Ask the Advisor: Do Members Of Congress Pay Into Social Security?

Ask the Advisor: Do Members Of Congress Pay Into Social Security?

Q: I frequently hear that Members of Congress don't pay into Social Security.  Is this true?  I would like to propose that we demand that the Senate and the House rely on Social Security without having their lavish pension and medical benefits.  Believe me, Social Security would be "fixed" in a hurry and there would be no talk of sharing what we all have worked hard for with our illegal alien "guests".

A: Despite rumors to the contrary, Members of Congress do pay into Social Security, and have done so since 1984.  Like all workers, Members pay Social Security payroll taxes equal to 6.2% of the taxable wage base, and the government (the U.S. taxpayers) covers the other 6.2%.  But Members don't pay Social Security taxes on their entire $165,200 annual salary.  The maximum Social Security taxable wage base is $97,500.  Thus, by law, Members do not pay Social Security on the $67,700 in annual wages they receive over the taxable wage base.

Eligibility for Social Security benefits applies to Members of Congress the same way it applies to you and me.  But in addition to receiving Social Security benefits, Members also receive generous Congressional pensions.  They are eligible for a Congressional pension at age 62 with as little as five years of service.  To receive Social Security, an age 62 worker must have paid into the system for at least 10 years to become "fully vested."

The amount of Social Security benefits a worker receives is based on a Social Security benefit formula that uses 35 years of highest earnings to determine the average earnings.  Congressional pensions, on the other hand, depend on the number of years served and the highest three years of salary, yielding a much higher initial retirement amount.

Fortunately for taxpayers, Members can't retire with "full salary."  By law the starting amount of a Member's retirement pension may not exceed 80% of his or her final salary.  Under Social Security, Members would receive an initial benefit that's about 30% of their average earnings.

And even convicted Members of Congress, like former Representative Randy "Duke" Cunningham, continue to draw handsome pensions while in jail at the taxpayers' expense.  Under existing law, pensions can only be taken away if a lawmaker commits treason or espionage.  Cunningham was sentenced to more than eight years in prison after pleading guilty to conspiracy and tax evasion and admitting to accepting $2.4 million in bribes, not to mention a Rolls Royce.  According to The National Taxpayers Union, which tracks Congressional pensions, Cunningham who is 65 and served eight terms in the House, could receive about $64,000 a year.

Recently the Senate and the House grudgingly approved major ethics and lobbying reform legislation that would deny pensions to Members of Congress convicted of crimes such as bribery, perjury and similar crimes.

Sources:  "Retirement Benefits For Members Of Congress," Patrick J. Purcell, CRS, February 9, 2007, RL30631.  "Salaries of Members of Congress," Paul Dwyer, CRS, March 29, 2007, 97-1011 GOV.  "House Strips Convicted Members Of Pensions," Associated Press, January 23, 2007.