Cloud & Congress – Part 2

My apologies for the post notice you may have received earlier.  It was a glitch – truly!  I am using Thor’s PC and he’s been having some “issues” with it.  In any event, let me try again.


I haven’t blogged recently; I’ve been too distracted by U.S. political events.  Today, however, I decided to write a post.  First, Cloud, followed by Congress.


Three years ago I used Anzula’s Cloud (100g=575y=525m, 80% superwash merino, 10% cashmere & 10% nylon), to knit Linda Marveng’s “Milanese Shawl.”  (I wrote about it here.  Marveng’s attention to detail and exquisite use of cabling has made her one of my favorite designers.)  I narrowed this pattern, however, because I wanted more of a scarf than a shawl.  That scarf is my “go-to” winter scarf; it is warm, soft and long – and I love a wrappable scarf.  I was left with a full unused skein.

anzulacloudheadband-2Cloud is a fingering weight, and I wanted a heavier yarn for a headband.  After partitioning the skein into four balls to experiment with gauges, I decided I liked the three-ply the best.  Using Chic Knit’s cabled headband in its Elisabeth Collection as a start, I am pleased with this attractive and warm headband – and it matches my favorite scarf!


This morning I was mulling over the Republican-dominated Congress’s rabid obsession with ending the Affordable Care Act, privatizing medical care, and push to employee 401(k) plans.  Curious, I thought, given the cushy health and retirement plans of Congress members.  How cushy?  Extremely generous compared to most workers, even those employed full times.

First, Congress’s health plan.  Congress members (and their families) participate in the Federal Employees Health Benefits Program.

  • The Office of Personnel Management describes it as “the widest selection of health plans in the country.”  (Click here to read more detailed description from the OPM.)
  • The Congressional Research Service sheds some light for us on this topic. (If you want details, read its nine-page summary report.)

Second, Congress’s retirement plan.  Nearly all members of Congress are covered by the Federal Employees Retirement System (FERS).  What does this provide them upon retirement?

  1. Social Security (yes, Congress members have SS taxes withheld from their paychecks).
  2. Thrift Savings Plan (TSP).  This is a defined contribution (DC) plan for federal employees.  (Click here to read more.)
    • TSP is similar to 401(k)s common to private employees.  (By the way, 401(k)s were and are not intended to be a retirement plan.)
    • Federal agencies match up to 5% of a member’s contribution.
    • TSP differs from 401(k) plans in a key manner:  Whether or not the employee chooses to contribute anything to her/his TSP, the government contributes 1% of the person’s base pay to the TSP.  This isn’t a hidden bonus; click here to go to the TSP website and read their own words.
    • A Defined Benefit (DB) plan that guarantees an employee a specified benefit level upon their retirement if they serve five (5) years.  This means recipients receive a lifetime annuity (i.e., series of monthly payments) based on their salary when employed and years of employment.
    • According to the Congressional Research Service:  “There were 601 retired Members of Congress receiving federal pensions based fully or in part on
      their congressional service as of October 1, 2014. Of this number, 351 had retired under CSRS [the Civil Service Retirement System, pre-1984] and were receiving an average annual pension of $72,660. A total of 250 Members had retired with service under FERS and were receiving an average annual pension of $41,652 in 2014.”
    • What does that translate to?
    • Retired Members of Congress Annual Pension Pay* Total Per Year
      Retired Under FERS 250  $    41,652  $             10,413,000
      Retired under CSRS 351  $    72,660  $             25,503,660
      Total 601  $             35,916,660
    • If you feel like reading relevant data from the Bureau of Labor Statistics, you will learn that fewer than 20% of private employees have DB plans  Experts believe DB plans are on their way out for private employees.

Are you wondering how much a person would need in savings in order to create a replacement income for the pension income taxpayers are footing for their elected officials?  Here’s how much you would need (thanks to Thor for preparing this for me):

Yield Needed: 0.80% 1% 2%
Amount of principal needed to generate $41,652 per year in income  $       5,206,500  $       4,165,200  $       2,082,600
Amount of principal needed to generate $72,660 per year in income  $      9,082,500  $      7,266,000  $        3,633,000
Yield Needed: 3% 4% 5%
Amount of principal needed to generate $41,652 per year in income  $       1,388,400  $        1,041,300  $           833,040
Amount of principal needed to generate $72,660 per year in income  $      2,422,000  $        1,816,500  $        1,453,200
Yield Needed: 6% 7% 8%
Amount of principal needed to generate $41,652 per year in income  $          694,200  $           595,029  $           520,650
Amount of principal needed to generate $72,660 per year in income  $        1,211,000  $       1,038,000  $           908,250
Yield Needed: 9% 10%
Amount of principal needed to generate $41,652 per year in income  $          462,800  $           416,520
Amount of principal needed to generate $72,660 per year in income  $           807,333  $          726,600

As an example, the following yields show (as of 2/27/17, 9:27 pm EST), the yields currently available to bond investors.  Yields of 10% are not available unless you invest in stocks and it’s a good year.  Higher overall returns thus requires greater risk to the investors.  Investors are not assured a steady income as are our elected officials.

Current Bond Yields From To
US Treasury Bonds 0.45% 2.93%
Municipal Bonds 0.72% 3.38%
Corporate Bonds 1.21% 3.89%

In conclusion, if privatizing health care, abolishing the Affordable Care Act and starving Medicare and Medicaid are for the benefit of our country and its citizens, Congressional members should set the example.  Let them first get rid of their defined benefit plans, Thrift Savings Account and Federal Employees Health Benefit Program so they can more closely experience what we taxpayers would have to experience.

Let’s remember that elected representatives work for the taxpayers, who are effectively, then, employers of the those elected.  How many employees in the U.S. create retirement and health plans for their employers?  The answer, I would guess, is a very small number or, more probably, none.

It’s time Republicans put their moneys where their mouths are.

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4 Responses to Cloud & Congress – Part 2

  1. Pingback: Squarely knitting. | kmkat & her kneedles

  2. Susan says:

    And, good luck with that….


  3. Yes! They absolutely should! Nice article.


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