SOCIAL SECURITY Why it will never change

We should be much, much angrier about this. This is worth the read - it's short and to the point:

Our Senators and Congressmen do not pay into Social Security and, of course, they do not collect from it.

Social Security benefits were not suitable for persons of their rare elevation in society. They felt they should have a special plan for themselves. Many years ago they voted in their own benefit plan. In more recent years, no congress person has felt the need to change it. After all, it is a great plan. For all practical purposes their plan works like this: When they retire, they continue to draw the same pay until they die, except it may increase from time to time for cost of living adjustments.

For example, former Senator Byrd and Congressman White and their wives may expect to draw $7,800,000.00(that's Seven Million, Eight-Hundred Thousand), with their wives drawing $275,000.00 during the last years of their lives. This is calculated on an average life span for each. Their cost for this excellent plan is $00.00. Nada.Zilch. This little perk they voted for themselves is free to them. You and I pick up the tab for this plan. The funds for this fine retirement plan come directly from the General Funds-our tax dollars at work!

From our own Social Security Plan, which you and I pay (or have paid) into - every payday until we retire (which amount is matched! by our employer) - we can expect to get an average $1,000 per month after retirement. Or, in other words, we would have to collect our average of $1,000 monthly benefits for 68 years and one month to equal Senator Bill Bradley's benefits!

Social Security could be very good if only one small change were made. And that change would be to jerk the Golden Fleece Retirement Plan from under the Senators and Congressmen. Put them into the Social Security plan with the rest of us and then watch how fast they would fix it.

If enough people receive this, maybe a seed of awareness will be planted and maybe good changes will evolve. Or will you just read this and ignore your rights, saying what good would it do? If we do nothing, nothing will change. How many people can YOU send this to?

"What is the lifetime pension benefit for, say, a one-term Congressman who serves in his mid forties? What is the formula?"

Here's the information from the National Taxpayers' Union website:

"Congressional retirement benefits

Members of Congress began paying into Social Security in 1983, as part of a government-wide pension overhaul. This is a requirement, and Members may not opt out of it. They then have the option of participating in one of two pension plans, depending upon when they were elected (most of them do). If elected before 1984, they participate in the Civil Service Retirement System; if elected 1984 and after, they participate in the Federal Employee Retirement System. These two plans are also offered to rank and file federal employees, EXCEPT that the Congressional plan's benefit is calculated on a more generous formula than that offered to most other government workers. The "accrual rate" is much higher, and lawmakers tend to be able to retire earlier with benefits than other federal workers (as early as age 50).

Also, Members of Congress may participate in the government-wide Thrift Savings Plan, which works like a federally-managed 401 (k) salary reduction plan. FERS participants are entitled to a government match of up to five percent of salary; CSRS participants may set aside part of their own salary, but they do not receive the match.

In both cases, Members of Congress do contribute to their pension plans, although the rates are somewhat complicated by the fact that since 1983, lawmakers have been required to pay into Social Security. Members elected before 1984 must pay 8 percent of their salaries into the pension plan, but may elect a "Social Security offset" provision that allows them to split the pay-in (6.2 percent for Social Security and 1.8 percent for the pension.) The result is that upon retirement, Members receive a pension that is reduced by the amount of Social Security that is attributable to Congressional service. Members elected in 1984 and thereafter pay 1.3 percent towards the pension and 6.2 percent to Social Security. This only compensates for about 1/5 of the typical lifetime benefit. We cover the rest as taxpayers.

With service of 20-25 years, a Member of Congress could retire with up to 80 percent of his or her final salary replaced. Of course, the only cap on how fast their benefits rise is the rate of increase in CPI. For this reason, Congressional pensions can and frequently do exceed a Member's final salary, but only after a few years in retirement, when COLAs begin to kick in. For example, a Member of Congress who could collect $5 million or more, if he or she retires in his/her fifties, lives until his/her eighties, and elects to leave a part of the pension benefit to a spouse, who then live 10 or more years longer. This could include George Mitchell, especially after his post-Congressional government service. With Cost of Living Adjustments, total payments over a lifetime can reach these levels (though the more typical payout is likely to be between $1 million and $2 million).

In the final analysis, Congressional pension benefits are 2-3 times more generous than what a similarly-salaried executive could expect to receive upon retiring from the private sector.

Additional information concerning pay and perks is available in NTUF Policy Paper 131 .

Does Congress pay Social Security taxes?

Lawmakers do pay 8 percent of their salaries into their pension system, although this only compensates for about 1/5 of the typical lifetime benefit. We cover the rest as taxpayers.

Member of Congress began to pay into Social Security in 1983, as part of a government-wide pension overhaul.

In addition, Members of Congress DO NOT draw the “same pension” as their pay in the last year of office as suggested in a rumor circulating on the Internet; only federal judges do that under the term “retirement pay.” Still, the formula is quite generous, and, with 20-25 years, a Member of Congress could retire with up to 80 percent of his or her salary replaced. Of course, the only cap on how fast their benefits rise is the rate of increase in CPI. For this reason, Congressional pensions can and frequently do exceed a Member’s final salary, but only after a few years in retirement, when COLAS begin to kick in.

In the final analysis, Congressional pension benefits are 2-3 times more generous than what a similarly-salaried executive could expect to receive upon retiring from the private sector. That ought to be enough to concern any taxpayer.

Additional information concerning pay and perks is available in NTUF Policy Paper 131.

Do Members of Congress pay income taxes?

Members do pay taxes on their Congressional salaries, but they have given themselves some extra perks that elevate them above normal taxpayers.

For example, they wrote into the law a $3,000 annual income tax deduction for maintaining a second residence. Normally, a taxpayer in a lawmaker's income bracket could be subject to reductions in the value of his or her mortgage interest write-off for residences. The typical American who uses an additional residence for business or rental purposes may qualify for certain expense deductions, but only by filing complex forms.

In addition the IRS maintains two "customer service centers" to assist lawmakers and Capitol Hill employees in filling out their tax forms at a cost to taxpayers of $100,000. In 1993 Money Magazine determined that 60 percent of the Members of the House Ways and Means and Senate Finance Committees, who are responsible for our tax laws, didn't even prepare their own tax returns. (For more on the advantages of holding office, see "Congressional Perks: How the Trappings of Office Trap Taxpayers)

(This information is at This-here page.

Michael

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