I am Barbara Kennelly , President and Chief Executive Officer of the National Committee to Preserve Social Security and Medicare, and I appreciate the opportunity to submit this statement for the record. With millions of members and supporters across America , the National Committee is a grassroots advocacy and education organization devoted to the retirement security of all citizens.

Chairman Kerry, Ranking Member Ensign and members of the Subcommittee on Social Security, Pensions, and Family Policy, the National Committee appreciates your holding this hearing to review the Government Pension Offset (GPO) and Windfall Elimination Provisions (WEP) of Social Security, which can unfairly impact workers with mixed social security and non-social security work careers. As a national, grassroots organization dedicated to the retirement security of all Americans, we strongly urge you to repeal the GPO and WEP thereby eliminating the hardship caused by the Social Security offset rules that decrease benefits for many government retirees.

Federal, state and local workers receiving retirement or disability benefits from government employment that was not covered by Social security often are eligible for Social Security based on their own or a spouse's employment. In 1977 and 1983, Congress enacted legislation reducing Social Security benefits to such individuals through the GPO and the WEP, respectively. The argument in support of these reductions was that government annuitants frequently received higher Social security benefits in relation to contributions than individuals who worked solely under Social Security. Instead, these reductions are excessive, inequitable, and unfairly penalize government workers.

The GPO unfairly reduces the Social Security spouse and survivor benefits of government employees who earned pensions under a system not covered by Social Security. Under the GPO, a government annuitant may receive only that portion of a Social Security spouse or widow benefit that exceeds two-thirds of the government pension. No one but a government annuitant suffers a loss of Social Security due to receipt of a pension. Spouse and survivor benefits are not denied to persons receiving other, comparable non-Social Security annuities. Approximately, 85% of those affected by the GPO lose their entire spousal benefit. Those most adversely affected are widows and separated or divorced women. In many instances, the spouse and widow benefit offset is far greater than would have occurred had the public employee spent her full work life in Social Security covered employment. The offset is especially likely to be excessive for those spouses and widows who have earned both a public annuity and a personal Social Security retirement benefit.

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 reduction is achieved by modifying the formula used to figure your benefit amount, giving you a lower Social Security benefit. The windfall elimination provision primarily affects people who earned a pension from working for a government agency and also worked at other jobs where they paid Social Security taxes long enough to qualify for retirement or disability benefits. While the amount of reduction depends on when the person retires and how many years of earnings the individual has accumulated, many public employees can lose up to 55.5 percent of the Social Security benefits they earned in other jobs.

The intent of the Social Security benefit computation formula is protection of low earners. The WEP diminishes that protection by its universal application to any annuitant with less than thirty years of substantial Social Security earnings. The reduction is especially harsh on retirees with work careers divided roughly equally between covered and non-covered employment. Government plans are less generous to short-career workers and WEP removes Social Security's bias toward workers with low lifetime average earnings.

The GPO and WEP have an impact far beyond those states in which public employees are not covered by Social Security. Because people move from state to state, there are affected individuals everywhere. Moreover, the number of people impacted across the country is growing everyday as more and more people reach retirement age. Currently, the GPO affects approximately 401,207 individuals, and the WEP affects about 971,310 individuals. The National Committee supports repealing the GPO and WEP or, at a minimum, modifying the offsets to alleviate their severity.

The GPO and WEP have had a devastating effect on the retirement incomes of many federal, state and local government retirees. It is hoped, Mr. Chairman, that your Subcommittee will seriously consider changes to the GPO and WEP provisions of the Social Security Act to provide a more equitable solution. Again, thank you Mr. Chairman and the Subcommittee for giving me this opportunity to discuss the WEP and GPO and to share the National Committee's view on this issue. As always, I would be more than happy to provide assistance to the Members and more than willing to work with you to provide any additional information you request.