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The Sting of Health Care
These nifty features sure take the sting out of health care costs. But what about another nagging worry—paying for retirement? Our fearless leaders have that figured out too.They can count on a pension system that's both cushier and far more secure than what many people get from the private sector. Members of Congress can retire at as young as 50 if they have 20 years of service (including time in the military), or at age 62 with just five years of service. And a retiree's payout can be pretty sweet. A 2007 study found that the average Congressional pension totaled around $53,500. Several dozen former Congressmen and Senators are pulling down $100,000 a year or more, thanks to long tenures on the Hill.
Maybe sweetest of all, Congressional pensions come with annual cost-of-living adjustments, tied to inflation. How many of us get that? “It's very rare for a private-sector, traditional pension to include a cost-of-living increase,” answers Stephen Blakely of the Employee Benefit Research Institute.
According to the National Taxpayers Union, Congressional pensions are about twice as generous as a comparably paid corporate executive's. And there's basically zero chance that the federal government will ever break its pension promises, since it can borrow endlessly or simply raise taxes.
It's all too much for North Carolina Congressman Howard Coble. Since his election in 1984, Coble has refused to participate in Congress's pension system. “I'm not sure it's the most brilliant financial decision I ever made,” Coble says, but he doesn't like that taxpayers subsidize such bountiful retirement plans.
How would you like to be able to count on automatic raises? Wages have been pretty stagnant for millions of American workers. But not for Congressmen. In fact, being a legislator on Capitol Hill virtually guarantees automatic pay hikes. Unless they vote to stop it—which they almost never do—members of Congress get an annual boost tied to inflation. Yet after Congress raised the minimum wage in 1996, it took 11 years before they got around to raising it again. And no, the minimum wage is not tied to inflation.
Former Republican Congressman Mickey Edwards of Oklahoma says it's not fair to expect members of Congress to accept lesser benefits than they'd get in good private-sector jobs. But nonpoliticians didn't make the choice to serve the public, and their jobs aren't funded by the taxpayer. If you're going to represent the people, at their expense, you should be willing to live more like the typical American.
Instead Congress seems out of touch with America—which makes it our duty to get them in touch. My advice: Learn who your representatives are (type in your zip code at congress.org) and go to their town hall meetings (call their local offices or check their websites); find out how much they know about your health care, pension and wage struggles; and let them know how much you know about their plum deals. Put the heat on them publicly and you may embarrass them into working for changes you need. If they can't do more for you, then they should do with less for themselves.
And here's a thought: If you don't have health insurance, or you're worried your pension might get wiped out by the stroke of a corporate pen, or you haven't seen a raise in a long time, don't just sit there complaining—do something about it. Run for Congress! I hear the benefits are great.
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