The Social Security Protection Act is the First Step

(Washington, D.C.) – The Council for Citizens Against Government Waste (CCAGW) today commended House Committee on Ways and Means, Subcommittee on Social Security Chairman Clay Shaw (R-Fla.) for introducing the Social Security Protection Act of 2003 (H.R. 743), and urged the House to act swiftly in passing the bill.

“The Social Security Protection Act will eliminate waste, fraud, and abuse within the Social Security system,” CCAGW President Tom Schatz said.  “It will deny Social Security benefits to fugitive felons, increase oversight of representative payees, and close loopholes in the system that end up costing honest, hard-working Americans millions of dollars in benefits.”

The bill was first considered under suspension of the rules on March 5, but failed to pass.  It is expected that Rep. Shaw will offer the bill again in the near future after a similar bill passed the House last year by a unanimous vote.

“This legislation is the first step in reforming Social Security,” Schatz continued.  “Congress should not give into the special interests that benefit from loopholes, and instead work to make Social Security a fair and balanced system for all.”

The most controversial loophole eliminated by H.R. 743 is the Government Pension Offset (GPO) last-day exemption.  The GPO calls for a reduction in benefits a person receives as a spouse if they did not pay into Social Security and receive a government pension.  The last-day exemption provides relief from the GPO if an employee’s last day of state/local work is a job that calls for them to receive both Social Security benefits and the state/local pension.

Teachers have been the most criticized for taking advantage of the loophole.  Last year, Texas had one-fourth of its public education retirees spend one day on a dual benefit job.  Twenty-seven other states also allow teachers the last-day exemption.  In order to be eligible, educators receiving a government pension resign for a day to work as a custodian or clerk, a job that makes them eligible for both Social Security and their pension.  After a day’s worth of work, they have paid approximately $3 in Social Security taxes, yet will be eligible to receive about $5,200 annually in benefits.  According to the General Accounting Office, the exemption will cost $450 million over the long term.

“This exemption is unfair to the millions of Americans who have worked their entire lives and have continually been paying Social Security taxes,” Schatz concluded.  “Congress now has a chance to act to eliminate fraud and close loopholes, while strengthening Social Security.”

The Council for Citizens Against Government Waste is the lobbying arm of Citizens Against Government Waste, the nation's largest nonpartisan, nonprofit organization dedicated to eliminating waste, fraud, abuse, and mismanagement in government.  For more information, please visit www.ccagw.org.