New Rule #14: People who have no idea
whereof they speak must actually learn something before they criticize and lie
about those in public service. This is especially true for those who have been
in business and should know better.
Just
to be clear: I am, and will always be, among those Americans who feel Congress is frequently
too self serving . I have frequently been critical of its (their) actions in
many areas. I have frequently referred to some members and sometimes to the
entire body in unflattering terms. I have sometimes thought that some individuals
were overpaid and underproductive. Having said all this, I have reached my limit for blatant bullshit, as purveyed by those of both parties who are unhappy with some aspect of Congress' performance and choose to buttress their sometimes justifiable complain with absolute falsehoods and misinformation, all too readily believed by their equally gullible and ill intentioned acquaintances. It seems weird to be defending those whom I have so readily criticized, but liars need to be called out and held accountable. I'll do this by listing the lies and misconceptions and then discussing each one.
· Legislators
receive free health care at military facilities such as Walter Reed.
Totally false! Members of Congress can receive care at the
new Walter Reed National Military Medical Center, but the cost of such care is
billed to their federal insurance, which as we will see isn't as good as my
military retired coverage! If
House and Senate members choose to use the Capitol attending physician and the
Army and Navy hospitals while in D.C., they pay an annual fee (equivalent to
being part of an HMO). If they seek private medical care while in D.C. or back
in their home states, they use their private health insurance. If they are over
65, they use Medicare and whatever private supplemental insurance they may
carry. And, of course, they pay into
Medicare while working just like everyone else.
Members of Congress are
eligible — like all other federal employees — to sign up for one of the
"cafeteria" health insurance plans offered all other federal
employees. If they sign up for one of these policies, the federal government
pays two-thirds of the premium and the Congressman pays the other one-third.
This is comparable to insurance offered by many private employers. Most members signed up for one of the Blue Cross plans that has both deductibles and co-pays. The family (spouse and children) of House and Senate members are not entitled to be treated by the Capitol attending physician and thus must be covered by private insurance. Most members include their wives ( and minor children) under a Blue Cross (or equivalent) plan and pay the higher family premium. One of the most popular plans under FEHBP (the Blue Cross Blue Shield Standard plan) costs beneficiaries $430 a month for a family, and $185 a month for individual coverage. This is about the same as family coverage costs a teacher in Orange County Florida, however, at present, the individual is covered at no cost, so Congressmen actually pay more than some school teachers!.
· Myth:
Members of Congress do not pay Social Security taxes and do not participate in
the system
Fiction since 1984. The 1983 amendments to the Social
Security Act (P.L. 98-21) required federal employees first hired after 1983 to
participate in Social Security. These amendments also required all Members of
Congress to participate in Social Security as of January 1, 1984, regardless of
when they first entered Congress. Thus, since then, all Members of Congress
have paid, and continue to pay, Social Security taxes. All
Members of Congress pay Social Security payroll taxes, regardless of any other retirement plan coverage. Members of
Congress, like all other workers covered by Social Security, pay Medicare
Hospital Insurance taxes on all earnings at a rate of 1.45% of pay in 2007.
Note:
this means that some members of congress pay 14.2% of their Congressional pay
into their retirement plans!
· Myth: Members of
Congress are exempt from the laws they pass
Just not true, since 1954, but saying it sure seems to make the Tea Partiers
feel better, though, and you'll note that the Tea Party members of Congress
don't disabuse them of the idea, since they want the lunatic fringe support for
the rest of their agenda. In fact, the Tea Party members of Congress' mantra
is, apparently, "Everyone in Congress is f****d up except us, and you
should trust us!
·
Myth:
The new health care law (The Affordable Health care Act) will not apply to
Members of Congress.
Reality:
The law actually states, “Notwithstanding any other provision of law, after the
effective date of this subtitle, the only
health plans that the Federal Government may make available to Members of
Congress and congressional staff with respect to their service as a Member of
Congress or congressional staff shall be health plans that are created under
this Act or offered through an Exchange established under the Act." In other words, yeah, it certainly will apply!
·
Myth: Members of Congress can retire and
receive their full salary after serving just a single, two-year term
This is perhaps the longest running, and most blatant lie extant regarding
Congressional compensation! In fact, a person elected to Congress for just two
terms as a member of the US House of Representatives is ineligible for any
Congressional retirement whatsoever. We're talking about the difference between
$174,000 (current compensation) and Zip, Zero, Nada! That's some lie!! The minimum amount of
service to be eligible under the retirement system ("vested" is the term
usually used) is 5 years of service.
Congressional pensions, like those of all
other federal employees, are financed through a combination of employee and
employer contributions. All Members pay Social Security payroll taxes equal to
6.2% of the Social Security taxable wage base ($97,500 in 2007). Members
covered by the federal Employee Retirement System (FERS) also pay an additional 1.3% of full salary to the Civil Service
Retirement and Disability Fund.
Under
both CSRS (the pre-1984 plan) and FERS, Members of Congress are eligible for a
pension at age 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, no Member’s retirement annuity may exceed 80% of his or her
final salary. This means that no member of Congress can ever retire at full salary, even if they serve
40 years in Congress! As of October 1, 2006, 413 retired Members of Congress
were receiving federal pensions based fully or in part on their congressional
service. Of this number, 290 had retired under CSRS and were receiving an
average annual pension of $60,972. A total of 123 Members had retired with
service under both CSRS and FERS or with service under FERS only. Their average
annual pension was $35,952 in 2006 (For comparison, this is about the value of my Navy
retirement as a senior enlisted man, and I have free medical on top of
that!)
· Congressional retirement in perspective:
To put this into perspective a three term congressman who loses his seat is "vested" and can draw retirement, but only at age 62, at which time his retirement would be 12.5% of his high three salary years. If you were elected in 2006 at age 36 to the House and were defeated in 2012, you wait 20 years to draw any retirement benefit, and then it would be 12.5% of $174,000, or $21,759. Not bad, but...a Navy Commander, retiring at 42 after 20 years would earn a minimum of $50,000 annually and would have been paid over $1 million dollars in retirement by age 62, at which time he also would draw Social Security.
For example, the pension for a
Representative or Senator who retired in
December 2006 at the end of the
109th Congress with a total of 30 years of service years covered under CSRS and 23 years covered under FERS) and a high-3 salary of
$161,800 would be:
$161,800 x .025 x 7 = $28,315 (CSRS)
+ $161,800 x .017 x 20 = $55,012 (FERS)
+ $161,800 x .01 x 3 = $ 4,854 (FERS)
______________________________________
total retirement at 62 of $88,181
Comparing again, A Vice Admiral
in the navy, at retirement after 30 years (which, assuming he attended
Annapolis at 18 would by 50 years old) earns in base pay alone, $167,000
annually plus as much as 40,000 in allowances. If a doctor: add 22k to 36k
annually depending on specialty. If a dentist and (at any rank) agreeing to do
4 years naval service, add $50,000. If this theoretical admiral would therefore
retire, assuming not medical or dental corps, at 30 years, his immediate retirement would be
about $125,000 annually, plus freed
medical for life for him and his spouse, at age50.
Before the Congressman retires at 62, on 30 years, the admiral will have been
paid over
$1
and 1/2 million in retirement (not to mention the immensely profitable private sector jobs retired
admirals frequently "earn" in their former military area of
expertise. Even a Captain retiring on 30 years earns more retirement longer.
Lest you think
this is a military phenomenon, let's look at a civilian 20 year career: firefighter.
The average 20 yr NYFD retiree earns in retirement just under 100k annually! NYPD is
similar. Obviously firefighters, law enforcement personnel and the military
risk their lives while employed, but this is about retirement compensation, not
active duty salary. That's what hazardous duty supplements are for. By comparison,
Congress does well, but not nearly as well as the lie portrays!
So
why this willingness to lie about and castigate Congress and begrudge them
their pay? It may be that we feel that,
as public servants, they should do exactly as we want, and so some persons are
probably delighted with their representation while others are unhappy. It is
also an "us" and "them" mentality, in which we single out
Congress because they are easy to blame, just as many single out the President
for things that are Congress' responsibility. Goodness knows it's easier to
blame others than to assume responsibility for one's own shortcomings and
misfortunes.
The
real scandal is about what we are willing to pay (or about what Boards of
Directors are willing to pay) Business executives, regardless of performance. This is especially troubling in light of reality,
which is that many of the economic woes we face are due to the malfeasance of
CEOs in the financial sector of American banking and trading. America bitches
about what Congressmen earn, yet seem fine with the huge disparity between the
average wage earners' pay and that of
corporate CEOs. Profits at big U.S.
companies broke records last year, and so did pay for CEOs. The head of a
typical public company made $9.6 million in 2011, according to an analysis using
data from Equilar, an executive pay research firm. Many CEOs have retirement
packages and or "Golden parachutes" worth more than $25,000,000.
In Great Britain, the ratio of CEO compensation
to that of the average worker is 22:1,
in Japan - 11:1, in Germany - 12:1, in
the United States - 475:1 ! Where's the indignation?? (Curiously enough, the
two nations whose CEO to Workers' earnings ratio (excluding the USA) is highest
are Mexico (47:1) and Venezuela (50:1) - good company, huh??
To
illustrate this point I offer something I never thought I'd do - a defense of John
Boehner, the second most powerful elected man in America. Boehner came to
politics relatively late, since as one of 11 siblings, he had to work his way
through college (seven years to graduate). Elected to Congress in 1990, he will
reach 30 years service at age 71. At that age, assuming his current Speaker of
the House salary (higher than a regular Congressman and deservedly so) he would
draw a Congressional retirement pension of about $113,000 annually, less than Lebron James earns
just for showing up on the court for one game!. There will be no lump
sum payout, no golden parachute. He will be responsible for his own healthcare
costs as well.
By
contrast consider two executives who "failed" at their jobs in the private sector:
Robert Nardelli, (Home Depot) -
bad performance as CEO, share prices down significantly, asked to resign,
Consequences: $210 million in cash, $84 million in stock - A quarter of a billion dollars for leaving,
having underperformed!
Yet
there are those who begrudge an ex-President (arguably the most taxing and
significant job in the world) their taxable pension., currently under $200,000
annually, plus allowance for transition
staff, etc.
Again,
I have been mightily pissed off at Congress and the President from time to time,
but I will never think they are over compensated as long as Donald Trump lives!
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