Monday, January 24, 2011

Will Congressional Pensions "Share the Sacrifice"

            If public employee pensions are responsible for exploding State deficits, are Congressional pensions also responsible for the increased Federal deficit?  If Congress increases the eligibility age for Social Security to 70 years, will Congress  increase its own pension eligibility age to 70 years?

            On November 29th, President Obama added his voice to the offensive against public employees when he froze Federal worker salaries citing that "the hard truth is getting this budget under control is going to require some broad sacrifice and that sacrifice must be shared by employees of the Federal government."  Immediately embraced by Republicans, the truth is that the freeze will produce insignificant savings. Obama's message failed to suggest that members of Congress as Federal employees share the sacrifice.   

            With no Fed Bank bailout or Federal assistance on the horizon, States continue to grapple with recession-era deficits of $150 billion as Congressional budget hawks turn their sights to legislative remedies that would allow those States to go bankrupt.  Certain to exploit the crisis by taking shots at public unions, retirement pensions and health care benefits for millions of public employees, members of Congress, past and present, will be trapped by their own hypocrisy.     

            Those public pension funds, often a substitute for increased wages, were once invested in safe securities and bonds held in trust for retirees, suffered historic losses with the collapse in 2000 and the 2008 meltdown.   Never mind that those greedy teachers, librarians, police officers and firefighters and other purveyors of essential public services, some of whom risk their lives daily on our behalf have paid into those pension funds all of their working lives and look forward to retirement without any guarantee of Federal government benefits.     
            States have suffered draconian cuts to Federal aid as a reflection of unsustainable Congressional priorities that do not include State infrastructure or averting a widespread dismantling of public services.   Congress spares no expense when it comes to spending $1.1 trillion on two wars (Iraq $767 billion and Afghanistan $366 billion) since 2001. Appropriating $664 billion for the 2010 military budget, Congress provided $16 billion more than President Obama requested.  Hasn't anyone inside the Beltway connected the dots between a total 2010 Defense budget of $1.3 trillion and recent Congressional Budget Office projection of a 2011 deficit at $1.5 trillion?
            Public employees and their unions are easy scapegoats for those who would deflect attention away from the deregulation enacted by subversive politicians and avaricious high rollers on Wall Street who drained the Federal treasury and brought the country to the edge of bankruptcy.  Never mind that those grasping swindlers betrayed the trust of the American people have contributed nothing worthwhile to society and served no useful purpose. 

           The Civil Service Retirement System (CSRS) of 1920 served as the Federal civilian pension system until replaced by the Federal Employee Retirement System (FERS) in 1987 at which time Congress had the option to stay with the more generous CSRS.  While most Americans cannot retire until their mid-60’s and deficit hawks are pushing to bump the retirement age up, a 62 year old member of Congress qualifies for retirement with 5 years of service or a 50 year old with 20 years of service.  

            By 2009, with 455 “retired” Members of Congress which includes those defeated for reelection, 275 former members were receiving an average CSRS pension of $69,000 annually while 180, mostly elected after 1987, were receiving an average FERS pension of $41,140.  Those figures do not include the Golden Goose of Congressional Pensions known as an annual guaranteed Cost-of-Living-Adjustment (COLA) adopted  in 1989 as the Ethics Reform Act.  The Act which included a 25% increase of Congressional salaries from $89,500 to $133,600 further rigged the system by adopting an automatic cost-of-living-adjustment that would kick in every year unless Congress voted to deny the increase.       

            Between 2001 and 2009, Congressional salaries increased from $145,100 to $174,000 thanks to an automatic Cola increase.   As Social Security recipients have not received a cost of living adjustment since 2008, Congressional Cola increases cost taxpayers $2.2 million and $2.5 million in  2008 and 09 respectively.  In 2010,  Congress voted to not accept a 2011 COLA increase.  On January 7, 2011, Rep. Gabrielle Giffords (D-Az) introduced a bill to cut Congressional salaries by 5%.  

            Would it come as a shock to hear that former Speaker Newt Gingrich who resigned under an ethics cloud with 20 years in the House and former Senator Alan Simpson with 18 years in the Senate who serves on the President’s Deficit Commission, both hard line advocates of cutting People Program entitlements, are on the public dole.  Both collect full CSRS pensions including Cola increases, full medical care and other Congressional privileges.  As an example, consider that Sen. Bill Bradley (NJ) who retired in 2000 after 23 years of service is expected to receive a total of $7.9 million in pension payments (assuming an average lifespan).

            More recent examples of Congressional pension largesse are Senators Chris Dodd and Byron Doran who will collect $125,000 and $116,000 annually after 30 years of service, Judd Gregg will collect $63,000 for 16 years, Kit Bond and Jim Bunning will each receive $58,900 for 14 years of service.   These pensions do not include annual COLA 'adjustments.'    

            Even if Congress protects Social Security and Medicare as well as it protects its own pension and health care coverage, public employees who are not eligible for Social Security, are falling through the social safety net and waking up in an America with all the earmarks of a third world banana republic. 

1 comment:

Jeff Mannix said...

Nice rant, but what exactly would you advise can be done about it?

You really can't believe that congressmen will entertain sharing with other federal and private employees a reduction to their retirement or healthcare benefits, do you?

As far as salaries go, congressmen are still underpaid. And because of that we cannot attract honest, talented candidates.