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June 27, 2000, Tuesday

SECTION: PREPARED TESTIMONY

LENGTH: 612 words

HEADLINE: PREPARED TESTIMONY OF COLLEEN M. KELLEY NATIONAL PRESIDENT NATIONAL TREASURY EMPLOYEES UNION

BEFORE THE HOUSE COMMITTEE ON WAYS AND MEANS SOCIAL SECURITY SUBCOMMITTEE

SUBJECT - THE GOVERNMENT PENSION OFFSET

BODY:
in May of 1998. At that time, the subject of the hearing was H.R.2273, legislation Congressman William Jefferson introduced similar to the bill under consideration today. In the 105th Congress, that legislation gathered 183 cosponsors.

Two hundred and forty two (242) members of the House of Representatives have cosponsored the bill under consideration today, H.R.1217. A clear majority has spoken and following today's hearing, I urge the Chairman to push for full Committee consideration of this legislation as soon as possible. H.R.1217 is a modest proposal that would not entirely eliminate the Government Pension Offset. It seeks to apply the GPO only to combined annuity and Social Security spousal benefits that exceed $1,200 per month - $14,400 each year. For an elderly widow, that $1,200 each month will make a considerable difference. However, I am sure the Chairman would agree - even with this slight relaxation in the GPO, $14,400 in annual income is hardly a princely sum.

To put these calculations in perspective, if an elderly widow is eligible for a monthly pension of $600 as a result of her federal government service, two-thirds of that amount, or $400, must be used to offset the Social Security spouse or widow's benefits she may also be eligible for. If, for example, she is eligible for a monthly spousal Social Security benefit of $500 based on her husband's earnings record, the GPO results in her receiving only $100 in Social Security each month, or a total monthly income of $700 instead of the $1,100 she would otherwise be eligible to receive. This is hardly an isolated example.

I urge this Subcommittee to look carefully at the impact the GPO has on real people. While our files are overflowing with correspondence from individuals severely harmed by the GPO, I want to bring the hardships visited upon one NTEU member in particular to the Subcommittee's attention. Her case presents a particularly cruel application of the GPO.

This individual has been a seasonal employee at the Internal Revenue Service Cincinnati, Ohio Service Center for more than 36 years. As a seasonal employee, she works for the IRS only during tax season and can, therefore, expect a small federal pension at the end of her career. Although she is fully eligible to retire, she cannot afford to do so. Her husband, six years her senior, is retired and collecting Social Security benefits. As long as she continues to work, she is eligible to collect her spousal Social Security benefit. Yet, when she retires, she will lose that benefit.

She can expect a federal pension at retirement of between $700 and $800 each month based on 36 years of federal service. Her spousal Social Security benefit right now is approximately $550 each month. When and if she retires, that Social Security benefit will be reduced by 2/3 of her federal pension, or approximately $530 of an $800 pension. She will be left with a spousal Social Security benefit of about $20 each month. She is not entitled to Social Security benefits in her own right.

Surely, the GPO was never intended to thrust individuals such as this one into poverty, however, that is the unintended effect of the law. Blindly applying a law such as the Government Pension Offset without regard to the economic hardship it causes is difficult to justify.

Thank you again Mr. Chairman for holding this important hearing today. I hope that my testimony helps to shed some light on the importance of passing H.R.1217 - a modest amendment to the Government Pension Offset. I look forward to working with you toward this end.

END

LOAD-DATE: June 28, 2000

Document 1 of 26.


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