Massachusetts Retirees United Legislative Interests at the Federal Level
Prepared by
Marie Ardito
MRU Information Coordinator
If you see any issue that you are really interested in, send for more information to mardito@retireesunited.org
The MRU is petitioning to get a bill filed at the federal level that will enable retirees to subtract their health care premiums from their pensions and or Social Security before each are federally taxed. You can view information and download the petition here.
Repeal of the WEP/GPO
If Collecting a Federal Pension or State Pension from Massachusetts and 14 other States
Government Pension Offset (GPO)
- Will not receive Social Security or will have it reduced by 2/3 either as a spousal or survivor benefit if not eligible to retire by December 31, 1982 or July 1, 1983
- Will be eligible for Medicare
Windfall Elimination Provision (WEP)
Will receive a greatly reduced percentage of what you are entitled to in Social Security unless:
- Eligible to retire prior to January 1986
- Have 30 years of substantial earnings
- You are eligible for Medicare
Present Status
There are 435 Members of the House of Representatives. Currently, there are 350 signed on to repeal the Bill.
There are 100 Members in Senate. We currently have 37 Senators signed on to the repeal the Bill.
What We Have Done
We did a mailing to MA Retirees in some dozen States last summer.
Results: about 33 new signatures in the House and 5 in the Senate
We feel we must concentrate on the Senate as we have ample signatures to override a veto in the House.
What We Want To Do This Summer and Fall
Concentrate on the States that have Senators up for re-election and see if we can get commitments, that if elected he/she will sign on to co-sponsor the Repeal Bill. Do not need to limit contact to them. Also, look at some of the states in which neither Senator is aboard. If we do a mailing to those states we will include both names.
A No after a name indicates they are not signed on for the repeal. Asterisks ***** after a name indicates they represent a state such as ours that is affected by the penalty. Those that are bold faced are Senators that are thought to be in trouble. Also, all those collecting a Government Pension are affected by the penalty.
Senators with Terms - Up
Yes/No means they are signed on to the repeal
***** indicates a state that is under penalty
Senators’ names all in caps indicates a race where the incumbent is believed to be in trouble.
Senators Terms – Up
|
STATE |
SENATOR |
POSITION |
|
|
|
|
|
Alabama |
Sessions |
NO |
|
Alaska |
Stevens |
NO ***** |
|
COLORADO |
ALLARD |
NO not seeking reelection**** |
|
Georgia |
Chambliss |
NO **** |
|
Idaho |
Craig |
NO not seeking reelection |
|
Kansas |
Roberts |
NO |
|
Kentucky |
McConnell |
NO ***** |
|
MAINE |
COLLINS |
YES ***** |
|
MINNESOTA |
COLEMAN |
YES |
|
Mississippi |
Cochran |
NO |
|
Nebraska |
Hagel |
NO not seeking reelection |
|
NEW HAMPSHIRE |
SUNUNU |
NO |
|
New Mexico |
Domenici |
NO not seeking reelection |
|
NORTH CAROLINA |
DOLE |
NO |
|
OKLAHOMA |
INHOFE |
NO |
|
Oregon |
Smith |
NO |
|
South Carolina |
Graham |
NO |
|
Tennessee |
Alexander |
NO |
|
Texas |
Cornyn |
NO ***** |
|
Virginia |
Warner |
NO not seeking reelection |
|
Wyoming |
Enzi |
NO |
|
ARKANSAS |
PRYOR |
NO |
|
Deleware |
Biden |
NO |
|
Illinois |
Durbin |
YES ***** |
|
IOWA |
HARKIN |
NO |
|
LOUISIANA |
LANDRIEU |
NO **** |
|
Massachusetts |
Kerry |
YES |
|
Michigan |
Levin |
YES |
|
MONTANA |
BAUCUS |
NO |
|
New Jersey |
Lautenberg |
YES |
|
Rhode Island |
Reed |
YES **** |
|
SOUTH DAKOTA |
JOHNSON |
YES |
|
West Virginia |
Rockefeller |
NO |
States under the Penalty and Senators
Alaska one up for re-election not signed on BUT other Aboard
CT Liberman not aboard
Dodd is aboard
CA, ME, MA, RI, IL both Senators aboard
CO one aboard
one is not seeking reelection
NV neither aboard
M0 one is aboard
Bond is not
OH one is aboard
Voinovich is not
KY, GA, TX neither is aboard
one in each state up for reelection
LA one is on board
Landrieau isn’t and up for reelection
As you can see we have a great opportunity to make inroads in the Senate on this issue.
Who and Where Are the Senate Races?
ALASKA: Ted Stevens (R) vs. Anchorage Mayor Mark Begich (D). Leans Republican. However recent polls show Begich has a good shot at the seat.
COLORADO (open R -– Wayne Allard retiring): Ex-Rep. Bob Schaffer (R) vs. Rep. Mark Udall (D). Leans Democratic pickup. Mark Udall has signed on as a Rep. so there is an excellent chance to get him aboard
GEORGIA: Saxby Chambliss (R) vs. July 15 Dem primary winner. Likely Republican.
IDAHO (open R –- Larry Craig retiring): Lt. Gov. Jim Risch (R) vs. ex-Rep. Larry LaRocco (D). Likely Republican.
KENTUCKY: Mitch McConnell (R) vs. businessman Bruce Lunsford (D). Likely Republican.
LOUISIANA: Mary Landrieu (D) vs. state Treasurer John Kennedy (R). Likely Democratic.
MAINE: Susan Collins (R) vs. Rep. Tom Allen. Leans Republican. Both have signed on.
MINNESOTA: Norm Coleman (R) vs. Al Franken (D). Leans Republican.
MISSISSIPPI special: Roger Wicker (R) vs. ex-Gov. Ronnie Musgrove (D). Tossup.
NEW HAMPSHIRE: John Sununu (R) vs. ex-Gov. Jeanne Shaheen (D). Leans Democratic pickup. We are attempting to get a commitment from Shaheen.
NEW MEXICO (open R –- Pete Domenici retiring): Rep. Steve Pearce (R) vs. Rep. Tom Udall (D). Leans Democratic pickup. Rep. Udall has signed on Rep Pearce has not. Good state on which to concentrate.
NORTH CAROLINA: Elizabeth Dole (R) vs. state Sen. Kay Hagan (D). Leans Republican. Dole has a fight on her hands according to all the pollsters
OREGON: Gordon Smith (R) vs. State House Speaker Jeff Merkley (D). Leans Republican.
Surprise! Senator McCaskill of Missouri, Mikulski of Maryland, Landrieu of Louisiana and Biden of DE are not aboard
VIRGINIA (open R -– John Warner retiring): ex-Gov. Jim Gilmore (R) vs. ex-Gov. Mark Warner (D). Likely Democratic pickup.
This state should be worked on in conjunction with the National Association of Retired Federal Employees (NARFE) to gain both Senator Webb and new one.
Other States that we should look at because good # of Reps aboard but no Senator
Neither Senator in Wisconsin is aboard
100% of Reps aboard in W. Virginia, OR, NV, KY, KS--- neither Senator
New Federal Legislation Attempting to Get Filed
Cafeteria Plan for Retirees
Presently you are paying tax on the money that you pay for health care premiums. If you are only on the town/city plan, this is deducted from your pension but you still pay federal tax on that amount.
In addition, if you are on Medicare, that is deducted from your Social Security and if you pay taxes on your Social Security you are also paying tax on the money deducted for Medicare
NARFE estimates that the average amount of taxes paid is $410 - $820.
Under the Cafeteria Plan which many of us were under while we were working, your health care premiums were deducted from your salary before it was federally taxed. Those in the private sector not only paid less in Federal Tax but in FICA and Medicare Tax because it was subtracted there as well. As a retiree, we pay tax on the money we pay for our health care premium. Fair????
Medicare B Surcharge 2007
If you are married and your modified adjusted gross income is over $160,000 or you are single and it is over $80,000 you will pay the premium surcharge.
The surcharge is based on your Adjusted Gross Income of two years previous. (2005)
If Single 2007 (double everything except the percent if married)
Will the premium surcharge change after 2007?
Yes. It increases dramatically. For 2008 the surcharge percentages will be double those shown in the previous tables and will be based on 2006 income.
Single - 2008 Rates
Double first two columns if married.
What does this mean in dollars and cents?
Medicare B premium for a single individual is $96.40 a month this year without the surcharge.
With the surcharge those in:
First row would pay $122.20 a month;
Second row $160.90 a month;
Third row $199.70 a month;
Fourth row $238.40 a month.
For 2009 the surcharge percentages will be triple those shown in the first table and will be based on your 2007 income.
The first two columns are blank, as we do not know what the increase in the amount of income will be.
Supposedly Washington is looking to repeal or revamp the Medicare D legislation that became effective a few years ago. This surcharge was part of that legislative package. We have not been able to learn if this surcharge is going to be repealed. At first sight this may not seem as if it should concern us as the amounts seem high. First of all it is based on the salary of two years previous and a lot of things you are able to deduct for tax purposes are not deductible for surcharge purposes. There are so many things that must be studied about this in order to educate our members. For example, does money inherited affect you so that you would fall under the surcharge? It is imperative that people become aware of this surcharge when taking TSA distributions, selling stock, etc. etc. etc. This should never have happened. The justification supposedly is that those in the private sector have a cap on the money they are taxed under Social Security. There is no cap on what they pay in Medicare tax. They pay it on their whole salary. Explain to me how that justifies this?!
Income Tax on Social Security Benefits
When Social security began the benefit was never supposed to be taxed. In 1983, Reagan signed a bill to allow 50% of SS annuity benefits to be taxed. This was the same time that the GPO/WEP penalties went into effect!
The Basic Rule
Up to 50% of Social Security benefits are taxable if total “provisional income” (adjusted gross income, tax-exempt interest and one half of Social Security benefits) exceeds a base amount.
BASE AMOUNT
· $25,000 for single taxpayers
· $32,000 for married taxpayers filing jointly
Very few Social Security recipients reached this amount in 1983. Now, most are paying tax on their Social Security. The amounts have never increased and we feel this should be addressed legislatively.
In 1993 Clinton increased the taxation to 85% when:
- 1) provisional income for single taxpayers exceeds $34,000
- provisional income for married taxpayers filing jointly exceeds $44,00
- all married taxpayers file separate returns but do not live apart
Legislation should be filed to increase the amounts in both the 50% and 85% bracket and then provide for increases each year (similar to what they do with the surcharge)
Continue to Support
There is a bill that I would like to see MRU continue to support even though we are not the ones asking for it to be filed. Tim Bassett of the Essex County Retirement System asked Senator McGee to file the following:
Legislation that would require a 30 days written notice and a hearing must be held for retirees before a town/city/district/regional school district/ etc. could reduce the amount the municipality pays for hospital, group life, surgical, medical dental or other health insurance for its retirees. This bill gives retirees a voice in what will happen to their health insurance premiums or coverage.
Tim assures me this bill will be refilled and welcomes our willingness to work with him on its passage.
General information
Legislative issues involving seniors nationally.
Information on the Windfall Elimination Provision and the Government Pension Offset and how each affects what you will collect from social Security because of your MA pension. This tally is a report of the Congressmen who have signed on as co-sponsors of the Fairness Bill to repeal the Government Pension Offset (GPO) and the Windfall Elimination Provision (WEP).
HR594, filed by Representatives. McKeon and Berman of California calls for the complete repeal of the Windfall Elimination Provision (WEP) and the Government Pension Offset (GPO). Please call your Congressman and ask that he/she co-sponsor this legislation.
S349, filed by Sen. Feinstein of California calls for the complete repeal of the Windfall Elimination Provision(WEP) and the Government Pension Offset (GPO). Please call your Senators and ask that he/she co-sponsor this legislation.
Information on the National Coalition for WEP, GPO repeal
You can find a great deal of information about municipal retirees returning to work for municipalities at this site. It sets all of the states into categories so that you can check out the rules for returning to the public sector work force in different states.