STUMP » Articles » Pity the Poor Congresspeople... Someone is Trying to Take Away Their Pensions! » 21 February 2019, 20:57

Where Stu & MP spout off about everything.

Pity the Poor Congresspeople... Someone is Trying to Take Away Their Pensions!  

by

21 February 2019, 20:57

There’s a bill out there to get rid of U.S. Congressional pensions. And in the wake of the news that Anthony Weiner can be collecting such a pension, this would be the perfect time to just get rid of it.

Braun proposes end to congressional pension

Freshman U.S. Sen. Mike Braun announced Tuesday he has introduced legislation that would eliminate congressional pensions.

Braun, R-Ind., was joined on the bill by freshman Sen. Rick Scott, R-Fla. They have named their proposal the End Pensions in Congress Act.

“It’s time we make Washington more like the private sector and the best place to start is to end taxpayer-funded pensions – like Nancy Pelosi’s six-figure annual pension – that senators and congressmen are entitled to in retirement,” Braun said in a statement, referring to House Speaker Nancy Pelosi, D-Calf.

“If we remove the luxurious perks from Congress, we’ll get better leaders: that’s why I’ll never accept my Senate pension and, if forced to, I pledge to donate every penny to Hoosier charities,” he said.

Karen Friedman, policy director for the nonprofit Pension Rights Center, said Braun’s bill “is a terrible idea.”

“We should be ensuring that people have good pensions, not getting rid of pensions,” Friedman said in a telephone interview.

Dear lord, don’t cry for the poor politicians.

Nobody should be in Congress for their entire career – that’s for starters.

Another piece: Tax-paid Hill Pensions Would End Under Scott, Braun Bill

Generous tax-funded pensions for members of Congress would be abolished under a proposal introduced in the Senate on Feb. 12 by two Republican freshmen senators, Mike Braun (R-Ind.) and Rick Scott (R-Fla.).

“It’s time we make Washington more like the private sector and the best place to start is to end taxpayer-funded pensions—like Nancy Pelosi’s six-figure annual pension—that senators and congressmen are entitled to in retirement,” Braun said in a joint news release.

“If we remove the luxurious perks from Congress, we’ll get better leaders: That’s why I’ll never accept my Senate pension and, if forced to, I pledge to donate every penny to Hoosier charities.”

I don’t think the point is to make Congress like the private sector (what a joke), but they are not like union employees or some such. It makes absolutely no sense to give something that gets only more valuable the longer they sit around. Defined benefit pensions reward people who are lifetime employees, and those who have it for a short period of time generally get screwed.

I do not think we should give Congresspeople more incentives to think of their elected positions as jobs that they earned or deserve…. or anything that is productive at all. They should be given incentives to not stick around government. Take George Washington’s example: he deliberately decided to walk away from a position he could have kept getting elected to until he died.

Be like George.

Or… be like James K. Polk:

BILL SPONSORS: SOME DETAILS

I decided to look up the two politicians pushing this bill.

Mike Braun is about my parents’ age, and he mainly worked in the family business, helped get it through a rough patch, and actually did useful stuff:

After Harvard, Braun moved back to Indiana and joined his father’s business manufacturing truck bodies for farmers. When the economy of the mid-1980s hit farmers hard and his father’s business nearly went under, Braun steered the business in the more lucrative direction of selling truck accessories. The business subsequently grew from 15 employees to more than 300.6 In 1986, Braun and Daryl Rauscher acquired Meyer Body Inc., a manufacturer of truck bodies and distributor of truck parts and equipment.8 In 1995 Braun fully acquired the company. Meyer Body was renamed Meyer Distributing in 1999. Braun is its president and CEO.

Sounds like he still has ownership of the family business (and yes, acquiring somebody else’s business and adding it to the family biz counts.)

Rick Scott is also about the same age as my parents, and he worked in finance, healthcare, etc. I.e., business.

Neither of these guys became politicians for their full careers. They both did something outside that sphere.

MEEP’S TAKE

So, here is my stance on elected officials’ pensions:

- Either no (and definitely not their own fund, like the Illinois GARS)
- Or they have to participate in existing programs for general governmental employees, under the same terms

That is, same vesting period, same benefit formulas, everything.

In many ways, I prefer the second. None of this bullshit of becoming retirement-benefit eligible in many fewer years than a regular state employee.

The problem, of course, is that these elected officials are generally the folks determining the benefit formulas, parameters of the plans, etc. in the first place. I don’t want them voting in higher benefits for themselves.

But I do want them to have a little skin in the game: Illinois GARS, for instance, has an awful funded ratio, but it’s never in danger of not paying benefits… it’s separate from the other funds, and the legislature can always explicitly make the benefits pay-as-they-go.

So, having got that out of the way, I don’t like U.S. Congressional pensions. Not even a 401(k). They can just set up IRAs. And enjoy their Social Security benefits.

DETAILS ON CONGRESSIONAL PENSIONS

Should Congress Continue To Receive Pensions and Perks?

Congressional pensions are determined by salary level, length of service and retirement age. Most federal lawmakers earn roughly $175,000 per year, but are not pension-eligible until they have served a minimum of five years. A Congressman must be at least 50 years old and have 25 years of service, or otherwise age 62 before collecting the full pension.

Leadership positions like majority and minority leaders and Speaker of the House make anywhere from $193,000 to $223,000. Congressmen earn this salary annually for each year of their term – two years for a House member and six years for a Senator. If a member of Congress dies in office, the family is paid out the year’s $174,000 salary; military families by comparison receive $100,000 when a member of the military is killed in action.

By law, the pensions cannot exceed 80 percent of the person’s salary at the time of retirement. In other words, the law forbids a Congressman from earning a full salary in retirement.

And yes, my 80% pension news alert served up this story to me.

Congressmen also get sizeable allowances for staff funding, office expenses and travel. On average, senators get $3.3 million while a typical House member gets nearly $1 million. They get tax deductions too – around $3,000 per year in living expenses incurred while they are in Washington and away from home.

By comparison, the median American household income in 2017 was $61,372. While some think these salaries and perks are high, advocates say the salaries are on par with other professionals in the high cost-of-living D.C. and Virginia area. Advocates point out that Congress has not received a raise since 2009.

via GIPHY

Oh wait! Nobody is forcing them into the Congressional salt mines. If they want to make a private sector salary of high skilled people… I welcome them to go do so.

The benefits of Congress far outweigh those available to the average American worker, and many of the perks last long after their time in office. Take a gander at the list of perks, as provided by the Congressional Research Service.

Taxpayers still fund Congressional members’ official constituent mail for up to 90 days after the person leaves office. Congress gets free reserved parking at all Washington, D.C. airports. Congress can also reserve airline seats on multiple flights, but they only actually pay for the flight they take, and all major airlines have a dedicated staff just for Congress. Amazingly, the Senate even has its own hair salon; it is open to the public for haircuts, manicures and the like, but Congress can bump someone off the appointment list to take the spot. Former Congressmen join an alumni organization called the U.S. Association of Former Members of Congress, and are able to enjoy dining rooms, gym facilities and other amenities, some with a small fee. They are also allowed to borrow exclusive items from the Library of Congress. Former Congressmen can go to the chamber floor whenever they want to as long as they are not employed to influence legislation.

via GIPHY

The author also asks whether Congresspeople should be paid at all, but that’s a different path I don’t want to wander down right now.

Anyway, many congresspeople wouldn’t be happy with losing their pensions, but it may make for good politics.

But wait… you haven’t heard this hot take!

IT’S A CONSPIRACY TO EXCLUDE THE POOR FROM POLITICS!

These are so precious.

Millionaire Republican Senators Want To Kill Pension Plans For Lawmakers

Two extraordinarily wealthy Republican Senators – Rick Scott and Mike Braun – are trying to do away with the pension plans for Congress members that pay them retirement salaries after they leave office. These two men believe that they can get the public to support the plan, but the public is smart enough to understand that this means only the super rich will be able to afford to run for office.

Because IRAs are out of the reach of folks paid in the top 10% of income (actually higher than that, if they have a working spouse).

via GIPHY

2 millionaire senators introduce plan to make sure Congress is only for the rich

Before I quote the piece, this was the subhed:

Well, that’s one way to deal with Alexandria Ocasio-Cortez.

Yes, because everything is about her now. She’s a great match for Trump, who also seems to have everything about him.

Okay, to the piece:

Let’s start this column off with a bold assertion. Paying lawmakers good salaries is one of our country’s most important progressive reforms because it means that they don’t have to be wealthy to serve. High congressional pay is a safeguard against corruption, not a sign of it.

I said I wasn’t going to go down this path, but I somewhat agree.

That said — I do wonder how Nancy Pelosi and her husband became wealthy. I don’t want to pick on Pelosi specifically, but it is interesting how many people, like, oh, the Clintons, who have never done anything but politics, seem to amass a lot of wealth on what are “modest” salaries. (Note: it ain’t the salaries that made their wealth grow.) How did Bernie Sanders end up with multiple houses, even though he never did anything productive in his life? I would love to know.

Qualified former members receive a small percentage of their congressional salary for each year that they served in Congress. Again, the formula is fairly complicated [no, it’s not], but under this formula a retired congresswoman with 25 years of service will receive an annual pension of about $67,000. A single-term senator will receive an annual pension of less than $18,000 when they reach retirement age.

But what about the congressmen?! Do they get a better deal than the congresswomen?!

via GIPHY

That’s enough money to allow a retired lawmaker to live a solidly middle class life when they combine their pension with Social Security benefits and any savings they amassed over the course of their life. But it’s hardly a massive windfall.

Yes, but it’s a defined benefit pension, which most workers do not have… and have never had.

This Plan to Cut Lawmaker Pensions Is Actually Devious

In case you weren’t aware, Congress is brimming with rich people. The average member of Congress is a millionaire and worth 12 times the amount of the average American household. Now newly elected senators Rick Scott and Mike Braun have a plan to keep it that way.
….
While members of Congress shouldn’t be serving for the money, the fact is people need to earn income and want to set themselves up for a comfortable retirement. By taking away that financial security net, it makes it that much harder for working class people like Rep. Alexandria Ocasio-Cortez – who was refreshingly honest about her inability to pay rent in D.C. until getting her first congressional paycheck (and mocked by Republicans because of it) – to run for office.

So.

I have a question.

Since people like to mention AOC in these, given that she was tending bar (I don’t have issue with that)… I would like to know how the Congressional salary without pension would be a step down for her.

I probably made less (inflation-adjusted) as an adjunct at NYU and other colleges than AOC did as a bartender. I realized that was a crappy income level for what I wanted to accomplish… and I entered the actuarial world and immediately tripled my income.

I’m at a higher level than that now. And it’s less than current Congressional salaries. I’m not including my side gigs in this – my full-time job, including bonus, currently pays me less than congresspeople.

As a household income level, as I mentioned earlier, I’m at a 10% percentile (approximately). As an individual income level, it’s a much higher percentage, because many households have more than one income earner. (We don’t.)

The thing is, absent these people’s government connections, many of these folks could not make this level of income in the private sector. That’s the whole point.

I’m not crying for them.

The good news about this bad bill is that its chances of passing in Congress are tiny, since lawmakers aren’t exactly known for willingly forfeiting money owed to them. Instead, corporations will just have to rely on all of its other methods like lax campaign finance rules and control of the media to ensure that Congress remains stacked with millionaires.

It’s not a bad bill, but I agree with the author that it’s unlikely to get very far.

And no, it’s not because it would hurt so much to any of the politicians, but that these people who have seen politics as their core career are never going to give up potential money.

What doesn’t occur to the author is that many of the millionaires in Congress didn’t become millionaires before entering Congress (cf Sanders, Pelosi).

Maybe the author should look into that.