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The wildfires that set parts of Southern California ablaze are projected to cost over $20 billion in insured losses, according to JPMorgan estimates.
If your primary residence was affected by the wildfires, experts say to take these first steps, whether you’re a homeowner or a renter.

Flames and smoke from the Palisades Fire surround a home (C) in the community of Topanga, California, on January 9, 2025. 
David Swanson | Afp | Getty Images

Firefighters are still working to contain the record-breaking fires that have been raging for more than a week in Southern California.
The fires in the Greater Los Angeles area have burned through 40,000 acres, destroying more than 12,300 structures, according to NBC News. About 88,000 L.A. residents are under evacuation orders and another 89,000 are in evacuation warning zones, meaning they may need to leave at a moment’s notice.

The insured losses from the early January wildfires may cost over $20 billion, according to estimates published last week by JPMorgan. Wells Fargo similarly estimated about $20 billion worth of insured losses with an approximate $60 billion economic loss.
As many affected residents are trying to figure out what’s next, one of the first things to do is kickstart the insurance process, according to Karl Susman, insurance broker and president of Susman Insurance Services in Los Angeles.
“Get your claim filed as quickly as you can,” he said. “You don’t have to have all of the information on hand.”
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Insurers are likely to take a longer time than usual to process claims because of the influx of applications, he said, so the sooner you get the ball rolling, the better. 

If your primary residence has been affected by wildfire — whether you rent or own — experts advise taking these seven steps right away.

1. File the claim first, assess damage later

You don’t have to wait for firefighters to completely put out the fire to file an insurance claim.
Even if you’ve already evacuated and are unaware of the status of your home, you can still begin the claims process, Susman said.
Factors like the type and extent of the damage, the complexity of the claim and the volume of insured losses can affect the insurer’s processing time, experts say.
Renters have access to most of the same resources homeowners do, said Shannon Martin, a licensed insurance agent and analyst at Bankrate.com.
“For the most part, renters can follow the same process as homeowners,” she said. “You want to get yourself to safety, set up your insurance claim and then ask if you can get any additional living expenses in advance.”

2. Ask about ‘loss of use’ coverage

Ask your provider about “loss of use” coverage under your home insurance policy, said Jeremy Porter, head of climate implications research at First Street Foundation, an organization based in New York City that focuses on climate risk financial modeling.
The coverage would allow you to secure temporary housing or lodging while you’re out of your home, he said: “It’s there specifically to give people kind of a lifeline when they can’t move back into the dwelling.”
Tenants may have similar coverage — it’s generally known as Coverage D in renters insurance policies, Porter said. 

3. Keep your receipts and document everything

If you have loss of use coverage, make sure to keep every receipt for any clothes, food and temporary housing or hotel stays you may need. Also keep track of your activities and document all of your conversations with insurers, according to Douglas Heller, director of insurance at the Consumer Federation of America.
“The better you document what you are doing as you go through this awful time, the easier it will be to demonstrate your claim for reimbursements,” he said. 

4. Turn off your utilities

If the fire caused severe damage or you suffered a complete loss of your home, contact your utilities — such as electricity, water and trash collection companies — to temporarily shut off service. You may not have to pay for these services for the time being, Susman said.

5. Contact your auto insurer

If you lost a vehicle in the fire, the damage may be covered under your auto insurance policy, Susman said.
“It’s not going to be under your home [insurance policy] exactly, even if the car was in your driveway,” Susman said.
Look for what’s called comprehensive coverage under your auto insurance, he said. 
If you have comprehensive coverage on your car, you’re typically covered for wildfire loss, and “you just have to pay your deductible,” Bankrate’s Martin said.

6. Don’t forget property taxes

If your home suffered damages, or was a total loss, go to your county assessor’s website and type in your address.
If you’ve sustained more than $10,000 in damages, or the home is a total loss, you can file for an application to reduce or eliminate your property tax while the dwelling is under construction or uninhabitable, insurance expert Susman said.
“That’s something that people tend to not know or they overlook it,” he said.

7. Tap local aid opportunities

If you were not previously covered or your coverage was canceled before the disaster hit, keep an eye out for aid that may become available for those affected by the wildfires, Susman said. 
“For people that had zero insurance, [there will] probably be some type of assistance that will be available,” Susman said.
During a White House briefing, President Joe Biden announced a one-time payment of $770 through the Federal Emergency Management Agency is available for the wildfire victims. Nearly 6,000 survivors have registered for the aid and $5.1 million has gone out, according to The White House.
Those impacted can file for aid via DisasterAssistance.gov or FEMA’s hotline at 1-800-621-3362.
California’s Insurance Commission can be reached at 1-800-927-4357 to help individuals navigate the process as well as help uninsured victims.

FEMA is also providing assistance to those affected by the wildfires.
If you were not previously covered by an insurance plan, the agency’s Individuals and Households Program may provide funds for temporary housing.
Affected individuals can apply online at DisasterAssistance.gov or by calling 1-800-621-3362.
Seek out local support groups and workshops. The Insurance Commission of California will host its first workshop involving government representatives and insurers on Jan. 18-19 at Santa Monica College. Follow-up events are scheduled on Jan. 25- 26 at Pasadena College.
Some charities and nonprofits are actively accepting donations and are engaging in recovery efforts in the Pacific Palisades and surrounding areas. More

House Republicans are pushing for extensions of the 2017 tax cuts enacted by President-elect Donald Trump.
With full control of Congress and the White House, Republicans can pass legislation through a process known as “reconciliation,” which bypasses the filibuster. 
However, there’s Democratic pushback amid concerns over the federal budget deficit.

Chairman Jason Smith (R-MO) speaks during a House Committee on Ways and Means in the Longworth House Office Building on April 30, 2024 in Washington, D.C.
Anna Moneymaker | Getty Images News | Getty Images

With less than one week until President-elect Donald Trump takes office, some House Republicans are pushing for swift extensions of the GOP’s 2017 tax legislation.
Absent action from Congress, trillions of tax breaks are scheduled to expire after 2025, including lower tax brackets, a more generous child tax credit and a 20% deduction for pass-through businesses, among others. More than 60% of taxpayers could see higher taxes in 2026 without extensions of provisions in the Tax Cuts and Jobs Act, or TCJA, according to the Tax Foundation.

“We must not leave families and small businesses waiting for Congress to do the right thing and provide tax relief at the 11th hour,” House Ways and Means Committee Chairman Jason Smith, R-Mo., said during a committee hearing on Tuesday.
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With full control of Congress and the White House, Republicans can pass legislation through a process known as “reconciliation,” which bypasses the filibuster. 
“We must make the Trump tax cuts permanent as soon as possible,” Smith said.
However, some lawmakers on both sides of the aisle have criticized the cost of fully extending Trump’s expiring tax provisions, particularly amid concerns about the federal budget deficit.

The three-month fiscal year 2025 deficit grew to $710.9 billion in December, nearly 40% higher than the same period the previous year, the U.S. Department of the Treasury reported on Tuesday.

Some Democrats have also pushed back on TCJA extensions, noting that they disproportionately benefit the wealthy, rather than middle-class families.
“We know that most of these [tax] cuts went to people at the very top,” Richard Neal, D-Mass., ranking member of the House Ways and Means Committee, said during the hearing. “The American people are living under this tax plan and they need relief from it.”
Fully extending Trump’s expiring tax cuts could cost an estimated $4.2 trillion over 10 years, according to a report released last week by the Treasury. 
If extended, the average family would save 2.2% of after-tax income, whereas the top 0.1% of earners would receive a 4.2% reduction, the report found. When you factor in income, the average family would save roughly $2,000 per year, while the highest 0.1% could see an average tax savings of about $314,000. These figures are based on 2025 data. More

The Social Security Fairness Act adds to Social Security’s benefit costs when the program’s funding is already running low.
If you’re worried about your future benefits, or think you’re eligible for the newly enacted increases, here’s what experts say to consider.

AleksandarNakic | E+ | Getty Images

When it comes to Social Security, prospective beneficiaries often worry whether their benefits will be there when they retire.
Polls show Americans generally have low confidence in the program’s future.

A 2024 survey from Nationwide Retirement Institute found 72% of adults worry Social Security will run out of funding in their lifetime.
Likewise, an October Bankrate survey found that only 6% of Americans are “not at all concerned” their benefits won’t be paid when they reach retirement age. Gen Xers — who at ages 44 to 59 are getting closer to retirement — are most likely to be concerned about the program’s future, Bankrate found.
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President Joe Biden recently signed the Social Security Fairness Act, which will increase Social Security benefits for nearly 3 million individuals who also receive public pensions. Yet because that legislation did not provide for a way to fund those extra benefit payments, Social Security now has a shorter runway of time that it can afford to pay full benefits.
In 2024, Social Security’s trustees projected the program’s combined funds may last until 2035, at which point 83% of benefits would be payable. The newly enacted changes bring that date closer by six months, according to Congressional Budget Office estimates.

“There’s no new sources of revenue here, and so by definition, depletion is going to happen sooner versus later,” said David Blanchett, head of retirement research at PGIM DC Solutions.
To address the program’s shortfall, Congress may raise taxes, cut benefits or a combination of both.  
Those looming changes may influence claiming decisions — for all beneficiaries, as well as those affected by the new legislation.

Now is the time to ‘stress test’ your plan

Social Security retirement benefits are based on a worker’s earnings history, as well as the age at which they claim.
The earliest claiming age is 62. But claiming that early results in permanently reduced benefits.
By waiting until full retirement age — which ranges from 66 to 67, depending on date of birth — retirees will receive 100% of the benefits they’ve earned.
By delaying even longer — up to age 70 — they stand to receive an 8% benefit boost for every year they wait past full retirement age.
Even if there are benefit cuts in the future, experts say it generally helps to have a higher benefit amount, so long as you can afford to delay claiming benefits.

Year of birth
Social Security full retirement age

1943-1954
66

1955
66 and two months

1956
66 and four months

1957
66 and six months

1958
66 and eight months

1959
66 and 10 months

1960 or later
67

Individuals who are in or near retirement may not see imminent changes.
“It’s incredibly unlikely that they’re going to reduce benefits for any current retirees,” Blanchett said.
However, for future beneficiaries, Social Security probably won’t be as generous in 20 or 30 years as it is today, Blanchett said. Exactly how benefits may change will depend on a variety of unknowns, including future immigration and birth rates.
That doesn’t mean Social Security benefits won’t exist at all, Blanchett said. But he said it would be wise to assess how receiving just 80% of today’s benefits, or even 50% of the current value for dual-income households, affects your retirement plan.

Social Security is meant to be just one part of a retirement income plan. If Social Security cuts happen, it helps to have more retirement savings or other assets to rely on.  
“The one thing that you can do to kind of help yourself with all these risks and uncertainties is just to save more so that you’re prepared for whatever may happen,” Blanchett said.
Joe Elsasser, a certified financial planner and president of Covisum, a Social Security claiming software company, said he recommends a “stress test” for retirement plans in light of the possibility of benefit cuts.
“If you can’t live how you want to live even in the presence of a cut, consider reducing spending a bit now so that you don’t have to reduce it a lot more later,” he said.

If new law affects you, ‘take a fresh look’ at your plan

More than 72.5 million people now receive Social Security and Supplemental Security Income benefits, according to agency data.
Consequently, the nearly 3 million people who stand to benefit from the newly enacted Social Security Fairness Act are just a fraction of the beneficiary population.
The new law eliminates certain provisions — the Windfall Elimination Provision, or WEP, and the Government Pension Offset, or GPO — that reduced Social Security benefits for workers who had pensions or disability benefits from work where Social Security payroll taxes were not paid.

Because those changes have implications for an entire family, the new law may reach double the number of individuals who are directly affected by the changes, after accounting for spouses and children, according to David Freitag, a financial planning consultant and Social Security expert at MassMutual.
The potential difference in benefits may be dramatic. For example, one couple who would have faced a retirement funding shortfall when they had been affected by the WEP and GPO may now have a lifetime surplus of more than $300,000 once those offsets are eliminated, according to MassMutual’s computer models.
The effects of the new changes will vary on a case-by-case basis, and not all beneficiaries stand to see that level of increase. But even just $300 more in monthly income that’s annually adjusted for inflation can make a big difference in retirement, Freitag said.
“If you’re affected by this, you need to take a fresh look at your retirement plan,” Freitag said. More

Freshmen college enrollment increased in the fall, the National Student Clearinghouse Research Center said, contrary to what it previously reported.
The education research firm blamed a “methodological error” for the incorrect calculations.

Freshmen college enrollment increased in fall 2024, the National Student Clearinghouse Research Center said — contrary to its previous report that the enrollment declined.
A “methodological error” in the preliminary enrollment report, released in October, caused the miscalculation, Executive Director Doug Shapiro said in a statement Monday.

“The error in research methodology caused the mislabeling of certain students as dual-enrolled rather than as freshmen and, as a result, the number of freshmen was undercounted, and the number of dual-enrolled was overcounted,” Shapiro wrote.
Because of the error, the October report showed a decline in freshmen enrollment at both two- and four-year institutions. It also showed an even steeper drop in freshmen student enrollment at four-year colleges where large shares of students receive Pell Grants.
CNBC had included the original, erroneous data in several articles, which can be found here, here, here, here, here and here.
“Our subsequent research finds freshman enrollment increased this fall,” Shapiro wrote. He said the new research “is not based on preliminary data … and uses different methodologies to determine freshman enrollees.”
The final freshmen enrollment numbers will be released Jan. 23, the center said.

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Shapiro said the center is “conducting a thorough review to understand the root cause [of the error] and implement measures to prevent such occurrences in the future.”
Revised data shows a 3% rise in overall undergraduate enrollment in the fall compared with that period in 2023, according to the center’s updated analysis. Enrollment was also higher at four-year colleges where large shares of students receive Pell Grants.
“We are encouraged and relieved that updated data from the National Student Clearinghouse shows freshman enrollment is up this school year,” U.S. Under Secretary of Education James Kvaal said in a statement.
“The increase is consistent with what we are seeing on the financial aid side: More than 5% more students are receiving federal aid this year,” Kvaal said. 

Some experts had warned that problems with the new Free Application for Federal Student Aid could result in fewer students applying for financial aid and fewer students enrolling in college.
However, because of changes to the FAFSA, more students can now qualify for a Pell Grant, a type of aid that is awarded based solely on financial need.

‘We are not out of the woods’

Higher education expert Mark Kantrowitz said that although there have been improvements with the new FAFSA, “we are not out of the woods yet.”
“The new FAFSA should have yielded a significant increase in the number of applications by low-income and first-generation college students by making the form easier to file. It has not yet fulfilled this promise,” Kantrowitz said. “This year’s form is better than last year, but there is still a lot of room for improvement.”
The U.S. Department of Education released the FAFSA for 2025-26 ahead of schedule, saying it did so with the goal of improving college access.
Overall, total college application volume through Dec. 1 rose 8% for the 2024-25 application season, compared with a year earlier, according to the latest data from the Common Application, an online college application platform.
Kantrowitz, who is not affiliated with the National Student Clearinghouse Research Center, said an error on the part of the research group was “very rare.”
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More than 150,000 federal student loan borrowers will get their debt forgiven, the Biden administration announced this week.
Those who qualify include 61,000 disabled borrowers and thousands more under the Public Service Loan Forgiveness program.

President Joe Biden.
Irfan Khan | Los Angeles Times | Getty Images

Students from schools that misled them

Nearly 85,000 people will get their federal student debt forgiven through the U.S. Department of Education’s Borrower Defense Loan Discharge program. People may be eligible for the option if their school closed while they were enrolled or if they were misled by their school or didn’t receive a quality education.
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The Education Department said it had approved group discharges for 73,600 students who attended schools owned by the Center for Excellence in Higher Education, including Independence University and California College San Diego. The $1.15 billion in debt forgiveness will go to borrowers who attended these institutions between Jan. 1, 2006, and Aug. 1, 2021, the Education Department said.
Another 11,000 borrowers will get their student debt canceled if they attended any location of Drake College of Business between Jan. 1, 2008, and July 31, 2015, when the school closed. That debt cancellation totals $107 million.
Lastly, 280 borrowers who enrolled in the Criminal Justice Program at Lincoln Technical Institute’s campus in Lowell, Massachusetts, between 2010 and 2012, or the Somerville, Massachusetts, campus from 2010 to 2013, will have their federal student debt cleared. These borrowers will receive a total of $1.4 million in loan forgiveness.

Eligible borrowers who attended these institutions will receive the aid automatically, even if they didn’t apply for it, the department said.
Those who qualify should begin receiving emails in the coming days.

Borrowers with disabilities

An additional 61,000 federal student loan borrowers with a “total and permanent” disability will receive $2.5 billion in debt erasure, the Education Department said Monday.
This round of relief includes some borrowers automatically approved for debt forgiveness through data matches with the U.S. Social Security Administration and the Department of Veteran Affairs. Other borrowers applied for the loan discharge.
Borrowers may qualify for a Total and Permanent Disability, or TPD, Discharge if they suffer from a mental or physical disability that is severe and permanent, and prevents them from working. Proof of the disability can come from a doctor, the Social Security Administration, or the Department of Veterans Affairs.

Public servants

The Education Department also granted loan forgiveness to 6,100 borrowers under the Public Service Loan Forgiveness, or PSLF, program totaling $465 million.
The program, which former President George W. Bush signed into law in 2007, allows employees of the government and certain not-for-profit entities to have federal student loans discharged after 10 years of on-time payments.
The Biden administration has tried to reverse the trend of borrowers being excluded from PSLF on technicalities. It has broadened eligibility and allowed people to reapply for relief, as long as they were working in the public sector and paying down their debt.
With the PSLF help tool, borrowers can also search for a list of qualifying employers under the program and access the employer certification form. Go to studentaid.gov to learn about all the program’s requirements.

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Omer Taha Cetin | Anadolu | Getty Images

Crypto ETFs may be entering a year of innovation, with new funds and new approaches, but don’t expect demand to match what was seen in the first year of bitcoin ETFs.
Bitcoin exchange-traded funds debuted a year ago and have been hailed as one of the most successful ETF launches in history, drawing $36 billion in net new assets in their first year, led by BlackRock’s iShares Bitcoin Trust. The ETFs were a catalyst spurring institutional adoption and helped double the total market value of cryptocurrencies in 2024.

The next crypto ETFs could see weaker demand, however. Already, applications for new funds that would track Solana, XRP, Hedera (HBAR) and litecoin have been submitted but, even if approved this year, they may attract a fraction of the assets that flowed in to bitcoin ETFs, according to JPMorgan. There has also been an application for a hybrid bitcoin and ether fund.
“We don’t see a next wave of cryptocurrency [exchange-traded product] launches as being meaningful for the crypto ecosystem given much smaller market capitalization of other tokens and far lower investor interest,” JPMorgan analyst Kenneth Worthington wrote in a note Monday.
Worthington noted that assets of $108 billion in bitcoin ETFs make up 6% of total bitcoin market capitalization after the first year of trading. For ether ETFs, which launched in July with less fanfare, that percentage narrows to just 3% ($12 billion) of the coin’s market cap after six months.
Applying those “adoption rates” to Solana, which has a total $91 billion market cap, JPMorgan projects ETFs tied to the token will attract between $3 billion and $6 billion of net new assets. A fund tracking XRP, which has a market cap of $146 billion, would attract an estimated $4 billion and $8 billion in net new assets.
Worthington added that the regulatory environment – specifically, the promise of a pro-crypto Congress and White House in 2025 that the industry hopes will boost growth in crypto businesses – could shape the outlook for innovation in crypto ETFs.

“The regulatory and legislative guardrails in the U.S. … will determine the type, quantity and focus of new products and services launched,” the analyst said. “The new administration and a new SEC chairman opens the door for new opportunity in cryptocurrency innovation.”
Tyron Ross, founder and president of registered investment advisor 401 Financial, expects demand for bitcoin ETFs this year won’t live up to what was seen in 2024 but will remain “healthy.” That’s largely due to investor education and growing confidence in the 16-year-old digital asset class.
Adoption could accelerate, however, if bitcoin ETFs get added Wall Street’s to model portfolios, he said.
“None of those portfolios have crypto in them, so until crypto is in there, you’re not going to see that next leg of growth this year that you saw last year,” Ross told CNBC. “The majority of advisors buy their their models off the shelf, and those models don’t have bitcoin or crypto [exposure] in them… when that’s addressed, I think you’ll start to see that parabolic [growth] like you saw last year.”
“You can feel it across the space that some of the regulatory clouds are clearing and there’s blue skies ahead, but there needs to be tempered expectations of the ETFs in the coming year,” he added.

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The IRS free Direct File program opens on Jan. 27 for taxpayers in 25 states.
With expanded tax situations, more than 30 million taxpayers will be eligible to use Direct File in 2025, according to the U.S. Department of the Treasury.
Many taxpayers can also use IRS Free File, among other options.

Internal Revenue Commissioner Danny Werfel speaks during his swearing-in ceremony at the IRS in Washington, D.C., on April 4, 2023.
Bonnie Cash | Getty Images News | Getty Images

The 2025 tax season kicks off on Jan. 27, and more taxpayers will have access to Direct File, the IRS’ free tax filing program, which launched in 2024.
Starting on Jan. 27, Direct File will be open to eligible taxpayers in 25 states, including 12 states from the 2024 pilot and 13 new states, the agency announced Friday. 

The U.S. Department of the Treasury estimates that more than 30 million taxpayers across those 25 states will be eligible to use Direct File in 2025.
This season, new Direct File features will make tax returns “quicker and easier,” IRS Commissioner Danny Werfel told reporters on a press call.   
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For 2025, participating states include Alaska, Arizona, California, Connecticut, Florida, Idaho, Illinois, Kansas, Maine, Maryland, Massachusetts, Nevada, New Hampshire, New Jersey, New Mexico, New York, North Carolina, Oregon, Pennsylvania, South Dakota, Tennessee, Texas, Washington state, Wisconsin and Wyoming, according to the IRS.

After completing federal returns via Direct File, the program guides users to their state’s software for state filings. For some states, Direct File can transfer filing data.

However, you cannot use Direct File if you did not live in a participating state for the entirety of 2024, according to the website. You can check eligibility here.

Direct File to ‘cover more tax situations’

However, for 2025, Direct File has expanded to “cover more tax situations than last year,” Werfel said Friday.
For 2025, Direct File will add support for interest income above $1,500, pension and annuity income — excluding individual retirement accounts — and Alaska Permanent Fund Dividends, the agency announced in October.
Direct File will also accept more tax breaks, including the child and dependent care credit, premium tax credit for Marketplace insurance and the credit for elderly or disabled and retirement saver’s credit. While filers still must claim the standard deduction, Direct File will add the tax break for health savings accounts. 
Starting this season, filers can automatically import data from their IRS account, including personal data, an identity protection pin and some details from Form W-2, according to the IRS.

Other options to file your taxes for free

In addition to Direct File, most taxpayers also qualify for IRS Free File, which offers free guided tax prep through private software partners. The program opened on Jan. 10 and eligible taxpayers can start e-filing returns prepared by Free File on Jan. 27.
You are eligible for IRS Free File if your 2023 adjusted gross income was $79,000 or less.

“Many taxpayers believe that Free File is only for the simplest returns, but that is simply not true,” Tim Hugo, executive director of the Free File Alliance, said in a press release on Sunday.
For free tax preparation, many filers are also eligible for programs such as Volunteer Income Tax Assistance, Tax Counseling for the Elderly and MilTax.

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The Social Security Fairness Act was signed into law on Jan. 5, following years of lobbying efforts from groups representing firefighters, police, teachers and other affected workers with pensions.
Yet one cohort, Social Security experts, is mostly unanimously against the changes the law brings.
Now, Social Security’s insolvency issues are worse while a solution is just as elusive, they say.

Richard Stephen | Istock | Getty Images

When President Joe Biden signed the Social Security Fairness Act on Jan. 5, it was a victory for those who tirelessly lobbied for years for new changes that will provide more generous benefits to public workers with pensions.
Yet for the policy community, the enacted change backed by overwhelming bipartisan support in both the House and Senate is a huge disappointment.

“Literally, you cannot find a Social Security expert who thought Social Security Fairness Act was a good idea,” said Andrew Biggs, senior fellow at the American Enterprise Institute.
The new law eliminates two provisions that adjusted Social Security benefits for individuals who also receive pension income from work performed in the public sector where payroll taxes to Social Security were not paid.
The now defunct Windfall Elimination Provision, or WEP, reduced Social Security benefits for approximately 2 million individuals who also have pension or disability benefits from work where they did not contribute to Social Security. The WEP was enacted in 1983.
The Government Pension Offset, or GPO, reduced Social Security benefits for nearly 750,000 spouses, widows and widowers who receive their own pensions from work in the public sector. The GPO was created in 1977.
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The provisions were intended to help ensure all Social Security beneficiaries get a comparable payout from the program. Because Social Security is progressive and intended to be an anti-poverty program, low-income workers receive a higher income replacement rate when they collect benefits. The WEP and GPO were intended to adjust public workers’ benefits so they were not treated as low-income workers.
Once the bill was signed, organizations that lobbied for the change praised the new law for finally providing affected workers the full Social Security benefits they had earned. For the National Committee to Preserve Social Security and Medicare, the new law caps off a decades-long fight to either modify or repeal the rules.
The WEP and GPO were “a way of cutting benefits for a class of people who are providing a public service for our communities,” said Maria Freese, senior legislative representative at the National Committee to Preserve Social Security and Medicare.
“They got singled out, and their Social Security earns them less in benefits than a person who decided not to go into public service,” Freese said.
As the new law is phased in, Social Security beneficiaries may see monthly benefit increases ranging from an average of $360 to $1,190, the Congressional Budget Office has estimated. Affected beneficiaries will also get lump-sum payments for the extra benefits they would have received throughout 2024.
The law makes the program “more fair” now that people will no longer be penalized for income earned outside of the system, said John Hatton, staff vice president for policy and programs at the National Active and Retired Federal Employees Association, or NARFE.
Notably, income from capital gains or inheritances already did not influence the size of Social Security benefits. The same should be true for income earned outside of the program, Hatton said.

Yet many policy experts maintain the changes never should have been enacted.
“What we saw was a huge special interest push for a very poorly developed and poorly targeted policy which is creating windfalls for a number of recipients,” said Maya MacGuineas, president of the bipartisan Committee for a Responsible Federal Budget.
Notably, that change will cost almost $200 billion over 10 years, according to the CBO, at a time when Social Security’s trust funds are already running low. The program’s combined trust funds are expected to last until 2035, at which point 83% of benefits will be payable, Social Security’s trustees projected last year. Eliminating the WEP and GPO will bring move that depletion date six months closer.
Experts both for and against the Social Security Fairness Act agree Congress needs to address the program’s funding shortfall sooner rather than later.

Provisions aimed to prevent benefit windfalls

The WEP and GPO rules, and how their intricacies affect individual beneficiaries, are complex.
“There is an injustice here that the provisions tried to correct, maybe not perfectly,” said Alicia Munnell, senior advisor at the Center for Retirement Research at Boston College.
Despite experts’ tireless efforts to explain the provisions to lawmakers, “we all failed,” Munnell said. Now what’s left is “bad policy,” she said.
Put simply, without the WEP, state and local workers who only work in jobs that pay into Social Security for a short time look like low earners and consequently get the extra benefits aimed at low earners, she said.
The elimination of the GPO also now makes it so a nonworking spousal Social Security benefit goes to a full-time worker with their own pension benefit, noted Charles Blahous, senior research strategist at George Mason University’s Mercatus Center.
“There’s zero justification for doing that,” said Blahous, who called the legislation “unserious” and “disappointing.”
While the WEP and GPO were imperfect, they were needed to prevent the payment of benefit windfalls to a small number of people who didn’t pay Social Security taxes for years, he said.
“It’s a very concerning indicator of Social Security’s future,” Blahous said.

Lawmakers face Social Security solvency dilemma

The Social Security Fairness Act was passed by the Senate with a 76-vote bipartisan majority. Amendments that were introduced in those final legislative hours in December — including efforts to add ways to pay for the change or alter the provisions instead of replacing them — failed. The Senate took up the bill after the House passed it in November with a 327 bipartisan majority.
Now that the WEP and GPO elimination has become law, one way to make the changes more equitable would be bring the 25% of state and local workers who do not currently contribute to Social Security into the program, according to Munnell.
While Congress could revisit the changes it just made with the Social Security Fairness Act, experts say that’s unlikely.
The bigger problem lawmakers now face is when and how to restore the program’s solvency.
“We are still in a place where politically it’s very difficult for members of Congress to come out in support of any substantive, responsible changes to the program that will address its long-term fiscal issues,” said Emerson Sprick, associate director of economic policy at the Bipartisan Policy Center.
Future action will require presidential leadership and a commitment to address the issue, Sprick said.

However, for now, President-elect Donald Trump has promised not to touch Social Security. Trump has also said he wants to eliminate taxes on Social Security benefit income. Trump’s presidential transition team did not immediately respond to a request for comment.
Because that change would be expensive, over $100 billion a year, and does not have the same fairness argument to it, it would be less likely to go through, according to Biggs.
While Trump has promised no benefit cuts, that creates a mathematical problem for Republicans, who are typically a low-tax party, he said.
Ultimately, restoring Social Security’s solvency may require benefit cuts, tax increases or a combination of both.
“We know that we need to be addressing Social Security and Medicare because of the insolvency that they both face within roughly a decade,” MacGuineas said. “Neither party, no leader, seems to have the political will or the integrity to start talking about how to get that done.” More