Performance-Based Pensions for Politicians
Like high-level managers at publicly traded private companies, politicians who made bad decisions – judged according to a variety of indicators, from unemployment to health outcomes – should face clawbacks. The easiest way to achieve this would be to adjust their pensions.
NEW YORK – When the Speaker of the US House of Representatives, Paul Ryan, retires at the end of his term in January, he will likely qualify for an annual government pension of more than $80,000. Ryan’s case – and that of the dozens of other members of Congress who will be retiring this year – highlights the chasm between the financial benefits available to politicians and those available to the vast majority of citizens they are supposed to serve, regardless of how well they actually perform in office.
Confident that their own generous pensions will be paid out no matter what, politicians like Ryan often advocate measures that weaken the government’s fiscal position. The Congressional Budget Office has cautioned that the US government deficit is on course to triple over the next 30 years, from 2.9% of GDP in 2017 to 9.8% in 2047.
Among other things, that fiscal blowout will undermine the government’s ability to invest in education and infrastructure for future generations. Meanwhile, only 15% of private-sector employees – people who presumably rely on government-funded education and infrastructure – receive the type of fixed-benefit retirement plan that will cushion Ryan’s retirement, according to the Pension Rights Center.