I have seen several posts lately expressing outrage that members of Congress get paid their salary for life.
Now, while I don't like what Congress is doing any better than the next person, this outrage is misplaced.
Congressmen participate in FERS, the Federal Employee Retirement System. It is NOT a "free ride for life", as many would have it. But it IS an employer-sponsored defined benefit pension plan, and pensions of that sort are increasingly rare.
The plan itself is not terribly outrageous. They are vested after 5 years, which means three 2-year terms for a Representative and one 6-year term for a Senator. If that's all they serve, then at age 62 they can receive a pension of $17,588 for six years of work. Not earth-shattering, but not trivial either.
However, if they serve for 25 years, they can get up to about $68,000 a year. And there ARE some unique aspects to the pension. "Serving" can be in any federal job, not just serving in Congress, so it becomes easier to make those extra years. And the calculations are based on the three highest-earning jobs, not the most recent.
Congressmen can also participate in a TSP, which is the public-sector version of a 401k. The government matches their contributions up to 5%. Again, this is not outrageous; that level of employer match is not unusual.
They DO participate in Social Security. But because their salaries are so high, their initial benefits can be about $30k a year, and that's on top of their pension. Note that one proposal to "fixing" social security is simply to lift the cap on contributions. For 2017, the cap is $127,200; the current salary of members of Congress is $174,000. Congressmen are also allowed to earn up to $28,400.00 in "outside earned income", so raising the contribution limit to 250k would capture most of this income.
So what can we do, to save taxpayers from the burden of these (possibly overgenerous) congressional pensions? One theory is that minimizing income and class disparities would help our elected officials identify with, and actually serve, their constituencies. We should not have a ruling class.
We could start by adjusting their base salaries. Pay Congressmen the median salary of their constituency. According to the Bureau of Labor Statistics, for the entire US, this is currently $44,564 per year. This would both put Congressmen on a level with the constituencies they represent, and reduce the ongoing financial commitment of taxpayers to pay their salary-based pensions.
If Congressmen say they need the higher salaries to do their jobs effectively - they need to maintain an appropriate house in Washington, they need to host or go to the appropriate soirees - then those supposedly-valid expenses should be line-items in the state's budget. Let the voters decide if the expenses are warranted.
Unfortunately, this may not be much of a constraint on Congressmen, most of whom go into their jobs as millionaires anyway.
Another possibility would be to give Congressmen the same options given to most workers today. Pension OR 401k, not both. Or, as suggested here, replace FERS with Social Security.
To address the fear that reducing the salaries of members of Congress will make them more susceptible to bribery, I suggest that we a) make financial disclosure mandatory (ie, all elected officials must release their tax returns) and b) make such a disclosure mandatory again when they leave office or are re-elected. Let the public - their bosses - decide if any moonlighting they do has been interfering with their primary job.
Some complain that those in Congress get free Cadillac healthcare. Again, not true. Currently, Congressmen DO have to buy their healthcare on the marketplace, but in Washington DC (a district, not a State) they have options not available to their constituents. My solution would be to say they have to buy a standard plan offered on the state exchange of their state of residency. If they don't like what is offered there, they can work to get good, affordable plans offered to all.
Better yet, they could institute a national health plan, so residency doesn't dictate health care.
So - if I made the rules...
