Repealing the WEP/GPO Provision Leads to Larger Deficits and Earlier Insolvency

Members of Congress recently filed a discharge petition on a bill to repeal Social Security’s Windfall Elimination Provision (WEP) and Government Pension offset (GPO), which the Congressional Budget Office estimates would add $196 billion to deficits over the next ten years and hasten Social Security’s insolvency by roughly six months.

The Social Security Fairness Act, introduced by Representatives Abigail Spanberger (D-VA) and Garret Graves (R-LA), would eliminate the WEP and GPO provisions without any offsetting changes. The WEP/GPO provisions were put in place to prevent windfall benefits to many workers who did not pay into Social Security for most, or all, of their careers that would otherwise allow them to essentially benefit from both Social Security and the state and local alternative.

While the WEP/GPO provisions are poorly designed, they serve a real purpose, and there has long been bipartisan interest in reforming them so as not to unduly punish retirees with their blunt mechanism. However, simply repealing them – as this bill would do – without replacing the savings would increase deficits by $196 billion while advancing the theoretically-combined trust fund insolvency by six months.

With CBO projecting that the Social Security retirement trust fund less than a decade away from insolvency, and the theoretically-combined Social Security trust funds on track to be exhausted in 2034, policymakers shouldn’t do anything that would worsen its finances.