
    Ms. TUBBS JONES. Or that is part of the discussion we are 
having today, though, right?
    Mr. GERRY. Yes. I just wanted to separate it from the 
discussion on the WEP that we are having. I think they are 
related, but they are two different issues. The equity issues 
exist in both, but the provisions are quite different. In the 
example that I think you were giving, Congress adopted the 
theory of dual entitlement in the GPO approach. The reduction 
is at two-thirds, so it is not a dollar for dollar, but does 
reduce the Social Security benefit that a spouse can receive 
based on a non-covered government pension. In the case of 
Social Security, it is of course a direct offset, the dual 
entitlement provision. They are related.
    Ms. TUBBS JONES. Conceptually, then, we could end up when 
we come through this process in a similar problem that the 
notch people, or notch babies, are faced with in that we are 
unable to explain to them as to how we calculate or allocate 
Social Security for people.
    Mr. GERRY. I wouldn't want to compare them, but I think we 
could come through and have a problem that would not be easy--
--
    Ms. TUBBS JONES. I am not comparing, but----
    Mr. GERRY. I think it is very hard for people to understand 
this now, and I think it is going to remain complicated for 
most people to understand.
    Ms. TUBBS JONES. The process is complicated, but the dollar 
signs are not complicated. People understand ``more money'' or 
``less money'' or ``no money.'' I think the obligation is on 
us, and I think you are hearing from every Member of this 
panel, that we must resolve and work this issue out, because 
the people of the United States deserve some resolution to have 
this completed. Fair?
    Mr. GERRY. It seems fair to me, and I think obviously the 
Subcommittee is approaching it that way. It seems--I guess my 
only point would be that what we would like to do is, in any 
way that we can, be helpful to the Subcommittee in figuring out 
the best way to do that.
    Ms. TUBBS JONES. Including following whatever instructions 
we ultimately decide that you need to do to get this done, 
right?
    Mr. GERRY. Absolutely.
    Ms. TUBBS JONES. Okay. Thank you, Mr. Chairman, I 
appreciate it.
    Chairman SHAW. Good move. You passed the buck right back to 
us. Okay.
    [Laughter.]
    Chairman SHAW. Mr. Gerry, thank you very much for you 
testimony.We now have a panel of witnesses, if they would come 
up and take a seat at the table. Terry Hickman, who is the 
President of the Nevada State Teachers Association (NSEA), and 
he is appearing on behalf of the NEA; Randall Iglehart, who is 
the State President of the ATPE in Austin, Texas; Chuck 
Canterbury is National President of the Grand Lodge Fraternal 
Order of Police (FOP); and George Avak, who is the President-
Elect of the California Retired Teachers Association (CRTA), 
Sacramento, California. Welcome to all the witnesses. As is my 
custom, I may have mispronounced some of your names, and you 
can correct me when you are called upon, if you would. We have 
your full written testimony, which will be placed in total in 
the record, and you may proceed as you see fit.
    I am going to try--is the other side of that clock working 
down there? Nothing is working? Anyway, I think all of you have 
been instructed to be with us for 5 minutes of direct testimony 
and then being available for questioning. We appreciate that. 
Mr. Hickman, you may proceed.

 STATEMENT OF TERRY HICKMAN, PRESIDENT, NEVADA STATE EDUCATION 
ASSOCIATION, LAS VEGAS, NEVADA, ON BEHALF OF NATIONAL EDUCATION 
                          ASSOCIATION

    Mr. HCIKMAN. Good morning, Chairman Shaw and Members of the 
Subcommittee. Thank you for the opportunity to speak with you 
today about the Public Servant Retirement Protection Act. My 
name is Terry Hickman. I am a high school counselor. I am 
President of the NSEA, and I am here today on behalf of the 
22,000 members of the NSEA, the 2.7 million members of the NEA, 
and my own family.
    I am pleased to speak today in support of the Public 
Servant Retirement Protection Act. This legislation represents 
a critical first step toward addressing the harsh impacts of 
the WEP as well as the GPO. As you know, the WEP reduces the 
earned Social Security benefits of an individual who also 
receives a public pension from a job not covered by Social 
Security. I am a prime example of the impact of WEP. Years ago, 
when my wife and I were just starting out, I began teaching in 
Lake Tahoe, Nevada. I loved teaching, and I was thrilled to 
have my first job in Lake Tahoe. I was equally passionate about 
my students as well as building up my support for my own 
family.
    In my second year of teaching, my wife and I decided we 
needed some additional income in order to buy our first home, 
and to fulfill her lifelong dream of going to college. Rather 
than incurring large debt, we decided that I would take a 
second job. For nearly 10 years, I worked two jobs--teaching or 
in counseling every day until 2:30 p.m., and managing a health 
and fitness center in a casino until 10 p.m. four nights a 
week.
    The hours were tough, but the rewards were well worth the 
sacrifice. Not only were my wife and I able to purchase our 
first home in which to raise our family, but my wife was able 
to graduate from college and become a teacher herself. I was 
never more proud than the day that I watched my wife receive 
her diploma. Family came from across the United States to see 
her walk across the stage, because she had worked--we had 
worked as a family together to pull together the resources to 
make her dream come true. I was also very proud that I believed 
that by working the second job, I was working to make a 
difference for my family and for long-term security for my wife 
and myself. My job at the casino was covered by Social 
Security, and I had earned the 40 quarters necessary to qualify 
for benefits.
    I was quite surprised and disappointed to hear and to learn 
that the public teaching pension from Nevada would result in a 
loss of a significant portion of my Social Security benefit. I 
was further shocked to hear that some policy makers justified 
this offset by referring to my Social Security benefit as a 
windfall, or double dipping. It is unfathomable to me that 
Congress considers the benefits that I earned at two separate 
jobs to be double dipping. It seems only fair that if I worked 
two jobs that I should be able to collect the benefits that I 
earned. It is even more unbelievable that Congress would 
penalize me for my values of hard work and the family values 
that we had of dedication as a family to work together for my 
community and also for our country.
    Sadly, my story is not unique in Nevada or for many other 
States. As President of the NSEA, I have gotten phone calls 
from members devastated by the news that they are going to lose 
or sometimes almost all their benefits from Social Security. 
Like me, these educators entered the profession because of 
their desire to have an impact on the Nation's children. They 
often ask me to do something about it as President. Some of you 
have received e-mails today from those in Nevada and other 
States who are so concerned about this provision, the WEP.
    The WEP has an impact far beyond the individuals losing 
benefits. Perhaps the most alarming problem that we face is the 
fact of recruiting new teachers into the profession. Like many 
States, Nevada is the fastest-growing State and certainly needs 
more teachers. It is surprising when I get phone calls, 
especially--not too long ago I got a call from a couple in 
Minnesota who wanted to move to Las Vegas. After I asked them, 
do you live in a Social Security State, and explained to them 
the penalties that they could receive, they were no longer 
willing to move to Nevada. When we need teachers the most, we 
have to pull out the welcome mat in Nevada because of the 
benefits that they could lose if they come from a Social 
Security State.
    The NSEA has formed a strong coalition with our State 
retirement system, and together we regularly publicize the fact 
that public service in Nevada can lead to a significant loss of 
one's Social Security benefits. I would like also to just take 
a moment to address the GPO. The GPO also penalizes individuals 
who have dedicated their lives to public service. This offset 
has the harshest impact on those who can least afford the 
loss--lower-income women.
    Given the unacceptable impact of the WEP and GPO on so many 
of our Nation's teachers, NEA supports the Public Servant 
Retirement Protection Act as a critical first step toward 
repeal of both offsets. NEA is very pleased to see such strong 
bipartisan support for this important legislation, and we thank 
the Chair and the Committee Members, especially Congressman 
Kevin Brady, for their efforts to bring this legislation 
forward. The NEA supports the Public Servant Retirement 
Protection Act as a first step toward full repeal of the GPO 
and WEP. We believe it will result in a significant benefit for 
those educators and public employees in Nevada and the other 
states. I can say, from my own calculations, that I believe I 
will receive several hundred dollars more a month if this bill 
comes to fruition.
    On behalf of NEA, NSEA, and my family, I wish to thank you 
for the opportunity to share my thoughts. My wife and I made 
the right decision many years ago. We valued hard work, we 
valued our family, we valued our first home, and we valued her 
college education. We now ask the Committee to move quickly to 
mark up Public Servant Retirement Protection Act and move it 
swiftly to final passage and enactment. Thank you.
    [The prepared statement of Mr. Hickman follows:]
     Statement of Terry Hickman, President, Nevada State Education 
        Association, on behalf of National Education Association
    Chairman Shaw and Members of the Subcommittee:
    On behalf of the National Education Association's (NEA) 2.7 million 
members, I would like to thank you for the opportunity to speak with 
you today about the Public Servant Retirement Protection Act (H.R. 
4391).
    My name is Terry Hickman and I am a high school counselor and the 
President of the Nevada State Education Association (NSEA). I am here 
today on behalf of myself, the more than 22,000 members of NSEA, and 
the 2.7 million members of the National Education Association.
    I am pleased to speak today in support of the Public Servant 
Retirement Protection Act. NEA believes this legislation represents a 
critical first step toward addressing the harsh impacts of the Windfall 
Elimination Provision (WEP) as well as the Government Pension Offset 
(GPO).
The Windfall Elimination Provision: An Unfair Penalty for Public 
        Service
    As you know, the WEP reduces the earned Social Security benefits of 
an individual who also receives a public pension from a job not covered 
by Social Security. Congress enacted the WEP ostensibly to remove an 
advantage for short-term, higher-paid workers under the original Social 
Security formula. Yet, instead of protecting low-earning retirees, the 
WEP has unfairly impacted lower-paid retirees such as educators.
    I am a prime example of the impact of the WEP. Years ago, when my 
wife and I were just starting out, I began teaching in Lake Tahoe, 
Nevada. I loved teaching, and was passionate about working with 
children. I was equally passionate about building and supporting my 
family.
    In my second year of teaching, my wife and I decided we needed some 
additional income in order to buy our first home and to fulfill her 
dream of going to college. Rather than incurring large debt, we decided 
that I would take a second job. For ten years, I worked two jobs--
teaching every day until 2:30pm and managing a health and fitness 
center at a casino until 10:00pm four days a week. The hours were 
tough, but the rewards were well worth the sacrifice. Not only were my 
wife and I able to purchase a home in which to raise our family, but my 
wife was able to graduate from college and become a teacher herself. I 
was never more proud than the day I watched my wife receive her 
diploma, because I knew how hard she had worked, and how we had pulled 
together as a family to make her dream come true.
    I was also proud because I believed that by working two jobs for so 
long, I had made a real contribution to our family's long term 
security. My job at the casino was covered by Social Security, and I 
had earned the 40 quarters necessary to qualify for benefits. So, I was 
quite surprised to learn that my eventual receipt of a public teaching 
pension from Nevada would result in the loss of a significant portion 
of my hard-earned Social Security. I was further shocked to hear some 
policymakers justify this offset by referring to my Social Security 
benefits as a ``windfall'' or ``double dipping.''
    It is unfathomable that Congress considers the benefits I earned at 
two separate jobs to be double dipping. It seems only fair that if I 
work two jobs, I should be able to collect the benefits I earned. It is 
even more unbelievable that Congress would penalize me for my values of 
hard work and dedication to my family, my community, and my country.
    Sadly, my story is not unique in Nevada or in many other states 
across the nation. As president of NSEA, I get phone calls every week 
from members devastated by the news that they will lose Social Security 
benefits they had counted on for their retirement. Like me, these 
educators entered the profession because of their desire to have an 
impact on our nation's children, often at considerable financial 
sacrifice. They often ask me to do everything I can to get the WEP and 
GPO repealed.
The National Impact: Undermining Teacher Recruitment Efforts
    The WEP has an impact far beyond the individuals losing benefits. 
Perhaps most alarming, the offset is impacting the recruitment of 
quality teachers. Like many states, Nevada is facing a shortage of 
qualified teachers, and is looking for ways to attract the best and the 
brightest to teach in Nevada. Yet, while policymakers are encouraging 
experienced people to change careers and enter the teaching profession, 
individuals who have worked in other careers are less likely to want to 
become teachers if doing so will mean a loss of Social Security 
benefits they have earned.
    I see the impact on Nevada first hand. In addition to the calls I 
receive from NSEA members impacted by the WEP and GPO, I receive many 
calls from teachers looking to move to Nevada and from individuals 
looking to enter teaching from the military or other professions. I now 
advise these callers to think long and hard before making such a move, 
because of the negative impact of the offsets on any Social Security 
benefits they have earned.
    In addition, our state retirement system has just mandated that 
anyone new to the system be informed of the penalties that may result 
from the Social Security offsets by taking a public service job in 
Nevada. NSEA has formed a strong coalition with the state retirement 
system and, together, we regularly publicize the fact that public 
service in Nevada can lead to a loss of a significant portion of one's 
Social Security benefits.
The Government Pension Offset: Another Unfair Penalty
    Although the bill under consideration today does not address the 
GPO, a discussion of the offsets must include a mention of this other 
unfair penalty. The GPO reduces Social Security spousal or survivor 
benefits by two-thirds of the individual's public pension. Thus, a 
teacher who receives a public pension for a job not covered by Social 
Security will lose much or all of any spousal survivor benefits she 
would expect to collect based on her husband's private sector earnings.
    Congress and the President agreed in 1983 to reduce the spousal 
benefits reduction from a dollar-for-dollar reduction to a reduction 
based on two-thirds of a public employee's retirement system benefits. 
This remedial step, however, falls well short of addressing the 
continuing devastating impact of the GPO.
    The GPO penalizes individuals who have dedicated their lives to 
public service. Nationwide, more than one-third of teachers and 
education employees, and more than one-fifth of other public employees, 
are not covered by Social Security, and are, therefore, subject to the 
GPO.
    Estimates indicate that 9 out of 10 public employees affected by 
the GPO lose their entire spousal benefit, even though their deceased 
spouse paid Social Security taxes for many years. Moreover, these 
estimates do not include those public employees or retirees who never 
applied for spousal benefits because they were informed they were 
ineligible. The offset has the harshest impact on those who can least 
afford the loss: lower-income women. Ironically, those impacted have 
less money to spend in their local economy, and sometimes have to turn 
to expensive government programs like food stamps to make ends meet.
    NEA receives hundreds of phone calls and letters each month from 
educators impacted by the GPO. In Nevada, I also am contacted by many 
widows and widowers struggling to survive on incomes close to poverty 
and fearing they will be unable to cover their housing, medical, and 
food expenses on their meager incomes.
The Public Servant Retirement Protection Act: An Important Step
    Given the unacceptable impact of the WEP and GPO on so many of our 
nation's teachers, the National Education Association supports the 
Public Servant Retirement Protection Act as a critical first step 
toward repeal of both offsets. NEA is very pleased to see such strong 
bipartisan support for this important legislation, and we thank the 
chair and committee member Congressman Kevin Brady for their efforts in 
bringing this legislation forward.
    H.R. 4391 would eliminate the current WEP offset formula and would 
apply the same formula currently used to calculate non-impacted 
individuals' benefits. It would then reduce the benefit by the 
percentage of indexed earnings that came from work not covered by 
Social Security. The bill includes a ``hold harmless'' provision 
guaranteeing that no person who already has earnings from any non-
Social Security employment will receive less in benefits than they 
would under the current system.
    NEA supports the Public Servant Retirement Protection Act as a 
first step toward full repeal of both the GPO and the WEP. We believe 
it will result in a significant benefit increase for many educators and 
other public employees.
    We do, however, believe that several issues must be addressed as 
the bill moves forward. First, we look forward to working with the 
committee to resolve issues regarding the availability of earnings 
information from jobs not covered by Social Security. It is critical 
that the legislation address how the Social Security Administration 
will determine earnings from non-covered work in calculating benefit 
levels.
    Second, we urge the committee to pay for the WEP fix in a manner 
that does not further exacerbate the unfair impact of the WEP and GPO. 
We would strongly oppose any effort to pay for this legislation through 
additional enforcement of these discriminatory offsets.
Conclusion
    On behalf of NEA, NSEA, and my family, I thank you for the 
opportunity to share my thoughts with you today. I urge the committee 
to move quickly to mark-up the Public Servant Retirement Protection Act 
and move it swiftly to final passage and enactment. Furthermore, I ask 
that you please look for ways to repeal completely both the WEP and the 
GPO as Congress continues to explore these issues.
    Thank you.

                                 

    Chairman SHAW. Thank you. Here is the name I am worried 
about mispronouncing.
    Mr. IGLEHART. Iglehart.
    Chairman SHAW. I did it.
    Mr. IGLEHART. That is correct. You did an excellent job 
with that.

STATEMENT OF RANDALL IGLEHART, STATE PRESIDENT, ASSOCIATION OF 
          TEXAS PROFESSIONAL EDUCATORS, AUSTIN, TEXAS

    Mr. IGLEHART. Mr. Chairman, Committee Members, my name is 
Randall Iglehart and I thank you for the opportunity to be here 
today to testify in support of H.R. 4391. I am here as 
president of the ATPE, the largest professional educators 
association in Texas. We are the largest non-union independent 
educators association in the Nation. I have been a public 
educator for over 28 years. I teach English, limited English 
proficient students, at Mark Twain Middle School in San Antonio 
Independent School District.
    The ATPE supports H.R. 4391 because it addresses a problem 
in current law that reduces the Social Security benefits of 
individuals eligible for government pensions, such as those 
provided through the Teacher Retirement System (TRS) of Texas. 
Currently, only 45 of nearly 1,100 Texas public school 
districts participate in both Social Security and TRS. However, 
many public educators have earned Social Security benefits by 
working second jobs or from private-sector jobs they held 
before teaching.
    The WEP reduces the Social Security benefits of these folks 
by imposing an arbitrary formula on their benefits. Under this 
formula, a person who merely meets the minimum eligibility 
requirements for a government pension could face the full 
effect of the WEP formula, reducing his benefit by as much as 
$300 per month. The ATPE believes the WEP acts as a deterrent 
to talented private-sector employees who are vested in Social 
Security and are interested in teaching as a second career, as 
well as to professional educators from states that pay into 
Social Security who are thinking about moving to Texas to 
teach.
    Texas is facing a teacher shortage approaching 50,000. The 
State recently cut benefits for active and retired educators 
due to State budget cuts last year, and retirements are at an 
all time high. The ATPE believes we must take steps to recruit 
and retain the brightest individuals into the classroom to 
ensure that every Texas student receives an exemplary 
education. The ATPE supports H.R. 4391 because it repeals the 
WEP, and replaces it with a formula that figures government 
employee Social Security benefits in the same way the benefits 
of private-sector employees are figures. The Public Servant 
Retirement Protection Act will help the State of Texas recruit 
and retain qualified public educators from other professions 
and from other States, and Lord knows we need that.
    The ATPE thanks Representative Brady and Representative 
Johnson and the co sponsors of H.R. 4391 for working with our 
association toward ending the inequities of the WEP. However, 
because H.R. 4391 does not address the GPO, we urge your 
support for an amendment to the bill that will address the 
harsh effects of the GPO on public educators. By reducing the 
spousal or widow Social Security benefits of persons eligible 
for government pensions by two-thirds of the amount of the 
pension, the GPO eliminates spousal or widow benefits for many 
retired Texas public educators. The GPO has caused an enormous 
strain on the morale of public educators in Texas, causing a 
potential doubling of the retirement rate in 2004, as projected 
by the TRS.
    Many experienced educators recently retired to meet the 
July 1, 2004, deadline in H.R. 743. By retiring by that date 
and working their last day in a district that pays into both 
TRS and Social Security, they avoided the GPO. Many other 
educators are leaving the profession early and cashing in their 
TRS accounts to avoid the GPO. The ATPE urges this Subcommittee 
to amend H.R. 4391 to lessen the effects of the GPO on public 
educators. Now, although we support total repeal of the GPO, as 
is accomplished by H.R. 594, a bill that now has 300 
cosponsors, we have included several suggestions for compromise 
in our written testimony. This would bolster teacher morale and 
encourage qualified public educators to remain in the 
classroom.
    The ATPE thanks the Members of the Subcommittee for this 
opportunity to participate in this hearing and for your 
willingness to receive our input on this critical issue that 
affects so many public educators. We urge you to amend and pass 
H.R. 4391 during the 108th Congress. Educators are the most 
important resource in providing children with the knowledge 
they will need to succeed in life, and your efforts to protect 
their retirement benefits will have a lasting impact on the 
quality of the education received by students in the public 
school system. Thank you.
    [The prepared statement of Mr. Iglehart follows:]
 Statement of Randall Iglehart, State President, Association of Texas 
                 Professional Educators, Austin, Texas
    The Association of Texas Professional Educators (ATPE) is the 
largest professional educators' association in Texas. With more than 
100,000 members, we are also the largest non-union educators' 
association in the nation. ATPE is committed to: advocating for better 
benefits for all educators; promoting a collaborative work environment; 
the right of educators' to choose the association they feel represents 
their interests; and providing the best education possible for Texas 
children. We thank you for the opportunity to provide input to the 
Subcommittee on HR 4391, the Public Servant Retirement Protection Act 
(PSRPA).
    ATPE supports HR 4391 as a step toward addressing the inequities in 
current law related to the Social Security benefits of individuals 
eligible for government pensions, such as those provided through the 
Teacher Retirement System of Texas (TRS). In Texas, it is mandatory for 
public school employees to contribute 6.4 percent of their pay to the 
TRS system. Currently, only 45 Texas public school districts also 
participate in Social Security. However, many public educators have 
earned Social Security benefits by working second jobs or from private-
sector jobs they held before teaching.
    The Windfall Elimination Provision (WEP) reduces the Social 
Security benefits of persons who have worked in jobs that pay into the 
Social Security system and in jobs that do not. The WEP imposes an 
arbitrary formula on these individuals that is based partially on the 
number of years they paid into Social Security rather than the amount 
they will receive from their government pensions. That means that a 
person who worked in a Social Security-covered job for 20 years but who 
is also eligible for a government pension benefit of $500 per month 
will have his Social Security benefit reduced by the same amount as a 
person who paid into Social Security for 20 years but will receive a 
government pension benefit of $1,200 per year. Under this formula, a 
person who merely meets the minimum eligibility requirements for a 
government pension could face the full effect of the WEP formula, 
reducing his benefit by as much as $300 per month.
    ATPE believes the WEP acts as a deterrent to talented, private-
sector employees who are vested in Social Security and are interested 
in teaching as a second career, as well as to professional educators 
from states that pay into Social Security who are thinking about moving 
to Texas to teach. Furthermore, it arbitrarily punishes those who have 
worked to become vested in both Social Security and government 
pensions. Texas is facing a teacher shortage approaching 50,000, the 
state recently cut benefits for active and retired educators due to 
state budget cuts last year and retirements are at an all-time high. 
ATPE believes we must take steps to recruit and retain the brightest 
individuals into the classroom to ensure that every Texas student 
receives an exemplary education.
    Some suggest that mandating all public school employees to 
participate in Social Security would solve the controversy surrounding 
the Social Security offsets. ATPE emphatically disagrees and opposes 
mandating Texas educators into the Social Security system. Texas is one 
of 13 states where Social Security participation is not required of all 
public school employees. In those 13 states, contribution rates, 
retirement formula multipliers and cost-of-living adjustments (COLAs) 
are higher than in Social Security states. These higher rates are 
established by state legislatures to make up for the lack of this 
important federal retirement benefit.
    ATPE believes the additional fiscal demands that mandatory Social 
Security coverage would require of the state would ultimately be 
reconciled through smaller state contributions to TRS and larger 
contributions from active and retired educators. This would produce 
additional strain on an already overworked and under-appreciated 
profession and could have a devastating effect on the actuarial 
soundness of the TRS fund, reducing benefits for TRS members.
    ATPE supports HR 4391, the PSRPA, because it repeals the WEP and 
replaces it with a formula that figures government employees' benefits 
in the same way the benefits of private sector employees are figured. 
By considering the complete earnings history of a worker, in both 
covered (by Social Security) employment and non-covered employment, 
when determining average monthly earnings over a worker's lifetime and 
applying the same formula percentage to all workers, the PSRPA will 
mean greater benefits for public educators qualified for Social 
Security benefits.
    The new formula under the PSRPA is a fair compromise between the 
arbitrary WEP and total repeal and will help the state of Texas recruit 
and retain qualified public educators from other professions and from 
other states. ATPE thanks Rep. Brady and the cosponsors of HR 4391 for 
working with our organization toward ending the inequities of the WEP.
    However, because HR 4391 does not address the Government Pension 
Offset (GPO), we urge your support for an amendment to the bill that 
will address the harsh effects of the GPO on public educators. By 
reducing the spousal or widow Social Security benefits of persons 
eligible for government pensions by two-thirds of the amount of the 
pension, the GPO eliminates spousal or widow benefits for many retired 
Texas public educators. The GPO has caused an enormous strain on the 
morale of public educators in Texas causing a potential doubling of the 
retirement rate in 2004 as projected by the TRS. Many experienced 
educators recently retired to meet the July 1, 2004, deadline in HR 
743. By retiring by that date and working their last day in a district 
that pays into both TRS and Social Security, they avoided the GPO. Many 
other educators are leaving the profession early and cashing in their 
TRS accounts to avoid the GPO.
    ATPE urges this Subcommittee to amend HR 4391 to lessen the effects 
of the GPO on public educators. Suggestions include total repeal of the 
GPO, an exemption for public educators, or a partial repeal that would 
exempt widows and those with combined pension and spousal benefits that 
fall below a certain level.
    HR 594, the Social Security Fairness Act, is legislation that would 
repeal both the WEP and the GPO. That bill now has 300 bipartisan 
cosponsors, including several of the cosponsors of HR 4391, but the 
bill has yet to be marked up by this Committee and debated on House 
floor. ATPE is hopeful that both HR 4391 and legislation to address the 
GPO will pass the 108th Congress and become law. This will bolster 
teacher morale and encourage qualified public educators to remain in 
the classroom.
    ATPE thanks the members of this Subcommittee for the opportunity to 
participate in this hearing and for your willingness to receive our 
input on this critical issue that affects so many public educators. 
Educators are the most important resource in providing children with 
the knowledge they will need to succeed in life, and your efforts to 
protect their retirement benefits will have a lasting impact on the 
quality of the education received by students in the public school 
system.

                                 

    Chairman SHAW. Thank you, Mr. Iglehart. Mr. Canterbury?

STATEMENT OF CHUCK CANTERBURY, NATIONAL PRESIDENT, GRAND LODGE 
                   FRATERNAL ORDER OF POLICE

    Mr. CANTERBURY. Good morning, Mr. Chairman, and 
distinguished Members of the House Subcommittee on Social 
Security. My name is Chuck Canterbury. I am the National 
President of the FOP, and I am the elected spokesperson of our 
318,000 rank-and-file police officers. We are the largest law 
enforcement labor organization in the United States. I am here 
this morning to advise you of our support for H.R. 4391, which 
would repeal the WEP and replace it with a more equitable 
individualized calculation of Social Security benefits.
    The FOP has been at the forefront of an important effort by 
public employees to repeal both the WEP and the GPO. In May, I 
appeared before this Subcommittee to testify in favor of H.R. 
594, which would repeal both of these inequitable provisions. 
This morning I would like to confine my remarks to the WEP and 
its effect on retired law enforcement officers, and to 
demonstrate the importance of this new act and why it is needed 
and how it will help our law enforcement officers.
    Under the current WEP formula, law enforcement officers who 
serve communities which are not included in the Social Security 
system may lose up to 60 percent of their Social Security 
benefit to which they are entitled by virtue of secondary or 
post retirement employment which required them to pay into the 
Social Security system. While this provision affects all public 
employees who are outside the Social Security system, we have 
maintained that it has a disparate impact on law enforcement 
officers for several reasons.
    One, law enforcement officers retire earlier than employees 
in many other professions owing to the physical demands of the 
job. Thus, after their law enforcement service, many law 
enforcement officers are likely to begin second careers and 
hold jobs that do pay into the Social Security system, and even 
more officers are likely to moonlight, that is, hold second or 
even third jobs, throughout their entire careers in order to 
augment their income. This creates an unjust situation that too 
many of our members find themselves in. They are entitled to a 
State or local retirement benefit because they worked 20 or 
more years keeping their streets and neighborhoods safe, and 
also worked at a job, or jobs, in which they paid Social 
Security, entitling them to that benefit as well.
    However, because of the WEP, if their second career 
resulted in less than 20 years of substantial earnings, upon 
reaching the age they eligible to collect Social Security, they 
discover that they lose 60 percent of the benefit for which 
they were taxed. Actuarially speaking, I doubt many of our 
officers will even live long enough to break even, and that is 
to collect the money that they paid into the system, much less 
a windfall, Mr. Chairman. These men and women earned their 
State and local retirement benefits as public employees, and 
they paid Social Security taxes while employed in the private 
sector. There is no windfall. Bluntly put, the WEP has not 
eliminated a windfall for individuals who did not earn it, but 
it has resulted in a windfall for the Federal Government at the 
expense of public employees.
    House Resolution 4391 is an excellent first step in 
correcting the inequity of the current law and represents a 
commendable compromise between those who justly believe that 
public employees are being treated unfairly and those who are 
concerned about the potential financial consequences of 
repealing the WEP. Under H.R. 4391, the WEP would be repealed 
and replaced with an individualized calculation of Social 
Security benefits based on an individual's entire work history. 
Social Security benefits would be calculated as if all the 
worker's earnings were subject to Social Security taxes, using 
the standard benefit formula. To ensure Social Security 
benefits are based on Social Security wages, the benefit would 
be multiplied by the percentage of earnings subject to the 
Social Security taxes.
    The legislation will change the law to treat our Nation's 
public employees much more fairly, and the FOP is proud to 
offer this measure our support. Mr. Chairman, I want to thank 
you and the other Members of this distinguished Subcommittee 
for the chance to appear here today, and we thank you for your 
work on this very important action to our Members.
    [The prepared statement of Mr. Canterbury follows:]
    Statement of Chuck Canterbury, National President, Grand Lodge 
                       Fraternal Order of Police
    Good morning, Mr. Chairman, Ranking Member Matsui, and 
distinguished Members of the House Subcommittee on Social Security. My 
name is Chuck Canterbury, National President of the Fraternal Order of 
Police. I am the elected spokesperson of more than 318,000 rank-and-
file police officers--the largest law enforcement labor organization in 
the United States. I am here this morning advise you of our support for 
H.R. 4391, the ``Public Servant Retirement Protection Act,'' which 
would repeal the Windfall Elimination Provision (WEP) and replace it 
with a more equitable, individualized calculation of Social Security 
benefits.
    The Fraternal Order of Police has been at the forefront of an 
important effort by public employees to repeal both the WEP and the 
Government Pension Offset (GPO). In May of last year, I appeared before 
this Subcommittee to testify in favor of one of the F.O.P.'s top 
legislative priorities, H.R. 594, the ``Social Security Fairness Act,'' 
which would repeal both of these inequitable provisions in current law.
    This morning I want to confine my remarks to the Windfall 
Elimination Provision and its effect on retired law enforcement 
officers to demonstrate the importance of the ``Public Servant 
Retirement Protection Act''--why it is needed and how it will help law 
enforcement officers.
    Under the current WEP formula, law enforcement officers who served 
communities which are not included in the Social Security system may 
lose up to sixty percent (60%) of the Social Security benefit to which 
they are entitled by virtue of secondary or post-retirement employment 
which required them to pay into the Social Security system. This sixty 
percent (60%) is a lot of money, especially when you consider that the 
officer and his family were likely counting on that benefit when they 
planned for retirement.
    While this provision affects all public employees who are outside 
the Social Security system, the F.O.P. has always maintained that WEP 
has a disparate impact on law enforcement officers for several reasons. 
First of all, law enforcement officers retire earlier than employees in 
many other professions. Owing to the physical demands of the job, a law 
enforcement officer is likely to retire between the ages of 45 and 60. 
Secondly, after 20 or 25 years on the job, many law enforcement 
officers are likely to begin second careers and hold jobs that do pay 
into the Social Security system. Even more officers are likely to 
``moonlight,'' that is, hold second or even third jobs throughout their 
law enforcement career in order to augment their income. This creates 
an unjust situation that too many of our members find themselves in: 
they are entitled to a State or local retirement benefit because they 
worked 20 or more years keeping their streets and neighborhoods safe, 
and also worked at a job or jobs in which they paid into Social 
Security, entitling them to that benefit as well. However, because of 
the WEP, if their second career resulted in less than twenty (20) years 
of substantial earnings, upon reaching the age they are eligible to 
collect Social Security, they will discover that they lose sixty 
percent (60%) of the benefit for which they were taxed! Actuarially 
speaking, I doubt many officers will live long enough to ``break 
even''--that is collect the money they paid into the system, let alone 
receive any ``windfall.'' These men and women earned their State or 
local retirement benefit as public employees and they paid Social 
Security taxes while employed in the private sector. How is this a 
windfall?
    I think it is clear that Congress did not intend to reduce the 
benefits of hard-working Americans who chose to serve their States and 
communities as public employees and then went on to have second careers 
or worked second jobs to make ends meet. After all, when Social 
Security was established in 1935, it intentionally excluded State and 
local employees. And though most public employees are now in the Social 
Security system, fifteen (15) States--Alaska, California, Colorado, 
Connecticut, Georgia (certain local governments), Illinois, Louisiana, 
Kentucky (certain local governments), Maine, Massachusetts, Missouri, 
Nevada, Ohio, Rhode Island, and Texas--which remain outside the Social 
Security system. It is these approximately seven (7) million public 
employees that need the help of Congress.
    When the WEP was enacted in 1983, it was part of a large reform 
package designed to shore up the financing of the Social Security 
system. Its ostensible purpose was to remove a ``windfall'' for persons 
who spent some time in jobs not covered by Social Security (like public 
employees) and also worked other jobs where they paid Social Security 
taxes long enough to qualify for retirement benefits. Yet the actual 
effect of the provision has had a profoundly negative impact on low-
paid public employees outside the Social Security system, like law 
enforcement officers.
    To the Fraternal Order of Police, this is a matter of fairness. The 
WEP substantially reduces a benefit that employees had included and 
counted on when planning their retirement. The arbitrary formula in 
current law, when applied, does not eliminate ``windfalls'' because of 
its regressive nature--the reduction is only applied to the first 
bracket of the benefit formula and causes a relatively larger reduction 
in benefits to low-paid workers. It also overpenalizes lower paid 
workers with short careers or, like many retired law enforcement 
officers, those whose careers are split inside and outside the Social 
Security system.
    The repeal of the Windfall Elimination Provision has elicited no 
organized support, because I believe that the overwhelming majority of 
Members of Congress agree with the position of the Fraternal Order of 
Police, which is that the current law is unfair to public employees. 
Yet despite this agreement, the estimated costs for a full repeal of 
the WEP are considerable and I believe that this is the primary reason 
that such proposals garner a great deal of support, but little 
attention. Bluntly put, the WEP has not eliminated a windfall for 
individuals who did not earn it, it has resulted in a windfall for the 
Federal government at the expense of public employees.
    This is why I believe that H.R. 4391, introduced by Representative 
Kevin P. Brady (R-TX), Howard L. Berman (D-CA), Howard P. ``Buck'' 
McKeon (R-CA), Sam Johnson (R-TX), Michael Michaud (D-ME), and you, Mr. 
Chairman, is so important. It is an excellent first step in correcting 
the inequity of current law and represents a commendable compromise 
between those who justly believe that public employees are being 
treated unfairly and those who are concerned about the potential fiscal 
consequences of repealing WEP.
    The legislation we are discussing here today would repeal the 
Windfall Elimination Provision (WEP) and replace it with an 
individualized calculation of Social Security worker benefits based on 
an individual's entire work history. Under the legislation, Social 
Security benefits would be calculated as if all the worker's earnings 
were subject to Social Security taxes, using the standard benefit 
formula. To ensure Social Security benefits are based only on Social 
Security wages, the benefit would be multiplied by the percent of 
earnings subject to Social Security taxes. Current retirees and workers 
who have non-Social Security wages in or before the year following 
enactment will receive the higher of either their benefit under current 
law or their benefit calculated under this bill.
    The ``Public Servant Retirement Protection Act'' will change Social 
Security law to treat our nation's public employees much more fairly 
and the Fraternal Order of Police is proud to offer the measure its 
support.
    Mr. Chairman, I want to thank you and the other Members of this 
distinguished Subcommittee for the chance to appear before you today. 
It is my hope that you and the Subcommittee will mark-up and pass H.R. 
4391 in the near future. I will now taken any questions you may have.

                                 

    Chairman SHAW. Thank you, Mr. Canterbury. Mr. Avak?

 STATEMENT OF GEORGE AVAK, PRESIDENT-ELECT, CALIFORNIA RETIRED 
          TEACHERS ASSOCIATION, SACRAMENTO, CALIFORNIA

    Mr. AVAK. Good morning. Mr. Chairman and Members of the 
Subcommittee on Social Security, my name is George Avak and I 
am President-Elect of the CRTA. We have more than 52,000 
members and represent the interests of 170,000 retirees who 
receive a pension from the California State TRS (CalSTRS). 
Thank you for inviting me to testify here today regarding H.R. 
4391.
    The CalSTRS is not integrated with the Social Security 
system, so most of our members are subject to the WEP and the 
GPO. While we continue to support repeal of both of these 
penalties, as encompassed in H.R. 594 and S. 349, we welcome 
H.R. 4391 as the first step toward fair and equal treatment of 
all people, regardless of their careers, by the Social Security 
system.
    While California's public schoolteachers did not pay into 
Social Security during their teaching careers, nor were they 
given the opportunity to do so if they so chose, many did pay 
into Social Security doing summer jobs or prior employment. The 
reality was that a 9 month teaching job could not support a 
family for 12 months, so teachers worked in the summer. By 
doing so, teachers not only met the immediate needs of their 
family, but they thought they were also helping to meet their 
needs in their retirement. They recognized that they could not 
have a secure retirement by relying on just their teacher's 
pension. Not only was their pay below average compared to 
people with comparable educational backgrounds and training, 
but the pension based on that working salary was not adequate 
to maintain a decent standard of living in retirement. As 
recently as 1998, an independent study conducted for CalSTRS 
concluded that the pension benefit provided by the system was 
not generally accepted by standards of income replacement in 
retirement.
    I would also note that teachers paid for their pensions 
with an 8 percent payroll deduction. In the private sector, at 
companies that provide pensions, the common practice is for the 
employee to pay his share of the Social Security tax and the 
employer provides a pension at no additional cost to the 
employee. For example, a teacher who retired in 1987 today 
receives a CalSTRS pension of less than $2,000 a month. Women 
retiring that year, and most teachers are women, receive an 
average of just $1,688 a month. These pensions alone can hardly 
secure a retirement in a high-cost State such as California. 
That is why so many teachers worked in summer jobs where they 
could pay into Social Security in the belief that they would 
receive supplemental income in retirement. We estimate that 
about 40,000 California teachers are affected by the WEP. They 
lose an average of $300 per month due to WEP. That may not 
sound like much money, but it is nearly 18 percent of the 
average retired female teacher's income.
    The maximum Social Security benefit payable in 2004 is 
$2,111 a month. The average payment is $922. Our members 
typically qualify for a little more than half of the average 
payment based on their Social Security covered earnings before 
the application of WEP. That level of benefit is commensurate 
with the level of employment in Social Security jobs. To have 
what is already a modest benefit further reduced because one 
chose a career in public service such as education is not a 
message we should be sending. No other Social Security 
beneficiary is subjected to any type of means testing based on 
non Social Security income or financial resources, and we do 
not believe it is fair to impose such a test on public 
servants.
    California and many other states are facing looming 
shortages of qualified teachers. One important source of new 
teachers will be those who decide on teaching as a second 
career. While they may be willing to make financial sacrifices 
in order to teach, they may be unable to make similar 
sacrifices in retirement.
    There is another issue that must be addressed when 
identifying the necessary revenues to partially restore 
benefits lost to the WEP, as proposed in H.R. 4391. The fact is 
that 20 years after its imposition, the WEP and the GPO are a 
mystery to most people affected by them. The SSA sends out 
annual estimates of benefits that are misleading to those 
affected and has made no concerted effort to inform people 
about those penalties. The CalSTRS make only a limited mention 
of the Social Security penalties in the information it provides 
to its members. Many of our CalSTRS first learn about WEP and 
GPO when they apply for their benefits--much too late to make 
alternative financial plans to ensure a secure retirement.
    Many times Social Security mistakenly provides a full 
benefit to retired teachers even though they are subject to 
those penalties. When Social Security learns of their error, 
they routinely send out letters to recipients demanding full 
repayment of the overpaid amount within 30 days. We have 
members who have been paid full benefits for years, unaware 
that they are subject to these penalties. When the mistake is 
caught, they not only find they are losing a portion of their 
monthly income, but also have a significant and unexpected debt 
to pay. For some, the amount owed has ranged from $4,000 to 
$43,000. We would urge you to hold harmless such people who 
have been overpaid due to governmental error absent any 
evidence of fraud on the part of the recipient. Our members 
worked hard all their lives. They played by the rules and 
always expected to carry their own weight. What they didn't 
know was that the rules were changed, and now they are bearing 
the unfortunate brunt of that change.
    We applaud Congress for finally recognizing that the 
impacts of WEP are not what were originally intended. House 
Resolution 4391 makes an important first step in rectifying 
those unforeseen consequences, and it will provide a measure of 
needed relief. I would like to thank all the Members of this 
Committee, and thank you for the time you have given me.
    [The prepared statement of Mr. Avak follows:]
Statement of George Avak, President-Elect, California Retired Teachers 
                  Association, Sacramento, California
    Mister Chairman and members of the Subcommittee on Social Security, 
my name is George Avak, and I am president-elect of the California 
Retired Teachers Association. We have 52,000 members and represent the 
interests of 170,000 retirees who receive a pension from the California 
State Teachers Retirement System (CalSTRS). I want to thank you for 
inviting me to testify here today regarding HR 4391.
    CalSTRS is not integrated with the Social Security system so most 
of our members are subject to the Windfall Elimination Provision and 
the Government Pension Offset.
    While we continue to support repeal of both of these penalties, as 
encompassed in HR 594 and S 349, we welcome HR 4391 as the first step 
towards fair and equal treatment of all people, regardless of their 
careers, by the Social Security system.
    While California's public school teachers did not pay into Social 
Security during their teaching careers--nor were they given the 
opportunity to do so if they chose--many did pay into Social Security 
during summer jobs or prior employment. The reality was that a nine-
month teaching job could not support a family for 12 months, so 
teachers worked in the summer.
    By doing so, teachers not only met the immediate needs of their 
family but they thought they were also helping to meet their needs in 
retirement. They recognized that they could not have a secure 
retirement by relying on just their teacher's pension. Not only was 
their pay below average compared to people with comparable educational 
backgrounds and training, but the pension based on that working salary 
was not adequate to maintain a decent standard of living in retirement.
    As recently as 1998, an independent study conducted for CalSTRS 
concluded that the pension benefit provided by the system did not meet 
generally accepted standards of income replacement in retirement.
    I would also note that teachers paid for those pensions with an 
eight--percent payroll deduction. In the private sector, at companies 
that provide pensions, the common practice is for the employee to pay 
his share of the Social Security tax and the employer provides a 
pension at no additional cost to the employee.
    For example, a teacher who retired in 1987, today receives a 
CalSTRS pension of less than $2,000 a month. Women retiring that year--
and most teachers are women--receive on average just $1,688 a month. 
These pensions alone can hardly sustain a secure retirement in a high-
cost state such as California. That is why so many teachers worked in 
summer jobs where they could pay into Social Security in the belief 
they would receive supplemental income in retirement.
    We estimate that about 40,000 California teachers are affected by 
the WEP. They lose an average of $300 per month due to the WEP. That 
may not sound like much money, but it's nearly 18 percent of the 
average retired female teacher's income.
    The maximum Social Security benefit payable in 2004 is $2,111. The 
average payment is $922. Our members typically qualify for a little 
more than half of the average payment based on their Social Security-
covered earnings before the application of the WEP. That level of 
benefit is commensurate with the level of employment in Social Security 
jobs.
    To have what is already a modest benefit further reduced because 
one chose a career in public service such as education is not a message 
we should be sending. No other Social Security beneficiary is subjected 
to any type of means testing based on non-Social Security income or 
financial resources, and we do not believe it is fair to impose such a 
test on public servants.
    California and many other states are facing looming shortages of 
qualified teachers. One important source of new teachers will be those 
who decide on teaching as a second career. While they may be willing to 
make financial sacrifices in order to teach, they may be unable to make 
similar sacrifices in retirement.
    The penalties imposed on their earned Social Security benefits may 
make teaching a poor choice and could hamper efforts to recruit 
competent professionals in the coming years.
    There is another issue that must be addressed when identifying the 
necessary revenues to partially restore benefits lost to the WEP, as 
proposed in HR 4391. The fact is that 20 years after their imposition, 
the WEP and the GPO are a mystery to most of the people affected by 
them. The Social Security Administration sends out annual estimates of 
benefits that are misleading to those affected, and has made no 
concerted effort to inform people about these penalties. CalSTRS makes 
only limited mention of the Social Security penalties in the 
information it provides to its members.
    Many of our members first learn about the WEP and GPO when they go 
to apply for their benefits--much too late to make alternative 
financial plans to ensure a secure retirement.
    Many times Social Security provides a full benefit to retired 
teachers even though they are subject to these penalties. When they 
learn of their error, they routinely send out letters to recipients 
demanding full repayment of the overpaid amount within 30 days. We have 
members who have been paid full benefits for years, unaware that they 
are subject to these penalties. When the mistake is caught, they not 
only find out they are losing a portion of their monthly income but 
also have a significant and unexpected debt to repay.
    For some, the amount owed has ranged from $4,000 up to $43,000. We 
would urge you to hold harmless such people who have been overpaid due 
to governmental error absent any evidence of fraud on the part of the 
recipient.
    Our members worked hard all of their lives. They played by the 
rules and always expected to carry their own weight. But what they 
didn't know was that the rules were changed and now they are bearing 
the unfortunate brunt of that change.
    We applaud the Congress for finally recognizing that the impacts of 
the WEP are not what were originally intended.
    HR 4391 makes an important first step in rectifying those 
unforeseen consequences and it will provide a measure of needed relief 
to our members impacted by the WEP. Thank you.

                                 

    Chairman SHAW. Thank you, Mr. Avak. Just very briefly, the 
problem of a notice going out showing the incorrect amount is 
something that has come to the attention of this Committee, and 
we are working with the SSA hopefully to correct that, or at 
least have some type of a warning on it telling people 
receiving a government pension other than Social Security, that 
that amount might vary. It is unfair to people who are going 
into retirement and trying to figure out exactly what their 
budgets are going to be. Mr. Johnson?
    Mr. JOHNSON. Thank you, Mr. Chairman. Mr. Iglehart, thank 
you for being here. It is a lot cooler here than in San Antonio 
right now, isn't it?
    Mr. IGLEHART. A little bit.
    Mr. JOHNSON. I notice that you still want some changes to 
the GPO. I would love to ask you a question. The GPO only 
replicates the dual entitlement rule that all other American 
spouses live with. Everyone is allowed to collect the greater 
of either retirement benefits or spousal benefits, but not 
both. Why do you believe that those Texas teachers who don't 
participate in Social Security should get more benefits than 
those in the 45 Texas school districts that do pay taxes into 
Social Security?
    Mr. IGLEHART. Well, we don't view it as these individuals 
necessarily receiving more. We are just trying to establish 
some type of equity, because these people, even though they may 
not have paid into the system, their spouses did. As a result 
of that, we feel that they are entitled to some of those 
benefits.
    Mr. JOHNSON. Well, they do get the benefits. They get the 
higher of the two, whichever is greater. That is true for me 
and everybody else in this audience. What is different about a 
Texas teacher as compared to a policeman or a fireman or 
somebody else?
    Mr. IGLEHART. Well, we are not saying that there is any 
difference between them. That is not what we are saying.
    Mr. JOHNSON. Okay, you don't want to answer the question, I 
take it. That is okay. Mr. Avak, you indicated that some of 
your teachers get more than they should after they retire and 
then have to pay it back. I understand that situation, but does 
your organization try to inform the teachers, or do you just 
leave it to the Social Security system to do that?
    Mr. AVAK. Well, we don't have all of the retired teachers 
as members of our association. There are 170,000 in the State 
of California. We feel that the obligation of informing them 
should be with Social Security. We are not an agent----
    Mr. JOHNSON. Even though they don't work under Social 
Security?
    Mr. AVAK. Well, if they are going to have the penalties 
imposed upon them because of having paid in Social Security 
prior to their employment as teachers, or subsequent to having 
been employed as teachers, then the obligation is with Social 
Security to let them know of the consequences of this 
particular process.
    Mr. JOHNSON. You don't feel any obligation.
    Mr. AVAK. We do the best we can to inform as many of our 
retired teachers as possible. We have a limited budget and it 
costs a lot of money to send out letters to all the people in 
our association and those who are not members.
    Mr. JOHNSON. I bet you send out letters all the time. Do 
you in Texas, do you all inform them of the differences in the 
systems?
    Mr. IGLEHART. I am sorry, I was not listening to the 
question.
    Mr. JOHNSON. Do you keep them informed, your members, of 
the differences in the Social Security system and what they can 
expect when they retire?
    Mr. IGLEHART. We try to. Of course, on an individual basis, 
it is difficult to tell members exactly what they are going to 
get. We try to keep them informed about the differences between 
the two and what they may be eligible for and not eligible for.
    Mr. JOHNSON. Thank you. Mr. Hickman, do you all as well?
    Mr. HICKMAN. Yes. In Nevada we have made very sure, because 
we have a close relationship with the Public Employee 
Retirement System, and we were actually going to put a bill in 
for this coming session in Nevada to require such notification. 
Our Public Employee Retirement System has already agreed to 
that. We totally support the effort that everyone who now 
becomes a member of the Public Employee Retirement System is 
notified that, by doing so, they may be subject to the WEP/GPO 
problems that may come to them if they have some Social 
Security.
    Mr. JOHNSON. Thank you.
    Mr. HICKMAN. We are all very proud of that.
    Mr. JOHNSON. Thank you. Yield back.
    Chairman SHAW. I was reminded by staff that under H.R. 743, 
``The Social Security Protection Act'' (P.L. 108-203) passed by 
this Committee and recently enacted into law that the SSA is 
going to have to come up with some way of handling that 
particular problem of notification. Mr. Becerra?
    Mr. BECERRA. Thank you, Mr. Chairman, and thank you, 
gentlemen, for your testimony and the work that you and your 
associations have done to try to bring this to a final vote 
and, hopefully, passage. Let me ask a question. This is a 
question that I ask simply to see if you all can continue to 
give us some guidance on how to get this done.
    There will be a cost associated with this. Some may portray 
this as not so much a cost, it is finally paying up what was 
due a lot of folks who didn't get their share of Social 
Security retirement benefits. One way or the other, the Federal 
Government would have to come up with money--in the case of 
this legislation, if the cost projections are accurate, about 
$7 billion over the next 10 years. If we were to eliminate WEP, 
that would be somewhere around $30 billion over the next 10 
years. Let's talk simply about this legislation, about $7 
billion.
    We are running a fiscal budget deficit of some $470 billion 
this year alone. We have over a $7 trillion debt right now in 
this country. Everything that we are being told is that we are 
going to continue to see historically high budget deficits for 
the Federal Government. Seven billion compared to a $7 trillion 
national debt isn't that much. Seven billion dollars compared 
to a 1-year annual deficit for this year of $470-plus billion 
is not that much, but $7 billion is still $7 billion more than 
what the Federal Government has available to spend.
    Give me your sense of how you would suggest to us that we 
move forward on this. I can give you some of my ideas on that, 
but without influencing what you might have to say, give me a 
sense of how you would suggest that we try to address all the 
different needs that the government has, whether it is national 
security, fighting terrorism, providing education funding, 
providing health care, Social Security, Medicare, all the rest, 
and then also doing this which I think most of us would agree 
is essential to do. Open question. Anyone.
    Mr. IGLEHART. I am sure all of us would agree here that 
that is a very difficult task. With the help of Mr. Gerry and 
some other keen advisors, I think it is something that can be 
accomplished. Exactly how, we would have to look at the details 
of all of this, of course, which we don't have before us. Be we 
are pretty certain it can be done.
    Mr. BECERRA. Well, let me propose--let me ask a question, 
you can give me a thumbs up or thumbs down. Should we do more 
aggressive enforcement of current GPO/WEP provisions, to 
collect money there to then have money to pay out to do a 
revised or reformed WEP? In other words, there are lot of folks 
out there who have received these letters from Social Security 
saying we didn't realize this but we are paying you more than, 
under the current law, you should be receiving because you did 
government non-Social Security work and also you have earnings 
that are Social Security-related government work. Should we do 
more active enforcement of those folks who received those 
letters but haven't returned the money Social Security says 
they are owed to try to help pay for this reform of WEP? Any 
thumb up? Probably thumb down?
    Let me ask this. I am going to assume that if you don't 
give me a thumb up, that means it is a thumbs down. What about 
this? We passed some tax cuts in this country in the last few 
years, 2001 and 2003, totalling over a trillion dollars in 
reduced Federal revenues as a result of those tax cuts. Most of 
the money went to folks far beyond the means of those who are 
retired under Social Security and trying to get some of this 
money back. Would you suggest that perhaps we reduce the size 
of the tax cuts for perhaps the one tenth of 1 percent 
wealthiest Americans in this country to find some of the money 
to help pay for this? Thumbs up? Thumbs down? See, one thumb 
up. Okay.
    Mr. BRADY. Mr. Chairman, is Mr. Becerra leading the 
witnesses at all in this?
    [Laughter.]
    Mr. BECERRA. It is a tough one, and it is going to be a 
tough one for us to resolve, because I think everyone has the 
desire to try to make this work. I hope that what we will be 
able to do is come up with the courage to find how we pay for 
this, because we need to. We have a lot of obligations, but we 
also have obligations for people who have worked very hard. I 
just wanted to see if you all might have some recommendations 
or suggestions for us. Mr. Chairman, I know we don't have the 
light, but I suspect my time is up, so I yield back and thank 
you for the time.
    Chairman SHAW. You yield back 9 seconds. Mr. Hulshof?
    Mr. HULSHOF. Thank you, Mr. Chairman.
    Chairman SHAW. By the way, that was a very interesting line 
of questioning.
    Mr. HULSHOF. It was, and even though it is an accounting 
device, there still is the firewall between the Social Security 
taxes that are paid into the system and the income tax 
structure. I want to commend the gentleman from California and 
want to maybe step back. I appreciate the testimony offered, 
because we have had a good, lively discussion--I heard somebody 
say, actually, ``sparring'' this morning--and I wanted to get 
back more to some general themes. I have heard throughout about 
how your constituencies, in fact, yourself, Mr. Hickman, your 
personal story about working hard, people playing by the rules, 
a strong work ethic. We all lament the salary structure that 
you have. Of course, that is not within the purview of Congress 
necessarily. Mr. Avak, you even mentioned the high cost of 
living in California--talk to that guy down there, Mr. Becerra.
    As we understand it, the purpose of the hearing is, of 
course, that we recognize that last year there were 700,000 
retirees and disabled Americans, about 2 percent of the 
workforce, that earned the benefit both from Social Security 
and from a pension plan that substitutes for Social Security. 
Again, for those folks--Mr. Chairman, you reminded us that 
there is an audience broader than just these walls, that back 
in 1983 Congress enacted this arbitrary line of the WEP, and 
the intent was--I haven't gone back to look at the debate 
specifically, but generally the intent was this formula that 
employees who earned a Social Security pension along with a 
pension from a substitute, like a teacher, like a police 
officer or Mr. Canterbury, that they would not receive a more 
generous Social Security benefit that some worker with equal 
earnings who had paid into Social Security their entire 
lifetimes. That was the intent. Everybody recognizes, though, 
this was an arbitrary line that was drawn.
    The thing, though, the final point I would like to make, 
and really not a question but I think just, again, to kind of 
step back, is that Mr. Brady's bill, this bill that we are here 
and you have testified about, does in fact repeal the WEP. His 
bill repeals the WEP. Social Security would no longer be 
figured by an arbitrary formula but would, in fact, be based on 
each worker's actual work history. Again, that attempt is to 
treat all workers fairly. Again, I want to commend you not only 
for your lifetime of experience in the groups that you 
represent, but your willingness to work with us and to try to 
address this in the most fair and equitable manner possible. 
Thank you, Mr. Chairman.
    Chairman SHAW. Thank you, Mr. Hulshof. Mr. Brady?
    Mr. BRADY. Thank you, Mr. Chairman. I want to join with Mr. 
Becerra, Mr. Johnson, and Mr. Hulshof in thanking the witnesses 
because I think it has been real enlightening. A couple of 
thoughts. One, I think all of us agree that this formula from 
21 years ago just doesn't fit today. When you listen to a 
teacher who worked a second job in a casino, teachers trying to 
recruit educators to San Antonio, police officers whose 
colleagues aren't going to live to a ripe old age, and a 
teacher in California whose elderly colleagues have trouble 
living in a high-cost State. The real problems with the one 
size fits all approach. Under this bill, the point you made is 
this WEP formula disappears. The same formula that everyone 
else on Social Security receives is applied to your workers, 
which is--I can't think of anything fairer than equal 
treatment. If you will remove that--if you can pull that down a 
second, thank you, Mr. Hulshof.
    What we are trying to do under this bill is everyone is so 
different an individual it is hard to compare dollars, but you 
can compare how much their wages are replaced by Social 
Security. That is what we focused on. Are people getting back 
an equal percentage of what they put in, in other words. Under 
this bill, a Social Security worker, a little over 40 percent 
replacement wage. Under the current law, it dips, just as each 
one of you said. Each one of your fellow members and fellow 
teachers and police officers are penalized. Under H.R. 4391, 
the wage replacement rate is almost identical for workers, so 
they are getting back in Social Security almost identical 
percentage of what they paid in. That is the goal of what we 
are trying to do today.
    The point I think I want to make, the question I want to 
ask of each of those who testified, you are individuals, as 
your stories tell today. There have been some who are 
suggesting that the cost of going back and figuring out your 
accurate and complete work records is too high, is too much for 
the effort. While I think the $190 million estimate, which 
really does work out to about a quarter of a million dollars a 
worker, seems to me just insane in amount. I think we can do it 
for a fraction of that. The point that still remains is, for 
your members to be eligible for equal treatment based on, 
really, what their life work history is, do you think it is 
worth the effort to recalculate the benefits based on an 
individual rather than on some guess? I will start with Terry, 
Mr. Hickman.
    Mr. HICKMAN. Thank you, Congressman Brady. I would ask a 
question in return: what price is justice? I believe the 
individual does have a right to have their Social Security 
benefit based upon what they have done. You are absolutely 
correct, one-size-fits-all is not correct. I know the thousands 
of retired teachers and educators and State employees in the 
State of Nevada are asking for fairness, and this is the way 
for it to be based upon the individual. We totally support 
that. There is no price for justice, because this bill will 
help to make it right based upon the individual's work record, 
and we think that is what should be done.
    Mr. BRADY. Thank you, sir. Howdy, Randall.
    Mr. IGLEHART. Thank you, Representative Brady. We certainly 
appreciate your and the Committee's efforts in this process. We 
think it does take a giant step toward establishing some type 
of equity in this system. Our members will greatly appreciate 
this effort, and we would like to see it passed during the 
108th Congress.
    Mr. BRADY. You bet. Thank you. Sir.
    Mr. CANTERBURY. Absolutely, it has been an equity issue 
from day one. I think the misnomer has always been that it is 
getting a benefit that you are not entitled to. It is a benefit 
that you paid into. If I work a parallel career while I police 
the streets of my city and then bus tables at Shoney's the rest 
of the time, I am getting my Social Security benefit on my 
bussing tables. It was an inequity from the start. I can 
promise you that my members will volunteer enough man-hours 
individually to track down their non-covered wages.
    [Laughter.]
    If I can promise from the thousands of e-mails that I 
receive, they already know those figures. If they have to go to 
their private pensions, I am sure that the private pension 
calculated their benefit based on their non-covered Social 
Security. I believe those figures are very easily retrievable.
    Mr. BRADY. We hear exactly the same thing from our teachers 
in Texas. We can recalculate.
    Mr. CANTERBURY. We can find them.
    Mr. BRADY. Yes, sir. Thank you.
    Mr. CANTERBURY. Thank you.
    Mr. AVAK. We have a lot of retired math teachers.
    [Laughter.]
    We would be happy to resume employment. I know my wife, she 
is very, very mathematical. I don't want to say 
``calculating,'' but she is terrific in math. She looks forward 
to looking at the bill when we go to the grocery store and 
calculating to be sure that there were no errors in what the 
grocery store told us we were to pay.
    Mr. BECERRA. Mr. Chairman, we had better hire his wife.
    Mr. AVAK. Our association, though, is supporting this bill 
as a major step forward. We appreciate the efforts of this 
Committee, and especially you, in bringing it forward. I think 
that democracy is an evolution, and things take steps sometimes 
to get accomplished. If we didn't have these small or whatever 
steps they are, we wouldn't see the fruition of a lot of 
tremendous efforts that take a lot of time to accomplish. Thank 
you.
    Mr. BRADY. Well, thank you. All your testimony has been 
very enlightening. We appreciate it.
    Chairman SHAW. I think this is an unusual bill; it is an 
unusual moment. I particularly like the way Mr. Canterbury 
summed it up for the FOP, and that it is a question of 
fairness, getting what you paid into. That is what this bill 
asks, and that is what we hope it can do. I think also it is an 
interesting moment when you see the NEA, the Texas teachers, 
FOP, retired California teachers, and conservatives on this 
Committee, such as Mr. Johnson, all agreeing together. 
Something is wrong.
    [Laughter.]
    Or something is very right. I think all of us fully 
understand this bill. I join you in my hope that this can be 
done in the 108th Congress. If not, I would guess that in the 
109th Congress there will be probably an overhaul of Social 
Security. I, for one will work hard to try to get it done this 
year, but if not, we will work to get it put into the bill next 
year. In fact, I think it is in a bill. We are trying to move 
this ball ahead. One of the most unfair things that you think 
about in Social Security is that young workers going into the 
workforce, such as my grandson back here--who is working for 
nothing in my office. I might say--I want to be sure that Wyatt 
is going to be able to be sure that he is going to get back a 
good retirement for the money that he is going to pay into 
Social Security.
    Congress has got to do something about this, because we are 
in danger. We talk about the amount of deficit that we have 
today. We haven't seen anything yet, unless Congress gets busy 
and reforms Social Security. I will do my best to be sure that, 
if we haven't passed it beforehand, that it will certainly be 
part of the total Social Security reform. I want to join the 
other Members of this panel in thanking all of you for coming 
and testifying. You obviously have done your homework, and I 
share your views. Thank you.
    [Whereupon, at 12:21 p.m., the hearing was adjourned.]
    [Questions submitted from Chairman Shaw to Mr. Gerry, Mr. 
Hickman, Mr. Iglehart, Mr. Canterbury, and Mr. Avak, and their 
responses follow:]

    Questions from Chairman E. Clay Shaw, Jr. to Mr. Martin H. Gerry

    Question: Please comment on the enclosed CRS analysis of H.R. 4391. 
Do you agree with the findings of this report? Please describe 
generally the workers who would benefit from H.R. 4391.
    Answer: This CRS report analyzes the effect of the proposed benefit 
formula change on various categories of future hypothetical workers 
with scaled earnings who retire at age 67 in 2051. The report 
determined that minimum-wage workers and low-wage workers would receive 
the greatest percentage increase in Social Security benefits under H.R. 
4391, relative to current-law, regardless of the number of years of 
covered earnings. Further, the level of benefit increases under H.R. 
4391 for individuals with somewhat higher earnings would be dependent, 
in part, on the proportion of the individual's lifetime earnings that 
are attributable to covered employment. While H.R. 4391 would generally 
provide higher benefits for many beneficiaries, among those who would 
not gain would be: 1) average earners with more than 27 years of 
covered earnings, 2) high earners with more than 23 years of covered 
earnings, and 3) all those with career maximum earnings under Social 
Security.
    While we have not replicated their analyses, the methodology CRS 
uses in this report appears reasonable, and their conclusions are 
generally consistent with SSA's analysis of the bill's effects. We have 
generally found that:

      Lower and mid-level career earners (considering both 
covered and non-covered earnings) are more likely to receive a benefit 
increase under the proposal, and the amount of the increase would tend 
to be higher for these individuals than for other groups.
      Workers who are more likely to receive lower benefits 
under the new calculation formula (unless protected by the present-law 
guarantee provision) include workers who--

          currently benefit from the present-law rule that 
        phases out or eliminates the WEP reduction for individuals who 
        have 21 or more years of substantial covered earnings under 
        Social Security;
          have high career earnings with substantial combined 
        earnings from both covered and non-covered employment.

    Last year SSA staff evaluated the impact of this proposal on 
simulated WEP beneficiaries attaining age 62 in 1999. This analysis 
assumed that, unlike H.R. 4391, there was no present-law guarantee and 
that pre-1978 non-covered earnings were not considered. This analysis 
found that:

      88 percent of those affected would receive higher 
benefits under the new calculation; and
      the group with the largest average increase in benefits 
was the lowest earning group.

    A similar analysis (using the same assumptions) was done for 
simulated workers reaching age 62 in 2018. For this group, 61 percent 
of those affected would receive higher benefits. The substantially 
greater percentage with improved benefits in 1999 is due to the fact 
that the proposed proportional WEP would provide a greater increase if 
a portion of non-covered earnings is ignored, as occurs in the analysis 
for those eligible in 1999 by leaving out pre-1978 non-covered 
earnings.
    Question: Please discuss whether the current law WEP (WEP) fairly 
adjusts benefits for all workers to ensure workers with part of their 
careers in jobs not subject to Social Security taxes receive equal 
replacement of their Social Security-covered earnings as workers in 
covered employment their entire career. Also, please discuss the 
history of this provision and how the current formula was determined.
    Answer: Congress established the WEP to prevent workers with 
pensions from work not covered by Social Security from receiving the 
unintended advantage of the full weighting in the regular benefit 
formula that is meant for long-term, low-paid workers. The WEP 
eliminates this potential windfall by providing for a different, less 
weighted benefit formula to compute benefits for such persons.
    The WEP also includes two special provisions that limit the 
potential benefit reduction for many workers. One provision guarantees 
that the WEP reduction can be no more than one-half of the amount of 
the pension from non-covered employment. The other provision phases out 
the reduction for workers with more than 20 years of substantial 
earnings under Social Security and fully eliminates the WEP reduction 
for workers with 30 or more years of substantial earnings. These two 
provisions were included to provide some protection for workers with 
low non-covered pensions or workers who had substantial careers in 
Social Security covered employment.
    With respect to the legislative history of the WEP, the 1982 
National Commission on Social Security Reform, chaired by Alan 
Greenspan, recommended that the computation of benefits for workers who 
receive pensions from non-covered work should be modified. (No specific 
benefit formula was recommended.) The decisions to reduce the first 
factor of the Social Security benefit formula from 90 percent to 40 
percent, to set the guarantee at one-half of the pension, and to phase 
out the WEP reduction based on the number of individual's years of 
substantial covered earnings, were the result of compromises between 
the House and Senate versions of the 1983 Social Security amendments. 
(The Senate version would have lowered the first factor from 90 percent 
to 32 percent, set the guarantee at one-third of the pension amount, 
and provided a phase-out of the reduction for workers with substantial 
covered earnings. The House version would have lowered the first factor 
from 90 percent to 61 percent, set the guarantee at one-half of the 
amount of the pension, and did not include a phase-out provision.)
    Originally, the provision that phases out the benefit reduction for 
workers who had substantial earnings under Social Security applied only 
if the worker had 26 or more years of substantial earnings. Legislation 
enacted in 1988 (P.L. 100-647) extended the phase out so that it first 
begins to apply to workers who have 21 or more years of substantial 
earnings under Social Security.
    Question: You said the Social Security Administration (SSA) does 
not have complete information on earnings not subject to Social 
Security taxes prior to 1978 and has only incomplete information for 
about a decade after that. Why is that the case? What options does the 
SSA have for obtaining wage data that pre-dates 1978? Are you able to 
partner with the Internal Revenue Service, the Office of Personnel 
Management, State employers or State pension systems to obtain 
information not currently available in SSA archives? Are these agencies 
likely to have these records? Or would the SSA expect to rely primarily 
on beneficiaries' own records of their past wages? What procedures and 
evidence does the SSA normally utilize in verifying missing earnings 
information (whether or not an individual is affected by the WEP)?
    Answer: Prior to tax year 1978, when Annual Wage Reporting began, 
covered (FICA) wage data was collected by the IRS and forwarded to SSA. 
Non-covered earnings for these years were also collected by IRS but 
were not forwarded to SSA. While SSA did begin to receive non-covered 
earnings information on Forms W-2 beginning in 1978, many State & local 
government entities did not start submitting W-2 data to SSA until 1980 
or 1981. State and local entities began filing W-2s with all 
information including Social Security covered wages (previously 
reported separately to SSA) with W-2s for tax year 1982.
    Even after 1981, some earnings records continue to be incomplete--
primarily for years prior to 1990. An analysis of the records of 
individuals with non-covered earnings indicated that there are many 
individuals who have gaps in their non-covered earnings patterns. It 
appears likely that, in many cases, those individuals remained in non-
covered employment during those ``gaps.'' An evaluation of the largest 
155 non-covered Federal and State/local government employers showed 
that for about 30 percent of these employers there was either a 
complete gap for 1 year or more, or for 1 year or more there were 
substantially lower non-covered earnings posted relative to a 
surrounding year.

      Of the 47 employers that seemed to have a problem, 32 had 
a problem in one of the years in the period 1984-1986.
      For only 4 of the 47 employers, the ``gap year'' was for 
1990 or later.

    It appears that the missing non-covered earnings are due to 
reporting errors by the employer, rather than an error in posting the 
earnings to the worker's record.
    If pre-1978 non-covered earnings were to be used in the benefit 
computation (as under H.R. 4391), the potential sources for obtaining 
pre-1978 non-covered earnings are the individual, the individual's 
employer, or his/her pension system. Following is a discussion of the 
availability of non-covered earnings from various sources.
Individuals
    The IRS requires that an individual taxpayer keep his/her tax 
returns for 3 years from the date the return was due or filed, or two 
years from the date the tax was paid, whichever is later. Presumably, 
most individuals would not have wage information going back 27 or more 
years. Individuals could contact their prior employer(s) to see if they 
had this earnings information but IRS rules require that employers only 
keep employment records for 4 years after the tax is due or paid, 
whichever is later.
    Further, under the language in H.R. 4391, if the individual did 
have the earnings information, it may not be to his/her advantage to 
provide it to SSA because inclusion of these additional pre-1978 non-
covered earnings would serve to lower the benefit payable under the 
H.R. 4391 computation. Likewise, if an employer/pension payer had the 
worker's yearly earnings amounts (or could derive them from other 
records), there is no incentive for the employer/pension payer to 
expend the resources to research this information--especially if it 
could only decrease the former employee's Social Security benefit.
Internal Revenue Service
    IRS has informed us that they would be unable to supplement 
information already in SSA's possession regarding non-covered earnings. 
IRS stores paper copies of Forms W-2s for only 7 years from the date of 
filing before they are destroyed by law. The information that IRS 
stores electronically (related to this issue) is the ``wages, salaries, 
and tips'' block on the 1040, line 7--not wage amounts off the Forms W-
2. This excerpted information is only available for up to 10 years. 
Furthermore, the electronic transcript information for joint returns 
would combine the couples' wages (on line 7) and there would be no way 
to discern the earnings of each member of the couple, nor would there 
be a way to discern covered versus non-covered earnings.
Office of Personnel Management (Federal Employees)
    The OPM maintains only paper records of federal employee's annual 
retirement deductions, which presumably could be used to derive an 
annual earnings amount. It would be a very labor intensive manual 
process to obtain this information for prior years--potentially, back 
to 1951 (as required by H.R. 4391). SSA would have to provide OPM with 
the name and SSN of the employee; OPM would have to go to the record 
center and pull the paper record to get the payroll deduction amount. 
SSA would then have to apply appropriate conversion factors for each 
year to get the amount of earnings. (There were a number of changes 
made to the payroll deduction amounts between 1951 and 1969.)
    We were informed that individual federal agencies may have paper 
payroll records at the St. Louis records center; again, if available, 
obtaining this information would be a manual process and it is unlikely 
that records are maintained back to the fifties. Retirement records are 
automated but only record the total years of service and average salary 
amount for purposes of the ``high 3'' retirement annuity calculation.
State and Local Governments
    There are approximately 22,000 State and local governmental 
employers in the U.S. The number of State and local government pension 
payers is not known and it is not clear how many of these organizations 
would have wage information earlier than 1978. However, based on a few 
of the larger non-covered State entities we have contacted, few have 
such information available and those that do would require either a 
labor intensive search and/or development of a special program that 
could derive the wages from the contributions paid. For example, one 
large State pension plan told us they have wage information on 
contributions from the mid-seventies; however, to obtain just the 
contributions of one employee for 1 year, they would have to look at 24 
separate reels of microfilms (i.e., one microfilm for 1 pay period). In 
situations where wages could be derived from pension contributions, the 
amount of these wages would not match taxable wages because certain 
payments such as bonuses and overtime are not subject to pension 
contributions.
    The SSA has long-established procedures and evidentiary 
requirements that are used to develop and document earnings that have 
not been recorded on a worker's earnings record. The first step in an 
investigation and resolution of an allegation of missing or incorrectly 
posted covered earnings is to establish the identity of the requester. 
Once SSA has established the individual's identity, the individual is 
requested to provide evidence of his employment, such as a Form W-2, 
employer statement, pay stubs, and so forth. There is a hierarchy of 
primary and secondary evidence which is requested in order to establish 
and post missing earnings. Primary evidence of earnings, such as the 
Form W-2 or employer statements verifying the fact and periods of 
employment as well as amount of earnings, is always requested first. If 
primary evidence is not available, then additional evidence is 
requested, such as union statements, pay slips, tax records, and so 
forth., in order to establish the missing earnings.
    All questions, discrepancies, and so forth., are resolved by 
requesting additional evidence from the individual or employer before 
any action is taken by SSA to credit the earnings. SSA does not take 
any corrective action unless the evidence submitted or obtained clearly 
establishes the individual's identity, the employment and the amount of 
earnings.
    Question: H.R. 4391 provides leeway for your agency to determine 
how to implement the new benefit computation. In your testimony, you 
described a scenario where the SSA would use only post-1977 earnings to 
calculate benefits under the new benefit formula in H.R. 4391. Please 
elaborate on other options for how the SSA might implement the bill. 
For each option, provide a discussion of the following: the effect on 
the SSA's ability to administer the provisions of H.R. 4391; incentives 
or disincentives for workers and employers to provide historical 
earnings information; equity or potential inequity in treatment of 
workers who cannot obtain proof of their non-covered earnings; and the 
estimated short and long-term cost to the program. What do you 
recommend as the best way to ensure those affected by the WEP receive 
fair replacement of their Social Security-covered earnings without 
creating an undue administrative burden on the SSA and State and local 
government employers?
    Answer: For purposes addressing the lack of readily available data 
on worker's pre-1978 non-covered earnings, there are potential options 
for computing Social Security benefits under H.R. 4391 (in addition to 
excluding all pre-1978 non-covered earnings). These options are:
Option 1
    If actual earnings are unavailable, assign to the worker the 
``average'' salary in that jurisdiction for his or her specific 
position (e.g., teacher) for that year.

      While actual pre-1978 pay records of individual workers 
may no longer be available, historic pay tables may exist that would 
allow SSA to determine an average salary.
      The SSA would have to verify the job position (teacher, 
janitor, administrator, bus driver, and so forth.) for each worker for 
each year. We would then need to know the average salary for each non-
covered position.
      There would be a question of how specific should the 
``position'' be--for example, an electrician trainee is not the same 
position as a master electrician--at least in terms of salary.
      The SSA would have to determine whether to use the 
average at the State level or at the level of the specific employing 
entity (i.e. individual school district. Local government, and so 
forth--.)
      There is also a question as to what average amount would 
be used if the data needed to compute the average is not available.
      Because the greater the amount of non-covered earnings 
used in the computation, the lower the resulting benefit would be under 
H.R. 4391, people may complain that the average used by SSA is too high 
for them. For many affected workers, the pre-1978 non-covered may 
reflect their earliest years of employment and the ``average'' earnings 
amount could be too high compared to the amount of their actual 
earnings. Such workers for whom pre-1978 non-covered earnings are not 
available may believe that they are not being treated fairly compared 
to other workers who can obtain their pre-1978 earnings.
      However, if the ``average'' earnings amount used for many 
pre-1978 years were much higher than the worker's actual earnings, this 
could become an incentive for workers to provide SSA with proof of 
actual earnings. Conversely, there would be a disincentive to supply 
actual earnings if the ``average'' used for many of the pre-1978 years 
were much lower than the worker's actual earnings.
Option 2
    Determine the Average Indexed Yearly Earnings (AIYE) for all years 
of covered and non-covered earnings that are available (e.g., if there 
are 15 such years of earnings, then compute the AIYE for those 15 
years) and assign that AIYE for all years of non-covered earnings that 
are not available.
    The years of earnings that are not available (often early in the 
person's career) may be lower than the other, later, years and thus the 
AIYE that is ``deemed'' for those earlier years may be too large--
compared to the person's actual earnings. (This result would be 
disadvantageous to the person.)
    If the AIYE is larger than the person's actual earnings, this would 
serve as an incentive for workers to provide proof of non-covered 
earnings. However, applying the AIYE in such cases may then be viewed 
as unfair to workers who simply are not able to provide such proof.

      This approach may also be inaccurate if the worker 
received a significant promotion (e.g. teacher to principal) or a 
demotion.
      This Option would be simpler to administer than Option 1. 
Unlike Option 1, the amount of earnings for missing years would always 
be determinable and would not require research into the pay levels for 
a myriad of different positions in that State or local jurisdiction. 
Further, the earnings used for missing years would not be arbitrary 
amounts based on other workers' average salaries; rather, they would be 
based on the worker's own personal earnings history.
Option 3
    SSA would use all available procedures to establish a worker's 
entire non-covered work history in order to compute the worker's Social 
security benefit. However, if all non-covered earnings cannot be 
established, present-law WEP will apply.

      Such an ``all-or-nothing'' approach could be an incentive 
for workers to assist SSA in establishing proof of their non-covered 
earnings. Most workers would gain from the provisions of H.R. 4391. 
Under this Option, the only way they could take advantage of the new 
computation would be to have all of their non-covered earnings.
      For future cohorts, this provision may not be a 
significant problem as SSA has better records of non-covered earnings. 
However, it may be viewed as unfair to those workers who cannot give us 
this information, especially for workers on the rolls who have a 
significant proportion of their non-covered work prior to 1978.
      Maintaining present law WEP would prevent any worker from 
being disadvantaged. However, SSA may have to maintain present-law WEP 
forever since there may always be instances where SSA cannot establish 
amounts of non-covered earnings (e.g., foreign work for which the 
worker receives a pension.)

    In estimating the program costs of H.R. 4391, SSA's Office of the 
Chief Actuary assumed that no-pre-1978 non-covered earnings would be 
available for inclusion in the computation. Based on that assumption, 
program costs for H.R. 4391 are estimated to be $3.5 billion over the 
first 5 years and $7.1 billion over the first 10 years. The estimated 
long-range cost is 0.01 percent of taxable payroll.
    The program costs for Options 1 and 2 would be less than the costs 
for the approach that would exclude all pre-1978 non-covered earnings 
because any additional pre-1978 non-covered earnings used in the 
benefit computation would decrease the Social Security benefit. SSA has 
not developed costs for Options 1 and 2 because there is significant 
data that is unavailable, but needed, to generate reliable cost 
estimates (such as the periods and extent of workers' non-covered 
service before 1978). However, SSA is currently working on a cost 
estimate for Option 3.
    With respect to question 4b, SSA does not believe that any of the 
options offer a better way than current law to ensure that those 
affected by the WEP receive a fair wage replacement of their Social 
Security-covered earnings, without creating an undue administrative 
burden on SSA and State and local government employers.
    Question: Beginning with which cohort of retirees do you believe 
the SSA would have substantially complete earnings records and would be 
able to administer the benefit computation in H.R. 4391 without having 
to develop additional proof of non-covered earnings?
    Answer: The first year for which SSA has a record of workers' non-
covered earnings is 1978. Therefore, the first cohort for which SSA 
would have reasonably complete earnings records, and would be able to 
administer the benefit computation in H.R. 4391 without having to 
develop additional proof of non-covered earnings in most cases, would 
be those persons who were age 22 in 1978 and who will attain age 62 in 
2018. These individuals are currently about 48 years old. (Age 22 is 
often used in benefit examples as the age at which it can be expected 
that full-time workers will have begun their careers.)
    However, as noted earlier, many State & local government entities 
did not start submitting W-2 data to SSA until 1980 or 1981. Because of 
this significant issue, the first cohort for which SSA would have 
substantially complete earnings records, and thus could avoid having to 
develop additional proof of non-covered earnings, would be those 
persons who were age 22 in 1982 and who will attain age 62 in 2022.
    Question: The ``Social Security Protection Act of 2004'' (P.L. 108-
203) requires the SSA to include in the Social Security Statement sent 
to workers an explanation of the potential benefit reductions under the 
GPO (GPO) and WEP, and requires the SSA to develop a notice for 
employers to use in informing newly hired employees who are not subject 
to Social Security taxes of the effect of the GPO and WEP. Would you 
provide an update as to how implementation of this provision is 
progressing? What feedback are you receiving from stakeholders as the 
process moves forward?
    Answer: With respect to modifying the Social Security Statement, 
the Office of Communications (OCOMM) has been working with the Office 
of Disability and Income Support Programs to undertake the activities 
required to fulfill the requirements of the law. Because the SSPA was 
only signed into law on March 2, 2004, we are in the planning stages 
for this provision which is effective January 2007. Our goal is to 
provide the most meaningful WEP/GPO information to the largest number 
of workers, ensuring that all those potentially affected by these 
provisions receive the necessary information.
    With respect to the notice to be given to newly hired employees, 
SSA has developed a draft notice that provides information concerning 
both the WEP and GPO provisions, as required by the legislation. SSA 
recently met with concerned advocates to discuss the draft notice and 
to address their concerns. SSA is on track for timely implementation of 
this provision of P.L. 108-203.
    Question: In addition to worker education about the GPO and WEP 
required in P.L. 108-203, what other recent improvements to brochures, 
the SSA website and other public communications have been made to help 
make individuals aware of these provisions and how they may affect 
their benefits?
    Answer: We have taken many actions in the last year to help 
individuals affected by GPO and WEP understand how these provisions may 
affect their future benefits. For example, we have strengthened the 
language in our publications, GPO and WEP. These publications are 
available in print and electronically.
    On our website, Social Security Online, we have improved our page, 
``Information for government Employees,'' at http://www.ssa.gov/gpo-
wep/ by adding a GPO calculator, enhancing the existing WEP calculator 
and adding a chart on ``How the WEP Can Affect Your Social Security 
Benefit.'' This page provides ample information on GPO and WEP. It is 
valuable in financial planning, because it helps the public get 
realistic estimates of the benefits they may receive from Social 
Security after GPO or WEP is taken into account. We also have added 
several new entries to our ``Frequently Asked Questions'' page on our 
website that explain the GPO and WEP provisions and how they can affect 
Social Security benefits.
    Question: Under current law, workers are exempt from the WEP if 
they have 30 or more years of substantial earnings under Social 
Security. If a worker retiring this year paid Social Security taxes on 
approximately $282,000 in wages, just meeting the minimum requirement 
over the past 30 years, he would be exempt from the WEP. However, if he 
paid Social Security taxes on the same amount of wages, but earned it 
over 20 years instead of 30 years, he would not be exempt. Or, if he 
earned just $1.00 less than the minimum amount for ``substantial'' 
earnings in each of those years, he would not be exempt. While H.R. 
4391 grandfathers current and past non-covered employees if they 
benefit from this exemption, do you think it is needed as a permanent 
part of the law under the new benefit computation in the bill in order 
to ensure workers with identical wage histories are treated equally? 
Similarly, do you believe the provision limiting the WEP reduction 
under current law to an amount equaling no more than one-half the 
government pension should be made a permanent part of the law under 
H.R. 4391 (rather than only a grandfather provision) in order to ensure 
workers with identical wage histories are treated equally under the 
program?
    Answer: The H.R. 4391 ``hold harmless'' provision allows any 
individual who has non-covered earnings prior to the year after 
enactment to be subject either to the new benefit formula or to the 
current-law WEP, whichever is more advantageous. These individuals 
would have the opportunity to benefit from current-law provisions which 
1) phase out the WEP reduction if the worker has 21-29 years of 
``substantial'' covered earnings and fully eliminate the WEP if the 
worker has at least 30 of such years, and 2) guarantee that the WEP 
reduction will not be more than one half of the non-covered pension 
amount. Approximately 7.6 percent of workers subject to the WEP have 
the effect of the WEP reduced due to the guarantee that the WEP 
reduction will not exceed one half of the non-covered pension amount; 
almost 19 percent have the effect of the WEP reduced because they have 
between 21 and 29 years of substantial covered earnings. No data are 
available on the number of beneficiaries who would have been subject to 
the WEP but were exempt because they have 30 or more years of 
substantial covered earnings.
    Under H.R. 4391, individuals with non-covered earnings which first 
occur in the year following enactment or later would not benefit from 
the exemption based on 30 years of substantial covered earnings or the 
guarantee that the reduction will not exceed one half of the non-
covered pension amount. Modifying H.R. 4391 to make these two 
provisions a permanent part of the law would provide additional 
protections for those whose non-covered employment begins in the 
future, reducing the possibility that they would be disadvantaged 
relative to current law. However, these changes to the bill would 
increase program costs. In addition, they would also increase 
administrative complexity because SSA would need to administer these 
additional provisions for all years into the future.
    As pointed out in the question, it is true that equity questions 
can be raised about the operation of the WEP ``phase-out'' based on the 
number of years of substantial covered earnings. That is, the 
distribution of earnings over a worker's lifetime, including whether 
the earnings in a given year are slightly more or less than the 
specified threshold, can result in wholly different treatment under 
this provision. These points could be used as arguments against 
retaining the current phase-out provision for those whose non-covered 
employment first begins in the year following enactment.
    Question: We heard testimony stating that about one-third of 
teachers pay into a government employee pension plan that substitutes 
for Social Security coverage, and the remaining two-thirds pay into 
Social Security. Would H.R. 4391 help ensure that both groups of 
teachers are treated equally in terms of how much of their Social 
Security-covered wages that Social Security benefits replace? If we 
repeal the WEP, would the two groups be treated equally?
    Answer: As I stated before your Subcommittee at the July 20, 2004 
hearing, the goal of H.R. 4391 is to better target the effect of the 
offset so that the amount of the resulting reduction in benefits more 
closely approximates the individual facts in each case. Unfortunately, 
the data needed for these calculations--much of it wages paid to 
individuals as many as 27 or more years ago--will not be readily 
available in many (perhaps most) cases, making it difficult for SSA to 
equitably administer the provisions of the bill. Inequities would occur 
in the application of the WEP because counting pre-1978 earnings for 
some cases and not for others (based on availability) would not be 
fair.
    As an illustration, there would be a question of equity in 
recomputing the benefits of workers whose non-covered earnings are 
entirely before 1978. For those workers for whom the needed pre-1978 
earnings information cannot be obtained, the WEP reduction would be 
entirely removed. However, for those workers for whom pre-1978 earnings 
are available, those earnings would result in a WEP reduction.
    Repeal of the WEP would not result in equal treatment of teachers 
who were covered under Social Security compared to teachers who instead 
paid into a government retirement system. As I stated in my written 
testimony:
    ``The purpose of the WEP was to remove an unintended advantage that 
the weighting in the regular Social Security benefit formula would 
otherwise provide for persons who have substantial pensions from non-
covered employment. This weighting is intended to help workers who 
spent their lives in low-paying jobs by providing them with a benefit 
that is relatively higher in relation to their prior earnings than the 
benefit that is provided for higher-paid workers.
    ``However, because benefits are based on average earnings in 
employment covered by Social Security over a working lifetime (35 years 
for retired workers), a worker who has spent part of his or her career 
in employment not covered by Social Security appears to have lower 
average lifetime earnings than he or she actually had. (In determining 
average earnings for Social Security benefit purposes, years with no 
covered earnings are counted as years of zero earnings, as if the 
person had not worked at all.) Without the WEP, such a worker would be 
treated as a low-lifetime earner for Social Security benefit purposes 
and inappropriately receive the advantage of the weighted benefit 
formula. The WEP eliminates this potential ``windfall'' by providing 
for a different, less heavily weighted benefit formula to compute 
benefits for such persons.''
    Thus, repealing the WEP would result in workers who spent a portion 
of their careers in employment not covered by Social Security receiving 
more favorable treatment under Social Security than comparable workers 
who had worked a lifetime in covered employment.
    Question: One of the witnesses at the hearing testified that the 
SSA does not always immediately identify workers who should be subject 
to the GPO or the WEP, and as a result some retirees may accumulate a 
large overpayment of benefits by the time the SSA correctly applies 
those provisions to their benefits. The witness also recommended that 
the SSA hold these individuals harmless, absent any evidence of fraud. 
Do you agree with the recommendation? What do you recommend to prevent 
or minimize these overpayments?
    Answer: Claimants for retirement benefits are asked at the time of 
application if they are receiving or expect to receive a pension based 
on non-covered work, and the application they sign affirms this 
information. If they expect to receive in the future a pension based on 
non-covered employment, the beneficiary is required to report such 
receipt to SSA. Once SSA learns of the pension receipt, SSA obtains 
verification of the pension and applies the WEP and/or GPO accordingly. 
Because claimants are made aware of the need to report these pensions, 
we have concerns about the recommendation to hold them harmless if they 
are overpaid because they have failed to report.
    Waiving the overpayment would result in an incentive for the 
claimant not to tell SSA of the receipt of the non-covered pension. If 
the claimant knew that the overpayment would be waived, it would be in 
his/her best interest to not inform SSA of the pension because the WEP 
or GPO reduction would only apply prospectively beginning at the point 
that SSA otherwise learns of the pension receipt.
    Further, waiving the WEP/GPO overpayment in situations in which the 
beneficiary fails to inform SSA of the receipt of a non-covered pension 
may provide an advantage to this group compared to other similarly 
situated beneficiaries. For example, when a disability beneficiary 
fails to inform SSA of the receipt of a workers' compensation payment 
that is subject to Social Security offset, the resulting overpayment 
that occurs when SSA learns of the payment is not automatically waived.
    The SSA largely relies on the applicant/beneficiary to correctly 
inform us that he or she is entitled or becomes entitled to a non-
covered pension. To minimize overpayments that result due to 
retroactive application of the WEP and/or GPO, SSA has an ongoing 
computer-matching program with the Office of Personnel Management (OPM) 
that matches persons receiving Social Security benefits with persons 
receiving a pension from OPM based on non-covered employment. However, 
SSA does not have any similar program to identify Social Security 
beneficiaries who are also receiving pensions based on non-covered work 
for a State or local government. In addition, when the claimant states 
that he/she expects to receive a pension from noncovered employment in 
the future, SSA establishes a diary to alert claims personnel to 
recontact the claimant at the time the claimant has alleged that 
pension payments will begin.
    To help address this problem, the President's FY 2005 Budget 
includes a proposal that would improve the administration of the WEP 
and GPO by improving the coordination of reports of pension payments 
based on employment not covered by Social Security. This change would 
give SSA the ability to independently verify whether beneficiaries have 
pension income from employment not covered by Social Security.
    A past study of SSA's administration of the WEP and GPO provisions 
by the General Accounting Office (GAO) found that there are many 
beneficiaries who are not subjected to the WEP and GPO because SSA does 
not know they are receiving pensions based on non-covered employment. 
With the change proposed in the President's Budget, SSA would be able 
to obtain data on pensions based on non-covered work in a more timely 
and consistent manner. The proposal would thereby improve SSA's 
stewardship over the program and the Social Security trust funds.

     Questions from Chairman E. Clay Shaw, Jr. to Mr. Terry Hickman

    Question: You stated that H.R. 4391 would apply the same basic 
benefit formula to everyone. If H.R. 4391 would ensure that all workers 
are treated equally, regardless of whether part of their career was 
spent in jobs not subject to Social Security taxes, would you explain 
why you believe the WEP should be completely repealed? Should teachers 
who pay into a Social Security substitute receive more generous Social 
Security benefits than teachers who pay Social Security taxes on all 
their earnings?
    Answer: The NEA supports repealing two Social Security Act 
amendments that negatively impact thousands of public employees 
including many teachers and education support professionals. The GPO 
(GPO) and WEP (WEP) unfairly reduce or eliminate benefits that 
employees or their spouses have earned and are expecting in retirement. 
These provisions impact educators, police officers, firefighters and 
other public employees who have dedicated their lives to public 
service. The WEP reduces the earned Social Security benefits of an 
individual who also receives a public pension from a job not covered by 
Social Security. The WEP causes hardworking people to lose a 
significant portion of the benefits they earned themselves. The number 
of people impacted by these provisions across the country is growing 
every day as more and more people reach retirement age.
    While H.R. 4391 does initially apply the same basic benefit formula 
to all recipients, it then reduces the final benefit by a percentage. 
NEA believes this bill offers an important first step, but it does not 
ensure that educators and other public employees will receive all the 
benefits they earned by paying into Social Security. Therefore, NEA 
urges Congress to pass H.R 4391 as a first step, but also to pass the 
Social Security Fairness Act (H.R.594), which would completely repeal 
both the GPO and the WEP.
    The NEA believes that teachers and other public employees should 
receive the Social Security benefits they have earned by paying into 
the system. We do not believe that repealing the WEP or GPO would give 
public employees a more generous benefit, but would simply ensure them 
the benefits they or their spouse have earned.
    Question: You state in your testimony that the WEP hurts teacher 
recruitment efforts, especially in cases where people are considering 
teaching as a second career. Would passage of H.R. 4391 help your 
recruitment efforts?
    Answer: The NEA believes that individuals who worked in other 
careers are less likely to want to become teachers if doing so will 
mean a loss of earned Social Security benefits. The WEP also causes 
current educators to leave the profession, and students to choose 
courses of study other than education. Passage of H.R. 4391 would be an 
important first step in providing relief from the negative financial 
consequences of the WEP and ought to encourage more individuals to 
enter the teaching profession.
    Again, thank you and the House Ways and Mean Committee, 
Subcommittee on Social Security, for addressing the Social Security 
provisions affecting public employees. We look forward to working with 
you on this issue.

   Questions from Chairman E. Clay Shaw, Jr. to Mr. Randall Iglehart

    Question: You stated that H.R. 4391 would apply the same basic 
benefit formula to everyone. If H.R. 4391 would ensure that all workers 
are treated equally, regardless of whether part of their career was 
spent in jobs not subject to Social Security taxes, would you explain 
why you believe the WEP should be completely repealed? Should teachers 
who pay into a Social Security substitute receive more generous Social 
Security benefits than teachers who pay Social Security taxes on all 
their earnings?
    Answer: As I stated in my testimony last month, ATPE supports HR 
4391. We believe that the formula proposed by the bill to calculate the 
Social Security benefits of persons also eligible for a government 
pension is a fair one because it will figure these workers' benefits in 
the same way that private sector employees have their benefits figured. 
Our advocacy of full repeal of the WEP has been based on our members' 
recognition of the inequities of the current law and their desire to 
receive the benefits they have earned while working in jobs covered by 
Social Security. We understand that full repeal of the WEP would create 
new inequities in the benefits formula and believe HR 4391 offers a 
workable solution and a fair compromise between total repeal and the 
current law.
    Question: You state in your testimony that the WEP hurts teacher 
recruitment efforts, especially in cases where people are considering 
teaching as a second career. Would passage of H.R. 4391 help your 
recruitment efforts?
    Answer: I also testified that removing the strong disincentive 
(WEP) in current law to become a Texas teacher would help the State of 
Texas with our massive shortage of certified teachers. If potential 
Texas teachers know that the Social Security benefits they have earned 
in other states or other careers will be not be reduced by an arbitrary 
formula just because they are also eligible for a pension from the 
Teacher Retirement System, school districts will be better able to 
recruit the best and brightest into our classrooms.

   Questions from Chairman E. Clay Shaw, Jr. to Mr. Chuck Canterbury

    Question: We appreciate your support for H.R. 4391. As you said, it 
would help police officers who enter a second career after doing so 
much to ensure Americans' safety. Are there any particular aspects of 
the bill you think could be improved?
    Answer: The F.O.P. supports H.R. 4391, the ``Public Servant 
Retirement Protection Act,'' (PSRPA) which we view as a solid, 
compromise piece of legislation between the proponents of a full repeal 
of the WEP (WEP) and the GPO (GPO), as provided for in H.R. 594, the 
``Social Security Fairness Act,'' that was the subject of a hearing 
before the Subcommittee last May, and those who have concerns about the 
cost associated with the full repeal of both these measures.
    In the view of the F.O.P. however, the issues of the WEP and GPO 
are linked. While we have no further suggestions to improve H.R. 4391 
insofar as it addresses the WEP, we would be supportive of adding a new 
section to the bill which would address the unfairness of the GPO to 
law enforcement officers and their families and believe the legislation 
would be improved by such an addition.
    Question: According to a Public Pension Coordinating Council 
survey, about 40 percent of police officers and firefighters are 
subject to Social Security taxes in their jobs, and would not be 
affected by the WEP. Since H.R. 4391 results in equal treatment of both 
Social Security-covered and non-covered police officers and 
firefighters, would you explain why you believe the WEP should be 
completely repealed? Should police officers who pay into a Social 
Security substitute receive more generous Social Security benefits than 
police officers who pay Social Security taxes on all their earnings?
    Answer: The enactment of H.R. 4391, the ``Public Servant Retirement 
Protection Act,'' does make the treatment of public employees more 
equal, and it is for that reason that the F.O.P. supports its passage. 
However, the new benefit calculation proposed by this legislation still 
treats public employees who pay to participate in their own retirement 
plans differently than public employees who are inside the Social 
Security system.
    The ostensible purpose of the WEP is to remove a so-called 
``windfall'' for persons who spent some time in jobs not covered by 
Social Security (like public employees) and also worked other jobs 
where they paid Social Security taxes long enough to qualify for 
retirement benefits. The PSRPA does lessen this penalty and certainly 
treats public employees in a public pension plan better and more 
equally than the current formula, but the basic unfairness still 
exists--the Social Security benefits for which these employees were 
taxed are computed differently, not for different work or a different 
length of service, but solely because they receive a government pension 
from non-covered employment in the public sector. These retirement 
plans, many of which were designed and tailored with the public safety 
employee in mind, deliver a greater benefit to their participants than 
does Social Security. This is the so-called ``windfall'' that the WEP 
was designed to eliminate and it is also the basis for the new benefits 
calculation proposed by H.R. 4391.
    We believe that Martin H. Gerry, Deputy Commissioner of Disability 
and Income Security Programs at the Social Security Administration, was 
correct in his concluding remarks at the Subcommittee's hearing on this 
legislation: ``H.R. 4391 proposes significant changes to the manner in 
which the WEP is calculated. These changes are intended to better 
target the effect of the offset so that the amount of the resulting 
reduction in benefits more closely approximates the individual facts in 
each case.'' [emphasis added]
    The F.O.P. supports H.R. 4391 because it does treat public 
employees more fairly than the current formula. However, the fact 
remains that the benefit formula in the PSRPA is still a reduction that 
is applied only to those employees who receive a government pension for 
work outside the Social Security system who also worked at jobs inside 
the Social Security system and who paid taxes on these wages in the 
expectation that they would provide them with a future benefit. The 
F.O.P. maintains that this benefit ought to be calculated in the same 
way as any other employee's Social Security benefit, and not be reduced 
because they participate in a State or local retirement plan.

      Questions from Chairman E. Clay Shaw, Jr. to Mr. George Avak

    Question: You mentioned that H.R. 4391 makes an important step 
toward helping teachers affected by the WEP. Would you explain in more 
detail how it would help retired teachers in California?
    Answer: HR 4391 would reduce the WEP (WEP) by approximately 10% to 
30% for those currently retired teachers who are effected by the WEP. 
We estimate that over 40,000 California retired teachers are affected 
by the WEP and that many more will be affected in future years. The 
estimate of the 10% to 30% restoration for those affected by the WEP is 
based upon the HR 4391 examples developed for the legislation and our 
analysis of data from the State Teachers' Retirement System. 
Approximately 30% of the STRS members have joined the System after age 
40. Presuming those who joined the system after age 40 had a career in 
Social Security prior to joining STRS, we then project for those 
retirees who are affected by WEP. Because the WEP reduction can be up 
to $300 per month, the 10% to 30%, HR 4391 restoration would result in 
between $30 per month and $90 per month compared to the current 
application of the WEP.
    Question: You stated that sometimes the Social Security 
Administration (SSA) does not learn a beneficiary is subject to the GPO 
or WEP until they have received benefits for many years, thus resulting 
in overpayment of benefits. Individuals are asked whether they receive 
a government pension when they apply for benefits, and are required to 
report any changes in their government pension to the SSA. Why do you 
believe so many people become overpaid? How would you suggest we 
prevent overpayments from happening?
    Answer: We believe individuals indicate that they have a government 
pension when they are asked the correct question. However, it might not 
always be clear to either the person in Social Security filling out the 
form or to the individual applicant that this also then triggers a WEP 
or GPO effect. CRTA, State Teachers' Retirement System, California 
Teachers Association, and the United Teachers Los Angeles are 
attempting to ensure that all current and future retirees are aware of 
this issue. CRTA believes that in addition to our efforts to inform 
current and future retirees, the SSA needs to have more significant 
training of their personnel to ensure that the questions are asked 
correctly and any necessary follow up questions are asked correctly.
    The CRTA strongly believes that if the overpayment occurred because 
of Social Security staff error, then the individuals should not be 
excessively penalized for that overpayment. We recommend the repayment 
be no more than 5% of the monthly Social Security allowance reduced 
until the overpayment is paid. We do not advocate this, however, in the 
case of fraud or intentional misrepresentation. In those cases, the 
full overpayment should be recovered as soon as possible, if not 
immediately, and any appropriate legal sanctions should be applied.
    Thank you for this opportunity to respond to your supplemental 
questions.

                                 

    [Submissions for the record follow:]
         Statement of Jeanne M. Alberti, Harvard, Massachusetts
    I am writing to explain my concerns regarding the WEP and the GPO, 
and to urge you both to pass H.R. 4391, the Public Servant Retirement 
Protection Act, and to work toward repealing both the WEP and the GPO.
    Both my husband and I worked for many years in the private sector, 
each of us earning enough quarters to be eligible for Social Security 
benefits upon retirement. When we started our family and bought a 
house, I continued to work by writing the local newspaper, and selling 
Avon products, which I could do from home while raising our children. 
My husband continued his education, getting his doctorate, and went 
into teaching at Northeastern, a private university.
    In order to help out financially, I finished my degree, and taught 
at a Catholic high school for two years before entering the public 
education system. Eventually we both decided to spend the largest part 
of our career years teaching in public education, myself at the high 
school level, and my husband at the university level. My husband, now 
deceased, had a gift for teaching and connecting with university-age 
students. I myself have loved teaching, and though retiring this year, 
will miss it greatly.
    Since my husband's death I have been receiving a small pension from 
the Commonwealth of Massachusetts, as he died before retiring, just 
after reaching his 50th birthday. His Social Security benefits, which I 
am not yet eligible for as his widow, are currently approximately $600 
per month.
    Having retired this year due to health concerns, and as I didn't 
start public school teaching until the age of 40, I will be receiving a 
pension of only 36% of my annual salary, which is only slightly more 
than the 2/3 of my husband's Social Security benefits to which I would 
be eligible next year on my 60th birthday. This completely wipes out 
for me any widow's benefits I might have been expecting. In addition, 
at age 62, when I might be able to begin collecting on my own Social 
Security benefits (which are approximately $350 per month at the 
moment), my benefits will ostensibly be cut in half due to the pension 
I am receiving from the Commonwealth of Massachusetts.
    Together, my husband's annuity and my pension total barely enough 
to cover my present living expenses. I foresee future possible medical 
expenses, and worry how I will cover them when the time comes. Although 
retired, I will be looking for ways to find additional income in the 
next few years, while I am still healthy and can do so. To have to pay 
more into Social Security in the next few years will be a very unfair 
situation considering my expectation of receiving little in return.
    I fail to see how either my public school teaching pension or my 
Social Security benefits could be construed as a ``windall'' or 
``double dipping.'' If I have worked at separate jobs, why am I 
penalized, and not able to collect benefits from each job worked?
    Teaching is hard work, and though my first inclination was that it 
would give me time with my family, I came to love the opportunities I 
was given through teaching to work with and be inspired by the 
teenagers I taught. I find it incomprehensible that I am now struggling 
to make ends meet because I changed careers from the private sector to 
committing myself to the community and our nation through public 
education.
    I respectfully urge the committee to move quickly to move the 
Public Servant Retirement Protection Act swiftly to final passage and 
enactment. In addition, I ask you please to look for ways to repeal 
completely both the WEP and the GPO as Congress continues to explore 
these issues.

                                 

                                            Midlothian, Texas 76065
                                                      July 20, 2004
House Ways and Means Committee
Social Security Subcommittee

    Dear Sirs:

    I am writing this letter as a plea to quickly pass the Public 
Servant Retirement Protection Act, which will ultimately repeal the 
Government Pension Offset of Social Security provision and the Windfall 
Elimination Provision. These laws penalize the people who have 
dedicated themselves to serving their communities and their country. 
Most of us have sacrificed financially in the first place by providing 
these services. As it stands now, I would never encourage anyone to 
enter the education field knowing what they would be facing at 
retirement age. My particular situation is as follows:
    I am a single woman and have 25 years of social security 
contributions (19 years that ``count''), but have spent the last 12 
years working for a public school district. I will be eligible to 
retire from Teacher Retirement Service (TRS)in 8 years. Since I am a 
secretary (lower salary=lower annuity), my retirement will not cover my 
living expenses. I was counting on supplemental income from social 
security to help offset this deficiency. I have recently attended a 
seminar, which clarified that my social security will be cut by 
approximately 66% because I will be drawing retirement from TRS.
    I realize that my contributions to social security ceased when I 
began my employment with the school district, but feel that I should be 
allowed to draw the full benefit that I earned with 19 years of prior 
contributions. Without this, I will fall into the poverty level and 
will most likely be forced to sell my home.
    My projected TRS retirement annuity will be approximately $1100/
month. My full social security benefit is $575/month. I will be hard 
pressed to live on $1675/month when I am 65 years old but if that 
social security figure is further reduced to $200/month, I will be 
forced to sell my home and rely on government assistance. This is NOT 
what I worked my entire life for.
    I'm not asking for anything more than what I feel I have earned but 
I would like to know that what I have contributed to social security 
was, indeed, mine and not be penalized for drawing retirement from TRS. 
Had I been self-employed these last 12 years, I would not have suffered 
from this reduction in benefits. Had I just stayed home and not worked, 
I would not have suffered from this reduction in benefits. Had I 
retired from ANYPLACE other than TRS, I would not have suffered from 
this reduction in benefits.
    I know that I am just one of many who have similar situations. 
Please listen to our pleas and move the Public Servant Retirement 
Protection legislation through your committee.
            Respectfully,
                                                      Judy A. Bates

                                 

   Statement of the Honorable Howard L. Berman, a Representative in 
                 Congress from the State of California
    Thank you, Chairman Shaw, Ranking Member Matsui and Members of this 
Committee for holding this hearing to highlight the unfairness facing 
some public employees upon retirement.
    The Government Pension Offset (GPO) and Windfall Elimination 
Provision (WEP) are two provisions of Social Security law that directly 
affect public servants who, throughout the course of their career, 
earned both a Social Security benefit and a benefit from a Social 
Security substitute, such as a state pension plan. The GPO reduces or 
eliminates Social Security spousal benefits if the worker's spouse has 
a government pension based on work that was not covered by Social 
Security. Likewise, the WEP reduces Social Security worker benefits 
based on work history by applying an arbitrary formula to calculate 
benefits.
    Public employees--teachers, police officers, fire fighters--face 
the possibility of losing up to two-thirds of their retirement benefits 
as a result of the GPO and WEP. While these two provisions were created 
to help equalize the treatment of workers, the consequences have proven 
to be a significant financial burden for many of our nation's retiring 
public servants.
    Today, more than 758,000 public servants in thirteen states today 
face up to a $306 reduction in their monthly Social Security income 
upon retirement.
    In early February 2003, Congressman ``Buck'' McKeon and I 
introduced legislation to repeal both the Social Security Government 
Pension Offset (GPO) and the Windfall Elimination Provision (WEP). Our 
bill, the Social Security Fairness Act (HR 594), has 300 cosponsors.
    Since introducing H.R. 594, I have been working with you, Mr. 
Chairman, other members of Congress and with various advocates to 
provide workers affected by the GPO and WEP with some financial relief 
before the end of the year. That is why I am an original cosponsor of 
H.R. 4391, the Public Servant Retirement Protection Act, introduced by 
Congressman Kevin Brady, which takes a meaningful step in granting some 
relief to these dedicated workers.
    The Public Servant Retirement Protection Act provides an immediate 
solution to the arbitrary WEP adjustment of worker retirement benefits 
by implementing a formula that calculates retirement benefits in 
proportion to each worker's actual work history. Specifically, the 
legislation repeals the arbitrary WEP formula and treats the Social 
Security contributions of public servants the same as those of the rest 
of the American workforce. Under this legislation, a worker's entire 
work history, regardless of whether he or she paid into a Social 
Security substitute, would be used to calculate benefits.
    Although H.R. 4391 does not address the GPO, it does provide 
immediate relief for retirees and their families while serving as an 
amicable bipartisan compromise. H.R. 4391 is an important first step 
leading to a full repeal of the GPO and WEP. I urge you, Mr. Chairman, 
to move this legislation to the Floor as quickly as possible.
    Thank you again for holding this hearing. I hope that this is one 
of many steps that will lead to the elimination of this inequity in our 
nation's Social Security policy.

                                 

         Statement of Carolyn J. Bishop, Belmont, Massachusetts
    Please accept my statement for the record for the hearing by the 
Committee on Ways and Means, H.R. 4391. The Public Servant Retirement 
Protection Act:
    As a statement on the unfairness of the current WEP provision I 
would like you to consider my story. I contributed to Social Security 
while a teacher in NY State for three years, while a teacher in a 
private school in MA for 6 years and during various summer jobs before, 
during and after college. I had my 40 quarters in and am eligible to 
collect benefits of over $600 a month and of course a portion of my 
husband's benefits should I survive him.
    However, because for 24 years I taught in the MA public schools I 
am receiving a pension from the Mass Teacher's Retirement System. This 
pension is based on 24 years of 3/4 pay because that is what I made as 
a full time Kindergarten teacher in the Brookline Public Schools. I 
retired at age 56 because of personal health reasons. Therefore I 
retired on 40% of my 3/4 pay, which amounts to about $15,000 a year . . 
. obviously not enough to live on!
    When my husband turned 65 in 2002 and went to the Social Security 
office to inquire about his benefits, the agent urged me to start 
collecting at my age of 62, and then gave me the bad news about WEP/
GPO: my benefit is reduced by 2/3s to $225 from which is now deducted 
by $66.60 Medicare since I turned 65 this spring. My survivor benefits 
would also be seriously reduced. Now if I were unfortunate enough to be 
single and trying to survive on my own pension plus SS you can see I 
could not manage.
    Teachers in New York State contribute to Social Security and a 
retirement system and are able to retire relatively comfortably. Not so 
in Massachusetts.
    As it is the unfairness of the situation still rankles! If I had 
not contributed to SS then of course I should not expect to collect. If 
I had been offered the option of contributing during my Massachusetts 
Public School teaching years and refused it, then I should not be able 
to collect. But to have contributed through those many years and not be 
able to collect what should be due me is UNFAIR! Add that to the fact 
that my income from my pension is exceedingly low, the spectre of 
struggling by in my senior years is very real, especially if widowed.
    It is ironic that ``public servant'' has come to mean just that, 
being treated as the lowliest of servants when it comes to collecting 
the Social Security to which we are due. When accepting and performing 
the low paying public position for the rewards of teaching in the 
public school, I never dreamed I would be penalized by the Social 
Security system at retirement.
    This unfair provision must be repealed and repealed retroactively 
to bring those of us who are being cheated into a living wage. Thank 
you for your consideration of my statement.

                                 

        Statement of Martha E. Blackwell, Sunnyvale, California
    At age 76, the GOP and WEP prevent me from retiring from part time 
teaching. My California State Teacher's Pension is $752 a month. My 
Social Security benefit has been decimated to $200 a month by the GPO 
and the WEP. My retirement income does not cover the rent and mortgage 
on my very modest Mobile Home in Sunnyvale, CA., not to mention other 
living expenses.
    I was married to a Methodist pastor for 32 years and assisted him 
in the churches he served while he paid into the Social Security 
system. During those years, I worked full time and part time (and paid 
into S S) and raised two children. I fully anticipated being eligible 
for a modest retirement income from my spouse's account as well as the 
portion I earned on my own. I am denied all but $200 because of my very 
modest California Teacher's pension of $752 a month. Divorced at age 
61, I earned a Master's Degree in order to resume teaching in order to 
support myself.
    I respectfully request that you repeal or at the least modify the 
formula in these laws which unfairly penalize teachers (as well as 
other public servants) such as myself who, after working many years, 
find ourselves living barely above the poverty line.
    I do not believe these laws were designed to create the 
circumstances I have described. I sincerely hope and pray that you will 
seriously consider the hardship that many of us are enduring and take 
action during this Congressional session.
    I heartily commend Anna Eshoo for her hard work on our behalf and I 
thank the 300 co-sponsors of HR 594.

                                 

          Statement of Charlene Bovee, Long Beach, California
    I do not have access to word perfect. I would like to respond to HR 
4391. I think Teachers et al should be able to get Social Security and 
their retirement. I am a widow and cannot even get my husbands social 
security because I get a teachers' retirement! Thank you for 
considering this response.

                                 

         Statement of Richard Kirk Bowers, Spring Branch, Texas
    This letter is to inform you that I am in favor of the repeal of 
the Social Security, Windfall Elimination Provision on federal retired 
employees. I paid in my quarters and feel that I am entitled to my fair 
share.

                                 

    Statement of Maurice A. Bracken, North Brookfield, Massachusetts
    I am a veteran teacher of electrical technology at Tantasqua High 
School in Sturbridge, MA. I have been here in the trenches for 20 
years. Although many years ago I took a substantial cut in pay and 
benefits to leave employment in the electrical trade for a career in 
public education, I am proud to say that I have made a significant 
difference in many young people's lives. I know this because the past 
graduates stay in touch with me and I am privileged to watch them grow 
into contributors to our society.
    I began working on a farm at the age of 13 and began contributing 
to Social Security at that time. I contributed into Social Security for 
20 years before I left the system to start work as a public school 
teacher in a state (Massachusetts) that has it's own public employee 
pension system. Now I find out that my benefits as a citizen 
contributor into Social Security will be severely depleted because of 
the GPO-WEP laws that currently exist. Worse than that, my spouse will 
not receive the normal death benefit from the system when I pass on!
    Truthfully, if I had know the consequences of leaving the Social 
Security system 20 years ago I doubt that I would have made the choice 
to switch careers. One of my former students, a gainfully employed 
electrician, wishes to make a similar career choice to teach in a 
public vocational school and I am advising him not to! This will be a 
loss of a fine teacher to the future of America. This example is 
typical of the hurdles the educational industry has to overcome in 
hiring qualified teachers in every subject area, due in no small part 
to the GPO/WEP laws.
    I understand the original logic of the law. I respectfully submit 
however, that my circumstance, which is typical, is not the intention 
of the original legislation. People like me, and our loved ones, are 
being penalized for making an unselfish career choice many years ago. 
This affects not only teachers, but also any public servant who retires 
from a non-contributing state. We are not seeking a ``windfall'', but 
rather are trying to secure only the benefits that we paid for, and not 
to have our families penalized because we choose to serve the country 
we love!
    I urge the Committee to favorably move the Public Servant 
Retirement Protection Act to enable its enactment into law. This will 
provide some temporary relief to my colleagues who are facing 
retirement soon. My ultimate goal is for the complete elimination of 
the GPO/WEP laws. I believe the Public Servant Retirement Protection 
Act is an important step towards that goal.
    Thank you for this opportunity to testify.

                                 

       Statement of Janet Brandwein, Newton Center, Massachusetts
      I retired in 2000 after having taught for 28 years in 
Massachusetts having moved to Massachusetts when my husband's 
profession brought us there. I taught in New York and Maryland and had 
paid into Social Security while working at other non-teaching jobs as 
well. I will be 67 years old in September and have paid into Social 
Security since age 16.
      I was fully vested only to learn that I would receive 
only 40% of what I would otherwise have been entitled to because of the 
WEP; after the fact and when it was too late to make a career decision 
based on this knowledge.
      The Windfall Elimination Provision was enacted after the 
fact of my paying into Social Security and thus withdrew the social 
contract promised by the government. I now receive $86 per month, 40% 
of what should have been my allotment and a sad thank you for a 
teacher.
      It is terribly unfair and discriminatory to single out 
and penalize those of us who chose careers in public service while 
retirees who worked in the private sector receive no penalty at all.

    In addition to the WEP's effect on retirement security, because of 
the Government Pension Offset provision, were I to be widowed, I would 
receive nothing in survivor benefits through my husband's Social 
Security despite the fact that, at age 70, and still working, he has 
paid into Social Security at the maximum rate for half a century. Who 
would choose a teaching or other public service career today knowing 
they would lose so much in benefits? ? ?

                                 

          Statement of Dennis E. Buccola, Rock Falls, Illinois
    I am writing to you with my concern about the Social Security Bill. 
I worked hard putting myself through college as a young adult. I 
entered the teaching profession because I wanted to work with kids and 
to help mold them into becoming successful citizens. While attending 
college I worked full time to keep my head above water. I continued 
working in retail for over 20 years. I have paid thousands of dollars 
into the social security program and am STILL paying into it. I have 
heard over the years I will not be able to collect any of this money 
since I am a teacher. How UNFAIR! If I am not able to collect SS, then 
why am I being forced to pay it? All I am asking is that I am given the 
SS that I am entitled to when I retire. It is so unfair that since I 
chose to enter the teaching field, that I will not be able to collect. 
Public servants should NOT be discriminated against. We are underpaid 
as it is. For those of us who have paid into SS and have over their 40 
quarters, should be entitled to collect their benefits or be given a 
refund of those contributions.

                                 

   Statement of Judith Michaels, California Federation of Teachers, 
                         Sacramento, California
    The California Federation of Teachers, American Federation of 
Teachers, AFL-CIO submits this testimony because of the serious affect 
the Government Pension Offset and Windfall Elimination Provision of the 
Social Security Act have upon our more than 100,000 active and retired 
members, specifically those who are members of the California State 
Teachers Retirement System (Cal-STRS. Many California teachers have 
earned Social Security benefits by working second jobs or from private-
sector jobs they held before becoming teachers. In addition, many mid-
career individuals reject teaching when they discover that they would 
have to give up Social Security benefits during retirement if they 
become teachers. Our teachers, former teachers, and prospective 
teachers cannot count upon a full Social Security benefit, either as a 
benefit from work they may have done under Social Security or from 
benefits earned by a spouse.
    The California Federation of Teachers supports H.R. 4391, the 
Public Servant Retirement Protection Act (PSRPA), revising the Windfall 
Elimination Provisions of Social Security, as a step forward that would 
partially correct current inequities by looking at each member's full 
career, work covered by both Social Security as well as in California 
teaching. We realize that H.R.4391 addresses only the Windfall 
Elimination Provision. Since H.R. 4391 does not address the Government 
Pension Offset (GPO), we urge your support for an amendment to the bill 
that will address the harsh effects of the Offset on California public 
school teachers. H.R. 594, the Social Security Fairness Act, 
legislation that would repeal both the WEP and the GPO, now has 300 
bipartisan cosponsors, including several of the cosponsors of H.R. 
4391.
    We urge you to take steps to make sure that public employees will 
not have to worry about their retirement because of the provisions that 
reduce Social Security spousal and worker benefits. We would like to 
see both H.R. 4391 and legislation to address the Government Pension 
Offset pass the 108th Congress and become law. Passage will encourage 
qualified teachers to remain in the classroom, and support mid-career 
individuals to become public school teachers without giving up the 
Social Security benefits to which they would otherwise be entitled.

                                 

Statement of Gary Lynes, California State Teachers' Retirement System, 
                         Sacramento, California

                              Introduction

    Established by State law in 1913, the California State Teachers' 
Retirement System (CalSTRS) provides defined pension retirement 
benefits to more than 735,000 active and retired public school teachers 
and their beneficiaries. Thus, CalSTRS was in operation some 22 years 
before Social Security was created. At the time Social Security was 
established, California's teachers and all other State and local 
government workers were barred by Federal law from participating. 
California public school teachers are the largest single group of State 
and local government employees in the country who do not participate in 
the Social Security system. Through sound management over nine decades, 
CalSTRS has developed into the third largest pension system in the 
United States, with assets of over $116 billion. CalSTRS currently 
provides almost $5 billion a year in retirement benefits.
    The California Teachers' Retirement Board has previously expressed 
its strong concerns about the impact of the Government Pension Offset 
(GPO) and the Windfall Elimination Provision (WEP) of the Social 
Security Act, particularly on California's ability to recruit and 
retain workers from other professions into second careers as teachers 
and teachers from other states. California would be better able to 
recruit and retain future California educators if these professionals 
did not face reductions in their future Social Security benefits. 
Accordingly, in 2003, the Board supported California Assembly Joint 
Resolution 29, which requests that the President and U.S. Congress 
enact legislation that removes the burdensome effects of the WEP and 
GPO. Absent full repeal of the WEP and GPO, CalSTRS supports efforts to 
eliminate the inequities resulting from the application of the WEP. 
Benefits should not be determined by provisions that are arbitrary and 
unrelated to the very government pensions which subject those 
individuals to the offsets.
    H.R. 4391, the Public Servant Retirement Protection Act (PSRPA) 
represents a good first step to addressing these inequities. The 
Teachers' Retirement Board supports the general approach taken by the 
PSRPA to address the inequities created by the WEP under current law. 
In addition, the Board stands ready to work with the Subcommittee in 
exploring possible legislative solutions to relieve similar inequities 
created by the GPO.
The Windfall Elimination Provision Hinders Efforts to Attract Qualified 
        Teachers
    CalSTRS members do not pay the Social Security payroll tax on their 
earnings from CalSTRS-covered service, and therefore are not entitled 
to Social Security benefits for such service. Nonetheless, many CalSTRS 
members are eligible for Social Security benefits either because they 
were employed in Social Security covered positions for some period of 
time or are the spouses or widow(er)s of individuals who were employed 
such positions. However, the WEP reduces Social Security benefits of 
teachers in California public schools, who worked in education long 
enough to receive a CalSTRS pension and also worked other jobs for 
which they paid Social Security taxes long enough to qualify for Social 
Security retirement or disability benefits.
    Many California educators have complained that the WEP creates an 
unfair reduction in the Social Security benefits that they have earned. 
In addition, California schools have indicated that imposing a 
reduction in Social Security benefits has a negative effect on efforts 
to recruit and retain teachers. Specifically, the WEP may reduce the 
willingness of people who have worked in Social Security-covered 
service to change to employment, such as public school teaching in 
California, if it results in a reduction in Social Security benefits. 
This is particularly true for individuals who are considering teaching 
as a second career or taught in another state under Social Security.
    Creating an impediment to people who might otherwise want to change 
careers to become public school teachers in California may hinder 
efforts by school districts to attract new people to the California 
classroom. Currently, there are over 100,000 public school educators in 
California who are eligible to retire and over 35,000 who are 60 years 
old or over. Clearly, most of these people will be retiring over the 
next decade. Although many enter the teaching profession at the 
beginning of their career, a significant portion become teachers as a 
second career, after lengthy work in the private sector covered by 
Social Security. In addition, individuals work as educators in a state 
in which their earnings are covered by Social Security, but later 
desire to teach in California. The current WEP may cause persons who 
otherwise would receive a full Social Security benefit to decide not to 
become public school teachers in California, if their Social Security 
benefits would be substantially affected by their California service. 
This makes it more difficult for California school districts to find 
qualified educators to replace those who will be retiring in the near 
future.
H.R. 4391 Is a Significant Step Forward to Correct Inequities Caused by 
        the WEP
    Unlike the arbitrary WEP offset formula, which reduces the Social 
Security benefit from the covered employment unless the individual has 
30 years of substantial Social Security covered earnings, the PSRPA 
replaces the WEP with an approach based on each worker's actual work 
history. More fairly, it uses the standard benefit formula based on an 
individual's entire work history as if all the individual's earnings 
were subject to Social Security taxes with the benefit multiplied by 
the percent of earnings subject to Social Security taxes. Similar to 
the current Social Security benefit formula, the earnings that are 
covered and the earnings that are not covered by Social Security would 
be adjusted for inflation.
    A more detailed analysis of H.R. 4391, its impacts on CalSTRS 
members, and issues raised by the current version of H.R. 4391 is 
attached to this written statement.

                               Conclusion

    PSRPA represents a new approach to addressing some of the concerns 
of the Windfall Elimination Provision. The proposal would result in a 
larger and more equitable Social Security benefit for most affected 
CalSTRS members. For some future workers, there could be a reduction in 
Social Security benefit as compared to the current WEP, although 
typically the cut would be relatively modest compared to the increases 
in Social Security benefits to others.
    Although the Teachers' Retirement Board remains concerned about the 
adverse impact of the Social Security offsets on California's efforts 
to recruit and retain people to serve as public educators in 
California, the Board, on behalf of its 735,000 members, supports the 
efforts reflected in the Public Servant Retirement Protection Act to 
provide a more equitable adjustment in Social Security benefits to 
those members who receive both government pensions and Social Security 
benefits. We stand ready to work with the Subcommittee on some minor 
changes to the legislation to improve its equitability and resolve 
potential administrative burdens.

                                 

       Statement of Robert Arthur Cannon, Rockport, Massachusetts
    I am writing in favor of the ``Public Servant Retirement Protection 
Act'' as a proper and appropriate step to correct the existing 
situation, which is blatantly unjust and a grievous disservice to 
public servants and the people they serve.
    Approaching retirement, my wife and I decided to finish our working 
careers in public education as a way to contribute to the future of our 
community, state, and country. We had no idea what a personal financial 
calamity would ensue due to the misfortune of our living in one of a 
few states where public servants are singled out for a so-called 
``Windfall Elimination Provision'' or ``Government Pension Offset''. 
After a lot of effort to fathom this complicated and arbitrary WEP/GPO, 
it is our understanding that we must either give up pension benefits in 
the last years of our working lives or lose roughly two thirds of the 
Social Security benefits we have already earned. Believe me, when you 
look at the numbers for people changing careers to serve the public, 
this is no windfall! If the 108th Congress does not take action soon, 
we will have to leave our service careers in order to meet basic family 
financial responsibilities. How ironic it will be if we--and many 
others in our situation--have to leave our government jobs in order to 
keep the government retirement benefits of Social Security we have been 
earning all the previous decades of our working lives.
    At a time when the Committee on Ways and Means states that 
``America's economy is strong and growing'' your action is needed to 
backup stated administration priorities for education and other public 
service efforts by supporting H.R. 4391 now.

                                 

             Statement of Henry L. Carbone, Fort Kent, Main
    I would like to ask for help in correcting a wrong that has been 
done to retired teachers in the State of Maine and other states that 
have their own retirement systems.
    The Public Servant Retirement Protection Act offers an important 
first step toward the ultimate goal of repealing both the WEP and the 
GPO. It will make a real difference for many public employees, who will 
receive increased Social Security benefits as a result.
    I recently retired after thirty-eight of teaching in secondary 
education and now faced with the realty that my other career as an 
adjunct faculty member at the University of Maine at Fort Kent will 
have been and is for not. I have been employed for twenty-seven years 
at the university, working to supplement my state retirement because of 
low teaching wages. Now I find that my social security will be reduces 
by sixty percent because I already have a pension from the state. This 
is not fair, as I have worked two careers so I would be able to enjoy 
my retirement. This is not a case of double dipping. I have put the 
hours into both jobs and should be able to receive the benefits that I 
am entitled to from each.
    We who have earned Social Security benefits are not getting a 
``windfall.'' We are merely asking to receive the benefits we earned.
    I urge the Committee to move this important bill quickly to final 
passage and enactment into law, and I urge Congress to continue to work 
toward full repeal of both the GPO and the WEP. Thank you in advance 
for any help you give on this important matter. Time is of the utmost 
importance to me as I am quickly reaching full retirement age.

                                 

            Statement of Margaret Ann Castro, Cypress, Texas
    My name is Margaret Ann Castro. I am a teacher in the Cypress 
Fairbanks School District in Cypress, Texas. I have taught in this 
district for 14 years, and twice during that time have been named the 
Spotlight Teacher of the Year for my campus (Millsap Elementary and 
Hamilton Elementary). I have also been a participant in the NEWEST 
program, which is a 2 week training program sponsored by NASA for math 
and science teachers. I received my Masters in Early Childhood 
Education in May 1985 after working 13 years in the business world. 
Throughout my years of teaching I continued to work part-time to 
supplement my income, especially once my two children began college. I 
love teaching, and do not want to give up this career. However, I face 
losing major portions of my own social security income and that of my 
husband's (in the case that he predeceases me) due to the unfair laws 
currently in effect. I am asking you to correct this inequality to me 
and to all other public servants the law affects. My last statement 
from social security states that at retirement age of 66 years, my 
benefits would be $663 a month. This is money I paid into social 
security myself. I WOULD NOT be ``double dipping''! I have paid into 
two different retirement programs and should be able to receive 
complete benefits from both without being penalized. With my 
understanding of the law as it now stands, I would stand to lose 
between $600 and $700 per month from social security benefits owed to 
me or to my husband, merely because I have served as a public school 
teacher. This represents a major drain on my retirement income. This is 
not fair, and it is a shame to penalize those of us who teach our 
future generations. I ask you to please revoke the existing laws and 
quit penalizing teachers and other public servants. Thank you.

                                 

                 Statement of Jeff Clary, Spring, Texas
    To Those People Who Care About Our Children:
    I write to you as a teacher. I made a career change six years ago 
and have invested my life since in young people. I always hear people 
talk about the importance of education, how children are our future. I 
have chosen to not only talk, but to do something. I hope you will join 
me!
    Recently, I have discovered that my government has decided that the 
Social Security money that I paid in during a previous career shouldn't 
be mine. I am not referring to unearned benefits. I am talking about 
money I contributed. Although it really isn't relevant, it should be 
noted that in my previous career, I was an independent contractor, so I 
paid ALL of those benefits directly, myself! Now, I discover that 
teachers, who are in another retirement system, are barred from 
collecting their SS benefits. Imagine that, the people who are in 
charge of caring for our future are asked to turn over all those 
retirement earnings and start again at zero. Where is the support for 
our children in those actions?
    We constantly hear of teacher shortages. The newspapers tell story 
after story of troubled children facing difficult times. We only have 
to turn on the TV to discover the plight of thousands of young people 
born into desperate situations. Yet teachers across this country 
dedicate themselves to fighting for those kids. A short visit with any 
seasoned teacher will expose you to a series of sad stories of kids in 
need.
    It is no secret that those very teachers can never aspire to earn 
their way to the top levels of society. Personally, it is my wife's 
income that allows me to continue to teach and maintain my standard of 
living. I am not asking for a handout; simply allow me access to my 
money.
    If you are truly concerned about our children, then you will 
support those with whom you have entrusted their care. Please allow 
Texas teachers to collect all the retirement benefits they earn, both 
as teachers and in their other careers.
    Do it for the children!

                                 

    Statement of Robert Gray, Colorado Public Employees' Retirement 
                              Association
    Chairman Shaw, Ranking Member Matsui, Members of the Subcommittee, 
I am Robert Gray, Director of Government Relations for the Colorado 
Public Employees' Retirement Association (PERA). PERA covers 177,000 
active state, school, local government, and judicial employees in 
Colorado. PERA also pays monthly lifetime benefits to 67,000 retired 
public employees and survivor beneficiaries. Except for a few of the 
local government members, PERA members are not covered by Social 
Security from their public employment with a PERA employer.
    I would like to thank you for having the hearing on July 20 and 
receiving written testimony on H.R. 4391, the proposed Public Servant 
Retirement Protection Act (PSRPA). PSRPA would affect thousands of 
state, school, and local workers who will receive or who already are 
receiving benefits from public employee retirement systems from their 
employment not covered by Social Security.
    Colorado PERA has followed the Social Security Windfall Elimination 
Provision (WEP) since it was enacted over 20 years ago and revised in 
1988. There have been a number of attempts to revise or repeal WEP 
since then. H.R. 4391 has many strong features, and Colorado PERA urges 
the Subcommittee to approve this bill and send it to the full Ways and 
Means Committee.
    The original purpose of the WEP is to ensure that public employees 
who work a part of their career in Social Security-covered employment 
and the other part of their career in public employment outside Social 
Security, do not receive an unfair advantage from the weighting in 
Social Security's regular benefit formula. Social Security is a social 
insurance program in which benefits paid to low-income workers replace 
a higher percentage of pre-retirement earnings than for higher-income 
workers. For example, in 2004 Social Security replaces 90 percent of 
the first $612 of a worker's AIME (Average Indexed Monthly Earnings), 
and replaces 32 percent of the next $3,077 of AIME.
    Because weighting occurs in all Social Security benefit 
calculations, it makes sense that public employees who have pensions 
from employment not covered by Social Security should be treated for 
Social Security benefits in some manner that takes into account their 
entire career earnings. Public employees who also have other employment 
in their careers that was covered by Social Security should not be 
accorded the advantage normally given only to low-income career workers 
in the calculation of their Social Security benefits.
    PSRPA would accomplish this goal better than WEP. PSRPA would use a 
sounder concept for calculating the Social Security benefit. It 
compares the average indexed earnings covered by Social Security to the 
average indexed earnings during the worker's entire career, and bases 
the Social Security benefit on this ratio.
    PSRPA would apply to public employees' Social Security benefits the 
same earnings-based weighting that is currently used in Social Security 
benefit calculations. According to examples prepared by the 
Subcommittee, the Social Security benefit under PSRPA to a low-wage 
career earner would replace a higher percentage of his average SS-
covered indexed monthly wages than would be replaced for a medium-wage 
earner or a high-wage earner.
    The WEP calculation, on the other hand, uses fairly arbitrary 
percentages in order to calculate the ``windfall'' reduction. Employees 
who meet other fairly arbitrary thresholds of income earned and years 
worked are exempt from WEP.
    Colorado PERA prepared seven examples of employees with differing 
work patterns. In six of the examples, the Social Security benefit 
under PSRPA would be higher than the benefit under WEP. This occurred 
whether the employee first worked under Colorado PERA and then went to 
a Social Security-covered job, or started in Social Security and ended 
the career under PERA. A table showing results for all seven examples 
is attached.
    For worker 7 in the table, WEP provides a larger benefit than PSRP, 
but only because the worker has 33 years of ``substantial earnings'' 
under Social Security and is exempt from WEP. However, PSRPA would 
grandfather active and retired public employees, including worker 7. 
Under H.R. 4391 an employee would receive the greater of the benefit 
under WEP or PSRPA if he or she is already retired or had public 
employment outside Social Security prior to 12 months following 
enactment of H.R. 4391.
    The examples in the table are consistent with the findings of 
several other groups that show that most public employees would receive 
larger benefits under PSRPA than under WEP.
    In addition to providing larger benefits under a fairer method than 
WEP, Colorado PERA believes that H.R. 4391 is attractive for other 
reasons.
    Many Colorado PERA members make good use of portability provisions 
in PERA to purchase additional years of service credit based on prior, 
nonvested employment with another employer. In many cases, the prior 
employment was covered by Social Security. The maximum reduction under 
WEP is $306 per month in 2004, but in no case greater than one-half of 
the PERA retirement benefit. The PERA benefit, for purposes of the WEP, 
excludes the purchased service if the prior employment was covered by 
Social Security. Currently, PERA completes a special form to calculate 
the correct PERA benefit that is used by SSA for determining the WEP 
reduction in Social Security benefits. H.R. 4391 would eliminate this 
step because under PSRPA, the amount of the PERA retirement benefit 
would not affect the Social Security benefit.
    The cost to the Social Security trust funds is far less for H.R. 
4391 (PSRPA), at $7 billion over the next 10 years, than the cost of 
full repeal or the cost of H.R. 4234, which would eliminate WEP for 
public retirees with income below a certain figure.
    H.R. 4391 addresses how best to provide benefits to public 
employees who have also worked in covered employment for enough years 
to qualify for Social Security benefits based on those earnings. It 
does so without mandating Social Security coverage.
    Colorado PERA opposes mandatory Social Security because the current 
PERA retirement system has worked very well in the eyes of employees, 
retirees and employers. PERA provides very comprehensive benefits as a 
substitute for Social Security, and PERA is an attractive part of the 
benefits package for Colorado public employees. All seven examples from 
the attached table show that the worker received a significantly larger 
benefit if he was covered by PERA during his entire career than if he 
was covered by Social Security during his entire career.
    The Colorado General Assembly has stated several times that it also 
believes that its employees are already well-served by existing 
retirement plans that do not include Social Security. Mandatory Social 
Security coverage would increase costs to taxpayers and employees, and 
challenge the soundness of the current plan. In the long run, mandatory 
coverage would not significantly benefit Social Security.
    The Social Security Administration testified at the hearing on July 
20 that it would be difficult to obtain data for employees' earnings 
prior to 1978, or to estimate it. The Internal Revenue Service has 
received wage and salary earnings reports from all employers for years, 
and if it was retained, it would seem the IRS could transmit this 
information to SSA. Colorado PERA would be willing to work with federal 
agencies and national public pension groups to try to find a workable 
solution to data problems.
Conclusion
    Colorado PERA urges the Social Security Subcommittee to adopt H.R. 
4391 and greatly appreciates the efforts of the sponsor and cosponsors 
to improve equity in the calculation of Social Security benefits for 
state and local workers who have earned those benefits.
    Thank you for the opportunity to submit this testimony. I would be 
glad to provide further information or answer any questions the 
Subcommittee may have.

                                 

                                     Braintree, Massachusetts 02184
                                                      July 15, 2004

    Dear Sir or Madam:

    I am a reading specialist for the Braintree Public Schools in 
Braintree, MA. I spend my day helping children in grades 1-5 improve 
their reading skills, something I consider extremely important. I am 
writing to you concerning the Windfall Elimination Provision, 
Government Pension Offset, and the Public Servant Retirement Protection 
Act. I want to thank you for working on this bill because its passage 
will make a tremendous difference to my family and me.
    I am 51 years old and left a position in private industry in 1994. 
I had worked for 13 years in an extremely well-paid position, a systems 
analyst in the communications industry. I left my job to get my 
master's degree in education from Lesley University in Cambridge, 
Massachusetts; something I had always wanted to do. It took me four 
years to complete my degree and find a teaching position. Because of 
the years I spent working in private industry and the years spent 
working on my graduate degree, I will never be able to receive a full 
teacher's pension. In addition, the pension I will receive for those 13 
years at my former company will be miniscule. Little did I know I would 
have little else on which to fall back.
    When I left what was then the NYNEX Corp. (now Verizon) to go into 
education, it was for all the right reasons--social security and 
retirement issues never entered my mind. I knew I would be taking a 
tremendous salary cut (I am making about the same salary now in 2004 
that I was making at NYNEX in 1994). However, I had absolutely NO idea 
that making this particular career change would have such a detrimental 
effect on my retirement income. The public pleas from state and federal 
government encouraging those in business to switch careers and enter 
teaching failed to inform about what we would be giving up. Many of the 
years that I was employed in the telephone industry seem to be for 
naught when it comes to my Social Security benefits. I also don't 
understand why, as a spouse, my survivor benefits will be cut. My 
husband has worked only in private industry, so that represents a 
significant loss for me as well.
    I worked in private industry while my children were small. 
Financially our family, like so many others, required two incomes to 
make ends meet. Those were very difficult years for us. However, during 
those years, one consolation to me was that I was building retirement 
security. What is the windfall that this provision speaks of? It is 
only money I earned through hard work and sacrifice. To think that I am 
going to receive basically no credit for that work and also stand to 
lose most of my husband's benefit because I chose to enter the teaching 
profession seems cruel, unfair, and I must say, unfathomable.
            Sincerely,
                                                   Patricia E. Cook

                                 

               Statement of Tracey Cook, Lisle, Illinois
    I am writing to support the passage of the bill. My husband, Donald 
R Cook and I are both impacted by the current laws that prevent us from 
collecting our social security benefits at 62 or 65. We are not unique. 
We never expected to get rich in our careers. We have simple goals, but 
we do believe that we deserve the benefits we have paid. Both of us 
paid into social security in our first careers; both of us have earned 
the necessary credits to receive benefits. However, both of us chose to 
enter public service careers. I am a teacher and he is a firefighter. 
When we decide to retire, we will receive reduced benefits, if any, 
from Social Security. Public servants in other states receive benefits 
from more than one retirement plan. I have a friend in Montana who not 
only receives his full teacher pension, but also his pensions from BLM 
and Social Security.
    I decided to become a teacher at age 40. I will never teach long 
enough to receive the pension equivalent of a thirty-year career. There 
are many answering the call to teach who bring the wisdom of a former 
career to the classroom. This is a benefit to the students and the 
educational system in general. Every career-changing teacher in 
Illinois is penalized for their decision by not being able to receive 
full social security if they also choose to take TRS benefits when they 
retire. We do not have the choice to continue to pay into the Social 
Security system. We are required to pay into TRS. Many teachers do not 
realize this situation until their first job. Many do not stay once 
they realize the long-term financial implications.
    Why do legislators think we will become so rich? Firemen typically 
work 56 hours a week and then work a second job to support their 
families. Their wives usually juggle around their schedule to work a 
job as well. Teachers put in long hours (60 hours a week) during their 
nine and 1/2 months active teaching time and more hours retaining their 
certification and curriculum planning during their 2-month ``vacation'' 
time. Many teachers work another job in the summer to help make ends 
meet. People in both of these careers could be doing something that 
makes more money, but then who would save your houses when they burn? 
Who would teach your children?
    You have chosen to punish us in a monetary fashion for dedicating 
our lives to the community. You, legislators, have a separate pension 
plan, at no cost to you just because you were elected to office. It is 
time to allow us to collect the full benefits of all of our pensions, 
just as you, the ``servants of the people,'' do.
    Please note that the WEP and the GPO unfairly punish people who 
chose to become firefighter and teachers, in spite of the long term 
financial consequences. We cannot afford to continue penalizing 
teachers and firemen. With our fragile education system and even 
greater hazards in the fire service, our nations needs dedicated 
individuals who are appreciated for their efforts, not punished at the 
end of their careers.
    Please also note that we are not asking for a ``windfall;'' we are 
only asking to receive what we have earned. My friend who stayed at 
home and never had a career will receive more social security benefits 
than me. That just doesn't make sense.
    Please also note that the Public Servant Retirement Protection Act 
is an important beginning with the goal of repealing both the WEP and 
the GPO. This will impact many public employees by allowing them to 
receive what they have already earned.
    I am asking you to get this bill out of committee so that it can be 
passed and enacted into law.
    Then I ask you to work quickly to repeal both the GPO and the WEP. 
We need good teachers in our school system. We can make a difference by 
getting career-changers into the schools. Repealing the GPO and WEP 
will allow them to make that transition without penalizing them with 
long-term monetary consequences. Within the next two years, the country 
will need over 200,000 teachers to replace those who retire. If you 
really value education, you cannot fail to repeal GPO and WEP.
    Thank you for your time and consideration.

                                 

              Statement of Audrey Cournia, Sparks, Nevada
    I have been a teacher for 40 years and retired in 1997 from Washoe 
County with 20 years of service qualifying me for a pension from the 
state of NV which approximates 50% of my salary. In addition I have 
worked in other capacities earning more than the required 40 credits to 
qualify for social security. It was not a lot, but my $300 a month was 
arbitrarily cut to $150 a month. These work credits had nothing to do 
with my pension and I fail to see how it can be considered a windfall. 
It is as unfair as any legislation can be and it singles out public 
employees in a discriminatory fashion. I feel quite sure that public 
employees in the Congress are not subject to this same unfair 
treatment, or it would have been rectified long ago. Please pass HR 
4391 as at least a first step in bringing justice to those Americans 
who have chosen public service and are being treated so poorly!

                                 

                Statement of Paul A. Cyr, Greene, Maine
    Thank you for giving me this opportunity to write to you.
    I am fifty-seven and a half years old and I work for the state of 
Maine Department of Transportation as a Highway Worker II. My job is 
driving truck--winter and summer--and when I'm not actually driving I 
am doing heavy physical work. I've worked for the state of Maine for 
approximately nine and a half years. The first three and a half years 
were as a Highway Worker I. The job was mainly flagging for eight to 
ten hours a day, and at forty-seven years old it wasn't easy standing 
on hot top all day or being out in 10 below zero weather. While doing 
this job I've had the driving public swear at me for holding them up 
for three minutes, or people going by and hollering at me to get a real 
job. There have also been numerous times when I was almost hit by cars 
and in some cases the drivers actually laughed about it. I took the 
insults and obsenities thinking I would just do what I had to and it 
would pay off in the long run--that when I retired I would have a 
pension from this job to go along with my social security.
    Before I went to work for the state of Maine I was a sheet metal 
journeyman. I spent four years going to school at night to get my state 
license as a sheet metal worker. I worked for a copy while going to 
school and stayed with them for approximately twenty-five years. After 
that I worked for another metal shop for about four years until they 
filed for bankruptcy. And than it was another metal shop company for 
three years until I was let go for supposedly not being able to keep up 
with the younger people. These companies had very few benefits--no 
pension, no paid vacations, no bonuses, some paid holidays, and some 
had very limited health insurance. During all those years I installed 
duct work in dirty paper mills, in buildings with asbestos, and out in 
the cold and heat. I was paying into Social Security during this time 
and thought I would have a SS check when I retired. I couldn't put 
money into savings for retirement because it took all I had to be able 
to get by and pay the bills.
    Then after working with no benefits or pension all those years and 
being out of work for two years, I landed a job with the state of 
Maine. After being a state worker for seven years I went to a 
retirement seminar and learned about the GPO and WEP. I was very upset 
by what I was told so I went to my Social Security office in Auburn, 
Maine. The person I spoke to told me I would loose about a third of my 
Social Security benefits because I worked for the state of Maine. To 
add insult to injury, she told me that I should not have taken this 
job, but should have found work somewhere else! But as I told her, I 
had been out of work for two years when I got the job with the state 
and figured that with their pension and Social Security I would be able 
to get by when I retired. But now the way I feel they might as well 
bury me in my work clothes, because I'll probably be working until I 
die.
    From what I see the future looks pretty bad for me. With taxes 
going up all the time as well as the cost of living (gas, lights, 
insurance, etc.), I'll never have enough to make ends meet if I retire. 
Also, there has been a woman in my life and we can't get married 
because if we do and she draws any of my state of Maine pension after I 
die she will get penalized on her Social Security. And I won't do that 
to her. And why should she get penalized anyway?
    In my opinion HR4391 is not a good bill for anyone and will cost 
more to implement than just repealing the GPO and WEP. Just give me the 
money that I earned and put into Social Security over the years--all of 
it, no more and no less. And do not penalize my fiance either. Please, 
please repeal these two unjust laws so that people like myself that 
have worked so hard for so many years (four of which were serving this 
country in the military) can end our working days with dignity and a 
sense of self worth and accomplishment.
    Thank you.

                                 

       Statement of Therese K. Desmarais, Rockport, Massachusetts
    My name is Therese K. Desmarais. I am the only child of first 
generation Polish parents, the first girl on both sides to go to 
college. I paid my own way through a state college in order to earn my 
Bachelor's Degree in Elementary Education, and then attended a private 
university to complete my Master's Degree in Education. I was married 
in 1965, and continued to teach full time, attend graduate school part 
time and summers, and had two children.
    When the children were born, I was not allowed to be in the public 
schools after my seventh month of pregnancy. My husband was laid off 
from a computer-based company, and we moved to Massachusetts in 1970. 
Since I was 100 miles away from both sets of grandparents and extended 
family, I stayed at home to raise my two children until they were of 
school age.
    I returned to the public schools on August 24, 1975 and worked for 
two public school systems until my retirement at age 60, on August 24, 
2002.
    During that period of time, my parents began having age related 
health issues. I cared for my mother until 1996, when I was forced to 
turn to a nursing home because of her declining health, and the 
beginning of my father's poor health due to colon cancer. My husband, 
Richard had a serious heart attack in 1997, and I had to continue 
working because he was self-employed and our medical insurance was 
available through my teaching job. Richard was self-employed for thirty 
years.
    In that same year, I was diagnosed with the same breast cancer that 
my mother was recovering from in 1994. After two surgeries and 
radiation, I could no longer keep up with the two round trips a week to 
my hometown of Hartford, Connecticut to care for both parents. My 
father wished to remain in the house he had built for us fifty years 
earlier, and to be near the Polish Catholic Church and his Carpenter's 
Union, his only sources of peer support.
    I incurred many bills while caring for them, as they were both 
receiving Social Security. My mother's Social Security went toward 
payment of the nursing home. I managed my father's household bills, 
taxes, insurance, food, fuel, and clothing costs for those five years. 
My mother died in February 2001. My father died on Father's Day of 
2001.
    Both of our children attended college. Our daughter did a mid-
career change from finance to teaching, attending Harvard University 
School of Education in order to comply with certification in 
Massachusetts for Math and Science teachers. She taught for two years, 
and is presently on maternity leave with her second child.
    Upon my retirement, we relocated to our daughter's place of 
residency in order to be close to grandchildren and family, and 
eventually help with childcare, as she will return to work as a Math/
Science teacher in a public school.
    My husband, Richard James Desmarais, died on February 14, 2004 
after living in our retirement home for nine months. Our second 
grandchild, Talia Therese was born February 5, 2004. Those nine days 
were filled with the most intense joy one could ever have imagined.
    Our son and his new wife were visiting the new baby when Rich had 
his fatal heart attack here at home, and he died in my arms, with my 
son and new daughter-in-law at my side. I can never forget the sadness 
of the ensuing weeks and months. Richard's death caused his ninety-
year-old mother to be hospitalized with grief, in shock, over losing 
her son.
    I then began making all the arrangements for his funeral, tried to 
sort out his company which death with Information Systems, and our 
finances. It was at that time that I realized that I was not eligible 
for his social security widow's benefits because I was retired and 
receiving my teacher's pension from a private retirement board.
    Because of Richard's history of heart disease, (his father died of 
a heart attack, his mother has had a triple bypass twice), he was only 
able to get minimal life insurance before his parents were diagnosed 
with heart disease. It was minimal coverage. Since he was self-
employed, he not only paid the standard Social Security tax; he paid 
twice that amount.
    Richard began working on tobacco in 1954 at the age of 14. He 
worked very hard, providing all the necessities to both his children, 
my parents, his mother who is still living. He contributed to the 
Social Security System for fifty years, expecting that it would help, 
along with my retirement to allow us to live in our own home, as 
independently as our health would allow.
    The Government Pension Offset (GPO) and Windfall Elimination 
Provision (WEP) are causing me to loose my home, my independence, my 
simple but quality life style of caring for family and community 
members. I have been receiving the same social security projection 
notices that everyone else receives not knowing that I would loose them 
upon my husband's death, when I need it the most. I was not trying to 
cheap or double dip, as the writers of that bill projected. I need it 
to pay my mortgage, my taxes, and my car insurance, buy food, fuel, and 
clothing.
    I urge you to consider the impact this is having on my family, 
especially my daughter, whom I never want to see in this position at 
any point in her lifetime.
    I urge you to consider my situation when you meet to discuss this 
bill addressing the GPO and WEP. Richard paid into social security for 
fifty years so that he and his family would have financial security.
    I do not have him to help me through this sad time. Please consider 
my situation, and know there may be many others who are depending on 
your support of this action.

                                 

         Statement of Alfred E. Devereaux, Lenox, Massachusetts
    I would like to submit for testimony my personal distress caused by 
the GPO WEP.
    I taught in the public schools of Massachusetts for 24 years and 
retired early. I currently receive $609 per month in retirement 
benefits.
    For the past 16 years I have been self employed and have 
contributed to Social Security.
    I was surprised to find out just three years ago that I would only 
be eligible for a portion of my Social Security.
    I had been counting on the full amount that was revealed in the 
statements that I was receiving from the Social Security 
Administration.
    I was assuming at the age of 65 I would be able to get by on the 
combination of my Social Security, my wife's Social Security and my 
small teacher's pension.
    Unless this law is overturned I do not see how I can get by unless 
I continue to work full time.
    It is not fair to have to pay in to the system and not receive the 
benefits that are accorded to other people that pay the same and have 
not worked as a public servant.
    I realized going into teaching that the rewards were not 
necessarily monetary, however, I didn't realize going in that I would 
be penalized further.
    Please repeal this law and allow our teachers, police, firemen, and 
other public servants in Massachusetts that work a second job to be 
fairly treated.
    Thanks

                                 

             Statement of Katie DeSotell, Aurora, Illinois
    I am writing in regard to the Social Security issues facing me and 
many other Americans. I am very proud of my work as a teacher and I 
feel that I have given a great deal of myself serving my community as a 
teacher.
    Raised in a middle class neighborhood, I worked to put myself 
through college. While my parents helped with the cost of my education, 
I worked part time during the school year as well as the summer to put 
myself through school. During my beginning years as a teacher it was 
necessary for me to work a second job to meet my financial obligations.
    During high school, college and for part of my teaching career, I 
contributed to Social Security. I do not feel my contribution to the 
Social Security funds is any different than anyone else's contribution. 
I do not feel that I should be penalized for serving my community as a 
teacher while working a second job.
    Please allow me and other public servants the opportunity to obtain 
our fair share when we reach retirement. I have paid into Social 
Security and should be allowed to collect upon retirement from the 
teaching profession.
    Thank you very much for the opportunity to share my thoughts.

                                 

                                       Foxboro, Massachusetts 02035
                                                      July 20, 2004

    Dear Hearing Committee Member,

    Please address the unfair impact of the Windfall Elimination 
Program (WEP) which has caused many teachers like me, who left industry 
to work in our public schools, to lose the benefits for which they have 
worked long and hard.
    In 1986 I left a lucrative position as a Systems Analyst working 
for a privately held firm (Nyman Manufacturing, RI) to work as a high 
school teacher in the Bridgewater-Raynham Regional School System. I was 
39 years old and had dutifully paid social security during my years in 
industry. I have since contributed to the Massachusetts Retirement 
System and my current rate of contribution is 11% of salary. 
Massachusetts teachers do not contribute to Social Security. I will be 
62 in five years but will only have 23 years in the teacher retirement 
system by that time. This means I can only draw 50.6% of the average of 
my last three years income at that time[1] Current calculations show 
that I would only receive about 1/3 of the social security payment I 
would receive otherwise (about $210 in today's dollars) according to 
the WEP calculator available at the socialsecurity.gov website.
    Had I never contributed a cent to Social Security but rather earned 
all my income teaching, I would be able to retire at 80% instead of 
50.7% at age 62. Conversely, had all my earnings been under the social 
security system, my monthly contribution would be at the rate of 6.2% 
and not 11%. To compare apples and apples this means that at age 62 I 
would have three sources of income:

    a.  Social Security at over $1500/mo plus
    b.  interest from retirement savings at the differential between 
the SS contribution rate of 6.2% and the MTRB contribution rate of 11% 
or an additional $500/mo plus
    c.  the professional retirement plan with over 30 years vested at a 
private company (like Nyman Manufacturing above) at about 80% of my 
last several years.

    This is the payback for leaving industry to work with our nation's 
children! Please do right by our nation's teachers by not penalizing 
them for responding to a noble calling.
            Sincerely,
                                                        Jeanne Dyer
                                 ______
                                 
    [1] Reference: Estimating Your Retirement Balance an MTRB 
publication

                                 

                                        Cotuit, Massachusetts 02635
                                                      July 22, 2004
Social Security Subcommittee
Committee on Ways and Means
United States House of Representatives
1102 Longworth House Office Building
Washington, D.C. 20515

    Dear Committee Members,

    I am writing to outline how the Windfall Elimination Provision 
(WEP) unfairly penalizes those who have chosen or desire to enter 
public service and how it impacts our nation's schools.
    In 1975, I obtained my Bachelors of Science in Mathematics. And, 
although I had many options available to me, I decided to become an 
educator. I truly felt that in a classroom, I could make a difference. 
For six years, I taught mathematics at Dedham Junior High School in 
Dedham, MA. During this time period I obtained graduate degrees in 
Special Education and School Administration.
    In 1981, I, like many of my peers, was faced with the impact that 
budget cuts and declining enrollment had on many aspects of public 
education. At that point, I decided to explore some of the other 
options that were available to me.
    For the next fourteen years, I worked in a variety of technology 
positions. These jobs ranged from computer programmer to director of 
information technology for a major manufacturer. In addition, I 
continued my studies at the graduate level and obtained my M.B.A.
    From a financial standpoint, my situation changed drastically 
during this time period. Within months of leaving the classroom, my 
salary doubled. The annual growth in my earnings after that point far 
exceeded that which I would ever see in public service. And, I must 
admit that for awhile I found myself questioning why I ever considered 
spending those first six years as a teacher.
    On a personal level, however, I knew why I spent those six years in 
a classroom and I yearned to be back there. It was because I could make 
a difference. As a teacher, I could ``touch the future''. Due to this, 
I returned to education in 1995.
    My desire to make a difference has not been without significant 
financial hardship. The Windfall Elimination Provision has 
significantly reduced the Social Security benefits that I earned and 
would have received if I was not committed to returning to the 
classroom where I knew my educational and business experience would 
make a difference.
    Our nation's schools are lacking qualified teachers of mathematics 
and science. There is a need to actively recruit educators from the 
private sector. The hardships associated with the Windfall Elimination 
Provision serves as a barrier to improving public education.
    The Public Servant Retirement Protection Act offers an important 
first step toward improving our nation's educational system. It will 
make a real difference for many considering the possibility of 
transitioning from business and industry in order to become public 
school teachers
    I urge the Committee to move this important bill quickly to final 
passage and enactment into law, and I urge Congress to continue to work 
toward the full repeal of the Windfall Elimination Provision.
            Sincerely,
                                                  Paula Emerson Fay

                                 

         Statement of Patricia Wolfe, Federally Employed Women
    FEW is a private, non-profit organization founded in 1968 after 
Executive Order 11375--that added sex discrimination to the list of 
prohibited discrimination in the federal government--was issued. FEW 
has grown into an international organization serving the one million 
federally employed women (both civilian and military). FEW is the only 
organization dedicated solely to eliminating sex discrimination in the 
federal workplace, and the only organization that monitors legislation 
particularly of concern to women employed in the federal government.

                              INTRODUCTION

    Federally Employed Women (FEW) very much appreciates the 
opportunity to submit this written statement on HR 4391, the ``Public 
Servant Retirement Protection Act.'' On behalf of the one million women 
employed in the federal government and military, we thank Chairman Clay 
Shaw and the other legislators serving on this Subcommittee for 
conducting this important hearing on the Windfall Elimination Provision 
(WEP). We call on Congress to completely repeal this provision, as well 
as the Government Pension Offset (GPO) which both unfairly impact 
federal workers, especially women.

                               BACKGROUND

    FEW is a private, non-profit organization founded in 1968 after 
Executive Order 11375--that added sex discrimination to the other forms 
of discrimination prohibited in the federal government--was issued. The 
early organizers of FEW realized that the government could dismantle 
the Federal Women's Program (FWP) that was established after E.O. 11375 
was issued within most Federal agencies. They wanted to ensure that 
there would always be an organization dedicated to promoting equality 
for women and addressing concerns of women in the Federal workforce.
    As a private organization, FEW works as a constructive pressure 
group to improve the status of women employed by the Federal 
government. This includes contact with Congress to encourage 
progressive legislation. FEW national officers also meet with agency 
officials at all levels to demonstrate support of the FWP, encourage 
officials to support the program and to obtain insight on the 
effectiveness of the FWP at agency and local levels. FEW has been 
called on in past years to testify before Congress on sexual 
discrimination, Senior Executive Service (SES) diversity and sexual 
harassment cases.
    For 36 years, Federally Employed Women has been working to end 
sexual discrimination and enhance opportunities for the advancement of 
women in government. Every day, nationwide, FEW members work together 
to bring about an awareness of the issues facing women throughout the 
federal government and achieve positive reforms and equality for women 
in the federal workplace. In addition, FEW members support all efforts 
within the government to improve operations and efficiencies in the 
federal workforce.

                             THE PROVISIONS

    As the Subcommittee members are already aware, the Windfall 
Elimination Provision (WEP) greatly reduces the Social Security 
benefits of a retired federal worker who paid into Social Security and 
also receives a government pension. Private sector retirees receive 
monthly Social Security checks equal to 90% of their first $561 in 
average monthly career earnings, plus 32% of monthly earnings up to 
$3,381 and 15% of earnings above $3,381. Federal retirees however are 
only allowed to receive 40% of the first $561 in career monthly 
earnings, a penalty of $280.50 per month simply for working in the 
federal government.

                       GOVERNMENT PENSION OFFSET

    Of equal importance to FEW members is the Government Pension Offset 
(GPO). This provision was enacted in 1977 to prevent government 
retirees from collecting both a government annuity based on their own 
work and Social Security benefits based on their spouse's. This law 
decreases by two-thirds whatever spousal social security benefits for 
which a retired government worker might be eligible.
    The GPO, in effect, prohibits federal retirees from collecting both 
a full Civil Service Retirement System (CSRS) annuity based upon his or 
her own government employment and full Social Security benefits based 
upon a spouse's employment. The victims of GPO are largely elderly 
women who are both CSRS annuitants and widows of private sector 
employees. Had these women spent their careers anywhere but the federal 
government, they would be entitled to full, unreduced Social Security 
spousal or survivor benefits. But because they earned their pensions 
through federal service under CSRS, their Social Security benefit is 
``offset'' by their own earned retirement benefits.
    The National Association of Retired Federal Employees (NARFE) has 
estimated that approximately 635,000 beneficiaries are receiving less 
benefits than they deserve due to the provisions of the WEP. This 
number continues to grow by 60,000 annually. The GPO penalizes about 
335,000 beneficiaries, and this number rises by about 15,000 per year. 
Of those affected by the GPO, 73% are women, and this offset reduces 
benefits by more than $3,600 a year. This is simply unfair and it is 
time to make it right.

                               OUR VIEWS

    FEW supports the repeal of both of these unfair provisions. Both 
the GPO and WEP lower the retirement income of federal employees by 
altering the Social Security benefit formula for certain groups. What 
is particularly egregious is that spousal and retirement benefits are 
reduced for Americans simply because they worked for the federal 
government. The end result is to dissuade more potential federal 
workers from joining the civilian workforce.
    Additionally, both affect women much more harshly than men despite 
the fact that older women are one of the fastest growing poverty 
populations in our nation today. Plus, women are more likely to spend 
time out of the workforce (about 12 years) to tend to family care 
giving responsibilities. That is time she is not earning a pension, 
vesting in a pension or contributing to Social Security. This absence 
from the paid workforce translates into inadequate retirement income 
and an increased financial dependency on their spouses.
    Our views have previously been made part of the public record 
through written testimony submitted to the Senate Governmental Affairs 
Committee for its September, 24, 2003, hearing, as well as the issuance 
of numerous Press Releases sent out over the last year.

                        FEW'S GRASSROOTS EFFORTS

    FEW, on August 1, 2003 asked its members and other interested 
parties to send letters to their legislators urging them to co-sponsor 
bills in both Chambers that would repeal these provisions. To date, 
over 2,500 letters were sent to lawmakers representing 42 states. And 
FEW is just one organization. No doubt, hundreds of thousands of 
letters from a whole host of multi-faceted organizations have been sent 
to Congress urging repeal.
    During these times of an aging workforce, we need to do what is 
right for federal retirees. Americans who choose to serve their country 
by working for the federal government should not then be penalized 
during their retirement years. These provisions need to be repealed as 
soon as possible.

                                HR 4391

    Although the bill being discussed at this hearing is a good attempt 
and first step at rectifying the situation for federal retirees, FEW 
harbors some concerns about the legislation's language:
No GPO Included:
     As mentioned above, FEW is firmly advocating the repeal of both 
the WEP and GPO. The latter has an even greater negative impact on some 
of our nation's most hard-hit Social Security recipients--widows and 
widowers, and lower-income women. Fixing the WEP while leaving the GPO 
in place will not help the majority of retired federally employed women 
who are being punished monetarily simply for working in the federal 
government. They need some relief now!
Social Security Records:
    It is our understanding that this bill would compute a recipient's 
benefits based on the individual's entire work history and earnings. 
However, it has been reported by the Deputy Commissioner of the Social 
Security Administration (SSA) that SSA only has records of non-covered 
earnings beginning in 1978. Therefore, those beneficiaries who earned 
non-covered wages after 1950 would be negatively impacted under the 
formula included in this legislation. This problem needs to be fixed.
``Hold Harmless'' Clause:
    Contained in this bill is a ``hold harmless'' clause that states 
that earners would receive the higher of the two benefit calculations 
(current method and new method outlined in this bill). We want to 
express our firm belief that no individual should be harmed by this 
bill, and we ask the Subcommittee to further investigate the proposed 
formula by using many different scenarios to ensure that it is 
equitable. We also ask that a process be detailed in the bill on how 
recipients can appeal their Social Security payments should they be 
penalized through the use of the new formula.
    Again, we very much appreciate the Subcommittee and Chairman's 
interest in this issue and all the support you have given federal 
workers in the past. I, and the thousands of other FEW members, am 
proud of the work we do for the federal government, and simply want to 
receive those retirement benefits to which we are entitled.
    We look forward to working with the Subcommittee members and their 
staffs to repeal these unfair provisions.

                                 

           Statement of Wayne Flick, Grand Junction, Colorado
    I taught in the public schools of Colorado for 31 years. I started 
teaching at age 30 after about 10 years working for several companies 
and spending time in the Army. I paid social security all those years, 
even the years in college. After receiving my teaching credentials, and 
getting my first teaching position, I realized how little teachers 
make. The first summer I got a job, and every summer following I got 
``summer jobs''. Summer jobs were easy to get in Leadville where I 
taught the first five years. When I moved to Grand Junction, summer 
jobs weren't easy to find. I probably made about $100,000 total in 
today's dollars in non-teaching jobs. As a retiree, I won't see but a 
small portion, if any, of the amount I would have, had I not gone into 
teaching.
    I understand why I don't get any SS for the money I earned 
teaching, but I can't understand why I can't get SS for what I earned 
outside of teaching. Had I known I was going to take such a hit, I 
probably would not have become a teacher.
    The Public Servant Retirement Protection Act offers a first step 
toward the ultimate goal of repealing both the WEP and the GPO. It will 
make a real difference for me and other people in my shoes since I will 
receive increased Social Security benefits as a result.
    Both the WEP and the GPO unfairly penalize public servants which 
severely limits communities ability to attract quality people to fill 
positions in education, firefighting, and public safety.
    I urge the Committee to pass this bill through congress and enact 
it into law, and I urge Congress to continue to work toward full repeal 
of both the GPO and the WEP.

                                 

         Statement of Gerald R. Garrett, Moses Lake, Washington
    I am writing to urge the Committee to move quickly in its 
deliberations on the Public Servant Retirement Protection Act as a 
first step toward full repeal of the WEP and GPO. I am one of the tens 
of thousands of retired Americans who are unfairly penalized by the 
WEP, thus denied full benefits of Social Security after making 
contributions to the system through full--and part-time jobs for fifty 
years. Since retirement I continue to contribute to Social Security 
through occasional and part-time jobs with no possibility of enhancing 
my benefits because of the WEP.
    In my opinion, both the WEP and GPO are unfair offsets that deny 
public servants who have worked in non-Social Security jobs the 
benefits that they have earned through contributions made in prior 
employment and in part-time or second jobs. Nothing about the careers 
of these hard-working public servants smacks of a windfall. Instead, 
these are benefits that have been earned through many years of social 
security contributions. In my case, I have made contributions in some 
years at the maximum level in every year of my life since I was a 
teenager. This includes some 32 years as a professor and administrator 
at the University of Massachusetts Boston and several years as a 
university professor providing educational services to the U.S. Forces 
in Europe, Asia, and at home. Like many others I was counting on Social 
Security to help protect me from inflationary costs that are often 
financial obstacles for retired Americans. Since I am subject to the 
WEP, my benefits are reduced to only a few hundred dollars each month.
    This nation should not take advantage of dedicated public servants, 
such as educators, police, firefighters, and public administrators, by 
denying them benefits that they have earned. Thus, I urge the Committee 
to move this bill quickly to final passage and enactment into law, and 
I also hope that Congress will continue to work toward a full repeal of 
both the WEP and GPO.

                                 

            Statement of Ken Hamdorf, Seal Beach, California
    Recently I retired after forty years of Teaching in California 
school systems. I also worked at numerous jobs part and full time to 
supplement my teaching income. These jobs all contributed into my 
social security account. In addition I served during the Viet Nam war 
for two years in the U.S. Army, also subject social security. When I 
turned 65 I applied for Medicare. Which I received because I had the 
necessary Quarters. I was also informed that because I had a teacher's 
retirement I would not be eligible for my full entitlement ($950), 
instead I would be reduced to approx. $243. Someone who works outside 
of the public employees system can earn MILLIONS and still be eligible 
for full social security. Hardly seems just or fair! !
    Please repeal the W.E.P.

                                 

        Statement of Wayne V. Hatford, Palm Springs, California
    There are several bills now before your subcommittee that deal with 
proposed changes in the very unfair WEP provisions of current Social 
Security laws: The Total Repeal Bill plus HR 1321 & HR 4391.
    Here is an example of how that unfairness adversely affects 
someone's life: I am a retired public school teacher who taught in the 
Brookline, Massachusetts public schools for a total of 24 years; my 
current gross teacher's pension from Massachusetts is approximately 
$12,.600 per year with net payments of $878 per month; I have worked in 
other part-timeand full-time jobs and paid into SS for a total 30 years 
which will provide me with a social security benefit; however, when I 
am eligible for Social Security in September, 2004 at age 62, under 
current law, and just for the fact of having been a ``public'' employee 
in MA, I understand that my earned social security benefit, which 
should be $444 per month, will be cut in half to $222 per month due to 
the WEP law.
    As you can see, my retirement income level is already low without 
facing a 50% reduction in earned social security benefits. And, at my 
income level, the notion of ``Retirement'' seems very elusive; Losing 
$222 a month is tough.
    The current WEP Law is unfair and discriminatory towards people who 
chose to be of service in society and who worked in the ``wrong'' 
states--teachers plus many other public sector employees--while those 
with any size private pension collect their full earned social security 
benefits--Another point: I was never made aware of this law when I was 
a teacher in MA; Neither the SS Administration nor the school districts 
in non SS public employees states inform teachers of this law and they 
should; I would have loved to pay into Social Security while working in 
the Massachusetts Public Schools but I had no choice in the matter.
    From what I have read, a large number of Representatives and 
Senators are interested in either eliminating the WEP and GPO 
provisions or providing relief in the form of exemptions or a 
recalibration of how SS benefits are calculated. Please give everyone 
in Congress a chance to discuss these bills and to vote on these ideas. 
Please help this to happen in the 108th Congress! !
    My personal opinion is that both the WEP and GPO should be 
completely repealed; however, if in your opinion, an exemption style 
bill is much more likely to pass in this Congress, please see that HR 
1321, (which exempts 24K annually of combined public pension and SS 
benefits from the WEP) or HR 4391 get to the floor for consideration 
and vote. These bills represent strong steps in the right direction! !
    HR 4391 provides some relief to the WEP; in my specific situation, 
I calculate that I would regain $50 to $60 per month of the $222 per 
month that I am losing due to the current WEP Law; that is an 
improvement and I support this proposed law as it does go in the right 
direction. However, I have 2 concerns: the calculations required for 
this law are complicated (because each person's tax returns will have 
to be examined for an up to 40+ yrs time period) and also this law may 
be very costly for the SS Admin. due to the personnel required to do 
the calculations work. Why not just exempt a certain amount of pension 
from being subject to the WEP and/or do a phase in of the WEP on higher 
amount pensions? ? ? ? That would be so much easier for the SS 
Administration to calculate and easily accomplish.
    Thank you so much in advance for your consideration of my comments 
and your support of either Hr 4391 or HR 1321; please work toward a 
total repeal of the WEP--.Please allow these bills on the floor ASAP! ! 
!

                                 

             Statement of James C. Hayes, Las Vegas, Nevada
    The WEP and the GPO unfairly penalize those who have chosen to 
enter public service, often at great financial sacrifice. Our nation 
cannot afford to penalize educators, police, firefighters, and others 
who have dedicated themselves to serving their communities and their 
country. The Public Servant Retirement Protection Act offers an 
important first step toward the ultimate goal of repealing both the WEP 
and the GPO. It will make a real difference for many public employees 
who will receive increased Social Security benefits as a result. I urge 
the Committee to move this important bill quickly to final passage and 
enactment into law, and we urge Congress to continue to work toward 
full repeal of both the GPO and the WEP.
    I am a teacher. I have been teaching mathematics in Clark County, 
Nevada for 29 years. Teachers are known to be underpaid professionals. 
I have had to financially supplement by teaching job by working for DOD 
and DOE. I have also done work for private industry. This was the only 
way I could remain a teacher yet afford the luxury of buying a home and 
new cars, sending my sons to college and living a life that is equal to 
the advanced degrees I have earned. In all these supplementary jobs, I 
paid Social Security taxes, making me eligible for benefits. I DESERVE 
to receive full Social Security benefits, just like every other US 
citizen that pays their taxes. To say otherwise is to say that teachers 
and others who have jobs that offer retirement benefits but still can 
qualify for Social Security benefits are not equal citizens.
    Since everyone knows that teachers are unpaid. Since most teachers 
work more than one job to maintain a higher standard of living and in 
doing so pay taxes which earn them Social Security benefits, PLEASE DO 
THE RIGHT THING and correct this unjust situation to the people that 
dedicate themselves to serving the citizens of our nation.

                                 

                Statement of Karen Hedden, Wells, Nevada
    I would like to be on record as opposed to the WEP and GPO. As a 
public school educator, I have worked part-time, minimum wage jobs. I 
did this before, during and after college. After obtaining employment 
as a teacher, I still needed a part-time minimum wage job at night and 
over the summer in order to pay off my student loans and make ends 
meet. I am a single-parent. Those small jobs meant a lot to my family. 
I had Social Security taxes deducted from my paychecks, now you are 
telling me because I chose a higher calling to work as a public 
servant, I won't be able to claim those benefits? How fair is that? ? ? 
Firefighters, police officers, and the military are also being 
penalized. We all put our lives on the line for the public and you are 
telling us we are not worth supporting when we retire! If this doesn't 
change, a lot of public servants are not going to be working in the 
professions they chose for the very reason of being penalized at the 
end of their careers. I wish to put in my two-cents worth and ask that 
these bills be repealed.

                                 

                Statement of James Herzberg, Katy, Texas
PUBLIC SERVANT RETIREMENT PROTECTION ACT
    This message is in support of the Public Servant Retirement 
Protection Act. This legislation offers an important first step toward 
the ultimate goal of repealing both the Windfall Elimination Provision 
and the Government Pension Offset. These provisions unfairly penalize 
people who have chosen to enter public service. We are not asking for a 
windfall, only to receive benefits we earned and which were promised to 
us.
    In my own case I entered the teaching profession after several 
years of work in the private sector and with government. I and my 
employers paid into Social Security for thirty-four years. As some of 
that work was part time and temporary when I was in school, I do not 
have enough years of substantial payments to avoid the Windfall 
Elimination Provision. As a result, even though I have more than met 
the forty quarters requirement and had several years in which I paid 
the maximum contribution into Social Security, I will see my benefits 
reduced to a third of what I had expected to receive. As is well known, 
teachers do not make a great deal of money. Saving and investing enough 
to cover this offset will be difficult. Having come somewhat late in 
life to this profession, neither can I accumulate enough seniority in 
the teacher retirement system to receive adequate support in my old 
age. As the law now stands, I will have to work several years beyond 
conventional retirement age. I will probably have to work part-time, 
even as a retiree.
    Besides being unfair, the present law discourages many qualified 
people from entering the profession. Had I known of this penalty, I 
would not have made the move myself. People who have years of 
experience and great expertise in many areas, which could greatly 
enrich the classroom, will find something else to do. With the chronic 
teacher shortage, our nation cannot afford to do this. The present law 
is unfair and punitive. I urge its repeal, or at least its 
modification.

                                 

       Statement of Robert A. Hudson, Colorado Springs, Colorado
    Even though I currently am employed by the Social Security 
Administration, this statement is not a voice of the agency but instead 
an individual citizens input. I am not representing the agency what so 
ever in this regard.
    I do however have an advantage in that I understand the WEP and GPO 
to a great extent. I must voice my concern regarding the solubility of 
the trust funds by allowing fellow tax payers to receive full Social 
Security benefits even though for years they had paid into another 
retirement. Since Social Security benefits are a pay as you go plan' 
then the persons not involved with paying as you go' for a number of 
years, if not an entire career should be offset under the Windfall 
Elimination Provision. It is only fair to those of us that have and 
will continue. There is no case to be made that these individuals are 
going to be disadvantaged. The max reduction this year is $306.00. Even 
though a person may be reduced by this amount, he or she will certainly 
still get more from the program than he or she paid in. The idea these 
individuals are `disadvantaged' is pure nonsense. Also, the system is 
designed to provide those that have contributed additional years by 
further lessening the reduction factor. Please do not give those that 
have not participated any more than the current law allows. It is fair 
and equitable the way it is written.
    As far as GPO goes I must echo the same comments. The Government 
Pension Offset is truly designed to stop those that would be the 
quintessential double dippers into a system that they contributed 
naught. Please allow the current law to stay the way it is. This is an 
equitable system and gives those that paid exactly what they are due. 
Thank you for your time.

                                 

          Statement of Linda B. Jacobson, Northbrook, Illinois
    I firmly believe that not permitting public school teachers to 
receive their teacher's pension AND social security benefits (if they 
qualify for such benefits) is discriminatory. In my personal situation, 
it has been a hardship, and a loss of income which I had counted on in 
my retirement years, not knowing initially that it would be kept from 
me by those very people that I elected. I began working and paying into 
Social Security when I was twelve years old. I continued working and 
earning Social Security benefits throughout my early years, even while 
I was attending college. Later, when I was teaching, I held a second 
job to earn Social Security benefits. That was the only way I could 
insure my retirement, since I did not make enough money to save 
significant amounts of money. When my children were eight years old and 
eleven years old, my husband became terminally ill, and I had to 
support my family alone. During this time, I paid into Social Security 
also, hopefully planning for my future needs, since it was clear that 
my husband would not be around to take care of us. As a young widow, I 
did receive Social Security benefits for my two dependent children 
until they were sixteen years of age (I understand that now, children 
get benefits until they are eighteen years old), but was denied Widow's 
benefits from Social Security, because I allegedly ``earned too much 
because I was a teacher.'' It did not matter that I had paid for many 
years into Social Security, or that my late husband had paid the 
maximum into Social Security during his work lifetime--I was denied 
benefits, except for the $255.00 I received as his death benefit. For 
the next fifteen years, following his death, I worked several jobs, 
sometimes as many as four jobs at a time, working seven days a week, 
including my full-time job in education, to save money for my 
children's college education. My husband was ill for four years prior 
to his death, and any money we had put aside for the children was used 
to help pay for his bone marrow transplant and other medical expenses. 
I supported our family during this time. I was a responsible citizen. I 
put my children through college. I paid off more than one hundred 
thousand dollars in college loans for them. When my educational career 
in the public school system approached twenty-nine years, I prepared to 
retire. The public elementary school districts where I had worked 
reported all my years of service to TRS (Teacher's Retirement System of 
the State of Illinois), so getting my credits from them was not a 
problem.
    Next, I contacted the University of Illinois, Illinois State 
University, Northern Illinois University, Northeastern Illinois 
University and Governor's State University for my work ``credits'', 
because I was told that if I paid into ``SURS'', the State University 
Retirement System, now, for the years I had taught at these 
universities, they would contribute to my retirement income. There was 
reciprocity with TRS, I learned. I was pleased, because there was no 
SURS credit available for part-time faculty when I taught at these 
graduate schools, so I paid into Social Security only at that time.
    It is significant to note that despite the fact that I worked over 
thirteen years in the state university system as a lecturer and adjunct 
professor, these state schools could not locate any employment records 
for me. They don't keep them that long, I was told. And I had paid into 
Social Security during those assignments! I taught for ten years and 
was a Program Director in the Graduate School of Education at Roosevelt 
University. In Chicago. I paid into Social Security for those years 
also, but Roosevelt. Is not, of course, a member of SURS.
    Next, I called and wrote the Social Security Administration to seek 
my old employment records. They did have a record of my participating 
in Social Security between 1981 and 1994 (My years at the 
universities), but they had NO records of where the Social Security 
contribution had come from, so I still could not document my service at 
the universities! Next, I called the Internal Revenue Service in Kansas 
City. Surely they would have a record of whom I had either 1099s or W2 
forms from during those years--they, too, informed me that they do not 
keep records that long.
    The end result was that I lost thirteen years of retirement credit 
when I retired from TRS. I received only less than two years credit 
from SURS, and my income from them is only one hundred four ($104.00) 
per month as a result. For twelve years of service in the SURS system! 
! ! ! Had I received the credit I was entitled to, I would have retired 
(as I planned) with full credit and full retirement benefits (36 years 
of service), but instead, got only twenty-nine years and a reduced 
retirement benefit. Also, even though I retired at fifty-eight due to 
health reasons, I had to pay an eighteen thousand dollar penalty to TRS 
on the day I retired, because I was retiring before the age of sixty, 
and wanted to get my full benefit for twenty-nine years.
    Also, from 1979 through 1998 I worked for the Illinois State Board 
of Education as a Level I Due Process Hearing Officer in matters 
related to schools and special education for the disabled (one of our 
three children was profoundly disabled, and I had become somewhat of an 
educational expert in this area of the law. I attended The John 
Marshall Law School for three years on a full Academic Dean's 
Scholarship, but was unable to ever finish my last semester because my 
husband was so ill). There was no retirement benefit available for 
these nineteen years of service.
    After these experiences, I hope you can imagine my upset and 
disappointment to learn that I would not be entitled to Social Security 
retirement benefits at sixty-two years of age. Despite the fact that my 
deceased husband paid the maximum into Social Security for as long as 
he worked, and despite the fact that I paid into Social Security for 
many, many years, I will be denied benefits. How could that possibly be 
fair? How could that possibly be equitable? How could that possibly be 
right?
    We are the people who taught your children and prepared them for 
life in our society. This is not the thanks I expected. Ironically, The 
Social Security Administration disappointed me again.
    After more than eight years I remarried. I was told that because I 
was not yet sixty at the time of my remarriage (I was only fifty), I 
would be permanently denied Widow's Benefits from my first husband when 
I turned sixty! It didn't matter that we were married for more than 
twenty-two years. It didn't matter that I was denied Widow's Benefits 
when I became a widow, because I worked and earned more than three 
hundred dollars a month! ! (How can the Social Security Administration 
arbitrarily decide, with the approval of legislators who don't seem to 
care or are unrealistic about life in the real world, that one who is 
widowed at forty-two years of age can not re-marry until they are sixty 
without losing their benefits? ? ?) To add insult to the injury, I was 
also informed that I can not get Social Security Benefits from my 
second husband either, until we are married for ten years! Then, the 
final blow! I wouldn't get benefits from either of my husband(s) or 
from my own Social Security paid in anyway, because my state, the State 
of Illinois, does not permit people receiving Teacher's Retirement 
Benefits to also receive Social Security, if the TRS benefits exceed 
the amount I would have received from Social Security. I could not 
believe that this could be true!
    I worked my whole life. I paid my taxes. I paid into Social 
Security. I raised my children alone. I put my children through college 
alone. I paid for their weddings alone. Now, it is time for me to 
retire, and I find I will be denied benefits I worked hard and long to 
get!
    It is my understanding, and has always been my understanding, that 
there is a pension one gets from working in the District Attorney's 
Office. Then, if they become legislators, they can get a pension from 
the House of Representatives. Then, if they go onto the Senate, they 
can get a third pension from the Senate. If they go onto to higher 
office, they can get a fourth pension. Presidents have received as many 
as five pensions! ! ! And I am only entitled to one? ? Where is the 
logic? ? ? Where is the concern for your constituency? ? ? Where is the 
fairness? ? ? I am only asking for what should be mine. I worked for 
it! I paid for it! I earned it. I do not get a refund of monies which I 
paid in from the Social Security Administration, if they do not pay me 
my benefits or the benefits worked hard for by my husband(s).
    I hope that you will consider this letter very seriously. I hope 
that you will attempt to put yourself in my shoes, so to speak, to see 
how truly unfair and inappropriate the current law is for teachers and 
other service personnel. I hope that you will not disappoint me, and 
that I will eventually receive the Social Security Benefits for which I 
worked, and which I counted on in my retirement years. To do otherwise 
is to discriminate against me and all others negatively affected by 
this unjust law.

                                 

              Statement of Sheri Jones, San Antonio, Texas
    My name is Sheri Jones. I have been a teacher in the San Antonio 
Independent School District for the last 20 years. As an employee of 
this school district I have paid into Social Security and into the 
Texas Teacher Retirement System for all of those 20 years. I was not 
given a choice. I had to pay into both because that is the way the 
school district is set up.
    Public Servant Retirement Protection Act is very necessary for me. 
Without a change in the way public servants are allowed to receive 
their social security benefits I will loose much of what I was told I 
had to participate in. I will loose benefits that the government of our 
Nation and the government of my state have required me to pay into. I 
am being negatively impacted and it is all because the two governments 
can't cooperate.
    This reform is very necessary.

                                 

             Statement of Barbara C. Joyce, Sparks, Nevada
    Please respect public service and repeal the Social Security 
Offset. I am one of the many people affected by this unfair offset. I 
began working part-time jobs in the state of New Jersey at the age of 
fourteen. I went on to teach in the public schools of New Jersey and 
New York for over ten years. I earned social security benefits during 
this time.
    Currently I am teaching in the state of Nevada and no longer earn 
Social Security benefits because I am now part of the Public Employees 
Retirement System. I am beginning my twenty-first year teaching in NV.
    I feel that I am being penalized by the Social Security Offset for 
choosing to continue my teaching career here. It is not unreasonable to 
expect to receive the benefits I have previously earned, as well as the 
retirement I am now building. This is not a ``windfall.'' This is 
simply what is right.
    Please move the ``Public Servant Retirement Protection Act'' to 
final passage quickly and enact it into law. I ask you to please 
continue to work to fully repeal both the GPO and WEP.
    Thank you so much for your consideration.

                                 

                Statement of D.R. Joyner, Lufkin, Texas
    Eight months ago, I became a teacher; however, I worked at the 
Lufkin paper mill for twenty-five years and also at a motor home plant 
before entering the teaching profession. The mill had five different 
owners during my employment. I toiled in the paper machine department, 
made cores, worked in the quality control lab, and endured humid 
buildings with 150 degree summer temperatures until I could go outside 
on a break where it felt cooler. I was re-assigned three times during a 
six month period of downsizing.
    Following several years of multiple-week shut-downs and downsizing, 
rumors began to circulate that the Canadian owners would permanently 
close the mill. Workers with over twenty years experience believed they 
were immune from the downsizing and doubted that the mill would ever 
shut its doors. Sons, fathers, and grandfathers had worked at that mill 
for sixty years. The Canadian government subsidizes its paper mills. 
When it was cheaper for a Canadian paper mill to transport its paper by 
boat and truck than the Lufkin mill could transport paper to their next 
door neighbor via the railroad tracks, the mill lost even its 
neighbor's business.
    I saw the handwriting on the wall and prepared for an ``after paper 
mill'' life. There were numerous newspaper stories about the Texas 
teacher shortage. I decided to reach my goal of earning a degree, 
started as an eighteen-year old in the 1970's, even though a teaching 
salary amounted to nearly a 50% pay cut from my paper mill salary. I 
took seventeen college hours each semester while working forty or more 
hours per week, mostly on the graveyard shift. I accumulated $32,000 in 
student loans while completing requirements for teacher certification.
    I wanted my sons' lives to be better than mine. Their college 
education was very important to me even though our finances were 
strained. My wife is a first grade teacher and her salary hasn't 
increased since her twentieth year of service. Our insurance costs are 
also much higher through TRS Active-Care than they were through Cigna. 
We drastically altered our way of life and budget. Watching our debt 
increase was terrifying. Watching my sons personally assume student 
loan debt was worse.
    During the summer of 2003, I applied to every school district in 
the area, but they chose certified teachers over those completing post-
baccalaureate certification. In September, a small school district 
planned to move one of its current teachers to a reading specialist 
position through the ``No Child Left Behind Act''. I was hired to teach 
fourth grade, pending grant funding. Unfortunately, funding for the 
bill was gutted on September 16 and TEA cancelled all grants. In 
November, the same district located alternate funds and hired me as an 
elementary science teacher for one year. Although I was heavily in debt 
and earned a diminished salary, I made a difference in children's lives 
as a public servant and had a future in teaching.
    There was one problem. When officials asked people to change 
careers and become teachers, they never mentioned that in doing so, one 
would be sacrificing their social security benefits earned over a 
lifetime. This spring, I was advised to quit teaching before becoming 
vested at five years to prevent the loss of the majority of my social 
security. My wife and I searched for school districts that still 
withdraw social security from teachers' paychecks to determine where we 
needed to move. Our home is here. Our friends are here. Our jobs are 
here. But we had to repay school loans and still save for retirement 
following our years of public service. Once shut-downs at the paper 
mill began, our budget hadn't included retirement plan allocations.
    At my age, I am unlikely to reach the twenty year marker as a 
teacher, so my teacher pension will be at a very reduced benefit and my 
social security will be WEP'ed. I could withdraw my TRS deposits 
instead of becoming vested at five years, but that would prevent me 
from buying TRS medical insurance during retirement. I could be covered 
with spousal insurance through my wife, but that is much more 
expensive.
    The Texas teacher shortage is more acute than ever following a mass 
exodus of veteran teachers this year. Many teachers retired early in 
order to take advantage of the government pension offset loophole, 
which was eliminated on July 1 of this year. Our entire nation needs 
science teachers. Please repeal the WEP and replace it with a fair 
benefit calculation so that those who entered public service after 
working for years in the private sector will not lose the retirement 
they earned. I ask you to reward those that chose to share their real 
world skills with America's children rather than punish them.

                                 

       Statement of James H. Keegan, Jr., Belmont, Massachusetts
    The WEP and GPO unfairly penalize people who have chosen public 
service. As someone who has paid into Social Security for over 42 years 
(both full-time and part-time), I know. When I begin to receive SS 
payments this fall, I will lose about $300 per month in benefits. I 
spent nearly 35 years in Massachusetts public education. During most of 
those years, I found it necessary to work second jobs just to satisfy 
basic family needs. I can't understand why those of us who chose public 
service are being singled out through the current WEP to receive a 
reduced benefit. We earned the full amount and planned on receiving it 
at retirement. The Public Service Retirement Protection Act is an 
important first step toward the ultimate goal of fully repealing both 
the WEP and the GPO. I respectfully request the committee to move 
quickly to final passage and enactment into law. Thank you. James H. 
Keegan Jr.

                                 

                                                 Elko, Nevada 89801
                                                      July 18, 2004
Committee on Ways and Means
1102 LHOB
Washington, DC 20515

    Dear Committee:

    The ``Windfall Elimination Provision'' is discriminatory and should 
be eliminated!
    From 1976 to 1998 I worked in the private sector as an account 
representative, sales manager etc. During this time, approximately 
$40,000.00 of privately paid Social Security taxes were taken directly 
out of my earnings. My deductions should be used for my retirement when 
I turn 66 years of age. I worked long and hard to maintain this 
employment, sacrificing my enjoyment with my family, friends, and 
educational endeavors as well.
    In 1998 I was able to sell some assets and go back to school to 
become a ``public school teacher''. You know those people that help 
train the next generation of ``tax payers'', the students we all so 
desperately need to keep filling the coffers of Social Security! After 
5 years of employment I am now vested in the Public Employee Retirement 
System of Nevada. My district (taxpayers) pays for a retirement 
contribution that goes into a fund for my retirement if I stay in the 
PERS system. My retirement account with the state of Nevada is paid by 
the taxpayers of Nevada, not the Federal Government. PERS is a totally 
separate retirement system than social security (thank god).
    I am now faced with the reality that my 22 years of ``private 
sector'' social security ``benefits'' will be reduced because I now 
have a ``state funded'' pension plan. This is outrageous! If Social 
Security was privatized, I would have MY MONEY, IN MY ACCOUNT and some 
bureaucrat would not be able to INTEND to do anything with MY MONEY 
without my permission! ! If I want to give it to others, then I could 
make that decision, not some Social Security analyst! !
    You have no right to reduce my hard earned Social Security benefits 
because of the ``intentions'' of the program. What made the United 
States a great country is the fact that some of us work long and hard 
to have a better life. What you have done with this provision is slap 
all of us ``hard workers'' right in the face with an illegal reduction 
of benefits for some idiotic social scheme built on the ``robin hood'' 
theme. Take from the rich and give to the poor. Need I remind you that 
``the road to hell is paved with good intentions''?
    From your web page I read--
    ``Your Social Security benefits are reduced because Social Security 
benefits were intended to replace only a percentage of a worker's pre-
retirement earnings. The way Social Security benefit amounts are 
figured, lower-paid workers get a higher return than highly paid 
workers. For example, lower-paid workers could get a Social Security 
benefit that equals about 55 percent of their pre-retirement earnings. 
The average replacement rate for highly paid workers is about 25 
percent.''
    The ``windfall elimination provision'' affects how the amount of 
your retirement or disability benefits is calculated if you receive a 
pension from work where Social Security taxes were not taken out of 
your pay. A modified formula is used to calculate your benefit amount, 
resulting in a lower Social Security benefit.
    This Committee needs to do one or more of the following:

    1.  Eliminate the WEP altogether.
    2.  Provide full Social Security benefits for teachers now covered 
by state plans.
    3.  Require everyone to pay into Social Security and eliminate WEP 
altogether.
    4.  Privatize Social Security so the individual can determine where 
and when to spend his/her money. Halleluiah! !

    Realize that your actions are important to many individuals that 
feel betrayed by a system that has no right to label hard work as a 
``windfall''. Being a Senator or Congressman with six figure salaries, 
outrageous perks, retirement benefits, cheap insurance, and Social 
Security to boot is a true ``WINDFALL''. Take some of these goodies 
away from the ``lords of the land'' and see how they squeal like pigs.
    Thank you for allowing me to opportunity to enter this into the 
record!
            Sincerely,
                                                        Gary Kimber

                                 

              Statement of Ralph Kush, Sylmar, California
    I'm requesting passage of H.R. 4391, the ``Public Servant 
Retirement Protection Act'' for the following reasons:

    1.  My wife pasted away in May of 2003. During the course of our 
thirty-three years of marriage, my wife paid Social Security more then 
sixty-thousand ($60,000.00) dollars. In addition, her private sector 
employers contributed an equal amount and the total received by Social 
Security is in excess of one-hundred and twenty ($120,000.00) thousand 
dollars. Because I come under the provisions of the Government Pension 
Offset (GPO), as a survivor, I receive one hundred and sixty-six 
($166.00) dollars a month.
    2.  I have been self-employed for the past six years. That means I 
have been forced to pay into Social Security both as the employer and 
the employee. For the month of October 2003, I earned Two-thousand, 
nine hundred and sixty-two dollars and thirty-seven cents ($2,962.37). 
According to Social Security, I will pay 15.30 percent or four hundred 
and fifty-three dollars and twenty-four cents ($453.24) into the Social 
Security Benefits Program. I am paying into the Social Security 
Benefits Program more then twice the amount I receive each month as a 
survivor. It is also my understanding that after paying into Social 
Security as a self-employed individual, my monthly benefits will not 
change after full retirement.
    3.  Had I been employed in the private sector, I would be receiving 
full benefits as a survivor. Because I was employed by my government I 
only receive a fraction of what other survivors receive. I paid for my 
pension and receive an amount commensurate with the duties, years and 
contributions I paid into the system while being employed by my 
government. Why should I be penalized for receiving a pension I earned?
    4.  My wife died thinking all the monies withheld from her private 
sector earning would be of help to her in her retirement years or to 
her family in the event of her death. I am sure she never conceived 
that her government would keep a vast amount of all that money and 
leave her family less well off.
    5.  I do not understand how something so grossly unjust and unfair, 
something so obviously illegal and morally wrong, has been allowed to 
continue for so many years.

    For the reasons cited above, I urge you to pass H.R. 4391.

                                 

              Statement of Deborah Langford, Spring, Texas
    Thank you for the opportunity to express my opinion on the matter 
of Social Security and WEP. When I began with the school district in 
1980, there was no penalty with me being able to have my own career and 
then still rely on my husband's social security in my older age. 
Especially, if he were to die before me. Now, that is not available to 
me, and also with the WEP, I cannot collect my own social security. I 
think this is very unfair, and Social Security was taken from my check 
every year for 11 years, (without my permission), and today, they tell 
me I can't receive any benefit from the monies that I paid in for those 
years. To me, that is theft. The government demanded that I pay into a 
system that would benefit me later, just to change the rules in mid-
stream to accommodate themselves. America shouldn't punish people for 
working with the school districts, or their state by ``stealing'' the 
monies already paid into the system. We should at least be 
``grandfathered'' into social security, since the WEP wasn't in effect 
when I started with a school district. Millions of other people are 
allowed to invest in social security and a pension plan at their jobs. 
Why should we be different? If I am not allowed to receive compensation 
for the 11 years, (plus what I will pay in, not voluntarily) when I 
work after retirement in 5 years, then all monies should be returned to 
me. If not, then again, It is theft. My daughter always wanted to be a 
teacher, but after teaching for four years, she had to make the 
decision to quit so that she could get another job, where she could 
earn a retirement and social security. This is really hurting the 
children, with so many school workers leaving the teaching field.
    This bill restoring the Social Security benefits of thousands of 
teachers, police, firefighters, and other state and local government 
employees now reduced by an outdated federal formula known as the 
Windfall Elimination Provision (WEP) is a great advancement for all the 
ones that have been forced to pay Social Security without benefits. God 
bless you all, and I am making sure that all school workers know of 
your attempts to ``make right'', what was made wrong by stupid and 
ignorant politicians.

                                 

           Statement of Paul E. Larson, Fallbrook, California
    My wife and I are impacted strongly by the Government Pension 
Offset and Windfall Elimination Provisions as they relate to Social 
Security retirement benefits. We are both retired teachers in the state 
of California. My wife retired in May, 2003 and I retired in June, 2004 
at the age of 74.
    I entered the teaching profession quite late in life. After serving 
four years in the United States Air Force and working in my family's 
automobile repair business in the state of Nebraska for approximately 
15 years and contributing to social security for 30 years due to 
contributions from other occupations, I have been receiving social 
security benefits for the past four years. Since I was over the age of 
70, I was able to continue teaching and still receive benefits. I was 
hoping to teach to age 75, but health issues that occurred in the past 
year have caused me to retire this past June. Now that I have retired 
from the teaching profession, I have been told by the social security 
administration that my benefits will be cut substantially when I need 
them the most. Should I become deceased, my wife as my dependent would 
not be entitled to any benefits due to the pension offset provision. 
This is extremely discouraging.
    It is most sad that I have had to drive 140 miles per day round 
trip to my place of employment at the age of 74 in order to maintain my 
standard of living. I was counting on benefits from social security 
added to my meager California State Teachers' Retirement benefits to 
provide a comfortable retirement. Unless these provisions are changed, 
a comfortable retirement that I have worked for 55 years to obtain will 
not be a possibility. This is truly unfair.
    Upon graduating from college in the state of New York and having 
obtained a teaching credential there, my wife worked in several 
different occupations during her college days and for several years 
after. She chose to move to California and become a teacher in 1965. 
She has accumulated 31 quarters of social security credit through 
working in other professions--real estate, immigration inspection, etc. 
Her plan was to accumulate at least 40 quarters by working after 
retirement from teaching. But due to the provisions indicated above, 
she would receive nothing for her efforts. What will happen to the 
money she has contributed to social security up to now? Will she just 
lose it?
    Please don't continue to penalize us as dedicated educators who 
have given much to the teaching profession. Please enable us to receive 
the benefits we have earned. Please pass this intermediate bill and 
continue to work towards full repeal of both the GPO and the WEP.

                                 

           Statement of Don LeCompte, Chula Vista, California
    It was the shock of a lifetime when the Social Security counselor 
told me that, contrary to my years of understanding, my retirement 
benefits would be reduced to a pittance of what I had been promised. It 
was explained that, because I am involuntarily part of the State 
Teachers' Retirement System, I fall under the cruelly titled, 
``Windfall Elimination Provision.'' (Up to this point the word windfall 
has meant to me some serendipitous, unmerited economic bonus.)
    My situation is that I spent the first half of my work life, 
following my four year enlistment in the Air Force, in the field of 
business, working for IBM, Xerox and Standard Oil. When I felt the call 
to become a business and social science teacher my wife was working as 
a modestly paid elementary teacher herself and we had two young 
children. I traded in my stock options for a college education. When I 
earned my credential and entered the field of education I was fully 
vested in the Social Security System.
    I happily spent the second half of my work life serving my students 
and their families and contributing to STRS. I have seen many of my 
students become entrepreneurs, business leaders, lawyers and solid 
citizens. I have always taught them of the benefits of active 
citizenship and self-determination.
    Imagine my surprise at age 65 when I discovered that my years in 
the world of business and my years in the service of education would 
collide to cost me the retirement benefit I had consistently been 
informed I could expect.
    My wife, by the way, has worked her entire adult life as a teacher 
and only earned 29 quarters of Social Security while putting herself 
through school. She has been cut off from the benefit she should have 
derived through our 45 year marriage because of the Government Pension 
Offset. Our question would have to be, ``Offsetting what and for whose 
benefit?''
    In the future we will have need for great numbers of new teachers; 
some are predicting a shortage of crisis proportions. Hopefully a 
balance will be drawn from among mature people attracted as I was from 
other fields of endeavor. If we expect our educational system to keep 
pace with ever-increasing demands, we must attract the best. How can we 
ask people of talent and good will to subject themselves to this future 
folly?
    Please vote to repeal the WEP and GPO.

                                 

                                        Natick, Massachusetts 01760
                                                     August 3, 2004
Representative Clay Shaw, Chairman
Social Security Subcommittee
The House Ways and Means Committee
Washington, DC 20515

    Dear Chairman Shaw,

    When I graduated from college I never thought about Social 
Security, pensions, Medicare, retirement, etc. I was young and I was 
just glad that I had been offered a job. I worked at that job for a 
year and had Social Security taken out. Then I moved to Massachusetts 
and took another job in which Social Security was also taken out. 
Again, who ever related to retiring and collecting a pension? I 
returned to graduate school and then took a job in a school system 
where I joined the Massachusetts Teachers Retirement System. A number 
of years ago I took a second job as a means of supplementing my 
educator's salary. That job deducted Social Security and Medicare 
payments. I still didn't think about Social Security or it's 
ramifications. All I knew was that someday I would have a pension. 
Well, that someday is now only 2 years away. I will be eligible for my 
state pension but I also have the 40 quarters needed to be eligible for 
Social Security.
    Over the years, I learned that even though money was being taken 
out for Social Security, money that was mine, part of my salary, I 
would not be able to collect its full value because I belonged to a 
State Retirement System, in one of the few states where you cannot 
collect a State Pension and full Social Security benefits. How unjust! 
! ! How unfair! ! !. The government is keeping my money. I earned that 
money! ! ! It's mine.
    I grew up in New York City. Both of my parents worked for the City. 
They contributed to both a City Pension System and to Social Security. 
When they retired they each made almost as much as I was making because 
they collected their City Pension and Social Security. They deserved 
it, it was the money that they had contributed and they were recouping 
it so they would be comfortable in their retirement. Why shouldn't it 
be the same for me? I guess they were lucky because they lived in New 
York. I am being penalized because I live in Massachusetts.
    I could go on and on and list umpteen concerns about the Windfall 
Elimination Provision and the Government Pension Offset and their 
impact on my retirement income. I guess one question I do have is why 
is it called ``Windfall'' Elimination?
    What kind of ``windfall''? Is it a ``windfall'' because I would 
collect my State pension and Social Security? ``Offset'' my State 
Pension? Why? Why not? No matter how or why, no matter what the 
rational was when this was first passed, no matter the present 
implications, THAT MONEY IS MINE AND I DESERVE TO GET IT BACK AND GET 
ALL TO WHICH I SHOULD BE ENTITLED.
    The Social Security Administration is concerned about finding the 
money to pay all the people affected, to recalculate and readjust 
payments already being made. Over all these years, they have been 
holding my money and the money of everyone else who has contributed but 
isn't getting their full amount back. What has been done with that 
money? It should have been accumulating interest all these years. Or, 
is the SSA using our money to pay full benefits to others? Robbing 
Peter to pay Paul.
    I certainly hope the Committee, in its wisdom, will realize how 
unjust these provisions are. They effect all public employees in the 
given states. That includes not only educators but firemen, policemen, 
senators and representatives and any one else who has a state pension 
but also has earned their Social Security quarters. The fact that a 
person cannot collect both also has an impact on people who are 
contemplating a career change. People who might want to move from the 
private sector to the public sector. Should they have to give up their 
full Social Security benefits? Unfair.
    Again, I could go on, as I tend to do, but I think you are all 
aware of the implications of the WEP and GPO. I hope you will all DO 
THE RIGHT THING and repeal this provisions.
    Thank you for your time and attention.
            Sincerely,
                                                      Jane Lenarsky

                                 

          Statement of Harold N. London, Northbrook, Illinois
    As a retired teacher, I often hear people talk about our retirement 
benefits. I assure you that they are not exorbitant, and are often less 
for more time on the job than other government employees who do not 
also have to face reduced Social Security benefits. I currently pay 
almost maximum Social Security, but will face a reduction in benefits 
simply because I receive a pension that I have paid into for 34 years 
as well. I feel that if I face a reduced Social Security benefit, I 
should pay are reduced amount to Social Security while I am working. If 
I pay, I should receive the benefits to which I am entitled I have more 
than fulfilled my 40 quarters of contributions, and continue to pay in 
to the system. I should receive the benefits to which my contributions 
would entitle me, not one reduced arbitrarily by law.

                                 

         Statement of Linda and Fred Makler, Ballwin, Missouri
    To: Committee on Ways and Means Hearing on H.R. 4391, the ``Public 
Servant Retirement Protection Act''
    My name is Linda A. Makler, and I am a retired Missouri Public 
School Teacher. My husband, Fred A. Makler, is also a retired public 
school teacher. Before re-entering the teaching profession in 1986, I 
held other positions in which I contributed to the Social Security 
System. My husband, Fred, taught for 30 years, and in addition, worked 
two other jobs, after school and summers to support our family. He also 
contributed to the Social Security System. We each have accumulated 40 
quarters but are receiving a very small monthly benefit in addition to 
our teacher pension. We feel this is unfair. We contributed to Social 
Security in good faith and expected to receive the benefits of our 
contributions. Please do all you can to pass the Public Servant 
Retirement Protection Act, H.R. 4391.
    Thank you for your interest, concern, and positive vote

                                 

    Statement of William A. Mathison, East Longmeadow, Massachusetts
    I wish to express my outrage at the unfairness of the Government 
Pension Offset (GPO). As I understand the provisions of the GPO, 
because my wife has a Massachusetts' Teachers Pension she will not 
receive full Social Security spousal benefits in the event of my death. 
After paying into the Social Security System for over forty years I am 
enraged that my wife's retirement security will be reduced because of 
this offset. I urge you to repeal this provision immediately!

                                 

Statement of the Honorable Howard P. ``Buck'' McKeon, a Representative 
                in Congress from the State of California
    Thank you Chairman Shaw, Ranking Member Matsui and Members of the 
Social Security Subcommittee for holding this important hearing on HR 
4391, the Public Servant Retirement Protection Act, which takes a 
strong step forward in obtaining equity in Social Security for our 
nation's public servants.
    As you know, full repeal of both the Windfall Elimination Provision 
(WEP) and Government Pension Offset (GPO) has become a very important 
issue to public servants, their spouses and families nationwide who 
earned both a Social Security benefit and a benefit from a Social 
Security substitute, such as a state pension plan throughout their 
careers. Although these provisions are only applicable to some 13 
states, they affect people in many of our nation's most populated 
states such as Massachusetts, Texas, Illinois and my home state of 
California.
    For this reason, my friend, colleague and fellow Californian, 
Congressman Howard Berman, and I have spent the last two Congresses 
working hard to provide these dedicated firefighters, police officers, 
teachers and other public servants with the money that they have 
rightfully earned over the course of their careers. Our legislation, HR 
594, the Social Security Fairness Act, accomplishes that goal by 
completely repealing both provisions.
    Since introduction of H.R. 594, we have spent a lot of time in 
discussion with Chairman Shaw, other members of Congress and various 
advocates, so that we could come to some compromise that would assist 
these workers with some financial relief before the end of the year. As 
such, I signed on as an original cosponsor to HR 4391, the Public 
Servant Retirement Protection Act, introduced by Congressman Kevin 
Brady, which will provide relief to those workers unjustly affected by 
the WEP.
    Specifically, the legislation repeals the arbitrary WEP formula and 
treats public servants' Social Security contributions like the rest of 
the American workforce. Under this legislation, a worker's entire work 
history, regardless of whether he or she paid into a Social Security 
substitute, would be used to calculate benefits. The benefit formula 
would be the same as applied to all other American workers. To ensure 
Social Security benefits are based on Social Security wages, the 
benefit would be multiplied by the percentage of earnings subject to 
Social Security taxes.
    While H.R. 4391 does not address the GPO, we still recognize the 
importance of its effect on retirees and their spouses. It is our full 
intention to continue to work with the Subcommittee and its members to 
push for further reforms of these provisions in the near future.
    I want to express my gratitude again for allowing me the 
opportunity to share my comments with the Subcommittee today.
    Thank you.

                                 

                                               Houston, Texas 77096
                                                     August 3, 2004
Committee on Ways and Means
1102 LHOB
Washington, DC 20515

    Dear Social Security Hearing Advisory,

    I am writing in reference to the Government Pension offset and the 
Windfall Elimination Provisions of the Social Security System.
    In Texas, as well as other states, the recruiting and sustaining 
new teachers in the field of education has become more difficult each 
year. States and school districts across America are desperately trying 
to find certified teachers to fill the diminishing ranks caused by 
attrition rates, leaving for other jobs, or simply because of the low 
pay and benefits that most teachers receive across our nation.
    Benefits are a critical issue when recruiting employees in any job. 
``Head-hunters'' for corporations tout benefits in accompaniment with 
salaries. One of the means to fill the vacancies in education is to 
find workers, current, or retired, who hold college degrees in any 
field and place them into education through ``alternative'' 
certification methods.
    Any employee who works in a school district which selected not to 
participate in our government's Social Security System, should not be 
penalized that business did not dig into its coffers to match Social 
Security Benefits for that employee whom they hire. It is common 
knowledge that teachers and all those who support their efforts in a 
school system traditionally have some of the lowest paying jobs. As a 
contract worker, my benefits paid by my employer are sick days and 
contributions to a health care plan.
    Until recently, there were few ways a teacher could receive ``extra 
money'' within a school system.
    A teacher that I admire greatly who is a single mom of five, left 
her job at school each day and went to work as a grocery cashier until 
midnight for years to support her family. She is still a career 
educator. Is she a double ``dipper?'' Another friend, recently lost her 
husband before she reached her magic number (80) to retire from her 
long time, educational district that selected not to pay into the 
system. She will not receive her spouse's Social Security check now. 
She could not retire on June 30, 2004. Many educational employees have 
left employment in Texas to meet the dead line of June 30th. In this 
manner, spousal benefits would not be denied. Your committee's 
recommendations in the upcoming months will have an effect on millions 
of families. Many educators wanted to keep working left the workforce. 
The idea of retiring to receive what was rightfully promised from our 
government, is a ``forced'' decision created by the current law(s). 
This is not a ``recent'' occurrence. Several years, a friend phoned me 
so distraught after retiring from her school district. She had paid 
into northern school districts, private schools, etc., which paid into 
the social security system. When she retired from a school system in 
Texas that didn't pay into social security, she ``lost'' 2/3's of the 
money she had earned. To add to this, she will not receive spousal 
social security if he precedes her death (it would be the greater of 
the two).
    I could go on. But, the point should be made by now. Why would any 
person retired or otherwise wish to work in a system that does not pay 
into social security? Many people retire from one job to work again. 
How could this committee vote for a taxpayer to have full deductions 
taken out and then receive 2/3's less or nothing, while other workers 
do not?
    If you speak to a person who started teaching at an annual salary 
of $1000, they would confer that after 30-40 years in education, their 
retirement check and even having full, social security benefits would 
provide an income barely above the poverty level. Therefore, having 
another pension is essential to provide a satisfactory level of income 
with inflation considerations. They were counting on both checks at 
full value. Many people have left the educational system as of June 30, 
2004 to ``beat'' the loophole. This mass exodus left many jobs without 
experienced employees. This loophole was not criminal then and would 
not be now if it continued to exist. My grandmother never worked 
outside the home, did not pay into the social security system, and 
received her husband's social security. My grandfather was a farmer and 
sought a job that paid some Social Security for her. Children who never 
pay into the system receive benefits from a deceased parent until age 
18 while perhaps, simultaneously having a job after the age of 16. Will 
you call that child a double dipper?
    Equity is the question that I would address to your committee. 
``Will you be our Representative that does not try to balance the 
budget with state or federal employee benefits?'' This is simply not 
the solution. Any company that has 20,000 employees should pay into 
social security and not have the option to eliminate those monies into 
the social security system. This could put money into the system. Does 
our government wish to have situations of this nature to embed reducing 
social security recipients by 20,000 employees in the future? If so, 
you have created a system of no-win for both our government and 
citizens.
    Do I have all my quarters? No. My husband worked sometimes three 
jobs while supporting our family and putting me through school. The 
district that I work in does not pay into Social Security. Honestly, at 
the time, 1978, the amount not taken out paid for many things we would 
have not had. No one explained the causal effect. Medicare, what was 
that in the 60s' and 70s' to a young worker? I needed that money. I 
remember leaving a job with an oil tool company because I did not get a 
raise of $ 5 a month when I was making less that $200 per month. I had 
earned that small raise. I left because I felt betrayed for doing a job 
well done. The next day, I found another job that paid that 5 plus 5 
more. Now, twenty-six years later, I have been employed by the largest 
employer in Houston, Houston ISD. It did not contribute to social 
security. Therefore, I am caught in this dilemma.
    Teachers who left our ranks faced this question, ``If I stay, will 
working keep reducing my benefits? If so, I must leave even if I don't 
won't too.'' They left to receive what their husband, wife, etc. had 
earned honestly in social security. To imply now that somehow it is 
``cheating'' is simply a deep betrayal. For people coming into a system 
that does pay into Social Security, that employer should give the 
opportunity to the employee to decline or to pay into Social Security. 
Why does our government allow an employer to make a decision not to 
support the Social Security System? My school district is the largest 
employer in this city. As an educator, where were my chances of getting 
a job?
    Employers should by law provide training and full disclosure of 
what not paying into Social Security could mean 30 years into an 
employee's future. Where was the label on the education, postal, 
firefighter, VA Hospital employment papers warning us that this 
company's policy was dangerous to our financial health? Who will 
testify that this information was with held from the worker? Where in 
the contract was the fine printing that we, the public servants would 
receive fewer benefits for ourselves or from a spouse because we worked 
for a state or federal company? Who was responsible for not reporting 
this to the worker years ago? Was it our government, employer, of a 
joint ``don't tell if not asked?`` I am still finding people today that 
do not know of this policy. Your citizens are distraught that their 
Social Security earned will be cut entirely or reduced. Do we have the 
option to pay into Social Security now what should have been taken out 
all along?
    I still have a job to tend to tomorrow in the same district that 
does not pay into Social Security. I recently compose a letter of 
recommendation for a peer who is seeking employment. She is a widow of 
two years. Her husband worked hard to provide for her. Social Security 
was part of that plan. She now does not qualify for his social 
security. She has changed jobs to a system that pays into social 
security and Texas Retirement System. My own husband worked over thirty 
years providing service to our veterans in the VA Hospital. He 
maintained many other jobs over the years that garnished social 
security from his paycheck. Now, the government will reduce the 
benefits he earned and will stop all his survivor benefits from me if 
he proceeded me in death.
    What would this committee say to the deceased husband or wife who 
paid into social security for years to have a fund available in case of 
his or her death for their surviving spouse? My friend must count every 
penny after the medical bills added up and wiped out most of their 
savings before her husband's passing. She continues to work, as she 
will receive nothing from her deceased husband's social security to 
offset living expenses at this time. She will do what she has to do. 
But after 30 years of her and her husband's financial planning 
together, the government decided that she should not receive money that 
her husband had earned. Your committee must address this issue of 
equity. Equity in terms of how benefits earned are then provided back 
to each citizen. Selecting one group over another is governmental 
discrimination. Selecting a group that the committee feels is most 
``deserved'' is subjective and based on a means to ``balance'' the 
budget. Using one group's money, state and federal workers, to balance 
the budget by cutting or eliminating spousal or personal benefits is 
not a solution. You, our legislators, have placed citizens who did not 
work in state and federal employment the majority of their careers into 
another category. You have decided up to this point, our future, with 
out due process from all concerned.
    I am asking you to help my friends, my retired uncle (postal 
worker), and the countless others, including my husband and myself, who 
feel the absence of equal treatment guaranteed under our American law.
            Respectfully,
                                                 Sandra L. McLemore

                                 

            Statement of Valerie J. McNay, Las Vegas, Nevada
    I am a 53 year old woman with a Ph.D. and employed as a Speech/
Language Pathologist in the Clark County School District, Las Vegas, 
Nevada for the past 10 years. I could work in private practice or in a 
hospital, home health care organization, university or other facility--
but I love to work as a school based speech/language pathologist 
because I can provide my services to those students who need treatment 
regardless of their ability to pay.
    Prior to relocating in Nevada to work for the 5th largest and 
fastest growing school district in the country, with extreme shortages 
of professionals in my field--I had worked for 27 years in the states 
of Michigan, Indiana, Montana, and Kansas and in all of the various 
positions I held I these states I contributed to the Social Security 
System. I receive my periodic reports from Social Security indicating 
what I have contributed and my expected benefits upon reaching 
retirement age.
    When I was considering the position in the Nevada Public Schools, I 
was told that though the salary I would receive was not very high for 
someone with my credentials, I would be receiving an excellent benefit 
package worth approximately nearly $7,000 per year if I had to pay for 
these benefits out of my own pocket and this included the district's 
contribution to the Public Employee Retirement System in Nevada and 
since FICA would not be taken out of my salary I would see more money 
in my paychecks. These financial considerations were important in my 
decision to accept the position in Nevada, since I am my sole provider.
    I had no idea there was such a thing as WEP (the Windfall 
Elimination Provision)--which is an inappropriate name for an act which 
reduces the Social Security Benefits I earned because I happen to have 
choosen to take a low paying position in the public schools for which I 
will receive a small public pension (depends on years of service and I 
have worked nearly 30 years in Social Security system and only 10 in my 
current public pension position). If I had known about this unfair 
legislation, I don't think I would have accepted a position in the 
Nevada Public Schools at this point in my career--I would have sought 
out position in the Social Security system so as not to loose the 
benefits I have earned over nearly 3 decades.
    Not only am I hurt by this unfair legislation but many of my 
colleagues are also being penalized not only by WEP but also by GPO 
(Government Pension Offset). The services for children in the Nevada 
Public Schools is also being harmed because we are loosing good speech/
language pathologists and other specialists and educators when they 
find out they will have their Social Security benefits reduced by 
staying in the teaching profession in Nevada. In our department alone, 
we are almost always short nearly 50 positions because of the growth in 
the district (1 new school built every month) and now the difficulty in 
recruiting staff from out of state who will be penalized like I will 
be. Please do the right thing for teachers and other poorly paid public 
employees and allow us to keep the benefits we earned by repealing both 
the WEP and the GPO. If there is further information that I can provide 
to the committee please feel free to contact me.

                                 

         Statement of Elsie Lynn Meehan, Salisbury, Connecticut
    I am a 61 year old retired teacher from the Connecticut and New 
York public schools. After teaching for 35 years, I was quite confident 
about my retirement benefits until I learned of the WEP and GPO laws. I 
discovered when I attended a retirement seminar, that even though I 
have met the requirements for Social Security benefits while I was 
teaching in New York state for 13 years, I am eligible for only 40% of 
these benefits because I retired after teaching in the state of 
Connecticut. There is no logical explanation for this reduction of 
federal benefits because of a state's employment.
    For years, I have received my Social Security earnings reports with 
no indications that my benefits would be reduced so drastically. 
Specifically, the report states that my earnings at age 66 would be 
about $747 a month; but in reality, I will receive about $298 a month. 
Since my husband was also a teacher, our two retirement funds are 
hardly what one would call a windfall, especially when we compare our 
incomes to those in the corporate world who receive substantial 
retirement benefits, golden handshakes, and full Social Security.
    There seems to be an underlying belief that retired state workers 
in 14 states do not need Social Security payments to live comfortably. 
This argument, at its best, is arbitrary and unfair. It does not take 
into account cost of living in our state nor the relatively low 
salaries of teachers. And in my case, why should my teaching in 
Connecticut have any effect on the benefits I earned in another state 
at another time? ?
    I must add a comment about the WEP. If my husband predeceases me, I 
will not be allowed to collect any of his Social Security payments. 
That means that I must provide for all my housing, medical and food 
bills on my retirement income and 40% of my Social Security benefits. 
This is not the way to treat your public servant who has taken care of 
this country's children for 35 years!
    The Public Servant Retirement Protection Act offers an important 
first step toward the ultimate action of repealing both the WEP and the 
GPO. Increased Social Security benefits will make a real difference in 
the lives of your public employees. I urge you to move this important 
bill to final passage and enactment into law.
    Ultimately though, both the GPO and WEP must be repealed and the 
fair and equable treatment of your public employees must be obtained.

                                 

            Statement of Mary Ann Moore, San Antonio, Texas
    I am currently a teacher in San Antonio, Texas. I am concerned with 
the unfairness of the non-application of social security funds for 
educators who have held other jobs before becoming a teacher. I was a 
late bloomer and did not earn my degree till I was 38 years old. Prior 
to that time I worked several jobs and earned social security benifits 
for a number of years. At the present time I work an extra job to 
increase my income. I feel that postal employees and military personal 
are able to get their retirement benefits and still collect social 
security with out being penalized. Why can't the same apply to 
educators? Your child's teacher, neighborhood policemen, and firemen 
should be afforded the same privilege especially if they contributed to 
the social security fund?
    These hard working Americans who have earned Social Security 
benefits are not getting a ``windfall.'' We are merely asking to 
receive the benefits we earned. Please support the Public Servant 
Retirement Protection Act offers an important first step toward the 
ultimate goal of repealing both the WEP and the GPO. It will make a 
real difference for many public employees, who will receive increased 
Social Security benefits as a result. As a teacher, I urge the 
Committee to move this important bill quickly to final passage and 
enactment into law, and we urge Congress to continue to work toward 
full repeal of both the GPO and the WEP. Thank you.

                                 

                                               Sparks, Nevada 89436
                                                      July 15, 2004
Committee on Ways and Means
1102 LHOB
Washington, DC 20515

    Dear Congressional Committee Members:

    I urge you to support H.R. 4391. I have always been under the 
impression that my Social Security earnings would supplement my 
retirement as I had always been told as a young man. I had my first 
Social Security earnings withheld in Corpus Christi, Texaas when I was 
eleven years old. Today, I am approaching retiring age and hope to 
retire within 3-5 years. From my perspective, the government has 
changed the law as it applied when I initially begin having Social 
Security earnings withheld from my wages. Now I am being told that I am 
eligible to draw a fraction of what was promised to me.
    As a teacher for 30 years and having paid into the Social Security 
System for a minimum of 40 quarters, it is only fair that I should be 
entitled to what I was promised initially. Please support and help us 
pass H.R. 4391. It will be of tremendous help in fulfilling a promise 
to the American worker.
            Sincerely,
                                                    Robert R. Munoz

                                 

                                           Point Blank, Texas 77364
                                                     August 1, 2004
Representative E. Clay Shaw, Jr.
Chairman
Subcommittee on Social Security

    Dear Representative Shaw:

    I am a retired Texas Public School teacher with 35 years of 
experience in the classroom. At the time that I retired from Jasper ISD 
in l997, Jasper was not contributing to Social Security. However, I had 
worked for the Port Arthur ISD who did contribute to the SS System for 
their teachers. Prior to my teaching career, I worked in several 
businesses in which I paid into the Social Security System giving me 
more than forty quarters of contribution. Now that I am retired from a 
school district that did not pay into Social Security at the time I 
retired, I am getting only one-third of the amount that I should be 
allotted. The SS office told me that I should be getting $l,l00. a 
month from my deceased husband of 39 years if it were not for the 
unfair Offset Laws. I only get a payment of $260. monthly which is a 
third of my earned Social Security. Of that amount, $66. is taken out 
for Medicare.
    Therefore, I am in favor of a complete repeal of the GPO/WEP. 
Please let this bill out of the Ways and Means Committee to be voted on 
in Congress. It has only 45 co-sponsors. This bill will not ``fix'' the 
Offsets. Also, I am in favor of the Discharge Petition for HR594 (the 
bill that would totally repeal the Offsets). It has 192 co-sponsors and 
only 26 more would force a vote on the bill. There are 300 co-sponsors 
for HR594. Please consider this plea from a retire Texas teacher and 
vote to repeal the GPO/WEP Offsets
            Sincerely,
                                                  Sally P. Montague

                                 

Statement of Wally Olihovik, National Association of Postmasters of the 
                             United States
    Thank you, Chairman Shaw and Members of the Subcommittee. I 
appreciate the opportunity to share the views of the more than 40,000 
members of the National Association of Postmasters of the United States 
(NAPUS) with you regarding legislation to modify the Windfall 
Elimination Provision (WEP). Moreover, NAPUS is pleased about the 
legislative efforts of Representative Kevin Brady and other members of 
this Subcommittee to alleviate the impact of the WEP on public 
employees. H.R. 4391, ``the Public Servant Retirement Protect Act,'' is 
a positive first step in addressing the legitimate needs of retired 
postmasters and other retired government employees.
    As members of this panel know, the WEP unfairly slashes the earned 
Social Security benefits of retired and disabled workers receiving 
annuities from employment not covered by Social Security. This large 
group includes many retired and soon-to-be retired postmasters. 
Postmasters who have Social Security covered employment contribute into 
Social Security just like private-sector employees. They should not be 
treated differently.
    I would like to note for the record that NAPUS continues to urge 
this panel to report favorably legislation to lessen the punitive 
affect that the Government Pension Offset (GPO) has on the surviving 
spouses of many Social Security recipients. Last year, NAPUS submitted 
testimony to this Subcommittee requesting that Congress enact 
legislation to correct both the WEP and the GPO problem.
    Under the WEP, postmasters who retire under the Civil Service 
Retirement System (CSRS) can lose almost two-thirds of their earned 
Social Security benefit. This is simply not fair. In 1983, Congress 
enacted the WEP during a legislative frenzy to ``save'' Social 
Security. The intent was to eliminate a ``windfall'' for public 
employees not covered by Social Security, yet who also worked in 
positions under which they earned enough credits to qualify for Social 
Security. The offset amount is arbitrary and regressive. The WEP 
victimizes many retired postmasters who managed small post offices for 
which their salary history renders them ripe for financial distress 
without their full-earned benefits under both CSRS and Social Security.
    Obviously, repeal of the WEP is the desireable alternative. 
Nonetheless, the legislation under consideration today, H.R. 4391, is a 
positive step forward. The measure would require that the Social 
Security Administration to compute Social Security benefits based upon 
a person's entire work history, using the standard benefit formula. The 
Social Security benefit would be adjusted to reflect the portion of the 
employee's earnings that were subject to Social Security taxes. This 
legislation would aid low and middle-income government retirees, while 
also guaranteeing that no employees subject to the WEP would receive 
less than currently entitled. Furthermore, Representative Brady's bill 
would apply to current and future Social Security beneficiaries. In 
sum, the measure would replace the current arbitrary WEP offset with a 
better, more appropriate, mechanism to narrow the impact that the WEP 
has on former public employees.
    While H.R. 4391 does not remedy completely how the Social Security 
law discriminates against public-employed retirees, the legislation 
strives to lessen the financial distress they suffer. Therefore, NAPUS 
urges the Subcommittee to report favorably the Public Servant 
Retirement Protection Act.
    Thank you.

                                 

   Statement of Colleen M. Kelley, National Treasury Employees Union

         Social Security Provisions Affecting Public Employees

    Chairman Shaw, Members of the Committee:
    I am Colleen M. Kelley, the National President of the National 
Treasury Employees Union (NTEU). NTEU represents more than 150,000 
federal employees across 30 agencies and departments of the federal 
government.
    First of all, Mr. Chairman, I want to thank you for holding this 
important hearing today. NTEU has presented testimony on many occasions 
and before several different Committees of the Congress over the years 
on the need to address the havoc that both the Windfall Elimination 
Provision (WEP) and the Government Pension Offset (GPO) have caused for 
federal employees and retirees.
    While we are disappointed that the legislation under consideration 
today does not address the GPO, NTEU is nevertheless pleased that the 
Social Security Subcommittee is examining the need for reform of the 
WEP. NTEU is on record in support of bills to repeal and/or revise both 
the GPO and the WEP. These two Social Security offsets may affect the 
benefits of as many as 7 million federal, state and local government 
employees. As you know, many of these employees first learn of the 
potential application of either the GPO or the WEP to their expected 
Social Security benefit at the time of retirement. This frequently 
comes as a devastating blow to their retirement plans.
    The WEP unfairly reduces the retirement income of many federal 
retirees by reducing their own earned Social Security benefit by as 
much as 50%. Under current law, an employee eligible for both Social 
Security and a pension from work not covered by Social Security finds 
that a lower benefit formula is applied when calculating the Social 
Security benefit to which he or she is entitled.
    For example, a private sector worker with average monthly earnings 
of $500 would be eligible for a Social Security benefit of $450 each 
month (90% of $500) at age 65. Using the same earnings as the private 
sector worker, a former federal employee at age 65 who is affected by 
the WEP would have his or her Social Security benefit calculated using 
a 40% formula in place of the 90%, significantly reducing the Social 
Security benefit he or she expected in retirement.
    The use of this lower formula--simply because the individual chose 
to spend his or her career in public service--has a devastating and 
unfair effect on the retirement plans of many federal employees. Those 
federal employees with 30 or more years of substantial Social Security 
covered employment are exempt from the WEP, however, it is a rare 
federal employee that can complete a public service career and also 
have 30 years of Social Security covered employment.
    It is precisely this financial devastation that so many federal 
employees only learn about when they apply for retirement benefits that 
has led so many members of Congress to introduce or cosponsor 
legislation to repeal or revise the WEP. Congressman McKeon (R-CA) has 
introduced H.R.594 to repeal both the GPO and the WEP provisions. This 
bipartisan bill has already garnered 300 cosponsors. In addition, 
Senator Feinstein (D-CA) has introduced S.349, legislation that also 
seeks repeal of both the GPO and WEP offsets. Her bill has attracted 30 
cosponsors.
    Moreover, two other bills are pending before Congress that address 
the WEP. S.1011 (Kerry, D-MA) would restrict the application of the WEP 
to those individuals whose combined monthly income from both Social 
Security and a public sector pension exceeds $2,000 each month. 
Congressman Frank (D-MA) has introduced similar legislation in the 
House, H.R.2011.
    H.R.4391, the Public Servant Retirement Protection Act, and the 
subject of today's hearing, seeks to apply a new benefit calculation 
that would take the place of the WEP. It is my understanding that under 
the new benefit calculation contained in H.R.4391, an employee's 
potential Social Security benefit would first be calculated as if 
Social Security deductions had been applied to all the employee's 
earnings (even for periods that the employee may have contributed 
instead to a retirement plan such as the Civil Service Retirement 
System). The standard Social Security benefit formula would then be 
applied and a Social Security retirement benefit determined.
    That potential benefit would subsequently be multiplied only by the 
period of time that the employee actually contributed to Social 
Security. This final calculation would determine the individual's 
actual Social Security entitlement. If half of the employee's career 
had been spent in positions covered by Social Security, for example, 
then the employee would be eligible to receive half of the Social 
Security benefit to which he or she would otherwise be entitled.
    While NTEU appreciates the Subcommittee holding this hearing to 
review H.R.4391, we would encourage the Chairman to fully consider 
these other pending proposals for reforming or repealing the WEP. 
H.R.594, in particular, with 300 current cosponsors should be the 
subject of thorough review by the Subcommittee.
    In addition, NTEU urges this Subcommittee to hold hearings and 
consider legislation to either repeal or reform application of the GPO. 
This offset unfairly penalizes recipients of government pensions who 
are also eligible for Social Security based on a spouse's work record. 
The GPO reduces the spousal Social Security benefit by two-thirds of 
the amount of the government pension. In entirely too many cases, this 
provision results in the elimination of any Social Security benefit the 
federal retiree is otherwise eligible for.
    Unlike the WEP, which predominantly affects men (December, 2001 
data from the Social Security Administration indicates that 67% of 
those affected by the WEP are male), the GPO has a particularly 
devastating impact on female federal retirees who frequently are 
eligible for smaller federal pensions than their male counterparts. 
This stems from a number of reasons, including interruptions they may 
have had in their careers while raising their families or working at 
lower paid positions for the bulk of their federal careers.
    A primary example of this is the elderly widow who is eligible for 
a monthly pension of $600 based on her federal government service. Two-
thirds of her pension, or $400 must be used to offset any Social 
Security spouse's or widow's benefit for which she is also eligible. 
Assuming she is eligible for a monthly spousal Social Security benefit 
of $500, the application of the GPO results in her receiving only $100 
in Social Security each month. The GPO has effectively slashed this 
individual's retirement income from $1100 monthly to only $700 each 
month.
    More often than not, the GPO disproportionately affects those who 
can least afford to forgo this retirement income. Had individuals such 
as the widow in the above example not dedicated their careers to public 
service, they would remain fully eligible to collect their spousal 
Social Security benefits. As you know, the GPO does not apply to 
individuals who collect private pension benefits and are also eligible 
for Social Security.
     According to the Social Security Administration, more than 300,000 
former federal employees have their Social Security benefits reduced as 
a result of the Government Pension Offset (December, 1999 data). It is 
particularly troubling that 69% of these individuals were women and the 
average offset applied to their Social Security benefits was $391 each 
month.
    I bring these facts to the Subcommittee's attention in the hope 
that the Subcommittee will consider legislation to amend or repeal the 
GPO. In addition to the bills mentioned earlier, H.R.887 (Jefferson, D-
LA) would impose the GPO in only those situations where the combined 
federal pension and Social Security benefit exceeded $2000 monthly. 
This bill currently has 126 cosponsors. Legislation pending before the 
Senate, S.363 (Mikulski, D-MD), would only apply the GPO when the 
combined pension and Social Security income exceeds $1200 each month 
This legislation is currently cosponsored by 28 Senators.
    It is my understanding that H.R.4391 has been estimated to cost $7 
billion over a 10-year period. In this period of tight fiscal 
restraint, I applaud the Chairman for his interest in taking steps to 
address the WEP. However, in NTEU's view, it is equally important that 
Congress commit the necessary resources to address the GPO. Thank you 
very much for this opportunity to share our views with the Social 
Security Subcommittee.

                                 

             Statement of Constance G. Newman, Acton, Maine
    Please repeal WEP and GPO
    I have been the wife of a retired teacher for 16 years. He served 
as a teacher/guidance counselor for 34 years before that. I raised four 
children on the meager teachers salary of those days. I worked part 
time getting 36 small quarters of Social Security in. He worked more 
time out of necessity, making his full 40 quarters. He EARNED his 
Social Security benefits.
    He also attended more classes at his expense to keep up his 
teaching and guidance qualifications and value to the children.
    Our Social Security benefits are cut because he has a teachers 
pension. He gets $381 a month and I get $135 a month. If he dies, I 
will receive nothing because of his teachers pension. But he EARNED his 
Social Security benefits. I feel that I earned something too, even if 
only in the part I played in keeping him in education when there were 
other more lucrative jobs available by taking care of our children and 
working part time.
    Our health insurance premiums are about $450 a month out of his 
teachers retirement pension of approximately $1440 a month gross, 
before fees, taxes etc. The COLA increase in Social Security and 
retirement pension is not a thirtieth of the increase in the health 
insurance premiums annually. We are going backward in income and will 
have to give up some essential living expenses at some time soon. Our 
small savings will not keep our house going. Maybe we will lose health 
insurance.
    Many people receive both private pensions AND Social Security 
benefits, many who do not need them. Teachers, police, fire department 
workers and others who serve their community all their lives deserve 
the same treatment. Even members of Congress receive both, do they not?
    Please repeal these unfair and perhaps illegal laws. Where will you 
get your public servants in the future if these are treated this way?

                                 

              Statement of Francis A. Newman, Acton, Maine
    How WEP and GPO affect me and my family
    I taught school and was a guidance counselor for thirty four years. 
Salaries were and are not high for teachers and I was forced to do 
other work to support my family which included four children. I also 
had to continue to take education courses to keep current with teaching 
standards.
    I earned my forty quarters in Social Security benefits.
    After retirement from teaching I found that my SS benefits were cut 
deeply because I had a teachers retirement pension which amounts to 
about $19000 a year. I receive $381 per month in Social Security and my 
wife receives $135 per month. If I die, she would receive no SS 
benefits at all because of my teachers pension income.
    Health insurance premiums are approximately $450 per month for the 
two of us. They outstrip by far any COLA included in the pension or 
Social Security updates. Therefore our income is going backward year by 
year becoming less and less.
    Please understand that I EARNED this Social Security benefit that I 
am not receiving. It was not given to me. At some point, we will not be 
able to afford health insurance or some other necessary cost of living. 
We live frugally now.
    I urge you to repeal the GPO and WEP bills. They are totally unfair 
to people who gave up lucrative types of work to serve their country 
and their children. At the same time they earned the benefits they are 
now denied.

                                 

          Statement of Joan Nimerowski, Andover, Massachusetts
    As an educator for nearly 30 years (1976-2004), member of MTA and a 
member of my local teacher organization AEA, I am submitting testimony 
in regards to the current House Ways and Means Hearing on the Public 
Servant Retirement Protection Act.
    I started my full time working career in 1974. I was just out of 
college and unable to find a teaching position, so I took a clerical 
position in a local office and worked there through 1974 and 1975. I 
paid Social Security taxes on about $4,000 of income for those two 
years.
    In 1976 I found my first teaching position in a small Lawrence 
``parochial'' school at the grand salary of $6,300. I continued there 
for the next 7 years until 1983 leaving at the grand salary of $8,500. 
Obviously, I worked additional jobs year round to supplement the low 
salary. Altogether I contributed Social Security taxes on about 
$56,000.
    From 1983 to 1986, I worked 1 year at a public library and then 
taught for 2 years in a New Hampshire school system. I contributed to 
Social Security on about $25,000 over these 3 years.
    From 1986 on I did not contribute to Social Security as I worked in 
a local community college part time and then in 1989 started in the 
Massachusetts public school system. I have paid into MTR since 1989 and 
have paid in to ``buy back'' substitute teaching time, New Hampshire 
teaching time, and my public library time. Much to my dismay I cannot 
``buy back'' the 7 years I taught in a parochial school or the three 
years I taught part time in the community college. I am also denied the 
full Social Security benefits I contributed from the 7 years spent 
teaching in a parochial school. I have no pension from those 7 years 
either. I'm not clear how Social Security could be considered a 
``windfall'' in this case.
    In conclusion, I feel the WEP as well as the GPO are penalizing me 
in three ways. First, I will not receive the benefits from Social 
Security that I contributed from my working years both in and outside 
of teaching. Second, I can't ``buy back'' the 7 years parochial school 
teaching time, which would help provide years towards the MTR system, 
and I again won't receive the benefits from Social Security for these 
years. Third, due to GPO, I'll lose a good portion if not most of my 
husband's Social Security benefits if he should predecease me.
    According to Social Security records I would be eligible to receive 
$370 per month in 2014 at age 62 (full benefits). If this were cut by 
2/3 (WEP), I would receive about $125 per month or $1500 year. If I add 
this to my approximately $30,000 to $35,00 per year retirement, I come 
up with a total of about $31,000 to $36,000 per year, not a very strong 
retirement package after 38 years as an educator.

                                 

            Statement of Jim Oldebeken, Gladstone, Missouri
    What successful American has not been positively affected by at 
least one teacher?
    Our teachers give us the knowledge, tools, inspiration and vision 
to succeed in our chosen profession.
    For this reason I am shocked to learn that teachers and other 
public servants are denied a full social security benefit under the so-
called Windfall Elimination Provision (WEP). Such is not the case with 
private sector workers and the military who receive all of their social 
security benefits in addition to their primary retirement plan 
benefits.
    My aunt, Sally Navarro, was a Junior High English teacher for 21 
years. After leaving the teaching profession in 1984, she worked in the 
private sector and paid into Social Security for 20 years, earning 80 
quarters under Social Security. Although the threshold for full 
retirement benefits is only 40 quarters, the WEP penalizes her for 
having been a teacher and participating in California's teacher 
retirement program, and denies her 56% of her rightful Social Security 
benefits.
    She is not alone. Over 7 million teachers, police officers, fire 
fighters and other government employees are discriminated against in a 
like manner.
    The WEP creates several embarrassing problems:

      Discriminates against ``public servants'' who 
traditionally receive lower pay than private sector workers and the 
military.
      Causes some retirees to have to resort to government 
assistance programs like food stamps.
      Discourages young people from becoming teachers, fire 
fighters, and law enforcement officials.
      Further undermines the reputation of the Social Security 
Administration as a fair, effective and properly managed federal agency

    Congress should not delay to pass this legislation. The excuse of 
``it's an election year'' is not acceptable. America needs H.R. 4391 to 
end injustice toward a group of seven million Americans we should 
protect and revere for their service to this country and all of its 
citizens.

                                 

                                        Palmer, Massachusetts 01069
                                                      July 17, 2004
    Dear Committee Members:

    Some 35 years ago, like so many other teachers, I found it 
necessary to hold two (sometimes three) jobs to support my family. I 
chose radio news broadcasting as my second ``career,'' because in 
addition to providing supplemental income, it also enhanced my teaching 
as a journalism instructor. I worked in radio over a period of two 
decades.
    I contributed Social Security payments during all those years, both 
because it was required and because I anticipated one day to supplement 
my teacher's retirement pension with my SS earnings. However, I 
narrowly missed the legislated cut-off date for making me eligible to 
receive the full benefits of my SS contributions.
    All those late nights and weekend days away from my family were a 
sacrifice I was willing to make in order to provide a better life for 
them. Without a second job, it would have been very difficult, perhaps 
impossible, to make mortgage payments on a home. Now, in our retirement 
years, Social Security income would be very helpful for my wife and me.
    The WEP and GPO are extremely unfair penalties for teachers and 
others who spent their careers in public service. It also bothers me a 
great deal to hear this situation referred to as a ``windfall.'' These 
Social Security benefits are benefits that I earned, just as everyone 
else, through deductions from my paychecks.
    My wife and I urge you to move the Public Servant Retirement 
Protection Act to final passage and into law, and we urge Congress to 
continue to work toward full repeal of both the GPO and the WEP.
    Thank you.
                                              Edward W. Orzechowski

                                 

         Statement of Jane K. Pickett, Worcester, Massachusetts
    I am very interested in the resolution of this act of Congress. I 
have earned the requisite number of quarters to enable me to collect 
Social Security.
    I'm also a late comer to the higher education system of the state 
of Massachusetts.
    With retirement in the foreseeable future, I will need to be able 
to use both benefits in order to maintain even a marginal standard of 
living. As you well know most public service jobs are not especially 
lucrative. At age 67 I would be able to get 80% of $42,000.
    I can't help but think about the retirement system that members of 
Congress are entitled to. Is it 100% of their current salary? ?
    I'm weighing for the public record because I think Congress needs 
to know that most public servants are not in lucrative positions, and 
will need as many resources as they are eligible for.
    Please restore our Social Security benefits, we have rightly earned 
them.
    Thank you for your consideration.

                                 

          Statement of Richard Pond, Rochester, Massachusetts
    I am writing to voice my opposition to the WEP and GPO bills before 
you for your consideration. I urge you to reject these acts as being 
unfair and hurtful to retired public servants who have had to work 
second and third jobs to provide for their families. As an elementary 
school teacher, that is what I had to do for 20 of my 30 years of 
teaching. I earned my social security benefits and I ask that you give 
me and others like me the benefits we earned.
    Our nation cannot afford to penalize educators, police, 
firefighters and other public servants who have dedicated their lives 
to serving their communities and their nation.
    By supporting the Public Servant Retirement Protection Act, you, 
the members of congress, will move toward repealing both the WEP and 
the GFO. That repeal will make a great difference in myself and my 
wife's quality of life in retirement. I am sure I speak for many public 
servants who have had to work second jobs and have social security 
benefits that they have earned. This money is no ``windfall''. It was 
earned-- often at great sacrifice to our families.

                                 

Statement of the Honorable Jon C. Porter, a Representative in Congress 
                        from the State of Nevada

  Subcommittee on Social Security Hearing on: H.R. 4391, the ``Public 
                  Servant Retirement Protection Act''

    Mr. PORTER: Thank you Chairman Shaw, for calling this hearing on 
H.R. 4391, the Public Servant Retirement Protection Act of 2004. I wish 
to express my gratitude to you, Mr. Brady, and Mr. McKeon for 
introducing this important legislation that will protect the hard 
earned retirement benefits of nearly seven million Americans, and many 
of Nevada's teachers, police officers, and other public servants. I 
would also like to thank Terry Hickman, of the Nevada State Education 
Association, for coming here today to represent Nevada's teachers and 
those around the country.
    This legislation represents a significant step forward in restoring 
fairness to the Social Security system that helps provide retirement 
benefits for many of America's most dedicated employees. While created 
to equalize the treatment of all workers, the Government Pension Offset 
and the Windfall Elimination Provision proved to be onerous burdens to 
many government employees. By correcting the problems associated with 
the Windfall Elimination Provision, a significant obstacle in restoring 
fair benefits will be overcome.
    Under current law, employees who pay into a government pension 
system or other retirement program in lieu of Social Security for some 
jobs in their career do not receive benefits that are relatively more 
generous than those of workers with equal earnings who paid Social 
Security taxes for all jobs in their career. An accurate accounting of 
the monies to be paid from the Social Security Trust Fund must be made.
    This important legislation would modify the Social Security benefit 
formula to first calculate all of the worker's earnings, as though they 
were subject to Social Security taxes, using the standard benefit 
formula. To ensure Social Security benefits are based only on Social 
Security-covered wages, the benefit that is actually paid would be 
adjusted to reflect the proportion of the worker's earnings that were 
subject to Social Security taxes. This common sense proposal would 
allow those individuals who choose to give up more lucrative careers 
for the benefit of their communities to receive their just dues from 
the Social Security Administration.
    Again, Chairman Shaw, I thank you for holding this important 
hearing. Through consideration of this important legislation, this 
Congress will better serve those individuals who so greatly benefit our 
communities. I encourage continued consideration of this legislation 
and urge support from all of my colleagues.

                                 

                                        Carver, Massachusetts 02330
                                                      July 31, 2004
Committee on Ways and Means
1102 LHOB
Washington, DC

    To Whom It May Concern:

    I am writing regarding the impact of WEP and GPO. I have been a 
Registered Nurse since 1968. Up until 1987, I worked at several 
different jobs, spending 13 years in geriatrics; my only pension was 
Social Security. I started working as a school nurse in 1987. My salary 
was initially reduced by 1/3; monetary compensation would have been 
much higher had I continued to work in the private sector. I chose to 
remain in the school system even as the Medical issues facing me every 
day increased. My pension will not be adequate to live on. If I had a 
pension other than Social Security for my first 20 years of employment 
I would be allowed to collect both.
    If something were to happen to my husband, the widows Social 
Security which I should be entitled to would be greatly reduced. I have 
a friend whose husband died; while she was working she was able to 
collect his Social Security after she retired it was taken away. She 
was a teacher, who had stayed home with her children for many years so 
her retirement was minimal.
    If I had known that I would loose most of my Social Security, which 
I worked hard for, I might have made different decisions.
    Please repeal the WEP and GPO so that those of us who are entitled 
to Social Security Benefits that we earned will be able to receive them 
enabling us to retire and live as we should be able to. Any one who has 
worked hard for their entire adult life deserves to collect the 
benefits they have earned.
            Sincerely,
                                                   Mary Ellen Pratt

                                 

 Statement of Retired Educators Coalition for Social Security Fairness
    We, the undersigned, as representatives of nearly 300,000 retired 
educators in 15 states that are affected by Social Security's Windfall 
Elimination Provision and Government Pension Offset, believe that H.R. 
4391 (the Public Servant Retirement Protection Act) is a positive first 
step in providing equitable treatment to public retirees. We are 
pleased to submit this statement to the House of Representatives' 
Subcommittee on Social Security as it gathers facts concerning the 
impacts on public employees of the current Social Security system.
    For 20 years, our members have suffered under the financial 
hardships imposed on public retirees by the Social Security system. 
Carefully constructed personal retirement plans have been destroyed 
because of the WEP and GPO. Too often, teachers and other affected 
school employees only find out about these penalties when they go to 
apply for their benefits. By then, it is too late to make alternative 
financial planning decisions, and public retirees are left to cope with 
what is often a greatly diminished retirement income. We appreciate the 
fact that Congress at long last realizes that the impacts of these 
penalties are not what were originally intended when they were enacted.
    The WEP, as currently designed, penalizes people who have dedicated 
their lives to public service, often at a personal financial sacrifice. 
Teaching is a rewarding career, but it is not lucrative. In order to 
support their families, teachers typically work in summer jobs and pay 
Social Security taxes. Many do so without realizing they will receive a 
reduced benefit because of the WEP. They understand they will not 
receive the maximum Social Security benefit because, frankly, they have 
not earned one. But they do believe they will be treated the same as 
everyone else who meets the minimum eligibility criteria of 40 quarters 
of covered Social Security employment.
    The regressive formula used in the computing the WEP, whereby all 
of the reduction is imposed on the first increment of eligible 
earnings, is counter to the intent of the Social Security system. The 
basic premise of Social Security is to replace a greater portion of the 
income of people who were more modestly compensated in their working 
lives. Imposing equal penalties on all public workers, regardless of 
whether the pension from a non-Social Security system is $500 a month 
or $1,000 or more per month, further compounds this inequity.
    Replacing the current WEP calculation with a formula that takes 
into consideration the individual's entire working career is an 
important step towards greater fairness in the system. While the 
increased benefit that will become available to those impacted does not 
fully restore Social Security earnings lost under the current formula, 
the additional income will be significant for the poorest retired 
teachers in our ranks.
    Additionally, many of the states we represent are experiencing 
severe teacher shortages. To meet increasing demands for qualified 
teachers, many school districts will seek to recruit mid-career 
individuals from other professions, most of which are covered by Social 
Security. While these individuals may be willing to make salary 
sacrifices to pursue a second career in education, they would be 
unwilling or unable to accept further financial sacrifices that Social 
Security will impose upon them for their career choice. Reducing the 
impacts of the WEP will also reduce this obstacle to teacher 
recruitment.
    As we have previously communicated to you and the entire Congress, 
our eventual goal is complete repeal of both the WEP and the GPO. These 
penalties impose too great a financial burden on hundreds of thousands 
of retired teachers who worked hard all of their lives, gave of 
themselves to their communities and played by the rules. HR 4391 
represents an important first step towards achieving that goal. Thank 
you.

                                 

                                        Farmers Branch, Texas 75234
                                                      July 16, 2004
Committee on Ways and Means
1102 LHOB
Washington, DC 20515

    Dear Sir,

    With regards to H.R. 4391, I can only relate my experience with the 
existing Social Security law. I worked for 22 years in jobs in which I 
was required to pay Social Security tax. I also worked as a public 
school teacher in Texas which did not withhold Social Security tax. For 
the last ten years or so, I received Social Security benefit statement 
that showed that I would get approximately $360. 00 per month at 
retirement age. When I retired, I was told by Social Security that 
since I was getting a pension from the state teacher retirement system, 
that my Social Security benefit would be $170.00 per month. To me this 
was not right at all. I had paid into Social Security and met all the 
requirements, yet couldn't receive the benefits for it. When I asked 
why, I was told---WEP.
    I hope that H.R. 4391 will correct the unfairness in the existing 
law. I urge you to support and pass a bill that will be fair to all who 
contribute to the Social Security system.
            Sincerely,
                                                Cecil Ralph Roberts

                                 

             Statement of Noel R. Rosenbaum, El Paso, Texas
    I have been teaching in the public schools since January, 1993. I 
teach Computer Literacy to 8th graders and assist teachers and students 
in their Internet projects.
    I am now 62. As a Texas teacher, I am automatically enrolled in the 
Texas Retirement System (TRS), for which pre-tax money is taken from my 
income.
    I am a widow. I also worked for thirty-five years--since the age of 
15--at jobs that were within the Social Security system, meaning that I 
was contributing POST-TAX money to that system.
    I became a public school teacher in 1993. NO ONE told me I would 
lose my survivor's benefit as a widow once I was part of the TRS 
system. I did not know that I would lose up to two-thirds of my Social 
Security benefits which, according to my December 17, 2003 Social 
Security Statement will be $1,042 per month at the retirement age of 65 
and ten months.
    My last TRS statement dated August 31, 2003 informs me that my 
maximum TRS based on my Three Year Average Salary of $41,408 is $873.02 
a month at normal retirement age.
    I've earned both Social Security and TRS retirements. I do not 
understand why I have to lose the Social Security I earned over 35 
years. I am not sure what my spousal amount would be, but my husband 
earned well over $200,000 every year, so I assume my spousal benefit 
would be at the TOP and maybe higher than my individual Social Security 
retirement amount!
    I though I could afford to be a public school teacher. I have some 
money from my husband's estate that allows me to live in my own house. 
I do not take frivolous trips or spend lavishly on my three 
grandchildren and two children or even myself. Why am I being punished 
to be a teacher?
    Please examine the consequences of this WEP provision keeping in 
mind thousands of women and men like me who have lost spousal benefits 
and will have their Social Security benefits reduced upon retirement 
from public school teaching. How can you justify such a legal/financial 
requirement?

                                 

            Statement of San Jacinto College, Houston, Texas
    This be the full written submission for the list of persons of the 
San Jacinto College in that we are all in full support of the ``Public 
Servant Retirement Protection Act''.

                                 

                         School Employees Retirement System of Ohio
                                               Columbus, Ohio 43215
                                                     August 2, 2004
The Honorable E. Clay Shaw Jr.
Chairman, House Ways & Means Subcommittee on Social Security
2408 Rayburn House Office Building
Washington, D.C. 20515

    Dear Chairman Shaw,

    The School Employees Retirement System of Ohio is deeply 
appreciative of your co-sponsorship of Representative Brady's H.R. 
4391, the Public Servant Retirement Protection Act, and of the recent 
hearing you held on this bill in the Social Security Subcommittee.
    As you know, H.R. 4391 would eliminate the Windfall Elimination 
Penalty and recalculate public employees' Social Security benefits 
based on both covered and non-covered earnings. We believe this new 
approach represents a far more equitable distribution of Social 
Security benefits to retired public employees.
    We are especially pleased that this new approach continues to honor 
the intent of Social Security by providing a higher benefit to lower-
wage workers. WEP penalizes both low-wage and high-wage workers 
equally; there is no modification for those who worked in vital, but 
poorly compensated public positions such as bus drivers, school cooks 
and custodians. These public employees will receive a far more 
meaningful Social Security benefit as a result of the new formula in 
H.R. 4391.
    We would like to alert you to some areas of concern for us as 
deliberations continue: we understand SSA only has records of non-
covered earnings beginning in 1978, and some of these records are 
incomplete; and mandatory coverage of new public employees could be 
suggested as a partial source of funding for the bill's implementation.
    On the data collection and reporting issues, it should be noted 
that public retirement systems might not have complete career non-
covered earnings information, especially if an employee worked for 
multiple public employers covered by different public retirement 
systems. On the mandatory coverage issue, we would firmly oppose such a 
suggestion, as it would not be in the best interest of the State of 
Ohio, our public employers, or our public employees and retirees. 
Mandatory coverage would ultimately destabilize public pension funds 
like ours by starving it of the new contributions needed to pay current 
benefits.
    In closing Chairman Shaw, we are extremely grateful for your 
efforts to move H.R. 4391 forward. It represents a far better approach 
to the calculation of Social Security benefits for public employees 
than we've had since the WEP and Offset were first introduced. Thank 
you for your diligence in pursuing critically needed reform in both 
these areas, and please let us know if we may be of assistance to you 
in this effort. Thank you again.
            Sincerely,
                                                   James R. Winfree
                                                 Executive Director

                                 

        Statement of Vashti E. Sherrill, Bakersfield, California
    I am writing this letter in support of H.R. 4391, the ``Public 
Servant Retirement Protection Act''. I ask you to support this bill 
because it is so important to teachers who begin their profession as a 
second career. As you know, I am sure, there are many working adults 
who change professions during their career. They change professions for 
many reasons, but one that is prevalent is the adult continues his/her 
education and is able to move into a more satisfying and economical 
position. At the present time, I am an Adjunct Professor with a private 
university that has many prospective teachers as students. The majority 
of these students are beginning a second career in education. Most are 
unaware that even though they worked in the private sector as a banker, 
secretary, medical assistant, etc., they are forfeiting a large portion 
of their Social Security benefit when they retire.
    This happened to me. I married immediately after high school and 
worked at a local bank. Actually I began working at the age of sixteen. 
When my children started school, so did I. I have to say it was 
exhilarating. Education became very important to me. I received a 
Masters Degree in English, in Administration and a Reading Specialist 
credential. I had a rewarding career as a teacher, curriculum 
specialist and a principal. Even after retirement, I continued in the 
educational field as an Adjunct Professor because I love teaching and 
feel I have something to offer prospective teachers.
    It was a shock to me to learn when I retired that even though I had 
been employed in the private workforce for almost twenty years before I 
became a teacher and had earned many more than the required 40 
quarters, I am eligible to receive only about $240 of a possible $650 
of Social Security benefits that should be available to me. I also 
learned that I would not receive ANY of my husband's benefits if 
anything happened to him. If I been widowed and receiving benefits from 
his Social Security, I would lose it when I retired. THIS IS NOT FAIR. 
If I had not paid into social security, then I would not expect to 
receive benefits, but I did pay into Social Security for many years. 
Not only that, I work for a private university part time and pay MORE 
into social security than I get and I will never receive any of these 
benefits unless you pass this bill. THIS IS NOT RIGHT!
    As President of the Kern Division of Retired Teachers, I have 
become acquainted with many members who are really struggling because 
they do not receive their earned Social Security benefit. These are 
teachers who spent their evenings, weekends and summers working a 
second job to support their families. They paid into Social Security 
for many years and now are denied the benefit they earned. But the 
teachers I am really concerned about are the ones who worked many years 
in the private sector and worked only a portion of their career as a 
teacher. Their pension, through the teaching profession, is low and 
even though they dedicated a portion of their life to helping students 
through teaching, they have to work during their retirement to survive. 
THIS IS NOT RIGHT!
    I am sure that every one of you--who are the successful examples of 
education--can remember a teacher who influenced your life. You must 
know and accept the importance of education. There are teacher 
shortages in many school districts in California and I fear that if 
becomes well known that second career teachers will not receive the 
Social Security benefit that they earned in their first career, they 
may decide not to go into teaching. They should not be penalized 
because they become teachers. If they worked in the private sector, 
received the necessary quarters, then they should also receive the 
benefits.
    Please support H.R. 4391, ``Public Servant Retirement Protection 
Act.'' You will be supporting the many teachers who have dedicated 
their lives to you and your children.

                                 

               Statement of Karin Shipman, Houston, Texas
    I would like to state my support for H.R. 4391, the ``Public 
Servant Retirement Protection Act.''
    While I am not schooled in the technical aspects of Social Security 
benefit calculations, I do know that the Social Security benefits for 
which I have paid are being reduced due to my drawing retirement 
benefits from Texas Teacher Retirement System. Upon my retirement next 
year from the private sector, I will have 20 years of ``Substantial 
Earnings'' for Social Security purposes. It is my understanding that my 
Social Security benefit is being reduced under the Windfall Elimination 
Provision.
    Let me be clear on this. I am not trying for benefits based on my 
husband's earnings. I simply feel that I should get full benefit of the 
Social Security taxes I have paid over the years. The publication 
furnished to me by Social Security Administration says that the 
``modified formula prevents a windfall to people who would unfairly 
benefit from provisions aimed at low-income workers.'' My Social 
Security account will show that I am not a ``low-income worker.'' 
Surely there's a more equitable way to compute my Social Security 
benefit.
    Thank you for this opportunity to submit information.

                                 

             Statement of Glen P. Shultz, Las Vegas, Nevada
    To the Committee on Ways and Means:
    I am a teacher in the Clark County School District in Nevada. I 
have been a teacher for six years. Before I became a teacher I was a 
pastor for 18 years. In those 18 years, and a few years before I became 
a pastor I paid into Social Security. It is my understanding that under 
current laws I would not receive my Social Security when I retired 
because of my public school retirement plan. I do not believe that I or 
anyone else who came into teaching as a second career should lose the 
Social Security benefits that we faithfully contributed to for many 
years. I urge your support of the Public Servant Retirement Protection 
Act and to stop this injustice toward public servants who have 
contributed to Social Security and who deserve to receive the full 
benefits of their prior service. Thank you for considering my request.

                                 

              Statement of Mary Sowder, Henderson, Nevada
    I would like to submit testimony for the Public Servant Retirement 
Protection Act explaining how the WEP will impact my husband and me, 
and why Congress should address the unfair public employee offset.
    I have been a school teacher for the past 26 years, and my husband 
recently is a recently retired police officer with 25 of years of 
public service. We both came to the public sector from careers in the 
private sector because we wanted to serve our communities. 
Unfortunately, it seems like we also chose to give up the Social 
Security benefits. My husband is now once again employed by a private 
company and he is once again paying for Social Security taxes which he 
will never have a chance to enjoy. Over the years I have worked part 
time in other positions in addition to teaching in order to make ends 
meet. In all of these positions I have also contributed some amount to 
Social Security. The current Windfall Elimination Provision will 
negatively impact our retirement income. Although the Social Security 
benefits we earned and expected to receive are not large, our combined 
benefits would help offset enormous payments for continuing health 
insurance payments once we fully retire.
    My husband and I have earned Social Security benefits, and we would 
not be getting a ``windfall.'' We are merely asking to receive the 
benefits we earned. I feel that the WEP and the GPO unfairly penalize 
those who have chosen to enter public service, often at great financial 
sacrifice. Our nation cannot afford to penalize educators, police, 
firefighters, and others who have dedicated themselves to serving their 
communities and their country.
    The Public Servant Retirement Protection Act offers an important 
first step toward the ultimate goal of repealing both the WEP and the 
GPO. It will make a real difference for many public employees who will 
receive increased Social Security benefits as a result. I urge the 
Committee to move this important bill quickly to final passage and 
enactment into law, and we urge Congress to continue to work toward 
full repeal of both the GPO and the WEP.

                                 

            Statement of Barbara W. Stek, Anchorage, Alaska
    WEP Testimony
    I am a retired school teacher from Anchorage, Alaska. Since high 
school, I have worked in many capacities in addition to my teaching 
career. I have earned all the quarters necessary in order to collect 
Social Security benefits when I reach the required age. Imagine my 
chagrin when I learned that even though I had met all the necessary 
requirements, I would not be entitled to all the Social Security 
benefits.
    The Windfall Elimination Provision is very unfair to those of us in 
public service who have worked in traditionally lower paying positions 
in order to give back to our communities. My pension alone is not 
enough to support me and I have worked continuously since my retirement 
to supplement my income. I was, of course, looking forward to my 
upcoming Social Security income to insure that I would be able to live 
without too many monetary worries.
    People in other professions are not subject to this inequitable 
practice. They are able to collect their pensions and their Social 
Security benefits. Clearly this is an injustice which needs to be 
remedied.
    I ask that you give positive consideration to those of us who have 
worked in a public service position, who have contributed to Social 
Security, and who have earned their appropriate quarters in additional 
employment. Please repeal the Windfall Elimination Provision so that we 
may collect all the Social Security benefits to which we are entitled.
    Thank you for your time.
                                 

       Statement of Frank W. Sterret, Bridgewater, Massachusetts

    In 1984 I left the for-profit sector to take a job as a professor 
at Bridgewater State College. Now at age 59 with over 20 years of 
service at the college, I will soon be looking at retirement. 
Unfortunately, I am one of those hard working Americans who is caught 
in the penalty situation under the current WEP and GPO laws. As I 
understand it now, I'll be penalized approximately 40% when I retire 
and claim Social Security. My wife, who has not always worked full time 
while raising our children, has been working at various positions in 
public K-12 education. She never worked in the private sector and will 
suffer under GPO as well.
    I really feel that the current WEP and GPO law is grossly unfair to 
those of us who have worked in multiple jobs where significant amounts 
of social security dollar have been deducted from our paychecks over 
the years while working in the private sector. (Please refer to the 
second page for a list of my Social Security wages.) Typically, I often 
worked two jobs to make ends meet and to fund college educations for my 
two daughters. This helped close the pay gap between typical private 
sector employment and the lower wages of a state college professor.
    It's not like I'm trying to get social security money when I retire 
and have never contributed-just the opposite. I have worked many years 
with significant earnings under social security in the aircraft repair 
business, medical device manufacturing, and as a senior systems 
analyst. As a result of these and other for-profit sector jobs over the 
years, I have contributed significantly to both the social security 
system in my private sector jobs and to mandatory state retirement 
funds when working in the public sector.
    My wife and I have been in situations where we've had to sell two 
houses at a loss. We usually earned enough so that our daughters 
usually did not qualify for need based scholarships. We own our own 
home but still have 12 years to pay off our mortgage at $2130 per month 
here in the Boston area. My wife and I do not have a lot of assets, are 
not independently wealthy, and will not inherit much. We are counting 
on Social Security to help us in our later years. We support all 
efforts to eliminate the unjust penalty clauses for those Americans who 
worked in both the public and private sectors. Thank you.

 
----------------------------------------------------------------------------------------------------------------
                                           Your Taxed  S.S.                                  Your Taxed  S.S.
           Year you worked                     Earnings             Year you worked              Earnings
----------------------------------------------------------------------------------------------------------------
1963                                      337.................  1981...................    26,983
1964                                      912.................  1982...................    30,500
1965                                      305.................  1983...................    35,700
1966                                      727.................  1984...................       833
1967                                     2,584................  1985...................         0
1968                                     6,421................  1986...................         0
1969                                     7,330................  1987...................     5,000
1970                                     7,800................  1988...................     6,400
1971                                     4,975................  1989...................     6,600
1972                                     8,546................  1990...................         0
1973                                   10,800.................  1991...................     7,800
1974                                   13,140.................  1992...................    17,400
1975                                   12,761.................  1993...................    13,399
1976                                   15,300.................  1994...................     1,500
1977                                   16,500.................  1995...................    56,072
1978                                   17,700.................  1996...................    62,700
1979                                   16,754.................  1997...................    65,400
1980                                   19,426.................  1998...................    68,400
                                                                1999...................    72,600
                                                                2000...................    76,200
                                                                2001...................    64,212
                                                                2002...................    21,700
                                                                2003...................     5,400*
                                                                TOTAL..................
                                                                S.S. Wages =...........  $801,717
----------------------------------------------------------------------------------------------------------------
* (partial)

                                 

           Statement of Juanita Terrell, Mont Belvieu, Texas
    I began work for the Barbers Hill ISD in 1975, coming from other 
places of employment and paid into Social Security while employed at 
these other places (enough quarters to draw full benefits)
    Since the school district only paid SS in the new employees, when I 
retired I was not paying SS and therefore fell in the bill ``must have 
been paying social security taxes on your last day of employment prior 
to retirement''.
    I am unable to receive the social security that I have rightly 
earned, and am merely asking to receive those benefits.
    The Public Servant Retirement Protection Act offers an important 
first step toward the ultimate goal of repealing both the WEP and the 
GPO. It will make a difference for many public employees, who will 
receive increased Social Security benefits as a result.
    I chose to work for the school district starting out at $350 a 
month which was not much, but I was giving back to my community.
    I would like to urge the Committee to move this important bill 
quickly to final passage and enactment into law, and I also urge 
Congress to continue to work toward full repeal of both the GPO and the 
WEP.
    Thank you very much for your consideration.

                                 

  Statement of Shelby Patrick, Texas Classroom Teachers Association, 
                             Austin, Texas
    My name is Shelby Patrick, and I am the 2004-05 president of the 
Texas Classroom Teachers Association. I am also a high school chemistry 
teacher in Wichita Falls, Texas, and I appreciate this opportunity to 
provide input to the committee on an issue that has a serious impact on 
Texas teachers.
    The Texas Classroom Teachers Association is a statewide 
professional organization representing over 50,000 teachers and other 
non-administrative educators across the state of Texas. A large 
majority of our members is affected by the Windfall Elimination 
Provision and the Government Pension Offset, the two laws that reduce 
Social Security benefits for many government employees.
    The TCTA supports HR 4391, and we appreciate the efforts of 
Representative Brady, Chairman Shaw, and the other members of the U. S. 
House of Representatives who have co-authored and co-sponsored this 
legislation. We have long supported HR 594 and other bills designed to 
either repeal the GPO and WEP or to at least mitigate their impact. We 
are aware that the costs of repealing the GOP and WEP are high, and 
understand the rationale behind finding a less expensive remedy to the 
problems faced by government employees who are subject to the two 
offsets. However, we strongly urge your support for HR 594 and 
encourage action on that legislation as soon as possible.
    While HR 4391 does not address the GPO, and does not completely 
eliminate the reduction of Social Security benefits for those employees 
who have earned benefits through their own participation in Social 
Security, it does represent a step forward that we believe will benefit 
government employees in Texas.
    Texas, as other states, faces a severe teacher shortage. The state 
has therefore made efforts to recruit individuals from other states and 
other professions. While there is no way to measure the impact of the 
WEP on these efforts, it is reasonable to assume that many such 
individuals are dissuaded from becoming a Texas teacher because of the 
likelihood that their hard-earned Social Security benefits will be 
reduced. Calls to our office have unfortunately borne out the other 
negative consequence: that individuals make the decision to become a 
Texas teacher only to discover the implications after the fact.
    The WEP also affects school employees who have taken additional 
jobs in the private sector in order to make ends meet. This is not 
uncommon, particularly among educational aides and other low-paid 
employees but also among teachers whose salaries are inadequate to meet 
their needs.
    These employees have paid into Social Security for 40 quarters or 
more, sometimes over a full career, and have fully earned Social 
Security benefits. The WEP arbitrarily and unfairly reduces those 
benefits. HR 4391 is designed to apply a more fair calculation that 
takes into account the employee's individual earnings and should 
represent an improvement over the current law.
    We appreciate your consideration of our remarks, and encourage you 
to move HR 4391 through the process. TCTA will continue to advocate for 
repeal of the WEP and the GPO, and again we urge the members of this 
committee to take action on HR 594 as well.

                                 

 Statement of Eric Hartman, Texas Federation of Teachers, Austin, Texas
    Thank you, Chairman Shaw, for scheduling this hearing and for 
providing the opportunity to submit testimony on behalf of the Texas 
Federation of Teachers, which represents more than 51,000 teachers and 
other education personnel in Texas public schools and institutions of 
higher education. TFT is an affiliate of the American Federation of 
Teachers, which represents 1.3 million teachers and other public 
servants nationwide.
    Congressman Brady, as author of H.R. 4391, deserves credit for 
recognizing that the Windfall Elimination Provision is Aterribly 
unfair, as he has put it. By replacing the WEP with a new benefit-
offset formula that could give back to school employees an average of 
23 cents for each dollar currently taken away by the WEP offset, H.R. 
4391 would be a partial corrective for that unfairness.
    We welcome the introduction of this legislation as well as this 
hearing as evidence of the growing momentum in Congress for Social 
Security fairness for Texas public school employees and other public 
servants. However, we believe Congress can and must do more to remedy 
the inequity of the WEP and the other offset that does grave harm to 
public servantsBthe Government Pension Offset.
    These unjust offsets single out public employees like teachers for 
harsh treatment. The WEP typically takes $306 a month out of the Social 
Security retirement benefit of a dedicated public servant who has 
earned those Social Security benefits. Even more damage is done by the 
GPO, which cuts Social Security widow's and spouse's benefits by two-
thirds of the pension earned from public service not covered by Social 
Security. For most of those affected, the GPO wipes out the entire 
Social Security benefit, and for many the result is poverty.
    At a time when Texas faces a shortage of more than 50,000 
appropriately prepared and certified teachers, these offsets deter 
recruitment of educators needed to serve the schoolchildren of our 
state. Just this summer, the end of the last-day exemption from the GPO 
has aggravated the teacher shortage in Texas, as many teachers 
reluctantly retired in order to take their last opportunity to avoid 
the unjust GPO.
    Texas educators already suffer low salaries, lack any guaranteed 
cost-of-living adjustment in their Texas Teacher Retirement System 
pension, and must bear soaring costs for retiree health insurance of 
deteriorating quality. Their Teacher Retirement System pension is not 
an adequate stand-alone retirement benefit. Yet both the existing and 
proposed versions of Social Security offsets for Anoncovered public 
service rest on the false premise that public servants already have the 
benefit of a sufficient substitute for Social Security and therefore 
can afford to lose some of their earned Social Security benefit through 
an offset. No formula-based justification makes this a fair outcome.
    These offsets should be repealed outright, not just partially 
corrected. Texas school employees and other public servants nationwide 
lose billions of dollars a year in earned Social Security benefits 
because of these two unfair benefit-reduction formulas that apply only 
to retired public employees. It is an outrage that these federal 
benefit formulas treat a teacher's pension as if it were some sort of 
ill-gotten gain that must be offset by a reduction in Social Security 
benefits duly earned by a school employee or that employee's spouse.
    H.R. 4391 would take a step in the right direction, but Congress 
must go much further. The current Congress should debate and vote on 
another bill that has gained broad support and would go the full 
distance toward fairnessBH.R. 594. This bill proposes a Social Security 
Fairness Act that not only would repeal the WEP entirely but also would 
repeal the equally unfair and damaging GPO offset of spousal benefits.
    The Texas Federation of Teachers therefore calls on the Social 
Security Subcommittee to move quickly to bring H.R. 594 out of 
subcommittee and onto the floor for a vote. Another option would be to 
mark up H.R. 4391 promptly, send it to the House floor, and let the 
broader language of H.R. 594 be debated and voted on as an amendment to 
H.R. 4391.
    Congressman Brady has estimated that H.R. 4391 could add something 
approaching $7 billion to Social Security checks for 700,000 retired 
public employees nationwide over ten years. By comparison, H.R. 594, 
the bill to repeal the WEP and GPO entirely, would provide more than 
$60 billion in added Social Security benefits to a million-plus 
retirees over that same span.
    It is clear to us that Congress increasingly sees full repeal of 
these unfair offsets as the right thing to do. H.R. 594 currently has 
300 cosponsors in the U.S. House, and an identical companion measure, 
S. 349, has 31 Senate cosponsors. Some 192 House members even have 
taken the extraordinary step of signing a discharge petition to force a 
House floor vote on H.R. 594.
    As you continue to consider H.R. 4391, we ask you also to weigh the 
following concerns about the mechanics of the legislation:
    Despite the net gain for affected retirees promised under H.R. 
4391, it should give you pause that, for a significant number of 
employees, the current WEP formula actually is more advantageous than 
the proposed new benefit-reduction formula. The current WEP places a 
cap on the reduction in benefits for noncovered service and phases out 
the offset for those with more than 20 years of covered employment. 
H.R. 4391 has no such limits on benefit reduction. The bill's hold-
harmless provision is a partial but not complete answer to this 
concern.
    When earnings records are unavailable, Social Security officials 
must not be authorized under H.R. 4391 to make arbitrary assumptions to 
the disadvantage of retired public servants regarding their earnings 
from noncovered employment.
    H.R. 4391 does not specify how Congress would pay the cost of 
restoring the benefits now unfairly reduced by the WEP. Ironically, it 
has been suggested that such costs could be covered by new measures to 
enforce Social Security offsets such as the GPO! Nothing could be 
better calculated to destroy the potential good will generated by H.R. 
4391 among school employees. We call on the subcommittee to reject any 
such approach to paying for H.R. 4391.

                                 

                Statement of Tom Tutor, Islesboro, Maine

    I ask that you support the passage of HR 4391 and eliminate the 
unfair provisions of the Government Pension Offset (GPO) and Windfall 
Elimination Provisions (WEP) of the Social Security Act.
    I am a teacher in a small island school in Islesboro, Maine. For 
fifteen years of my adult working life I was a ships carpenter and 
custom furniture maker. In middle age, with small children in our local 
school, I became a member of the school board and found the school to 
be a wonderful place. Several years later, off the school board and 
looking for more mental stimulation in my life, I became a math teacher 
at the age of forty--my math degree, earned almost twenty years before, 
became extremely useful.
    I have now been teaching for thirteen years and have found my 
life's calling. Without a doubt, this is the hardest work I have ever 
undertaken.
    Looking ahead to retirement in another ten to twelve years, I am 
appalled to find that the contributions I made to Social Security (SS) 
for fifteen years will not be returned to me. Why? I'm no fat cat 
looking forward to living a luxurious life at the expense of the state. 
I'm a middle class, responsible, working citizen devoting my work to 
the betterment of my community. Why am I to be penalized and scramble 
to make ends meet as a retiree? I have worked long and consistently; I 
deserve an adequate pension. Only by combining my rightful SS benefits 
and my Maine State Retirement (MSR) benefits will I receive a meager 
living allowance.
    I project that if I receive all of my rightful SS benefits from 
fifteen years' contributions and MSR after twenty years of teaching 
with a masters degree, I will receive $23,202 dollars a year. Under the 
present GPO, that would be decreased to $19, 602. I am not some well 
heeled executive trying to feather my nest. I, and my fellow teachers, 
are threads in the fabric of our communities who should be rewarded 
with an adequate compensation for years of conscientious work.
    I ask for your help. Be active in your support of HR 4391.

                                 

              Statement of Gertrude M. Vinci, Reno, Nevada
    This is my statement regarding the repeal of the Social Security 
Offsets.
    I am a two-career person. At age 40 I left my 20-year career as an 
office manager with the largest private accounting firm in the state of 
Nevada. I went back to school and became a teacher. I am currently 
teaching a Business Computer Systems class at Regional Technical 
Institute. I send high schools seniors into the business world with IC3 
and Microsoft Office Specialist (MOS) Certifications.
    All of my retirement money has been paid into Social Security. I 
will only be able to teach, at the most, 15 years. Therefore, I will 
not be able to collect a full retirement from PERS or from Social 
Security under the current Windfall Elimination Provision Act.
    It just doesn't seem fair that I have worked so hard and paid into 
these retirements and now will not be able to receive what benefits I 
have earned. I feel that this has been a deterrent for other people who 
have shown an interest in changing careers and going into teaching. 
There are a lot of business people who would like to help out our 
public education system, however, because of this WEP Act they feel 
that they cannot take the risk and loose their benefits.
    I urge the Committee to move this important bill quickly to final 
passage and enactment into law and I urge Congress to continue to work 
toward full repeal of both the CPO and WEP.
    Please respect public service--Repeal Social Security Offsets for 
the state of Nevada.
    Thank you!

                                 

         Statement of Donna Wasneski, Grand Junction, Colorado
    I am Donna Wasneski, a teacher who will not be able to receive my 
late husband's social security or the benefits I have earned myself 
because of the GPO and WEP.
    These legislative actions unfairly penalize teachers and other 
public servants who chose to enter these professions after accumulating 
sufficient social security quarters to qualify for benefits.
    I am not asking for a windfall, just what myself and my husband 
earned.
    Please repeal these two unfair mandates, GPO and WEP and support 
the Public Service Retirement Protection Act.

                                 

           Statement of Jean K. Willard, Spring Branch, Texas
    QUESTION: Looking for justification in not receiving ANY of my 
deceased husband's 40 years of involuntary contribution to Social 
Security. Perhaps this could be reworded--my husband's donation to be 
used for everything but his wife's welfare in her advanced unemployable 
years. That is the problem. These benefits were EARNED by a 
hardworking, conscientious man who started working nights during his 
high school years; then was a veteran Army Air Force pilot in the South 
Pacific; then employed (and contributing) until his death. He died 
thinking his family would be provided with those earned funds through 
Social Security. He was always active in his community believing he 
should contribute his expertise to make the community a better place in 
which to live. Many children benefited from his energy and caring for 
them. Meanwhile his wife taught school, not knowing the time and energy 
spent in that pursuit would penalize her and negate her receiving the 
benefits her husband had been assured would be there.
    That Social Security check could make the difference in getting 
dental work done; medication and a decent diet not to mention house 
repairs. I'm not talking the Riviera here.
    ANSWER: Repeal both WEP and GPO I don't understand how you can 
justify not doing IT. Stop the theft.
    A heartfelt plea.

                                 

           Statement of Kirt Willard, Pleasanton, California
    Thank you for taking the time to read this statement. My mother is 
Jean Kaylor Willard. She was married to my father Walter G. Willard 
(1923-1981). My father lost his dad when he was 9 years of age and 
worked two jobs (A&P market and Rubber sole factory) after school to 
help my grandmother make ends meet. During WWII my father was asked to 
fly B-24's in the South Pacific and was shot down three times. He 
returned to finish a degree in college and worked until his death, all 
the while paying Social Security.
    There were five children in the household. My mother still found 
time to substitute teach and, if we stayed in one place long enough she 
would teach full time. Teachers are the most under appreciated and 
under paid in my opinion. I have seen her spend countless late night 
and early morning hours preparing for lessons or grading exams.
    My concerns are that those who choose to enter public service are 
being penalized. The contributions my father made should not be kept by 
anyone other than his family.
    I strongly urge you to repeal the WEP and GPO in order to help 
those who have given the most and made the biggest sacrifices.

                                 

              Statement of Sandra Wilson, Aurora, Illinois
    My name is Sandra Wilson and I am a teacher at Still Middle School 
in Aurora, Illinois. If I had been aware of the WEP and GPO in 1992, I 
never would have left my business career to become an Illinois teacher. 
Although, I started out in teaching in 1970, I could not make enough 
money to support myself.
    For that reason, I went back to school and received a Masters in 
Business. I then worked for several Chicago companies for 15 years. I 
was making a good salary all of those years. However, I never lost my 
interest in the teaching field.
     In 1992, I took a 60% cut in pay to return to teaching. I was able 
to do that because then I was married. I exchanged a lucrative business 
career for a career working with children. Although it bothered me that 
I couldn't pay for an average house and lifestyle without my husband, I 
believed that I was making an important contribution to society and to 
the state of Illinois.
    Although I was foregoing current income, I did not realize that I 
was putting my future retirement income at risk. Because I would not be 
able to teach more than 10 to 15 years, I knew that I would not get a 
large teacher pension. However, I was counting on living a decent life 
based on the combined benefits of my Social Security Pension and my 
Teacher's Pension. In order to have enough money in retirement, I need 
the full benefits of both pension plans.
     This is not a windfall. I have worked very hard for both pensions 
and my husband and I will need that money when we retire due to high 
medical insurance cost and the rising cost of living. This is 
especially true since my husband has no pension benefits. It is only 
fair that I receive the all the benefits that I was promised and the 
money that I contributed to each retirement system. I especially will 
need both pensions if my husband dies and I am a widow. Since most 
women outlive their husbands, this is not an unlikely scenario.
    I know that the government wants its public servants to live a 
decent life in retirement and not be penalized. For that reason, I am 
urging you to support The Public Servant Retirement Protection Act. 
This act is an important step toward repealing both the WEP and the 
GPO. This act will help me live a decent life in retirement because I 
will be receiving the full benefits of Social Security.
    Please pass this bill and enact it into law as quickly as possible. 
Also, I encourage the Committee to continue to work toward the full 
repeal of both the GPO and the WEP.

                                 

                Statement of John G. Wolfe, Toledo, Ohio
    Gentlemen:
    I am a retired teacher, age 68, drawing my State Teachers 
Retirement and a monthly Social Security check of $99.00.
    I decided at age 13 to become a teacher. My parents were 8th grade 
educated that decided I would attend college. My dad was a city 
firefighter and my mother was a clerical worker in a hospital. I 
started my work experience at 13 in Pepsi Cola bottling plant putting 
cardboard carriers in pop cases. A year later, I got a job in a grocery 
store stocking shelves. When I turned 16 with a driver's license, I 
delivered groceries and then moved to a job in a dairy. I was general 
labor so I unloaded sugar trucks, took cans out of a can washer and 
helped load semi trucks with cases of dairy products. I always had a 
part time job after school when I reached high school age and in the 
summer I worked for a construction firm doing manual labor. My parents 
insisted I put part of my wages in a savings account for college. When 
I was 17, I had money to buy a Model A Ford to give me transportation 
to work (it was 24 years old).
    When I went to college, I had a room and board job in the dining 
hall that also provided me with money for books and spending. My 
parents used money from their savings to pay tuition. In those days, it 
was $90.00 per semester at a state university.
    During college, I worked in a school bus factory to earn money for 
the following year. I was a teenager doing men's work for men's pay.
    When I graduated college, I got married to my high school 
sweetheart and, because of Selective Service, I immediately became 
eligible for the draft. I chose to enlist in the Navy rather than go 
into the Army.
    Because I was a college graduate, I was eligible for OCS. I served 
3 years on active duty as a commissioned officer and upon completion of 
my obligation, I returned to Ohio and resumed a career in Education. 
Teachers were not overpaid in those days and I worked 2 jobs in 
addition to teaching to support my wife and children. Thanks to the GI 
Bill, I was able to go to graduate school and obtain a Masters. I 
continued summer employment, teaching in the winter and going to 
graduate classes at night.
    After obtaining a Masters, I was able to secure a principalship in 
an Elementary School. I still worked in the summer building school 
buses as there never seemed to be enough money with a young family.
    In my education career, I went on to be a junior high and 
eventually a high school principal.
    As my administrative career progressed so did the terms of 
employment in the school so eventually I was unable to work a 2nd job 
in the summer.
    I completed 31 years service in the Public Schools of Ohio and 
retired at age 51. Upon retirement from School Administration, I opened 
a remodeling and home repair business to supplement my retirement. I 
continued this for several years until I was eligible for Social 
Security. When I applied for Social Security, I was flabbergasted to 
find my Social Security benefit was reduced because I was drawing a 
teacher's retirement. I wrote to my congressman only to learn about the 
``Social Security offsets.''
    I continued in my remodeling business to supplement my teachers 
pension and meager Social Security benefit until last year, when at 67 
I was no longer able to physically do the work involved in remodeling.
    My wife, who worked as a secretary for 24 years, later pursued her 
degree and entered the teaching field. We were able to send 3 of our 4 
offspring to college with both of us working and our plans to reap the 
benefits of working 2 and 3 jobs with hopes of a teachers retirement 
and Social Security were dashed when we learned of the unfair offset of 
``windfall'' provisions of the law. When I was contributing to Social 
Security, the deductions from my pay were not at a ``50%'' rate and I 
believe I should be entitled to the full amount of Social Security 
benefits, whatever they may be, for the years I worked and the benefits 
I accrued.

                                 

                Statement of Mary E. Wolfe, Toledo, Ohio
    I am a retired secretary/teacher, age 67, drawing my State Teachers 
Retirement and a monthly Social Security check of $225.00.
    I began work at the age of 16 in various retail establishments. I 
started my college career at Ohio State Univ. in 1954, started as a 
clerk at a dairy company in the summer of 1955 and continued my college 
work in 1956 at Bowling Green State Univ. in their two year secretarial 
program. In 1957, I began doing secretarial work and had a variety of 
positions until 1967 when I started continuation of my college career. 
I was able to start in the teaching profession on a temporary 
certificate while completing my college degree in 1973. Needless to 
say, I was on a reduced payroll amount during this period of time. 
Because of my husband's career in Education, we had several relocations 
and thus I was unable to retain a steady teaching job and did a variety 
of secretarial work and substitute teaching positions.
    When my husband retired from the education field in 1988 and we 
relocated to the Toledo area there were no business teaching positions 
open and I again entered the secretarial field working in temporary 
situations until the age of 60 when I was able to start drawing on my 
State Teachers Retirement. My retirement from STRS was a greatly 
reduced amount since salaries were low, substitute teaching was not a 
steady income, and temporary secretarial jobs were not high paying.
    When I received information from the Social Security Administration 
that I could expect to receive $450.00 a month at retirement, I felt 
that this would help supplement my reduced STRS amount. I was 
astonished when I found out that my Social Security amount would be cut 
in half due to my STRS income. For the last five years, I have received 
$225.00 per month from Social Security. Every time there has been a 
COLA increase, Medicare has increased but my Social Security is still 
$225.00 per month! I find this a very unfair provision.
    Why is it that only a few of the 50 states have this offset? My 
understanding is that this involves only 12 or 14 states. Other 
teaching associates of mine, who have moved to other states that do not 
have this provision, receive their full STRS and Social Security 
benefits. Also, those in Ohio that started drawing Social Security 
first and later their STRS are not affected by this law. I do not find 
this a very fair legislative action.
    When I was contributing to Social Security, my deductions were not 
at a 50% rate and thus, I believe I should be entitled to the full 
amount of Social Security benefits. I also feel I should be reimbursed 
for what I was entitled to over the past five years.

                                 

         Statement of Pete Zimmerman, Mission Viejo, California
    In submitting the following written letter for the record for the 
Committee on Ways and Means Hearing on H.R. 4391, the ``Public Servant 
Retirement Protection Act'' (to amend the W.E.P.), I am in agreement 
with the subcommittee chairman's desire that the hard working, 
dedicated public servants of this country should not only be 
appreciated but should also be treated fairly and equitably with those 
in the private sector. That is why the first half of this letter deals 
with my opinion of the W.E.P. and the G.P.O. and why they both should 
be eliminated entirely. The last half of the letter focuses on my 
concerns/questions regarding H.R. 4391 which would instead amend the 
W.E.P.
    I retired in 1998 after 30 years as a California teacher and have 
worked another job for about 25 years (most of which were in the same 
years that I was teaching). As a California teacher, I paid no Social 
Security taxes; but in my other job over this period of time, I have 
paid a significant amount of total Social Security taxes, the amount 
varying each year.
    During the past years I have been working for the elimination of 
the WEP and the GPO. Since I am now 63 years old, and within two years 
of collecting Social Security, I have become more and more motivated to 
see the W.E.P. entirely eliminated--now. Furthermore, my wife has been 
a California teacher for 25 years; her government pension will be in an 
amount that will reduce her SSA survival benefit (after my death) to 
zero as a result of the existence of the G.P.O.--she is only one woman 
teacher out of tens of thousands that have or will have been hurt by 
this Social Security provision.
    As I have consistently argued over the past years, the W.E.P. and 
G.P.O. are very unfair to so many hard working, dedicated public 
employees in our nation. (It is estimated that more than 1/3 of 
education employees and more than 20% of other public employees in the 
U.S. are not covered primarily under Social Security.) Both offset 
provisions can be shown to discriminate against public employees who, 
for the most part, have not earned high incomes from government 
employment; but then they are penalized with varying cuts in Social 
Security benefits just because they also receive a government pension 
other than from Social Security. This is not true of most of the 
private sector employees who are allowed to keep their full Social 
Security and/or survivor benefits in addition to their own entire 
private pensions. (Note: I have not yet been able to discover if and 
how members of Congress are affected by the W.E.P. and/or the G.P.O.
    Secondly, many American public employees have not been made aware 
of these offset provisions until shortly before they retired. They had 
always counted on their full Social Security benefits for themselves 
and/or their spouses. Both the present G.P.O. and W.E.P. provisions 
have been a part of the Social Security Act since the 1980's, (15 years 
into my teaching career and 5 years after starting a second job). Yet 
I, like so many others, was never clearly informed by the Social 
Security Administration until the late 1990's. In reviewing my own 
written announcements that I received from the SSA (and still possess), 
I discovered that it wasn't until 1997 (the year before I had planned 
to retire) that the SSA started warning me of the possible affects of 
the G.P.O. and the W.E.P. on my Social Security benefits--a little late 
for planning for the future. All of these years I felt that by paying 
into Social Security on a second job I would be making retirement more 
comfortable for my wife and me.
    Furthermore, it should be said that some people in my case (paying 
into a government pension other than Social Security AND paying into 
Social Security for a second job) are totally exempt from the WEP if 
they can show 30+ years of what is termed ``substantial earnings'' in a 
job in which they paid Social Security taxes. They receive partial 
exemptions on a sliding scale down to 21 years of ``substantial 
earnings''. Without committing a whole lot of time to a second job 
(which takes away time both from a teaching/government job as well as 
from a family), it's not easy to acquire those years of ``substantial 
earning'' which could lead to an exemption from the W.E.P. 
Unfortunately, it's physically impossible for me to earn the required 
number of years of ``substantial earnings'', since my retirement at age 
65 (and eight months) is only two years away. Even if I would have been 
fully informed of these provisions back in the 1980's when the W.E.P. 
was passed (rather than in 1997 when I was actually informed), I would 
have only had a little over 20 years until my retirement at 65 to think 
about the importance of working towards qualifying for ``substantial 
earnings'' years. Of course, at that time, our decision that I would 
work a meaningful second job rather than my wife taking a job outside 
the home, may have been different.
    Still another crucial consideration is how the W.E.P. and G.P.O. 
affect teacher recruitment in many states. A state should want to 
encourage the hiring of quality, credentialed teachers for the open 
positions, rather than hiring less qualified teachers or rather than 
possibly raising the average class sizes. It doesn't seem wise to have 
the G.P.O. and/or W.E.P. penalizing individuals who are considering 
either moving from private sector employment (where they have paid into 
Social Security) or teachers who are moving from one state(where they 
paid Social Security taxes as teachers) to another state where their 
teacher pension will not be a part of Social Security. The latter would 
probably be best brought out by women teachers whose husbands are being 
transferred to another state; and the women might then have to think 
hard whether or not to continue teaching in any of the following 
states: California, Texas, Colorado, Illinois, Ohio, Louisiana, Alaska, 
Connecticut, Maine, Kentucky, Massachusetts, Nevada, or Washington 
(some of the 20 states in which the teacher retirement system is not 
within Social Security).
    In analyzing the recruitment of teachers from the private sector, 
one definitely needs to consider the possible affect of the W.E.P. It 
appears that both President and Mrs. Bush have been encouraging 
experienced people to eventually change careers and enter the teaching 
profession. Mrs. Bush has spoken out on this a number of times. A few 
years ago the President proudly introduced the national teacher of the 
year--a retired military man who chose to teach in a California 
community containing numerous low income families. It would be 
interesting to see if (and to what degree) he will be affected by the 
W.E.P. once he retires from teaching. (He served 22 years in the 
military as an officer and thus no doubt has been credited with 22 
years of ``substantial earnings'', still 8 years away from the 30 years 
necessary for a complete exemption from the effects of the W.E.P.)
    Individuals who have worked in other careers would seem to be less 
likely to decide to teach, if they knew doing so would mean a 
significant loss of Social Security benefits that they or their spouse 
had earned. This is especially true in California where it is estimated 
that more than 1/3 of our teachers will enter the profession after the 
age of 35. Again, anyone changing careers from a ``Social Security'' 
job into teaching while still in the 30-to-early-40's age group, has 
probably earned no more than 20 years of ``substantial earnings''--not 
even good enough to receive a partial exemption from the W.E.P. penalty 
(let alone the full exemption with 30 years of ``substantial 
earnings''). Thus, it appears then that the most successful recruitment 
program would have to be directed toward those who are at least 50--an 
age which many might consider a little old for starting an effective 
career in many teaching assignments.
    Finally, some would say that the W.E.P. was especially set up in 
the 1980's to limit ``double dipping''. Instead I would argue just the 
opposite--it actually affects peoplehaving two different jobs (one 
normally in the public sector and one in the private sector) and having 
two separate pension systems. That, in my mind, is not ``double 
dipping''.
    I worked two jobs so that I could afford to have my wife stay home 
with our children during their early years, so we could pay for their 
future education, so we could prepare for an emergency and so we would 
have a comfortable retirement. Is that something that we should 
discourage by penalizing in their later years both the husband and wife 
for doing so? The G.P.O. and W.E.P. seem largely to be penalizing a lot 
of people who serve their communities/their country in what have been 
generally, lower paying public jobs. Furthermore, they do not encourage 
quality people to transfer from the private sector into many public 
jobs (especially those involving teaching).
    At this time a ``compromise'' bill (H.R. 4391 or the Brady bill) is 
to be considered by the Social Security Subcommittee of the House Ways 
and Means. News of this led to efforts trying to figure out just how 
this would effect me personally and if my benefits would be much 
different than under the present W.E.P. offset. I used the examples on 
the N.E.A. website and also referred to Congressman Brady's website for 
a template or formula. Unfortunately, I was unable to calculate the 
impact on me under this new proposal, particularly in those years where 
I had earnings from BOTH covered and non-covered work. The following 
are questions about the Brady bill that I would hope that the 
discussions in the committee hearing would address: In counting the 
highest 35 years of earnings including those of non-covered work. How/
where does one (the Social Security calculator or a person like myself) 
find one's annual earnings as a teacher?
    1. In counting the highest 35 years of earnings including those of 
non-covered work . . .

      How/where does noe (the Social Security calculator or a 
person like myself) find one's annual earnings as a teacher?

    AND

      Are these teaching earnings gross or net earnings 
calculated after deductions such as dues, retirement, etc.?

    2. In averaging the earnings over 35 years . . .

      Does this mean to average those 35 individual years where 
the total of ``non-covered'' and ``covered'' earnings together was the 
highest?

    3. Who will make these calculations in determining my total Social 
Security benefit?

      How is this person able to determine which total yearly 
figure to use? It seems that for a person (like myself) who has worked 
two jobs each year at the same time for a great number of years, it 
will be difficult to calculate. (Whereas for a person working a job 
covered by Social Security in a separate time frame from working a non-
covered job, it could be a lot easier.) Needless to say, I would like 
to be able to verify for myself the final benefit figure determined by 
the Social Security Office.

    4. Did the formulators of the Brady proposal do numerous ``test'' 
analyses/calculations on specific, random individuals in various job 
scenarios to see how it would affect a lot of them individually? It 
would seem to me this would have to be done to determine accurately the 
actual cost of an amended W.E.P. Consider the following:

      Does the Brady Proposal mainly help those who worked in a 
Social Security covered job first and then went into a teaching career?
      Would it have the same affect if this order was reversed?
      Does the Brady bill have different affects (and how 
significant) on individuals like me who have worked, for the most part, 
on a teaching job (where I did not pay into Social Security) at the 
same time as another job (where I did pay into Social Security)--
compared to those who started into a new one of those types of jobs 
after completing another of those types of jobs (i.e. changed careers)?
      Does the number of years working in each of the careers 
have a significant affect on the level of benefits under the Brady 
bill.
      Finally, would all states be calculated the same 
according to the Brady bill? Why or why not?
      Would differences in costs of living affect the Brady 
bill calculations? How?

    5. Did the cost analysis of H.R. 4391 include any benefits to be 
provided to previously retired people?
    6. Roughly what proportion of the cost for this bill would be for 
increased benefit payments? Where would the remaining monies go?
    7. Was it ever suggested to amend the W.E.P. by merely decreasing 
the number of years of ``substantial earnings'' that one must have (in 
order to receive increased benefits) down from 30 to 10 or to 20? 
Consider the following:

      It would seem to benefit those who have had a serious 
second job/career as does the Brady bill.
      It would seem to be much simpler and faster to calculate 
and cheaper to implement than the Brady bill.
      It would seem to deal well with the issue of recruiting 
the best quality of teachers from other states where they had paid into 
Social Security or recruiting quality people from other careers who had 
paid into Social Security allowing plenty of time to serve in a school 
as an effective teacher.
      It would seem to be much easier way for those affected by 
the W.E.P. to understand and calculate their benefits by themselves.

    8. Finally, why was the W.E.P. addressed in the Brady proposal 
rather than the G.P.O.?
    Thank you in advance for your consideration.

                                 
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