After receiving approval from the U.S. Senate in the early morning hours of Dec. 21, the Social Security Fairness Act is set to be presented to the president and signed into law. The bill is designed to bolster Social Security benefits for a portion of Americans. But, despite its name, a number of experts don't believe the legislation to be fair at all.
One of them is Brenton Smith of the Heartland Institute, a public policy think tank. He described the bill as "incredibly irresponsible" in a column for MarketWatch. He also says it could result in automatic benefit cuts happening sooner, leaving those who may rely on Social Security worried about their future income.
"Where are the people who promised to protect Social Security?" he asked.
Meanwhile, the bill's passage is being celebrated by public worker groups, who argue millions of Americans were shortchanged when it came to receiving benefits.
So, what exactly is the Social Security Fairness Act, and why do Smith and others think it's such a problem?
The Social Security Fairness Act makes it possible for those who opted out of Social Security at some point during their career to receive more retirement benefits. It does this in two ways.
First, it gets rid of the Windfall Elimination Provision, which can reduce benefits for workers who get pension or disability benefits from an employer that doesn't collect Social Security taxes -- such as public service employees. The act also eliminates the Government Pension Offset, which can reduce spousal benefits if you get retirement or disability income from government-based work that doesn't require you to pay Social Security taxes.
Smith explained that around 4% of employees contribute to non-covered pensions instead of Social Security. Some of these workers also at one point had jobs that did pay into the system or are married to people who do pay Social Security taxes. Under the proposed rule changes, these workers could receive "overly generous" benefit checks, Smith claims, partly funded by those who regularly paid into Social Security.