Anthony Weiner - Dishonored But Still Worth A Million

By now we well aware of the dishonor that ex-Congressman Anthony Weiner brought down on himself, Congress, the country, and his constituents. Finally, after weeks of not doing the honorable thing, the Congressman finally resigned and left behind his place in Congress.

As he left, I wondered what the American taxpayer now owed him from a benefits and pension perspective. Even though his behavior was despicable, I assumed that he was not immediately going to go into the poor house, given how the political class takes care of themselves.

It did not take long to find out. An article on June 17, 2011 by Jack Hough at Smart Money's website explained how well the ex-Congressman will do at the expense of the American taxpayer. According to Mr. Hough, Mr. Weiner will eventually receive over a million dollars worth of pension benefits despite his pathetic and childish antics. The article lays out the details of his compensation quite clearly:

• Weiner is covered under the Federal Employee Retirement System which provides a defined benefit pension plan.
• The plan is a minimal cost to Federal employees and politicians, requiring a covered person to pay less than 1% of their annual pay into the system.
• The ex-Congressman was in Congress for only twelve years and was earning the standard Congressional salary $174,000 in 2011.
• Weiner can start taking a discounted pension of about $25,000 a year starting at age 56 (he is currently 47) or he can take a full pension of $35,000 a year at age 62.

With the average 10 year Treasury yield currently at 2.9%, a regular American would need to have $1.2 million worth of assets in order to generate $35,000 a year in retirement. How many Americans have that kind of money in their possession that would be needed to match the Congressman's pension benefit? Probably not very many.

Not too shabby. The article contains another comparison to a regular American trying to save for retirement:

• The example assumes that this regular American saves $12,000 of his own money each year in a 401k plan.
• These savings are matched up to $3,000 by the American's employer and generates an annual yield of 3.8% a year (the average stock market return over the past 12 years).
• After 12 years, this regular American would have $231,000 in their 401k plan.
• If they somehow were able to get their investment return up to 5% a year until they were 56 years old, this American would be able to draw down $15,000 a year in retirement funds (40% below what Weiner will get) at age 56 and $20,000 a year at age 62, more than 40% less than Weiner. And most of these regular Americans have caused far less anger, hurt, and dishonor than the ex-Congressman.

But there's more! As the article points out, not only does the average American get 40% less than the Congressman, the average American had to get that lower stream of retirement revenue using his or her own money. The Congressman invested very little of his own money, the American taxpayer funds his pension. This allows the Congressman, and politicians like him, to use their own money to open their own retirement 401k retirement accounts in addition to the virtually free pension programs for politicians.

But the fun doesn't stop here. They also pay into and receive Social Security benefits and get the best health care coverage possible, all at the taxpayer's expense.

Not a bad deal, over $1 million in benefits despite his actions and expulsion. But it gets better. Weiner's benefits are inflation protected. If inflation goes up, his benefits go up annually, courtesy of the American taxpayer. Many regular Americans who receive a pension never get a cost of  living increase, their pension payments are usually fixed for life when they start drawing their pension checks.

However, some insightful person might observe that comparing the ex-Congressman's benefits to the average American is not fair, given that his services are valued at $174,000, almost three times higher than the income of an average American household. He should be able to receive higher retirement benefits than the average American. The article provides no insights into this observation.

However, I have worked in corporate America and know many people that were or are in corporate America and one of them volunteered their retirement plans and details. We can use these details to standardize pension payouts of average, middle management corporate employees to political class pensions. In order to get to a common baseline for comparison, we need to account for differences in the working situations of both people and index them to a common base:

• My friend worked for 29 years to get their pension while the ex-Congressman worked for only 12 years.
• The Congressman's final salary was about 50% higher than my friends.
• My friend starting taking retirement at age 52 so their discounted annual payments had to be increased as if they had waited until 56 years of age like Weiner will have to do.
• My friend's pensions payments never increase for inflation, it is fixed for his entire life while the Congressman's pension payments will increase very year, based on inflation.

As a trained statistician, I believe that I properly and honestly took all of the available information and adjusted the variables to come up with a standardized comparison, the details of which I will not share here but which are available if desired. This approach and these results support what Mr. Hough found, i.e. the political class has given themselves a sweet deal:

1. If inflation averages 2% a year, Weiner will receive 18% more in value than my corporate friend, all other variables considered including life expectancy.
2. If inflation averages 3% a year, Weiner will receive 31 % more in value.
3. If inflation average 4% a year, Weiner will received 46% more in value.

No surprise no matter how you cut the data: the political class has taken a "let them eat cake" attitude towards the American taxpayer. No matter how much you dishonor the country, no matter how low your approval ratings go (recent Rasmussen polling shows Congress with an abysmal 9% approval rating), the political class has rigged the system to force the American taxpayer to overpay for their missteps, wasteful spending, moral shortfalls, and childish behavior even though they never seem to solve any major problem.

Several steps from "Love My Country, Loathe my Government" would finally end this charade and plundering of the taxpayer till by our politicians:

• Step 9 - this step would terminate the Federal pension program for newly hired Federal workers going forward in time. Given that a small and diminishing portion of most American workers do not have access to a traditional pension, it is not fair for them to fund something that they cannot get as they fund a rich pension program for Federal workers, including politicians.
• Step 39 - this step would impose term limits on all Federal election positions so that people like Weiner cannot serve a relatively short number of years yet receive robust pensions and health benefits for life.
• Step 41 - this step would prohibit any politician with a net financial worth over $3 million from drawing a paycheck while in office. It makes no sense for multi, multimillionaires in Congress, such as John McCain and John Kerry, to draw a salary in this time of financial distress. In addition, although not listed in the book, this step should have been expanded to also include pensions and health benefits. These politicians can afford to cover their own retirement needs and not burden regular Americans for their lavish retirement perks.

I wish there was a step that somehow covered sexting and obscene tweeting but when "Love My Country, Loathe My Government" was published I and the rest of the country had no idea how low a Federal politician could go. But the bigger issue is the contempt and aloofness of the political class in their attitudes towards us. Our politicians continually demonstrate how their welfare and careers take precedent over any other issue facing the country, no matter how major those issues are.

Mr. Hough's final paragraph pretty much sums it up: "The point here isn't that politicians don't deserve decent retirement plans. The last thing America needs is financially insecure lawmakers. But Weiner is getting the equivalent of a $1.2 million exit payment after serving just 12 years on the job." His behavior and dishonor is certainly not worth a million dollars.




Our book, "Love My Country, Loathe My Government - Fifty First Steps To Restoring Our Freedom And Destroying The American Political Class" is now available at http://www.loathemygovernment.com/. It is also available online at Amazon and Barnes and Noble. Please pass our message of freedom onward. Let your friends and family know about our websites and blogs, ask your library to carry the book, and respect freedom for both yourselves and others everyday.


Please visit the following sites for freedom:

http://www.loathemygovernment.com/
http://www.cato.org/
http://www.robertringer.com
http://realpolichick.blogspot.com
http://www.flipcongress2010.com/
http://www.reason.com/
http://www.repealamendment.com