Thursday, February 22, 2007

The American Spectator

The American Spectator

Provocative article about the now closed Social Security loophole that allowed educators to get spousal benefits by working only one day in a job covered by social security. The cost to the government is in the billions.

This article is referring to the Government Pension Offset (GPO) which affects social security benefits of spouses who work in the public arena and are covered by a public pension, but don't pay into social security. What the article leaves out is how unfair the GPO is to educators. Let me give you an example:

Suppose Sally went to work in the private sector and paid into social security, Sally's husband stayed at home with the kids and raised them, not ever working in a paying job or in a job paying into social security (notice how I didn't say "not working!"). John, who stayed at home, is not eligible for social security benefits on his own, instead the he is eligible based upon Sally's contributions. Sally's contributions INCLUDE a spousal benefit. John will recieve 50% of the amount that Sally receives and upon Sally's death, John's benefits from social security will be the same as what Sally was recieving.

The key in this story is that John is eligible based on his spouse, Sally, even though he never worked. Sally's contributions earned her a spousal benefit for her husband. Now, let's suppose that instead of staying home all those years with the kids, John went to work after the kids were old enough to goto school. John in fact went to work as a teacher. He paid into his state teachers pension fund, but in his state he was not required to pay into social security. When John retires he will NOT be eligible for a social security spousal benefit based on Sally's contributions (technically he might be eligible for something, there is a formula, but that is beyond our discussion).

The only difference between the two situations is that John worked in a public pension system and didn't contribute to Social Security. In both situations John didn't contribute to social security, but in one he recieved a benefit, in the other he didn't. This makes no sense. Either Sally earned a spousal benefit or she didn't - which is it?

The teachers in The American Spectator are made out to be criminals - they are not, they are simply trying to collect on something that should rightfully be theirs. They went through a perfectly legal process to gain these benefits and they shouldn't be punished or have these benefits taken away - they are not criminals like Dennis Koslowski.......to whom they were compared.

My only concern is that its a bit unfair that those 20,000 teachers got to do it, and the hundreds of thousands of others didn't. I agree that it is a major drain on social security, but that is a funding problem. Social Security if fundamentally flawed in its operation and needs to be reformed, but the same can be said for the Governement Pension Offset.

To all you Texas Criminal Teachers (TCT's) out there.......You have at least one supporter! I do ask one thing of you, perhaps think about spending a little bit of that extra money you receive on helping the rest of the teachers get reform for the GPO.

ScottyD
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