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Robert August Vanlangendonck
New Orleans, La 70116-2412
January 24, 2008
The Honorable Michael R. McNulty
Chairman, Subcommittee on Social
Security
Committee on Ways and Means
1102 Longworth House Office
Building
Washington, D.C. 20515
Dear Mr. McNulty and Committee
Members:
I could not
help laughing when I read Ms. Laurel Haltzel analysis “CRS Report for Congress”
Social Security: The Windfall Elimination Provision (WEP) (code 98-35) dated
March 8, 2007. On page CRS-4 she states the arguments for the WEP…”the
provision rarely causes hardship because by and large the people affected are
reasonably well off as most of them also receive government pensions.” She
should be informed that most Republicans are not affected by WEP. With that
attitude she probably thinks those who receive private pensions and Social
Security benefits (both earned simultaneously) and are well off should not be
penalized.
This problem exists
because the Federal Government has interfered into the activities of State
government and has piggybacked Social Security onto a State’s retirement
system. If the Federal Government would keep their paws out of a State’s
retirement system, then the problems that now occur would be non-existing. I
know of no State retirement system that reduces their retirement payment
because a retiree also receives Social Security benefits, nor does WEP apply to
Social Security benefits regardless of years of “substantial earnings” when a
recipient only worked for a private company that has their own retirement
system that is also earned simultaneously with their wages.
When Congress
enacted Social Security Administration’s WEP, they were not dealing with
reality. Congress should repeal WEP. The Social Security Administration
convinced Congress by naming it “Windfall.” It borders on why we have become a
sick nation because the rich have to pay more taxes (they make more income
therefore paying more taxes, even with all the tax loopholes that favor them).
SSA Publication No. 05-10045 states why a different formula is used: “lower
paid workers could get a Social Security benefit that equals about 55 percent
of their pre-retirement earnings. The average replacement rate for highly paid
workers is about 25 percent.” This is how percentages can twist logic. What
is wrong with a low paying worker getting 55 percent of their pre-retirement earnings
(except their retirement will be underfunded) who during employment made less than
$20,000.00 a year who paid into the Social Security system and upon retirement
receives about $11,000.00 a year (55 percent of their pre-retirement earnings)
that is sometimes 100% of their retirement income? Some Social Security
recipients also have other income from other retirement plans both private and
governmental. At my last job with the State of Louisiana, many of the clerical
workers who were at the bottom of the pay scale had part and full time jobs in
private industry to supplement their income. Those workers gave up additional
valuable time of being away from their families over their normal forty-hour
workweek to provide additional income for their families. They had to pay into
the Social Security System only to have upon retirement their Social Security
benefits reduced by WEP and the sickness of trickledown economics. Even a low
paying worker who only worked in private industry and receives an additional
retirement earned during the normal forty hour workweek does not have their
Social Security benefits reduced depending on the number of years of
“substantial earnings” and the modified formula.
The high
paying worker in private employment could earn over $100,000.00 a year, who
upon retirement can get the maximum in Social Security benefits. In addition,
they will probably receive money from another retirement plan (earned
simultaneously while paying into Social Security), a 401K, an early retirement
package, etc. They will probably have saving accounts, rental income, own a second
home, two or more cars, etc, but derives only 25 percent of his pre-retirement
income from Social Security and that’s not fair. Therefore, the Social
Security Administration penalizes the low paying worker and applies WEP. A
high paying worker in private employment can have high Social Security benefits
without having 30 years of “substantial earnings.” Is it fair when Federal and
State employees work forty years gets 100% of their salary for retirement, a
retirement that can be obtained when less than sixty years old and not be
subjected to WEP just because they did not work in private employment? I
assume now that Federal employees must pay for Social Security at the
appropriate retirement age will also get maximum Social Security benefits. It is
obvious in 1986 when the Social Security Administration initiated their WEP;
they made sure it would not affect them.
WEP does not
encourage a flow of employment between private and governmental. In the real
world, that is unknown to the Social Security Administration, no one usually
stays with the same employer during his or her years of employment. If I had
worked in private employment for four different employers who had retirement
plans, I would have probably got maximum Social Security benefits plus four
different retirements and WEP would not apply. If I had only worked for a
government employer, I would have received after forty years full retirement of
about $6,000.00 per month and no WEP would apply. However, I started working
and paying into the Social Security System in 1955 and retired in 2005 when I
was over 68 years old. During that period, I served in the U.S Air Force and
obtained a degree from Louisiana State University. My employment record can be
described as a “flip-flop” among federal, military, state, local, academic and
private. I am not getting maximum benefits of $2,185.000 from Social Security,
but after paying into the Social Security system for 32 years, my present
monthly Social Security check is reduced to $959.40 because of WEP. WEP
affects me because I was a “flip-flopper.” Where is my “Windfall?” To stay
the course would only have had me living in bread lines and not facing
reality.
There is no
reason to penalize a retiree when he could not pay into the Social Security
System. When I started working for the State of Louisiana, it took ten years
before I qualified for the State retirement system. If I had not made those
ten years, none of the amounts earned in those years nor the amounts after
qualifying are applied to my Social Security calculation and are referred as
zero years. The total number of zero years is used to reduce my average Social
Security monthly earnings. Then in 1986, the Social Security Administration
started applying WEP thus reducing my monthly payments even more by using a
modified formula. That is not fair. Where is my “Windfall?”
Even if WEP
is logically correct, the Social Security Administration should have made
provisions for workers who paid into the system or were not allowed to pay into
the system to secure their retirement plans. I paid into the Social Security
System for 32 years starting in 1955. The Social Security Administration in
1986 devised a Table of Substantial Earnings for qualifying years of Social
Security that goes back to 1937, according to the table, only 24 of the 32
years qualify for my WEP calculation. I missed the year 1958 by three
dollars, for 1960 by eight dollars even though I paid into the Social Security
System for those years, I was not told in 1958 and 1960 about WEP and how it
would affect my retirement. For the years 1956 and 1957, I missed both years,
but combined they would qualify for one year, instead both were not used.
After the year 1986, I was not given the opportunity to pay into Social
Security System when Louisiana State employees do not have to pay Social
Security taxes. I paid for Medicare after 1986. I should have been given the
opportunity to pay the employer and employee share of the Social Security tax. In addition, an employee can lose a year of Substantial Earnings depending
on when he was hired and when he terminated his job, a decision that is not
always made by the employee.
In August 2004, I received a letter dated August 12, 2004
from United States Senator, John Breaux with a letter dated July 16, 2004 from
Ms. Annie White, Associate Commissioner (SSA). In the letter, Ms. White states
“Legislation has been introduced in the 108th Congress that would eliminate or
change the GPO and WEP. While there are many changes that could be made to the
Social Security program to increase the protection it offers, the
Administration and Congress must decide which change or combination of changes,
would make the best use of the funds available for the program as a whole.”
Then 109th Congress introduced legislation to eliminate Windfall Elimination
Provision: “WEP,” now it is the 110th. How many more before this unfairness
is repealed? If our government can spend over 600 billion on an unnecessary
war and the loss of lives the value of which cannot be determined or replaced,
then it is sad that the Windfall Elimination Provision “WEP” cannot be repealed
for it is a hoax perpetrated by the Social Security Administration. Not only
should WEP and Government Pension Offset (GPO) be repeal, but also all monies
should be refunded. It is sad but most of the lower paid workers do not even
understand WEP or GPO. If it were not for teachers who understand their
impact, the unfairness would be unnoticed. This unfairness should be disclosed
each year on a recipient’s forms: New Benefit Amount (SSA-4926-SM) and Social
Security Benefit Statement (SSA-1099) so the recipients will know about this
stealth tax. It is not a “Windfall” but a method to shore up the Social
Security System at the expense of poor.
All of
Louisiana’s Congressional representatives support the repeal of WEP and GPO,
except for one, House representative Republican Jim McCrery, District 4,
northwest Louisiana. Rep. McCrery, like most Republicans, is always advocating
reducing taxation and keeping the money in the taxpayer’s pocket. It is
obvious whose pockets Rep. McCrery advocates keeping the money in when he wants
to repeal the Alternative Minimum Tax (AMT) that affects taxpayers who make
over $75,000.00 but not WEP and GPO. I wonder how many retirees are affected
by AMT. In the latest news in The Times-Picayune dated January 18, 2008
concerning an economic stimulus, Rep. McCrery states, “middle and low income
taxpayers…likely would put the money back into the economy quickly.” Retirees
can do it even faster.
I wish to
thank the Social Security Committee for letting me express my opinion. I
watched the hearing on January 16, 2008 and was impressed with your knowledge
of the situation. It was sad to see the lack of it from the first panel.
Sincerely,
Robert August Vanlangendonck
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