Date: 2003-04-02
Speaker: SAM JOHNSON (republican)
Chamber: H

of -Texas. Mr. Speaker. this is a terrible amendment. What I am rising for is to support equality for 95 percent of working Americans who pay into Social Security. Todays debate is about fairness. a need to bring equity to a system under scrutiny. This amendment concerns Texas teachers. This bill concerns equality. fairness and equity. Texas is home to great students and great schools. thanks in part to great Texas teachers. Educated in Texas schools myself. I put my kids through Texas schools. and my grandkids are attending Texas schools. but there is a lot of misinformation out there about Texas teachers and their retirement plan. Before I get too far into the details of this issue. I want to explain some of the fundamentals of Social Security. When the Social Security System was created. the workforce was made up largely of men whose wives stayed home. Spousal benefits were created for these women. Social Security spousal benefits are for the nonworking spouse of a worker covered by Social Security. Generally. we think of this as a stayathome mom and a working dad. Social Security retirement benefits are for those who work and pay Social Security taxes. Ninetyfive percent of working Americans are covered by this program. The situation is very different today from when Social Security was created in the 1930s. The majority of families today have two earners supporting the family. A primary rule of Social Security is that everyone is able to collect either their own retirement benefit from Social Security. or their spousal benefit. whichever is higher. Let me repeat that. It is one or the other. not both. The Texas teacher retirement system is a substitute for Social Security. A person can participate in one system or the other. but not both. Most school districts in Texas have chosen to stay out of Social Security. yet they have always had the chance to join the system. In fact. fifty school districts in Texas have entered into Social Security. and they can have their own 401(k)-type program also. Again. at any time school districts can leave the Texas teacher retirement system and enter into Social Security. but they cannot do both because the retirement system was a substitute for Social Security. Badk to Social Security. Whether a married couple works in a job such as a nurse and a small business owner. Social Securitycovered teacher and an accountant or a lawyer or an engineer. they both pay into Social Security and both are subject to this rule. A husband and wife are each able to collect either their retirement benefits earned through their own hard work or they are able to collect spousal benefits. i.e.. 50 percent of retirement. whichever is higher. They cannot collect both. It is very possible that if one spouse earns significantly less than the other. for example. that nurse and a small business owner. then the nurse is going to have higher spousal benefits than her own retirement. In that case. the nurse will collect the higher spousal benefit but may ask herself why she paid all those Social Security taxes all those years. If a retirement benefit is $600. for example. for the nurse. and her spouse benefit is $800. she would collect $800 but not $1.400 which is what her husband would have collected. Again. this is how the system works for 95 percent of all Americans. This bill concerns some teachers in Texas who have questioned the system because they want both Social Security spouse benefits and their Texas retirement. Again. the Texas teacher retirement system is a substitute for Social Security. A person can do one or the other. but not both. I want teachers to understand that the government pension offset actually only reduces their spousal benefit by twothirds of their State retirement benefit rather than dollar for dollar as in the case for other working spouses. Teachers right now get a better deal and more bang for their buck than 95 percent of the American public. They get onethird more of their spousal benefits than 95 percent of working Americans. The socalled "loophole" that is being closed here today is one small part of the government pension offset meant to encourage entire school districts to join the Social Security system. If an entire school district. such as the Plano Independent School District. were to decide to enter Social Security and get out of State retirement. then every teacher in that school district would then be subject to all Social Security rules. even for a teacher who only works 1 day. Roughly 4.800 teachers in Texas have found a way as individuals to leave their regular teaching job covered by State retirement and move. for 1 day. to a school district that does pay Social Security taxes and then retire. An example is a teacher from Plano who is covered by the State retirement system. If she transfers her last day of work from Plano to Ponder. Texas. which does pay Social Security. she is paid roughly $6 per hour. She might pay a total of $3 into the Social Security fund. but because of this final day of work in Ponder. paying Social Security taxes. she is able to collect the higher of either her benefit or full spousal. Of course. because she only paid $3 in. she would collect the spousal benefits based off her husbands work. plus she collects her Social Security substitute. that is. her Texas teacher retirement money. She can double dip. when 95 percent of the American public cannot. This costs the Social Security System thousands of dollars. The General Accounting Office has estimated that $450 million is being paid in benefits under this loophole. and that number could increase tenfold if the loophole is marketed to other people throughout the country. I am proteacher. and in Texas they have a great State retirement system. Mr. Speaker. this is not how Social Security operates for 95 percent of working Americans and we are going to break the Social Security System.