US Senate Approves Social Security Change Despite Fiscal Concerns

• The U.S. Congress early on Saturday passed a measure to boost Social Security retirement payments to some retirees who draw public pensions - such as former police and firefighters - which critics warned will further weaken the program's finances.
• The Senate in a 76-20 bipartisan vote shortly after midnight approved the Social Security Fairness Act, which would repeal two-decades-old provisions that can reduce benefits for people who also receive a pension.
• Last month, the House of Representatives approved the bill in a 327-75 vote, meaning the Senate approval sends it to Democratic President Joe Biden to sign into law.
• The bill will overturn a decades-old change to the program that limited federal benefits to some higher-earning workers with pensions. Over time, growing numbers of municipal employees such as firefighters and postal workers also saw their payments capped.
• Most Americans do not participate in pension plans, which pay a defined benefit, and instead are dependent on what money they can save and Social Security. Just one in ten U.S. private sector workers have pension plans, according to Labor Department data.
• The new provisions impact about 3% of Social Security beneficiaries - totalling a little more than 2.5Mn Americans - and the workers and retirees affected by these provisions are key constituencies for lawmakers and their powerful advocacy groups have pushed for a legislative fix.
• Some of them could receive hundreds of dollars more a month in federal benefits as a result of the bill, retirement experts said. Some federal budget experts, however, warned the change could hurt the program's already shaky finances as the bill's price tag is approximately US$196Bn over the next decade, according to an analysis by the non-partisan Congressional Budget Office

(Source: Reuters)