Freeze Congressional Pay?
Over the course of the last month, many have Facebook users have proposed pay cuts for Congress. Many believe it’s the right thing to do in our current economic condition. Others think it is only fair when other sectors of the population are being forced into pay cuts.
I’m not going to argue with any of that.
I do, however, have an issue with one point – will this help bring down the national debt?
The answer is simple – Not really, the money involved is statistically insignificant when compared to the national debt.
Let’s look at the best numbers I can find. I didn’t spend too much time researching this but I think I can make up for that by inflating the numbers a bit.
Senate Salaries $20,054,620
The party leaders each earn $193,400 and “rank and file” members each earn $174,000.
| No. | Salary | Total |
|---|---|---|
| 2 | $193,400 | $386,800 |
| 98 | 4174,000 | $17,052,000 |
Let’s adjust this for taxes, etc. $17,483,800 x 1.15 = $20,054,620
House Salaries $88,345,530
The Speaker of the House earns $223,500, party leaders $193,400, “rank and file” $174,000.
I am making the assumption that the six non-voting member (Puerto Rico, Guam, DC, etc.) are paid members.
| No. | Salary | Total |
|---|---|---|
| 1 | $223,500 | $223,500 |
| 2 | $193,400 | $386,800 |
| 438 | $174,000 | $76,212,000 |
Let’s adjust this for taxes, etc. $76,822,200 x 1.15 = $88,345,530
Retired $30,983,000
I did find current information about congressional pensions. It contains one useful bit of information for my purposes today – the maximum annual pension is 80% of the three year high salary. This puts the maximum pension for anyone that retires in 2011 at $178,800. Note that this is more than most congressman ever make. It is ridiculously incorrect because it assumes every retired member served as Speaker of the House for at least three years.
The best information I could find about members currently collecting was from 2007. At that time, 413 retirees were collecting an average of $64,000 per year and 123 were collecting an average of $37,000 per year for a total of $30,983,000.
Let’s overestimate these costs a bit. Let’s raise everyone’s benefits to the maximum AND retire everyone in congress and replace them today (sounds good, right?).
Total Compensation
| 1081 | Retired | $178,800 | $193,282,800 |
| 1 | Speaker | $223,500 | $223,500 |
| 4 | Leaders | $193,400 | $773,600 |
| 536 | Rank & File | $174,000 | $93,264,000 |
Now let’s assume that every current congressperson supports a staff whose salaries total five times their own salary.
If we add that to our total and add taxes, we get …
($287,543,900 + ( $93,264,000 x 5 ) ) x 1.15 = $866,943,485
How does this affect the national debt?
You know what? Let’s just round this up to $1,000,000,000 a year. Why not?
That’s $2,737,850.79 per day, which sounds like a lot, right?
Wrong?
The national debt is currently growing at $4.07 billion per day. IF we were really spending $2,737,850.79 per day (which we know is a huge stretch) AND we pulled the stop on ALL PAY – not a freeze on pay, not a pay cut, but a TOTAL ELIMINATION OF ALL PAY for all retired and current congress persons and their staffs!!
$2,737,850.79 / $4,070,000,000 = 0.0006726906117936118
This would decrease the growth of our budget from $4,070,000,000 to 4,067,262,149.21 per day – a reduction of 0.06726906117936118 percent!
To put this in perspective, let’s look at an example. Suppose you are overspending on your home budget by $150,000 per month. It doesn’t take much imagination to see how much trouble this would bring in short order. Now suppose your “plan” to reduce that deficit is to stop buying your morning coffee ($25 per week).
No help, right?
BUT you would be doing MORE to reduce your deficit than the savings our government would gain by TOTALLY ELIMINATING ALL CONGRESSIONAL PAY.