Will 'frozen pay' Congress be numb to military pay caps?
A House-Senate conference committee negotiating final details of the fiscal 2017 defense authorization bill will decide this summer whether to impose a fourth straight cap on the annual military pay raise set for Jan. 1.
The fate of that half-percentage point in basic pay swings on what weight conferees assign to compensation over other defense priorities. So it might be worth noting that this Congress is about to deny itself a pay raise for an eighth consecutive year.
Before crediting their frozen pay to altruism, consider that recent congresses have often described themselves as dysfunctional, bitterly partisan and fearful of compromise even on critical issues like debt relief, tax code reform, or addressing a steady slide in U.S. military readiness.
Many current lawmakers likely are wealthy enough not to need salaries adjusted annually to keep pace with the cost of living. But perhaps even more of them realize they’ve done little to address the nation’s problems and are fearful of how constituents would react to any pay raise.
The congressional pay freeze — $174,000 since 2009 — already is the longest in more than half a century. And it hasn’t made Congress more popular. Gallup polling last year showed Americans admired the military above all other major U.S. institutions, with 72 percent having “a great deal” or “quite a lot” of confidence in it. That was four percentage points higher than the military’s historical polling average.
Congress ranked lowest among institutions by an astounding margin. Only 8 percent of Americans had a great deal or quite a lot of confidence in Congress, a precipitous drop from its historical average of 24 percent.
While the pay freeze takes a toll on members’ purchasing power, most lawmakers seem not to mind, or haven’t the courage to complain. One exception is Rep. Alcee R. Hastings, D-Fla., who told the House Rules Committee last year that the freeze causes “serious problems for people who are not wealthy to serve in this institution,” the newspaper Roll Call reported.
The Congressional Research Service this month updated its periodic report on congressional salaries. Separate CRS reports on members’ retirement and health benefits, which since 2014 have been shaped by the Affordable Care Act, or Obamacare, also get updated regularly. The reports tend to shatter some popular myths about congressional compensation.
Here are highlights from CRS reports on pay and retirement:
Pay raises — There hasn’t been one since a 2.8 percent increase in January 2009, the month Barack Obama became president. Congress already is moving to block next January’s raise with language in the House-passed and Senate-reported legislative branch appropriations bills.
CRS tracks every past action on congressional raises and shows Congress historically struggling with the issue, though Article I of the Constitution says Congress is to determine its own pay. In 1789, lawmakers began by paying themselves $6 per day while Congress was in session.
In 1856, it replaced an $8 per diem with a $250 monthly salary. The $3,000 pay ceiling became $5,000 in 1865 after the Civil War ended. Lawmakers paid themselves between $5,000 and $10,000 per year for the next 70 years, until 1935. This period included long stretches of frozen pay.
With the Ethics Reform Act of 1989, Congress made a tradeoff to enhance its pay substantially and establish an automatic formula for setting raises in return for no longer accepting speaking fees or other honoraria.
In February 1990, House members raised their pay by 7.9 percent, to $96,600, to reflect raises missed the two previous years. The following January, House salaries jumped 25 percent, to $125,100, when the ban on honoraria took effect. In 1990, senators increased their pay 9.9 percent, to $98,400, to reflect raises denied the previous three years. But the Senate denied itself the bigger raise, to continue to collect speaking fees. Under pressure, senators caved. In August 1991, they increased their pay to match that of House members and joined in the honoraria prohibition.
The automatic pay-raise mechanism ties annual adjustments to growth in private-sector wages as tracked by Bureau of Labor Statistics’ Employment Cost Index (ECI). Also, congressional pay raises can’t exceed the annual percentage increase in base pay allowed for General Schedule (GS) federal civilian employees.
The automatic raise mechanism is easy to override, however, by inserting language to prohibit a raise in any other piece of legislation. So after only a few years, Congress froze its own salary for the next four. It did so a few more times in the 1990s before the mechanism was allowed to operate as intended, from 2000 to 2009 when the current freeze began.
The June 21 CRS report by research specialist Ida A. Brudnick, concludes with a chart showing how congressional pay has fallen behind since 1992 when the Ethics Reform Act was fully implemented and rank-and-file lawmakers had salaries of $129,500. If adjusted for inflation since then, those salaries would be almost $224,000, or $50,000 higher than today.
Retirement — Congressional pensions are funded through both member and employer contributions but plans vary based on when members were first elected. Before 1984, neither federal civil service employees nor members of Congress paid Social Security taxes, nor were they eligible for Social Security benefits. Instead they were covered by a separate pension plan, the Civil Service Retirement System (CSRS).
Those who entered Congress in 1984 or later are covered under the Federal Employees’ Retirement System (FERS). Members covered by FERS before 2013 pay 1.3 percent of salary into the Civil Service Retirement and Disability Fund; those first covered by FERS in 2013 contribute 3.1 percent and those first covered after 2013 contribute 4.4 percent of their pay.
Members have been required to participate in Social Security since 1984 regardless of when they entered Congress. Those in Congress when Social Security coverage began could remain in CSRS or switch to FERS. Under both CSRS and FERS, members are eligible for an immediate pension only if they complete 25 years of service. If they serve 20 years, they can begin to draw annuities at age 50. They must complete at least five years to be eligible for any congressional retirement starting at age 62.
Pension amounts depend on years served and the average of their highest three salary years. As of October 2014, there were 601 retired members of Congress drawing pensions based at least in part on congressional service. Of those, 351 had retired under CSRS and were receiving an average annual pension of $72,660. The 250 retired under FERS were receiving an average pension of $41,652.
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