Forcing all newly-hired public employees to participate in Social Security would have a "devastating financial impact" on states and localities, Coalition to Preserve Retirement Security Chair Terri Bierdeman told a congressional panel on June 9.

Try to understand our situation, we're looking for pieces here, there and everywhere that add up to a 75-year solution.

"Proponents of [mandatory coverage] fail to understand that the normal cost of the existing retirement plan will increase as a percentage of payroll as younger members are eliminated from the plan," Bierdeman stated in her written testimony for the House Ways and Means Social Security Subcommittee hearing. "Thus, employers and new workers will not only have to add an additional 6.2 percent for the new payroll tax, but employers may also have to increase contributions to the existing plan or cut benefits. When states and localities are under extreme fiscal stress as they are currently, this added expense will create enormous burdens with negligible, if any, positive outcomes."

While Bierdeman and other witnesses, including several associated with the coalition, made strong arguments against mandatory coverage - noting that The Segal Company, in an update of a 1999 report, concluded this month that the measure would cost state and local governments $44 billion over five years, nearly double the amount estimated six years ago - at least one key lawmaker appeared unconvinced.

"The question that keeps coming back to me is why shouldn't everybody contribute to a system like Social Security that is supposed to be a universal system," subcommittee Chair Jim McCrery, R-La., said. "You say you like Social Security, you support Social Security, yet you don't want to participate in it and you don't want to contribute to it."

Forced coverage, Bierdeman responded, would be a burden because so many public retirement systems - which were initially prohibited from participating in Social Security - have existed for decades outside of the program.

"To layer on the burden of Social Security would have a devastating financial impact," she said. "If we were creating a brand new system from scratch, it would be different."

Charles Loveless of the American Federation of State, County and Municipal Employees, a CPRS national partner, also stressed the fiscal effects, saying that mandatory coverage would be "an enormous financial burden on the states at a time when they just are not equipped to deal with it."

The witnesses also noted that mandatory coverage would have a minor impact on Social Security's finances, eliminating only about one-tenth of its projected 75-year shortfall and extending the program's solvency by just two years. McCrery, however, did not consider those numbers to be insignificant.

"Try to understand our situation, we're looking for pieces here, there and everywhere that add up to a 75-year solution," he said.

Several of the witnesses urged lawmakers to reform Social Security's government pension offset (GPO) and windfall elimination provision (WEP) but McCrery, whose panel generally must vet any Social Security bill before it can be voted on by the full House of Representatives, appeared unreceptive, with his statements and questions reflecting concerns about both the cost and fairness of reforming the two measures.

Bierdeman and Loveless were joined on the witness panel by Randall Iglehart of the Association of Texas Professional Educators, a CPRS member; Georgia State Representative Nan Grogan Orrock, representing the National Conference of State Legislatures, a CPRS national partner; and representatives of the Fraternal Order of Police, Federally Employed Women, the Government Accountability Office and the Social Security Administration.