|America's independent, non-partisan advocate for overburdened taxpayers.||Home | Donate | RSS | Log in|
Obama & Romney Dispute Over Pensions Highlights Public Sector's Advantage
October 19, 2012
Tuesday’s second presidential debate between President Obama and Mitt Romney became particularly heated when the topic turned to pensions, with the President condemning Romney for his blind trust investments in China, and the former governor countering that Obama himself likely has a pension which diversifies into Chinese markets.
According to this article from CNBC, Romney’s assertion is most likely accurate:
Many public pension funds have a diversified foreign investment portfolio that includes China. Most…public pension funds have directed increasing allocations to emerging markets and alternative investment classes to generate returns and bridge exploding funding gaps.
The two also tussled over whose investments might be larger, with Obama saying: "I don't look at my pension. It's not as big as yours so it doesn't take as long,” when Romney prompted him to check to see where his investments were.
According to the CNBC article, there is more to the story here than the President lets on. He himself has a very generous pension coming to him for his role as President whether or not he wins a second term---$191,300 annually for life as well as a security detail---not to mention the likelihood that he’ll also be due a generous pension for his time in the Illinois Legislature.
Romney on the other hand, although his Individual Retirement Account is rumored to contain a far from meager $87 million or more, will not be relying on a public pension at all:
Romney only served one term as governor of the Bay State and did not take a salary, so he is eligible for nothing.
So, despite Romney’s private sector success, it is the public servant that turns out to have the bigger pension –which fits in with a growing trend according to this recent article from the American Enterprise Institute by researchers Andrew G. Biggs and Jason Richwine:
Recent empirical evidence strongly suggests that, on average, combined wages and benefits for public sector workers now outstrip compensation for comparable private sector workers.
Finally, for fiscal conservatives and those concerned with the costs associated with big government, the logical place to focus our attention is on reforming excessive public sector pensions, as opposed to begrudging those who may have earned a generous retirement fund through the private sector. After all, it’s the government pensions you and I have to foot the bill for.
Comment on this blog