Mandatory Social Security Coverage for State and Local Government Employees

On Thursday, June 20, 2013, the Senate Finance Committee Staff released the last in a series of ten papers compiling tax reform options that Finance Committee members “may wish to consider” as part of any tax reform legislation. One of these options is mandatory Social Security coverage for “all State and local government employees.” It appears that this would apply to new hires only, as the paper cites the Congressional Budget Office (CBO) deficit reduction options proposal on mandatory Social Security coverage as one of its sources (applying only to new hires), and uses the CBO revenue estimate of a revenue pick-up of $96 billion over ten years for the Feds.

NAPO supports a long-term solution to Social Security reform, so long as such a solution does not mandate that all or some state and local government employees, including newly hired ones and their employing agencies, be required to pay Social Security taxes. Adding presently non-covered public safety workers will not fix the basic problems of Social Security. While it will bring new workers into the Social Security system, the system will also have to assume a liability for these new workers, which will eventually have to be paid.

Even if Social Security taxes were limited to new hires, the likely consequences of mandatory Social Security taxes, including reduced benefits, lower salaries, or frozen cost-of-living increase, would make law enforcement and fire safety work less financially desirable. It makes no sense to tamper with a system of pension funds that is working well and paying needed benefits to those who serve to protecting the public.

NAPO will continue to serve as the key representative of law enforcement in defending this issue before members of Congress.