The Impact of Politicians’ Pensions on the Budget

salary of politicians meme

salary of politicians memeCourtesy of The Other 98%, with over 28,000 likes and 24,000 shares. This meme presents the supposed salary and pensions for Presidents and Congress, and asserts that’s where the budget cuts should be made. Given the public’s disdain for our lawmakers, it’s a popular talking point, but how much would this really save? How much do politicians’ pensions cost?

Presidential Salary

Title 3 of the US Code says the president shall earn a salary of $400,000/yr in addition to $50,000 for expenses (this is where the meme gets $450,000). In addition, Congress may appropriate $100,000 for travel expenses, and according to some sources, $19,000 for entertainment. The max compensation could total $569,000/yr. Obviously, there are many other presidential expenses, like transportation and security, but those would be considered government related, not personal income.

However, this salary is not “for life”, as the meme suggests. As of fiscal year 2016, ex-Presidents get a pension of $205,700/yr (though for some reason Clinton and George W. Bush are getting more). In addition, they get official transportation costs, an office space and healthcare covered. This varies depending on the president, but total compensation ranges from $430,000/yr for President Carter, to $1.1 million for President Bush, Jr. Numbers for Obama are not in yet.

Presidential pension amount

Presidential Retirement Benefits

Assuming every ex-president costs $1 million/yr, that’s an annual expense of about $6.6 million/yr for current and ex-presidential compensation (assuming we continue to have 5 ex-presidents).

Congressional Salaries

According to the House of Representatives Press Gallery, House and Senate members receive a salary of $174,000. Majority and minority leaders earn $193,400, and the Speaker of the House earns $223,500. These amounts have remained unchanged since 2009. Yet, while these numbers are accurately portrayed in the meme, this salary is not “for life”. The real pensions are much less.

The rules on who gets a pension and how much is complicated, but here’s the basics:

Members of Congress are eligible for a pension at the age of 62 if they have completed at least five years of service. Members are eligible for a pension at age 50 if they have completed 20 years of service, or at any age after completing 25 years of service. The amount of the pension depends on years of service and the average of the highest three years of salary. By law, the starting amount of a Member’s retirement annuity may not exceed 80% of his or her final salary.

In other words, all Senators qualify for a pension, as they serve 6 year terms. Only House members who serve more than 2 terms would qualify. The pension amount depends on a variety of factors, as rules were changed in the 1980s to require all members of Congress to participate in Social Security. Therefore, more recent retirees receive less, in addition to receiving a Social Security payout.

According to the Congressional Research Service, there were 620 retired members of Congress collecting pensions in 2015. Of those, 344 retired under the older rules, and received an average of $74,136. Another 276 members retired under the newer laws, and received an average of $41,316. Eventually, everyone will be retired under the new rules.

The total amount of spent on Congressional salaries and pensions could be estimated as follows:

  • 432 House members at $174,000- $75.2 million
  • 98 Senate members at $174,000- $17 million
  • 4 Majority/Minority Leaders at $193,400- $774,000
  • 1 Speaker of the House- $223,500
  • Estimated 650 retired members averaging $60,000- $39 million

Total= $132.2 million/yr

All Combined

Using the methodology above, the combined total of Presidential and Congressional salaries/pensions would be about $139 million/yr.

Making the “Cuts”

Let’s assume we take an ax to politicians’ salaries and pensions, and cut everything by 50%. That would save just $65-70 million per year. To put that in perspective, the entire Federal budget for 2017 is $4.147 trillion. The savings for slashing Presidential and Congressional salaries would amount to just .002% (that’s 2 thousands of a percent) of the budget! This would be the equivalent of about 6 Blackhawk helicopters, or .1% of the EPA budget.

Even abolishing all Presidential and Congressional pay would only amount to a rounding error in the budget.

Comparison to Social Security and Military Salaries

The meme says the average senior gets $12,000/yr from Social Security. According to the Social Security Administration, the average is $1,360/month, which comes out to $16,320/yr. 41.2 million currently receive this benefit, not including survivors or those on disability. In 2017, Americans will receive an estimated $955 billion in Social Security benefits. To put this in perspective with this meme’s proposal to cut Presidential and Congressional salaries, if we slashed them by 50% it would free up barely over $1 per year for each Social Security recipient.

Salaries for deployed soldiers vary widely and depend on factors like rank and family status. According to the US Army’s website, an enlisted soldier who’s single earns $52,856 in compensation when housing, food and taxes are considered. A single officer earns a total of $83,319. If they are deployed in a combat zone, they would also receive an additional $250/month for family separation allowance, $150 in hazardous duty pay, and a possible $225/month in hostile fire/imminent danger pay. This doesn’t include other compensation like college tuition assistance.

Enlisted soldier compensation

Total compensation comparison chart published by the Army

There are currently 1.33 million active duty military personnel in the US military. This means, slashing Congressional and Presidential compensation by 50% would equate to just $52 per year for each soldier.

Conclusion

Given the perennial low approval ratings of Congress, and the general affluence of former presidents, it makes for an easy populist argument to focus on their compensation. Indeed, it might be appropriate to reduce their salaries and pensions if it’s determined this money is wasteful. However, when the numbers are analyzed, the amount “saved” is so trivial and meaningless compared to the overall budget that no serious person could honestly advocate it as a way to address budget problems. At best it’s a distraction from focusing on real issues.

1 Comment on "The Impact of Politicians’ Pensions on the Budget"

  1. >how much would this really save?

    That is missing the point–especially when members of Congress–now ex-member, thankfully–have voiced the opinion that the benefits for our soldiers are too high.

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