Followers of the business and political career of Sen. Rick Scott (R-Fla.) know that the multimillionaire can be counted on constantly to plumb new depths of cynicism. That’s the context against which a proposal he introduced this week to cut congressional pay should be viewed.
Scott’s proposal, introduced with Sen. Mike Braun (R-Ind.), is to eliminate congressional pensions. As Scott put it in a tweet Tuesday, “Americans shouldn't have to foot the bill for generous salaries and pensions for members of Congress.” He said his bill would help “to make DC work for all families.”
Scott’s proposal has a sort of superficial allure. The popular image of senators and members of Congress is of lazy good-for-nothing slobs snarfing greedily from the public trough. (I’m not saying that there aren’t some members who fit the description.) It’s certainly true that the spectacle of lawmakers collecting their paychecks while presiding over a government shutdown that deprived some 800,000 federal workers of theirs didn’t improve the reputation of our political leadership.
But there’s a hypocritical subtext to the proposal by Scott and Braun that needs to be brought to the surface.
The truth is that reducing compensation for federal legislators would make Congress immeasurably worse. It would become even more of a club for plutocrats than it is now by making it harder for those with modest resources to run for and stay on Capitol Hill. Scott intends, in other words, to make the Senate and the House safer for people exactly like him.
Who needs more people like Rick Scott in the Senate? (More on that in a moment.)
I last wrote about congressional pay in 2013, during a previous government shutdown in which federal workers were going without pay while members of Congress were held harmless. A couple of tin-eared lawmakers were quoted at the time bemoaning their tough lifestyles. Rep. Lee Terry (R-Neb.) was quoted saying that he wouldn't give up his paycheck in the shutdown because "I’ve got a nice house and a kid in college, and I’ll tell you we cannot handle it." Phil Gingrey (R-Ga.) was overheard grousing that while his staffers could hop to a lobbying job and make $500,000, "I’m stuck here making $172,000 a year." (Actually, $174,000.) Gingrey later joined a lobbying firm, by the way.
Notwithstanding their crass words, the truth then, as now, is that decent pay is necessary both to attract people from all walks of life into congressional service and to limit their temptation to jump to lucrative lobbying jobs (after perhaps greasing their path to the big bucks by doing favors for their future employers).
I quoted the insight of financial commentator Susan Webber, who writes under the pseudonym Yves Smith: "If you pay cops terribly, you'll get cops who take bribes. If you pay members of Congress or regulators way less than first-year law school graduates in large New York or D.C. law firms, you're going to get members and regulators who take bribes…. If you cut health care subsidies for Congressional staff, you’ll get lobbyists writing the laws."
If you want to see how this works, check your tax refund this year. Republicans in Congress made sure that the tax cut they enacted in December 2017 went chiefly to members of their class and the plutocrats they serve. They talked about the tax cut being all about giving the middle class a benefit, but they were blowing smoke. In 2027, when the tax changes will have been in place for a decade, the top 1% will be reaping 83% of all the tax cuts; the bottom 60% will actually be paying higher taxes. The rich got theirs, in other words; too bad about you.
Scott’s rhetoric feeds the notion that senators and House members are lavishly paid and enjoy unimaginable perks. There’s just enough truth in the notion to make it hard to contradict, but the story is more complicated. Let’s run through the numbers.
First, the salary of rank-and-file members is $174,000. Members of congressional leadership get more, up to $223,500 for the speaker of the House.
Is this a lot? A little? Too much? The basic salary is just under three times the median U.S. income of $62,175. Some lawmakers complain that they have expenses not common to the average family, including the need to maintain a separate residence in Washington if their home isn’t nearby — that’s why some end up with roommates or even bed down in their Capitol Hill offices.
The lawmakers also get expense allowances to cover Washington and district offices and staff, travel to and from their home districts, mail and other office expenses. These are generally based on factors such as the distance between Washington and home and the population of their states (for senators). These allowances average about $1.3 million a year for House members and $4.24 million for senators.
Popular mythology holds that legislators are exempt from Social Security and the requirements of the Affordable Care Act. I know this because every time I write about these programs, readers inundate me with emails suggesting that the programs would work better if members of Congress had to join them.
They’re not exempt. Senators and House members have had to pay into Social Security since 1984; in some cases, their pension payouts are reduced by a portion of their Social Security benefits, a common feature of private-sector defined benefit pensions.
They and their staffs also are required to get their health coverage through the ACA, even though Obamacare was not designed to cover most employed workers. (Congressional Republicans insisted on transferring lawmakers and staffers out of the existing health plans for federal employees and into Obamacare, which necessitated making special arrangements so that the traditional employer’s share of premiums could still be paid for them.)
What about pensions, which Scott implies are so generous? Lawmakers don’t vest in their pensions until they’ve served five years, though some can count prior or subsequent federal employment in their service calculation. At that point they can retire at age 62. Members are eligible for a pension at age 50 if they’ve completed 20 years.
Those elected in 2013 or later contribute up to 4.4% of their pay toward their pension. According to the Congressional Research Service, 335 former members of Congress who served prior to 1984 and retired under a pre-1984 pension plan were receiving an average annual pension of $74,028 as of 2016, but they weren’t collecting Social Security.
Some 276 members who have retired under the current plan, the Federal Employees Retirement System — which is coordinated with Social Security — were receiving an average annual pension of $41,076 in 2016. That’s higher than the median private pension of $9,300 or the average federal employee pension of $22,000, possibly because congressional salaries are higher. Members of Congress also are eligible to contribute to a 401(k)-style defined contribution plan; the government matches contributions by all federal employees up to 5% of pay.
So there are the numbers.
And that brings us back to the Scott proposal. Scott and Braun are both members of a class that never has to worry about Social Security or their pensions, because they’ll never have to pinch pennies in retirement. Scott’s net worth as of the end of 2017 was $232.6 million, a gain of more than $83 million from the year before, according to the Orlando Sentinel. That happened during a period in which he served as governor of Florida and his assets were supposed to be quarantined in a blind trust.
A reminder of the source of Scott’s fortune is proper here: It derives from his ownership and leadership of Columbia/HCA, a hospital company that was charged with defrauding Medicare, Medicaid and other government programs spectacularly, at least partly during his tenure. Company subsidiaries eventually pleaded guilty to 14 federal felonies and paid penalties totaling $1.7 billion. When the case was first announced in 2000, it was described as “the largest government fraud settlement ever reached by the Justice Department.”
Do you really want to take advice about making Washington “work for all families” from this guy?
As for Braun, his Senate disclosure documents value his personal assets at $35 million to $96 million. (Senate rules on financial disclosures are notoriously liberal.)
It’s easy for Scott and Braun — indeed, almost anyone — to advocate for pay cuts for senators and House members as part of generalized anti-government rhetoric. One can hear griping about do-nothing government and worthless government programs on every sidewalk in America.
But if the recent government shutdown teaches us anything, it’s that we all depend on a functioning government more than we thought. And a government that works “for all families,” as Scott would have it, depends on leadership that draws from more than the class that doesn’t need that paltry $174,000 a year to make ends meet.