Retirees who collect pensions from jobs that were not covered by Social Security would take a much smaller hit from Social Security's government pension offset (GPO) if legislation proposed in late September by a Maryland senator becomes law.

GPO reduces Social Security spousal and survivor's benefits for retirees who collect pensions from jobs that were not covered by Social Security by an amount equal to two-thirds of the pension. The Government Pension Offset Reform Act would make GPO equal to the amount by which two-thirds of a retiree's total monthly income (pension plus Social Security benefit, before application of the offset) exceeds $1,200. (That figure would be adjusted for inflation.)

So, for example, under the current law, a retiree who collects a $1,200 monthly pension from a non-covered job and would, in the absence of GPO, be eligible for a $600 monthly spousal benefit would see no spousal benefit at all, since the $600 would be completely offset by two-thirds of the pension ($800). Under Mikulski's proposal, though, that same retiree would be able to collect the full spousal benefit, since two-thirds of $1,800 - the retiree's total monthly income - equals exactly $1,200.

Mikulski has proposed this measure in previous sessions of Congress but her bills never made it out of committee.