For months now, I have seen graphics on facebook and via email saying that the President and/or Congress gets their salary for life. This is wrong.
Members of Congress (House & Senate) and the leadership do not receive their salaries for life.
According to the Congressional Research Service:
“Under both CSRS and FERS, Members of Congress are eligible for a pension at the age of 62 if they have completed at least five years of service. Members are eligible for a pension at age 50 if they have completed 20 years of service, or at any age after completing 25 years of service. The amount of the pension depends on years of service and the average of the highest three years of salary. By law, the starting amount of a Member’s retirement annuity may not exceed 80% of his or her final salary.
As of October 1, 2009, 455 retired Members of Congress were receiving federal pensions based fully or in part on their congressional service. Of this number, 275 had retired under CSRS and were receiving an average annual pension of $69,012. A total of 180 Members had retired with service under both CSRS and FERS or with service under FERS only. Their average annual pension was $40,140 in 2009.
Members who had retired under CSRS had completed, on average, 18.8 years of civilian federal service. Their average annual CSRS annuity in 2009 was $69,012. Those who had retired under FERS had completed, on average, 15.6 years of civilian federal service. Their average retirement annuity in 2009 (not including Social Security) was $40,140″
Secondly, Presidents — while they receive an obscene pension of $191,300 — do not get $450,000 a year for life. They get about $200,000 and benefits like travel funds and mailing privileges. Since 1997, Presidents receive Secret Service protection for a decade after leaving office. Beforehand, they got it for life.
Some back of the napkin math for you:
If all current living former Presidents lived to the ripe age of 93, and we took away all current appropriations (at current levels) — that would fund the salaries of 2,315 soldiers at this graphic’s average salary or the average income of 7,333 seniors on social security, assuming their figures are correct.
Active duty service members in combat zones are eligible for the military pay exclusion on their income.
Yes, a yearly pension of $191,300 is absurd. But, reducing it to zero and committing the money elsewhere wouldn’t make a big dent in entitlements or military funding. Not much of a dent at all.
Perspective is important.
Despite working an average of over 15 years, taking away the pensions of retired Congressman, similarly, won’t make much of a difference in ensuring military pensions or social security are funded.
That’s the simple truth.
To be sure, there are ways we can and should significantly reduce federal spending. During my five years of service in the federal government, I paid into a pension plan, a thrift savings plan (sort of a government-run 401(k)), and social security. I also saved on my own.
That’s four separate retirement mechanisms. Good enough for government work, huh? If we want to get serious about retirement spending for government employees, dinging the pensions of elected officials is probably a publicly popular way, albeit insufficient, to get started. We should, however, find a way to end federal pensions — which are outdated and costly.
Especially when there’s social security, the TSP, and private savings. However, if this last campaign taught us anything, getting rid of costly pensions and moving to less-dated retirement plans for employees is difficult and unpopular.
Ask Mitt Romney and the folks at Bain Capital.