Social security benefits to rise 2.5% in 2025
Social Security recipients will receive a 2.5% increase in their monthly checks in 2025. Analysts had predicted a 2.5% bump for 2025, which is smaller than increases in the previous two years and reflects moderating inflation. Recipients received a 3.2% increase in their benefits in 2024, after a historically large 8.7% benefit increase in 2023, brought on by record 40-year-high inflation.
WASHINGTON – A bipartisan, Social Security-related bill that would expand benefits for workers who are also eligible for other pensions passed this week in the U.S. House of Representatives.
The legislation, called the Social Security Fairness Act, will next go to the Senate.
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Here’s what to know about the bill and who would benefit if it’s signed into law:
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What is the Social Security Fairness Act, H.R. 82
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The measure would repeal provisions that reduce certain Social Security benefits for individuals who receive other benefits, such as a pension from a state or local government, according to the bill summary.
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Specifically, it would repeal the Windfall Elimination Provision (WEP) and the Government Pension Offset (GPO).
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The WEP can reduce Social Security benefits for individuals who worked for an employer that didn’t withhold Social Security taxes from their salary and now receive a retirement or disability pension. Such an employer may be a government agency or an employer in another country, according to the Social Security Administration.
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The bill summary says the GPO “in various instances reduces Social Security benefits for spouses, widows, and widowers who also receive government pensions of their own.”
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The bill would repeal those provisions and reinstate full Social Security benefits.
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Who would benefit if the bill passes?
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If approved, individuals who receive other benefits, such as a pension from a state or local government, could benefit.
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The bill’s co-sponsors, Republican Rep. Garrett Graves of Louisiana and Democratic Rep. Abigail Spanberger of Virginia, used teachers as an example.
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“Educators who do not earn Social Security in public schools but who work part-time or during the summer in jobs covered by Social Security have reduced benefits, even though they pay into the system for enough quarters to receive benefits,” Graves and Spanberger said in a joint statement.
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The bill could also benefit spouses, widows, and widowers of people who work as federal, state, or local government employees.
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The WEP currently impacts approximately 2 million Social Security beneficiaries, and the GPO impacts nearly 800,000 retirees, according to the Congressional Research Service.
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What is the criticism of the bill?
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Two leaders of the conservative House Freedom Caucus intervened when the rest of Congress was away from Capitol Hill, mostly in home states for Election Day.
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The Freedom Caucus chairman Rep. Andy Harris, R-Md., and former chair Rep. Bob Goode, R-Va., used a routine pro forma session of the House on Nov. 5 to swiftly table part of the measure.
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The Freedom Caucus tends to block new spending, according to the Associated Press, and the bill would add some $196 billion to the federal deficit over a decade based on estimates from the nonpartisan Congressional Budget Office.
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Graves said that’s the amount people are missing out on without reinstating full Social Security benefits.
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RELATED: Medicare premiums increasing in 2025
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What’s next for the Social Security Fairness Act?
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To force the legislation forward, the sponsors of the bill, Graves and Spanberger used a rarely successful process called a discharge petition. They collected the minimum 218 signatures needed from House lawmakers to dislodge the bill from committee and send it to the floor for a vote.
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On Tuesday, some 327 House lawmakers voted to support the bill.
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The move is often seen as an affront to House leaders, particularly the House speaker and the majority leader who determine the floor schedule, according to the Associated Press.
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But Spanberger and Graves — who both did not seek reelection — had little to lose, and House Speaker Mike Johnson backed the bill before becoming speaker.
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The measure is now headed to the Senate, where it has 62 co-sponsors.
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“We encourage Senate leadership to build upon this clear momentum, bring our bipartisan effort up for a vote, and deliver retirement security to Americans who have earned it,” the co-sponsors said in a statement.
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It would then go to President Joe Biden’s desk. If signed into law, the summary says the changes are effective for benefits payable after December 2023.