Howard County Maryland Blog

Local Politics and Current Events

Punitive Pension Penalty

Posted by bsflag2007 on Friday, January 5, 2007

It’s Back!

Every couple of years – or every time a Member of Congress goes to jail – folks get all hot and bothered about “public” pensions. Should former Congresspeople who end up in jail keep their pensions?

Apparently the popular opinion is no (actually Hell No!).

The rant goes something like this: ” The taxpayers have been abused enough – the Congress has given themselves lavish taxpayer funded pensions that they get to keep even if they are convicted of crimes – it’s not fair! If you are convicted of a crime you should lose your pension!”

Well, let’s look at this. I’m all for punishing criminals. I am all for “reasonable” compensation packages for elected officials and public employees. I am all for laws being applied evenly to all Americans. Heck, I’m even all for our laws being applied evenly to all the people we deal with.

Should public officials be treated differently?

Actually, I would say … yes.

A”breach of public trust” is (imho) the MOST serious offense against society and humanity. Worse than murder, theft, etc.

The penalties for breaches of public faith should – and in many cases are – more severe than for similar offenses committed by individuals against individuals. For example, an individual committing perjury in a murder case is bad — a policeman committing perjury could be a capital crime. I’m cool with that.

Or remember the televangelist Jim Bakker who went to jail for ripping off his “followers”. He got more jail time than other thieves who may have stolen more – and a longer sentence than some convicted of violent crimes. I’m cool with that, too. He took advantage of “implied trust” and undermined the fabric of society that we all count on and value.

I’m also cool with sending Martha Stewart to jail – and not just because her recipes don’t work.

But I am not as “convicted” when it comes to this question of cancelling the pensions of any congressman who is convicted of any crime.

First – it is important to have the facts straight on the whole Congressional pension package. It is not as cut and dried as the snippet news and urban myths would suggest. No, retired congress folks do not collect their full salary forever after they retire – nor do they collect 80%. (that is the upward limit)

Like most company pensions/packages – Congress people make choices among plan options. Those options have changed over the years – making the plans available now different from plans available 20 or 30 years ago. Like most companies, their pension benefits vary based on number of years served and pay rates during that time. The average congressional pension is currently between $41,000 and $55,000 per year.

Also – like at many companies – some packages offer employee contribution options and employer matching funds. So, yes, congress people can/do contribute to their pension plans.

Yes, Congressmen pay social security taxes. Though, not ALL gainfully employed Americans contribute to Social Security — there are other public employee pension options depending on the job and jurisdiction. You can find the specifics at about 20,000 web sites. The bottom line is that retirement planning is both very complex and very simple. Simply put – pretty much every “wage earner” is “forced” to pay into some kind of retirement plan, including public employees – including Congress.

The complexities come in with various options, incentives, deferred compensation arrangements — individual options and decisions.

The important thing is to try to remember the why, what and how questions.

WHY do we have “social security” and other “mandatory” contribution plans? Because we, as a humane people, do not want our elderly, infirm, widows and orphans eating cat food off neighboring porches or starving to death in the city streets. And we have figured out that during times of national economic catastrophe we cannot necessarily rely on family or the kindness of strangers to save everyone – and that it is more efficient to pool our resources to achieve the desired result.

WHAT is answered two ways. First, Social Security is the “original pay it forward” plan – though the “average” American either doesn’t remember that – or never understood it. You pay now to do good things and when it is your time, others take care of you.

Pension plans – retirement savings – 401ks – IRAs — on the other hand — are retirement plans, personal savings efforts. And, in most cases — PART OF THE DEAL.

The”deal” is between an employer and an employee — I agree to provide this labor and you agree to pay me this amount. In our financially complicated society – very few of us get “straight pay”. We get “compensation packages”. Those “benefits” are not “gifts”. They are part of the “deal”.

In the case of Congressmen, just like police, fire, teachers, sanitation workers etc – WE are the employers. Part of the “pay” we have agreed to give these employees has been deferred in the form of retirement/pension checks. That money is part of the inducement for the employee to accept the job. After the employee performs his job, his pension check is not a bonus or a gift – that money has already been earned.

HOW to punish criminals is another question. In cases where crimes or malfeasance which can be punished financially or which require reimbursement, have been adjudicated — then make them pay. Maybe they have to use their retirement money/savings, maybe not.

There are already laws and provisions in the “deal” for crimes like treason and espionage — of course, there are also provisions dealing with people serving jail time.

Presumably anyone convicted of treason would be in jail (for life)- so that is redundant. However, fyi, folks in jail for more than 30 days do not collect social security (and most other public retirement payments). Their “social security” is being taken care of — they are being fed, clothed, housed and given medical care. No starving in the streets.

However, how many convicted criminals have to forfeit their personal savings? Those who have been sentenced to make restitution — those who have lost civil suits – those who have gone through the “due process” of having their property seized … they forfeit that portion of their property which the courts have determined is fair for victim compensation.

Saved money, even when it is “promised” as deferred compensation, is property that should not be taken without due process.

I would argue that “our” deals with public servants, elected officials, etc, should be honored. I would also argue that corporations MUST honor their pension promises – even if that means liquidating and going out of business – but that’s another post.

Put a dollar amount on the harm these congressmen have done by lying, cheating, stealing —- and make them pay as part of their punishment. But let’s not confuse the issues.

Making criminals pay for their crimes is OK

Taking people’s savings  (without due process) – even when it is in the form of a promise – is NOT OK.

Cindy Vaillancourt

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One Response to “Punitive Pension Penalty”

  1. bsflag2007 said

    UPDATE:
    (from the Baltimore Sun) The House “voted unanimously to deny tax-funded pensions in the future to lawmakers-turned-felons….

    “Why should taxpayers fund a comfortable retirement for a crooked congressman?” asked Boyda, who was among the newly elected Democrats who highlighted congressional scandals in their campaigns. “The answer, of course, is that we shouldn’t. Corrupt politicians deserve prison sentences, not taxpayer-funded pensions.

    “Now, lawmakers can lose their pensions if convicted of a crime against the United States, such as treason. Under the House measure, bribery, conspiracy and perjury would be added to the list.

    Some think the measure is still not broad enough:

    “…the list should include 17 other felonies, such as income tax evasion, wire fraud, intimidation to secure contributions or racketeering.

    “…it falls 17 felonies short of the reforms needed to improve the ethics of this House.”

    Two things to keep in mind – one is the wording “taxpayer funded pensions…” which may not include all the pension programs available to congresspeople — and

    the list of crimes which will trigger forfeiture are (so far) only some of the crimes that involve a cirect breach of public trust or abuse of office.

    CIndy V

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