By: Wayne Brown
These are some tough economic times in America. Many industries which support the job market are swamped in debt and on the verge of failure. Our manufacturing sector in America is weakening by the day as the pressure of profits and competition call for more and more companies to move their operations outside the borders of the USA. Unions continue to demand high pay for its members even though their jobs are on the verge of disappearing. As a result we have a country which is mired in unimaginable debt and suffering with almost 10% of its working population unemployed. We look to our elected leaders for hope and for solutions. The question arises as to whether these elected officials can empathize with the less fortunate in the big government of today.
Let’s take a look at the wages and benefits of a sitting United States Senator. Most of us likely have not heard those numbers for a while. I think it would be rather sobering to be reminded of those facts just to keep us sharp on where our money is being spent in today’s struggling America.
Base pay for a United States Senator is, as of 2009, $174,000 dollars. Now, if you are a leader within your party, a committee chairman, etc., that pay level then jumps to $193,000 dollars annually. Senators are fully vested for retirement after only five years of service. Since a senatorial elected term is six years, a one term senator qualifies for full retirement vestment to include retirement pay and health benefits. Senators pay 1.3% of their annual salary or $2,262 per year into the Federal Retirement Plan. They also pay an additional 6.2% (base = $10,788) of their salary into Social Security. Under the guidelines of the retirement plan, a retiring senator receives his retirement compensation based on an average of his 3 highest years of pay. The Retirement Plan stipulates that a retiring senators starting compensation cannot exceed 80% of his final pay while on the job. In 2006, the average retirement compensation for retired senators and representatives was $60, 972 dollars annually. Not bad, considering that in 2003, 40% of the 100 senators elected to office were already millionaires in their own right.
Up until recently, legislation was in place which automatically forwarded bills to the floor of the Senate for raising the annual pay of Senators each year. That legislation was finally abandoned when public outrage on the subject got Washington’s attention. Amendments brought to the floor of the Senate were denied by Majority Leader Reid in an attempt to keep automatic pay raise in place. House Speaker Pelosi also supported this position citing that any amendment would require the House to have to revote the original legislation. Eventually these two lost in their efforts and the automatic pay was rejected by the Senate but not before an automatic increase was granted for the 2009 service year.
Keep in mind that U.S. Senators also enjoy the latitude of traveling to global destination as justified by the committee or senate responsibilities. These junkets are at government expense and include staff support on the trip. Spouses may also be brought along. There are also private dining rooms and washrooms for exclusive use by the senators along with provisions for staff support to complete administrative tasks. Senators are afforded the cost of their flights back to their home on the basis of staying in contact with their constituents. They receive stipends for support of local offices in their home area. They also have access to a pool of VIP aircraft based at Andrews AFB MD to support their official travels throughout the USA and abroad. Other perks include access to limousines, an underground subway system between buildings, a tax-allowance for maintaining two homes. All senators have at least an office in the capitol buildings maze but those in higher level positions may have more than one office in the government areas of Washington. Actually, in researching the concept of “perks”, I found that the subject inside Washington is so vast that one would be quite challenged to identify all that is available for a sitting U.S. Senator.
The effect in government certainly extends far beyond our legislative bodies of Washington. According to an article published in a March 2010 edition of USA Today, the average pay of a U.S. Government worker is $67, 691 dollars based on 2008 budget year figures. Similar jobs in the private sector yielded an average annual salary of only $60, 046 in 2008, a figure that is over 11% less than the average compensation of government employees. According to the article, these figures do not include the value of any health benefits or retirement accounts. Those items had an average annual value for government workers of $40,785 as compared to similar jobs in the private sector with a value of only $9,882 based on 2008 figures. Healthcare, pension, and benefit values for the government worker exceeded that of the private sector worker by more than four times the annual rate. In 2008, the federal government had a payroll of $224 billion dollars to cover approx. 2 million civilian employees. This amounts to an average annual outlay in total pay and benefits of $112,000 dollars per worker.
You don’t have to do much research to know that we have and have had a shortage of personnel in the nursing profession for many years now. Given that shortage, many private sector hospitals are very responsive in terms of pay and benefits for those with the qualifying nursing credentials. Understanding the laws of supply and demand, it is obvious that the nursing profession in the private sector would earn higher than average pay for the duties they perform. Amazingly, these same nurses, had they worked for the federal government in basically the same job, would have earned an average of $10,680 more annually than their private sector counterpart. Average federal government compensation of over 57,000 registered nurses supporting the VA and other entities received an average annual compensation of $74,460 dollars. This is on average, 16.7% more pay than afforded by the private sector.
The federal government points out that many jobs within the government structure do not have a private sector equivalent therefore there is no comparative basis for the compensation for the job. Conversely, the Bureau of Labor Statistics compared 216 occupations which did span both the public and private sector of working Americans and found some interesting conclusions which tend to support the findings noted above.
Out of the 216 job comparisons, government workers received better compensation in 180 of the cases. It was only in the remaining 36 that the private sector excelled in compensation. This finding encompassed highly specialized workers like airline pilots, lawyers, computer specialists, and veterinarians.
When the BLS looked at some of the same employment cited above in the 216 cases, they found that at the state government levels, employees received approximately 5% less than similar workers in the private sector. At the local government levels, that same occupation received approximately 2% more compensation than the same job in the private sector. In either case, neither figure supported the gap between federal and private sector employment compensation.
Today, we are facing the greatest debt burden of our times in this country. The federal government has also grown significantly in size in the past two years. Some estimates indicate a growth factor of as much as 25% in just two years. This growth adds people and payroll costs and seems to be unchecked by any particular sense that government is totally an expense on the American taxpayer, it is simply a burden. Yes, it is a necessary evil, but one must ask how big does that evil have to be in order to be functional?
We hear our elected officials crying over tax breaks that were instituted more than ten years ago. The government has not had that money in its coffers for more than ten years yet these officials are still counting the lost revenue and citing it as one of the primary factors for our growing deficit in this country. In truth, the tax break money has no bearing on the current debt ratio unless one is stipulating that the current spending will continue unchecked at the current rate. Then, one can calculate that indeed there was $700 billion dollars we could have collected from the taxpayers in additional revenue which would have offset what we spent. If you reduce spending, the argument loses its validity. If my job paid me $200,000 per year I would be much better off. But for the sake of this example, let’s just say that it only pays me $150,000 annually. Therefore, on the basis of the logic employed I am losing $50,000 per year and that becomes a deficit especially if I spend my income on that basis that I am indeed earning $200, 000 dollars annually…it’s voodoo accounting!
We have many rivers to cross in our quest to regain control of the government in terms of both expansion and spending. We must address what we are spending money for in this country. Since our previous Congress did not see fit to follow procedure and establish and approve an annual budget, we really do not know. As a country, we are simply writing checks right now for whatever bills come in. We have to get an accurate accounting of what we are spending money on before we can know whether these expenditures are justified or unrealistic. Once those adjustments are made and budgets are set, we have to roll back spending to levels that existed prior to 2006. This will create surplus revenues which can be directly applied to our outstanding national debt. Some estimates indicate the potential savings in this area can be over $100 billion dollars annually without touching our military or our entitlement spending of today.
We will not get out of this ditch today, tomorrow, or next year. As a public we cannot accept the fact that we have changed things, put things on their proper course, and predict good results only to forget what our plan was and go back to spending like drunken sailors. We have to stay the course and keep the ceiling on accumulated debt and spending rate in place for many years and possibly a number of administrations if we are ever to see the light of a day in America in which our debt service will be in proper proportion to our Gross Domestic Product.
All Americans have a vested stake in the successful outcome of reducing spending and debt. At the present, on the basis of revenue bonds and treasury bonds sold to finance our current debt load, our souls essentially belong to China. For years, many Americans have despised the fact that too many goods populated the shelves of our retail stores with “Made in China” tags attached to them. Today, we stand at the brink of having that same tag attachéd to the whole of this country. I cannot imagine any American with any sense of duty and pride who is willing to stand by and let that become a reality. If it does, they will have conquered us as a people without firing a single shot.
I am not sure there is any such thing as an honest politician. I think there simply is varying degrees of dishonesty and double-talk. One fact rings true…we cannot spend out way out of trouble in America. It does not work and the end result simply is a debt load that the country cannot sustain. It is time for accountability to step to the forefront and it is time that we, the American public, steps forward and speaks with one voice, “Quit Spending Our Damn Hard-Earned Money!” It’s time!
NOTE: If you have problems understanding how America got here, please take the time to watch the video below. It offers an excellent explanation and after you have seen it, you will never view our elected officials in the same manner again. WB
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