Both Parties Are Driving the Runaway Social Security Insolvency Train

C huck Schumer never lets a lame-duck session go to waste. He will lose his Democratic Senate majority in two weeks, so he is using this week to jam through an outrageous budget buster that further threatens Social Security’s solvency.

The mislabeled Social Security Fairness Act would repeal two 1980s laws that reduced the Social Security benefits of retired government workers who spent a portion of their careers in the private sector in addition to a federal, state, or local government job where they didn’t pay Social Security taxes because they had other pension rights.

With no hearings and little debate, it looks like a bipartisan majority in Congress will force through this $200 billion boondoggle at the behest of public-employee unions. It would be a fitting end to what has been one of the most spendthrift congressional sessions in history.

Over 40 years ago, Congress passed two laws that make sure more than 2.8 million state and local government workers who opted out of Social Security for some or all of their careers (because they had their own generous pension rights outside of Social Security) wouldn’t get windfall benefit checks. The two laws ensure that someone who contributed very little to Social Security doesn’t get better benefits than someone who contributed for their entire working career.

But public-employee unions are calling in chits and demanding the laws’ repeal. At a nosebleed price. Repeal would increase Social Security’s financial shortfall by nearly $200 billion over the next ten years and expedite the program’s insolvency. That would mean either automatic benefit cuts for all recipients or ruinous tax hikes.

This is one raid that almost every policy expert across the political spectrum in Washington is appalled by. Libertarian groups such as the Cato Institute and Americans for Tax Reform are natural opponents. But so too are analysts at the Urban Institute, the Progressive Policy Institute, and the Center on Budget and Policy Priorities.

They point out that the repeal would likely make the depletion date of Social Security’s trust fund come six months sooner (that doleful date is due in just nine years, according to the program’s trustees). The repeal would cost about $196 billion over a decade and add $34 billion to the federal debt.

“They are raiding the Social Security trust fund in order to expand a windfall for people that are already getting a windfall,” warns Marc Goldwein, senior vice president at the Committee for a Responsible Federal Budget.

The unions behind repeal represent popular constituencies such as teachers, police officers, and firefighters. So many Republicans are afraid to stand up for fiscal sanity. The bill passed the House last month by a vote of 327 to 75. In the Senate, such normally sane Republicans as Rick Scott of Florida, John Kennedy of Louisiana, and Pete Ricketts of Nebraska are among 13 GOP co-sponsors of the bill. With Democratic sponsors, the bill’s supporters had 62 senators willing to block a filibuster.

But until today it looked as if there was a decent chance that enough GOP co-sponsors would get cold feet at the last minute. Several have privately said they largely signed on to the measure as virtue-signaling to support first responders. Senator Mike Braun of Indiana, a co-sponsor, even admitted he was “weighing” his position. “Nothing ever gets paid for, so it’s further indebtedness, I don’t know,” Braun told the Associated Press.

But in the end, Braun joined with 23 other Republican senators, including Vice President–elect JD Vance, to shut off a potential filibuster of the Social Security Fairness Act.

All 49 members of the Democratic Senate caucus voted to move the bill forward. A bare majority of 26 Republicans — joined by independent Joe Manchin of West Virginia — stood up for fiscal sanity.

If the bill becomes law, average monthly benefits will increase by $460 for Social Security beneficiaries. Spouses of some affected workers will see benefit increases of more than $1,000 a month within a decade.

Having survived a cloture vote, the bill will almost certainly pass with a simple majority and head to President Biden’s desk for an almost guaranteed signature.

Emerson Sprick, associate director of economic policy at the Bipartisan Policy Center, says it’s highly unusual for such a sweeping bill to get so little scrutiny or attention in its rush to passage. Schumer rocket-launched it straight onto the Senate floor without holding any committee hearings.

“We have never in history, to my knowledge, unleashed such a massive bomb that would blow such a massive hole in the Social Security trust fund — $200 billion,” Senator Mike Lee of Utah says.

Republicans claim that they want to use their upcoming control of the White House, the Senate, and the House to launch sweeping budget reforms. But with so many of them directly complicit in hastily passing a bill that is the very definition of fiscal irresponsibility, they have forfeited whatever bona fides they had in containing runaway government spending and debt.