There are two hot button topics that receive a lot of attention these days— Congressional retirement and Congressional pay. Unfortunately most of what you hear about Congressional retirement is just plain false and I believe much of the ballyhoo about Congressional salaries is not justified.
The often repeated rumor is that a Representative or a Senator receives their full salary for the rest of their lives even if they have only served one term. I hate to burst anyone’s bubble, but that rumor is pure poppycock. Representatives and Senators participate in the same retirement plans that are available to federal employees with one notable exception; they are fully vested in their retirement after five full years of service whereas federal employees are partially vested after 10 years and fully vested only after 20 years of service.
All Members of Congress elected in 1984 or later, like all federal employees hired after that date, participate in the Federal Employee Retirement System (FERS). They pay into the Social Security system at the rate of 6.2% of the first $97,500 of their salary and they pay into the Civil Service Retirement and Disability Fund at the rate of 1.3% of their full salary. The federal government matches their contributions to those funds just like your private sector employer matches the 7.5% you pay into the Social Security fund. Representatives and Senators elected prior to 1984, like federal employees hired before that date, are participants in the Civil Service Retirement System (CSRS). After 1984, they were all given the opportunity to stay in the CSRS or convert to FERS.
Representatives and Senators are fully vested in the FERS after five full years of service, but they may not draw upon that retirement until age 62 with the following exceptions. If they have 20 years of service they may start drawing retirement at age 50 after they leave Congress, and if they have 25 years of service, they may start drawing retirement at any age after they leave Congress.
The amount of their retirement pension is based on the number of years served and the average of their highest three years of salary, but by law, their pension may never exceed 80% of their final salary.
According to the Congressional Research Service, “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.” (http://www.senate.gov/reference/resources/pdf/RL30631.pdf)
Now that the retirement myth is busted, let’s turn to the issue of Congressional pay. Many people believe we ought to have more of a citizen Congress that requires Members of Congress to earn their money in the real world and to not be paid by the federal government. Indeed, the Founding Fathers had this same debate during the Constitutional Convention with Benjamin Franklin arguing for no pay. However, he did not prevail and the first Members of Congress were paid a per diem of $6.00 a day when in session. Members of Congress began receiving an annual salary in 1855 and the rest is history. Current Members of Congress are paid $174,000 per year except the Speaker of the House who gets $223,500 per year and the Senate and House Majority and Minority Leaders who each receive $193,400 per year. The salary levels are calculated by the Office of Personnel Management and these salaries become the basis for Judges’ salaries as well as the salaries of senior federal executives.
Now, one can certainly debate the merits of these salaries and what level of salary is appropriate for the job, but the Founding Fathers clearly understood the Biblical principle that you should not muzzle the ox—in other words it is only fair that if the ox helps you harvest the grain and turns the mill stone to make the flour then you should not prevent the ox from eating while it works. We have certain expectations of our Congressmen and Senators and we should pay a fair wage for the work they do on our behalf. And, when re-election time comes around, we should hold them accountable for the job they have done.
More to the point, we want smart, energetic, and principled leaders to run our country, therefore we ought to expect to pay them a salary commensurate with their skills. The reality is that most Members of Congress have extraordinary skills that would probably enable them to earn more money in the private sector than they get paid in Congress. Many Members of Congress have left much higher paying jobs to enter public service in order to help make this country a better and safer place to live.
Certainly, in most communities across the United States and compared to the average American salary, $174,000 a year is a very comfortable income. But, let us consider that Members of Congress must maintain two households, one in their home district and one in the Washington metropolitan area. Moreover, unless you are willing to commute over one hour each way on top of your 10-12 hour day at work, sometimes seven days a week, then you will probably be paying somewhere between $800,000 to $1 million for a modest town home within 30 minutes of the Capitol.
The Bible also says in Proverbs 30:9, “For if I grow rich, I may deny you and say, ‘Who is the LORD?’ And if I am too poor, I may steal and thus insult God’s holy name.” There are countless stories in recent times about Congressional corruption, or at minimum, questionable business dealings by several Members of Congress. Certainly, an appropriate salary should help reduce the need and temptation to seek outside income, and at the same time, a salary that is not too high will help our representatives remember from whence they came. But, whatever the salary is for Members of Congress, let us remember we pay them because we expect a lot from them and we do not muzzle the ox.