Dem Senator Pushes For Bailout for His Own Pension

Gary Peters, worth millions, collects $50K a year from underfunded Michigan system

Gary Peters
Sen. Gary Peters (D., Mich.) / Getty Images
May 27, 2020

Sen. Gary Peters has repeatedly agitated for a federal bailout for his home state, indirectly seeking a rescue for the pension system that pays the millionaire Michigan Democrat five figures annually.

Financial disclosures reveal that Peters collects more than $50,000 a year from the Michigan state pension fund, a benefit accrued thanks to his eight years in the state legislature. Peters has given no sign he will forgo these payments even as nearly 900,000 Michiganders have lost their jobs in the last two months.

Peters's payments contribute to the obligations of the Michigan state pension system, which ranked as only the 31st-best funded in the nation. Peters and his Democratic colleagues have pressed for billions in federal dollars to shore up states' revenue streams—money, congressional Republicans have argued, that would help state governments paper over irresponsible management of their retirement schemes.

Peters supporting a bailout that could affect his own paycheck raises questions about whether his advocacy constitutes a conflict of interest, especially in light of his substantial net worth. His office did not respond to questions from the Washington Free Beacon as to whether he was concerned about this potential conflict or whether he intended to forgo his pension payment or congressional salary this year.

The senator collected $50,207 from the Michigan state pension fund in 2018, according to his financial disclosures. That figure is just shy of the state's median income. Between 2013 and 2018 Peters received over $235,000 from the Michigan pension system.

Peters also receives an annual congressional salary of $174,000. When a local news anchor asked whether he would forgo that income for the year, Peters demurred. He also commands substantial personal wealth: The nonpartisan Center for Responsive Politics estimates his net worth to be almost $4.4 million as of 2018.

The campaign of Republican John James, who is expected to secure the GOP nomination to challenge Peters in November, slammed Peters for the continued payouts amid economic crisis.

"It's sad that while millions of Michigan workers are worried about making ends meet, career politician Gary Peters worries about how to keep his $50,000 per year pension in addition to his 6-figure government salary," James campaign communications director Abby Walls said.

Peters has more than once called for funds for state and local governments to be included in future stimulus bills. He told a local news station that "revenues are dropping and yet the demand continues to go up, so I’m going to work to get additional funding for state and local government."

Peters also blasted Sen. Mitch McConnell's (R., Ky.) suggestion that states be allowed to declare bankruptcy, promising to "continue working in a bipartisan manner to ensure our state and communities across Michigan have the resources needed to stay afloat and emerge from this unprecedented crisis."

That puts the Democrat in line with his colleagues in Congress; the House Democratic caucus's most recent stimulus proposal includes $500 billion for state and local governments. Those funds would come in addition to the money previous stimulus bills already allocated to states. But whereas previous stimulus funds were earmarked for coronavirus-related expenses only, the new money Democrats want would be given to states to spend on their general revenue needs.

This measure is necessary, Democrats argue, because states are seeing major shortfalls in traditional sources of revenue amid the economic downturn. But the money would also cover shortfalls in underfunded entitlement programs, particularly many states' hulking pension systems.

That includes Michigan's. According to the Mackinac Center for Public Policy, a right-leaning Michigan-based think tank, the state has chronically underfunded its pensions, relying on over-optimistic assumptions about returns and, consequently, risky asset purchases. Peters has gotten to enjoy this largesse; his support for a state bailout would help ensure that the money keeps flowing.

Editor's Note: This story has been updated to reflect that Peters receives a state pension due to his time in the legislature, not as lottery commissioner.

Published under: Gary Peters , Pension