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Senate to vote on bill to increase Social Security for some beneficiaries

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Last month, Congress moved to take rare bipartisan action to change certain Social Security rules.

The House of Representatives on Nov. 12 passed the Social Security Fairness Act by an overwhelming 327 to 75 majority.

The proposal would eliminate rules that reduce Social Security benefits for those who also receive income from public pensions, roughly around 2.8 million people.

For supporters of the bill, that legislative victory has been followed by a suspenseful wait. The Senate must also pass the proposal for it to become law. And the number of legislative days left in this session of Congress are quickly running out.

At a Wednesday rally on Capitol Hill, Senate Majority Leader Chuck Schumer, D-New York, promised to put the bill up for a vote.

“I am here to tell you the Senate is going to take action,” Schumer said, prompting cheers from the crowd including fire fighters, police, postal workers, teachers and other government employees, who stood outside the Capitol building in the rain.

“I got all my Democrats lined up to support it,” said Schumer, adding they need 15 Republicans.

“What’s happening to you is unfair, un-American,” Schumer said. “I will fight it all the way.”

Bette Marafino, an 86-year-old retired teacher and a member of a national grassroots task force that has pushed to have the rules eliminated, was at the Capitol when the House voted in November.

The vote prompted cheers that turned into tears of joy from the small group of advocates who witnessed it. “We were so happy,” Marafino said.

Now, she is worried what may happen if the Senate does not pass the bill by Dec. 20.

“It’s going to be start all over again, and we’ll need to have some champions,” Marafino said, now that Reps. Garret Graves, R-La., and Abigail Spanberger, D-Va., who co-led the bill, are leaving Congress.

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Prospect of nixing rules prompts fierce debate

Despite the enthusiasm from advocates behind the bill, many experts on both the left and right have said the Social Security Fairness Act is not the best policy.

The rules the bill would eliminate — the Windfall Elimination Provision, or WEP, and the Government Pension Offset, or GPO — were designed to make it so all Social Security beneficiaries received a comparable reimbursement for their contributions to the program.

Social Security is progressive, which means workers with lower lifetime earnings receive higher income replacement rates.

Without the rules, workers who are eligible for Social Security retirement benefits and who also have income from pensions where they didn’t pay taxes into the program may receive a higher income replacement than some workers who contributed to the program for their entire careers, experts argue.  

The bill also does not include a way to offset the cost of the benefit increases it includes.

Over 10 years, it would cost around $196 billion, according to the Congressional Budget Office. That’s as the program currently has just nine years before the trust fund it relies on to help pay retirement benefits may be depleted.

“As far as I know, there are no policy experts who support repealing the Windfall Elimination Provision and Government Pension Offset,” said Emerson Sprick, associate director of economic policy at the Bipartisan Policy Center.

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The WEP affects about 2.1 million Social Security beneficiaries — or about 3% of all Social Security beneficiaries — who see their retirement or disability benefit checks reduced because they also receive pension benefits from jobs not covered by Social Security.

The GPO affects almost 746,000 individuals — about 1% of all Social Security beneficiaries — by reducing spousal or widow(er) benefits because of pensions from non-covered government employment.

Rather than eliminate the rules altogether, some experts have suggested it would make more sense to replace them with more precise formulas for adjusting benefits.

Yet groups like the International Association of Fire Fighters maintain eliminating the rules altogether is the best policy.

The starting salary for a firefighter in Louisiana is around $40,000, said Edward Kelly, general president of IAFF. To make ends meet, those professionals often take on second or third jobs, where they do pay Social Security payroll taxes. Yet once they become eligible for the program’s benefits, they have that income reduced.

Generally, workers who pay in the same amount as non-public employees can see their monthly benefits reduced by $500 or $600, Kelly said.

“That’s devastating and it’s patently unfair,” Kelly said. “You’re basically being discriminated against for your public service.”

Public workers say Social Security cuts hurt

For many public workers, the reduction of their Social Security benefits comes as a surprise.

Roger Boudreau, a 75-year-old former teacher who is on the executive board of the Alliance for Retired Americans, regularly received Social Security’s annual benefit statements with estimates of how much monthly income he may expect.

However, those disclosures did not include any information on the WEP or GPO penalties, he said.

Boudreau didn’t realize how much his monthly checks would be reduced until he went to sign up for his Social Security benefits 10 years ago.

It was a shock to find out his Social Security benefits would be cut by 40%, Boudreau said. He estimates has resulted in a loss of about $5,000 per year over the past decade.

Other public workers are forced to delay their retirements because of the way the rules affect them, according to Lois Carson, 64, president of the Ohio Association of Public School Employees, an affiliate of the American Federation of State, County & Municipal Employees.

Carson, who has been a Columbus City School employee for about 37 years, has delayed her own retirement since the rules limit the Social Security survivor benefits she would receive while collecting a pension.

“Most women work longer, because they can draw their husband’s Social Security while they’re working,” Carson said. “But once they retire, it drops down to a third.”

If the bill is not passed, most of the 30,000 members she represents will go way beyond their 30 years of employment, she said.

Advocacy groups have been working tirelessly to get lawmakers to move the bill.

Since the proposal passed in the House in November, Kelly said the firefighters alone have sent around 29,000 emails urging Senate leaders to pass the bill.

The stakes are high, experts say.

The initiative must compete with the Senate’s other legislative priorities. If the bill doesn’t get passed in this Congress, it dies, Kelly said.

With 62 Senate co-sponsors, the bill has a strong chance of passing once it is brought up for a vote.

“If it gets to a final vote under standard Senate procedure, I don’t see a whole lot of opportunity for it to fail,” Sprick said. “The question is whether it gets to that final vote.”

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Trump administration loses appeal of DOGE Social Security restraining order

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A person holds a sign during a protest against cuts made by U.S. President Donald Trump’s administration to the Social Security Administration, in White Plains, New York, U.S., March 22, 2025. 

Nathan Layne | Reuters

The Trump administration’s appeal of a temporary restraining order blocking the so-called Department of Government Efficiency from accessing sensitive personal Social Security Administration data has been dismissed.

The U.S. Court of Appeals for the 4th Circuit on Tuesday dismissed the government’s appeal for lack of jurisdiction. The case will proceed in the district court. A motion for a preliminary injunction will be filed later this week, according to national legal organization Democracy Forward.

The temporary restraining order was issued on March 20 by federal Judge Ellen Lipton Hollander and blocks DOGE and related agents and employees from accessing agency systems that contain personally identifiable information.

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That includes information such as Social Security numbers, medical provider information and treatment records, employer and employee payment records, employee earnings, addresses, bank records, and tax information.

DOGE team members were also ordered to delete all nonanonymized personally identifiable information in their possession.

The plaintiffs include unions and retiree advocacy groups, namely the American Federation of State, County and Municipal Employees, the Alliance for Retired Americans and the American Federation of Teachers. 

“We are pleased the 4th Circuit agreed to let this important case continue in district court,” Richard Fiesta, executive director of the Alliance for Retired Americans, said in a written statement. “Every American retiree must be able to trust that the Social Security Administration will protect their most sensitive and personal data from unwarranted disclosure.”

The Trump administration’s appeal ignored standard legal procedure, according to Democracy Forward. The administration’s efforts to halt the enforcement of the temporary restraining order have also been denied.

“The president will continue to seek all legal remedies available to ensure the will of the American people is executed,” Liz Huston, a White House spokesperson, said via email.

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The Social Security Administration did not respond to a request from CNBC for comment.

Immediately after the March 20 temporary restraining order was put in place, Social Security Administration Acting Commissioner Lee Dudek said in press interviews that he may have to shut down the agency since it “applies to almost all SSA employees.”

Dudek was admonished by Hollander, who called that assertion “inaccurate” and said the court order “expressly applies only to SSA employees working on the DOGE agenda.”

Dudek then said that the “clarifying guidance” issued by the court meant he would not shut down the agency. “SSA employees and their work will continue under the [temporary restraining order],” Dudek said in a March 21 statement.

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Most credit card users carry debt, pay over 20% interest: Fed report

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Many Americans are paying a hefty price for their credit card debt.

As a primary source of unsecured borrowing, 60% of credit cardholders carry debt from month to month, according to a new report by the Federal Reserve Bank of New York.

At the same time, credit card interest rates are “very high,” averaging 23% annually in 2023, the New York Fed found, also making credit cards one of the most expensive ways to borrow money.

“With the vast majority of the American public using credit cards for their purchases, the interest rate that is attached to these products is significant,” said Erica Sandberg, consumer finance expert at CardRates.com. “The more a debt costs, the more stress this puts on an already tight budget.”

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Most credit cards have a variable rate, which means there’s a direct connection to the Federal Reserve’s benchmark. And yet, credit card lenders set annual percentage rates well above the central bank’s key borrowing rate, currently targeted in a range between 4.25% to 4.5%, where it has been since December.

Following the Federal Reserve’s rate hike in 2022 and 2023, the average credit card rate rose from 16.34% to more than 20% today — a significant increase fueled by the Fed’s actions to combat inflation.

“Card issuers have determined what the market will bear and are comfortable within this range of interest rates,” said Matt Schulz, chief credit analyst at LendingTree.

APRs will come down as the central bank reduces rates, but they will still only ease off extremely high levels. With just a few potential quarter-point cuts on deck, APRs aren’t likely to fall much, according to Schulz.

Credit card debt?

Despite the steep cost, consumers often turn to credit cards, in part because they are more accessible than other types of loans, Schulz said. 

In fact, credit cards are the No. 1 source of unsecured borrowing and Americans’ credit card tab continues to creep higher. In the last year, credit card debt rose to a record $1.21 trillion.

Because credit card lending is unsecured, it is also banks’ riskiest type of lending.

“Lenders adjust interest rates for two primary reasons: cost and risk,” CardRates’ Sandberg said.

The Federal Reserve Bank of New York’s research shows that credit card charge-offs averaged 3.96% of total balances between 2010 and 2023. That compares to only 0.46% and 0.43% for business loans and residential mortgages, respectively.

As a result, roughly 53% of banks’ annual default losses were due to credit card lending, according to the NY Fed research.

“When you offer a product to everyone you are assuming an awful lot of risk,” Schulz said.

Further, “when times get tough they get tough for most everybody,” he added. “That makes it much more challenging for card issuers.”

The best way to pay off debt

The best move for those struggling to pay down revolving credit card debt is to consolidate with a 0% balance transfer card, experts suggest.

“There is enormous competition in the credit card market,” Sandberg said. Because lenders are constantly trying to capture new cardholders, those 0% balance transfer credit card offers are still widely available.

Cards offering 12, 15 or even 24 months with no interest on transferred balances “are basically the best tool in your toolbelt when it comes to knocking down credit card debt,” Schulz said. “Not accruing interest for two years on a balance is pretty hard to argue with.”

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The 60/40 portfolio may no longer represent ‘true diversification’: Fink

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Andrew Ross Sorkin speaks with BlackRock CEO Larry Fink during the New York Times DealBook Summit in the Appel Room at the Jazz at Lincoln Center in New York City on Nov. 30, 2022.

Michael M. Santiago | Getty Images

It may be time to rethink the traditional 60/40 investment portfolio, according to BlackRock CEO Larry Fink.

In a new letter to investors, Fink writes the traditional allocation comprised of 60% stocks and 40% bonds that dates back to the 1950s “may no longer fully represent true diversification.”

“The future standard portfolio may look more like 50/30/20 — stocks, bonds and private assets like real estate, infrastructure and private credit.” Fink writes.

Most professional investors love to talk their book, and Fink is no exception. BlackRock has pursued several recent acquisitions — Global Infrastructure Partners, Preqin and HPS Investment Partners — with the goal of helping to increase investors’ access to private markets.

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The effort to make it easier to incorporate both public and private investments in a portfolio is analogous to index versus active investments in 2009, Fink said.

Those investment strategies that were then considered separately can now be blended easily at a low cost.

Fink hopes the same will eventually be said for public and private markets.

Yet shopping for private investments now can feel “a bit like buying a house in an unfamiliar neighborhood before Zillow existed, where finding accurate prices was difficult or impossible,” Fink writes.

60/40 portfolio still a ‘great starting point’

After both stocks and bonds saw declines in 2022, some analysts declared the 60/40 portfolio strategy dead. In 2024, however, such a balanced portfolio would have provided a return of about 14%.

“If you want to keep things very simple, the 60/40 portfolio or a target date fund is a great starting point,” said Amy Arnott, portfolio strategist at Morningstar.

If you’re willing to add more complexity, you could consider smaller positions in other asset classes like commodities, private equity or private debt, she said.

However, a 20% allocation in private assets is on the aggressive side, Arnott said.

The total value of private assets globally is about $14.3 trillion, while the public markets are worth about $247 trillion, she said.

For investors who want to keep their asset allocations in line with the market value of various asset classes, that would imply a weighting of about 6% instead of 20%, Arnott said.

Yet a 50/30/20 portfolio is a lot closer to how institutional investors have been allocating their portfolios for years, said Michael Rosen, chief investment officer at Angeles Investments.

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The 60/40 portfolio, which Rosen previously said reached its “expiration date,” hasn’t been used by his firm’s endowment and foundation clients for decades.

There’s a key reason why. Institutional investors need to guarantee a specific return, also while paying for expenses and beating inflation, Rosen said.

While a 50/30/20 allocation may help deliver “truly outsized returns” to the mass retail market, there’s also a “lot of baggage” that comes with that strategy, Rosen said.

There’s a lack of liquidity, which means those holdings aren’t as easily converted to cash, Rosen said.

What’s more, there’s generally a lack of transparency and significantly higher fees, he said.

Prospective investors should be prepared to commit for 10 years to private investments, Arnott said.

And they also need to be aware that measurement issues with asset classes like private equity means past performance data may not be as reliable, she said.

For the average person, the most likely path toward tapping into private equity will be part of a 401(k) plan, Arnott said. So far, not a lot of companies have added private equity to their 401(k) offerings, but that could change, she said.

“We will probably see more plan sponsors adding private equity options to their lineups going forward,” Arnott said.

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