Thank you for inviting me to testify before the Subcommittee on Government Management, Information and Technology regarding whether the salary of the President of the United States should be increased.
The President's salary has remained unchanged for more than thirty years -- since January 20, 1969. The President earns a salary of $200,000 per year, with a generous pension, perquisites, a $50,000 expense allowance, living expense benefits that befit a king, plus a near certain prospect, if desired, of becoming a multimillionaire upon leaving office. The value of a presidential pension is $152,000 annually in fiscal year 1999.(1)
On May 14, the House Appropriations Subcommittee on Treasury, Postal Service and General Government approved a chairman's mark with a provision to double the President's salary to $400,000 per year. That pay raise, if approved, would take effect in 2001, because the Constitution forbids the President's salary to be adjusted during his or her term of office.(2)
Since the founding of the Republic, it has been customary for the President, who is the chief executive of the federal government, to receive the highest salary in the federal government. As other top federal government salaries have risen to approach an unchanged presidential salary, the President's salary now increasingly functions as a cap on the salaries of Members of Congress and federal judges. Some federal judges and Members of Congress criticize the cap. They complain of "pay compression" at the top of the federal pay scale.(3) They want a raise -- presumably a large one.
That is why we are here today. The real question for today's hearing is: does the presidential salary cap serve citizens well?
I think it does. The Congressional Accountability Project opposes a presidential pay raise, not only because the President does not need a raise, but, more importantly, because it would decrease the President's moral authority to govern, and lift the salary cap at the top of the federal pay scale, which restrains the energetic efforts of Members of Congress and federal judges who wish to further raise their salaries at taxpayer expense.
The public is best served by a presidential salary level that draws the most talented, good-hearted and public-spirited people to the presidency. The level should not be so low as to predispose a President to fall prey to the highest bribery. Nor should it be so low as to exclude all but the wealthiest citizens. But these problems do not affect the presidency at this time.
The complaints of "pay compression" occur against a backdrop of overgenerous and rising salaries for corporate CEO's(4) and many corporate lawyers,(5) but stagnant salaries and wages for a great many Americans. Of course, the public does not clamor to raise the President's salary. Neither does President Clinton, for that matter.
It would be wrong if the President's salary were so low that it discouraged the best, most honorable Americans from running for President. But, to the overwhelming majority of Americans, $200,000 per year plus enormous living expense benefits is a great sum of money. The President suffers no real privations. The President does not need more money, except to pay legal bills. We have no lack of exceptionally bright and talented people in this country who would be happy to serve as President for $200,000 per year.
Those people who would serve as President only if the salary were higher are less interested in doing service than in getting rich. We have no need for the greedy in the highest offices of our federal government. In fact, we ought to weed them out aggressively. Good riddance. Let them be the wealthy captains of industry, or lobbyists on K street. The honest pleasures of serving the public, of diligently attending to their needs, and earning their respect, as well as a generous $200,000 annual salary, is adequate compensation for the President.
It is mostly people who have adopted the values of the corporation who call for this pay raise. But the public sector is very different from the private sector. This makes comparisons between the President's salary and a corporate CEO's a case of apples and oranges.
The President's salary and benefits are furnished by the taxpayers, more than 99% of whom earn far less than the President. The taxpayers work hard to fill the coffers of the federal government. It is wrong for the differential between the President's salary and the median American's to grow larger than it is, because such a high Presidential compensation package begins to look as if the President were taking advantage of the taxpayers. It erodes the President's moral authority to govern.
To make matters worse, the pay raise boosters propose a 100% increase in the President's salary. This raise is not to $250,000, or $300,000, or even $350,000 per year -- but a full doubling of the President's salary. Try explaining that to a worker who hasn't seen a real salary increase in a generation.
Everything the President does sets the moral tone for America. What tone will the President set -- profligate or self-restrained? This country is crying out for leadership by example. The President draws a salary from a federal government that is currently $5.6 trillion in debt. If we are to reduce the federal debt, the upper reaches of government must lead by example, and sacrifice for the good of our country. That means the President first. Our nation's frugality should begin in the President's home.
Citizens are pleased when their elected leaders show some dignified self-restraint and humility, and forgo a pay raise. Their wallets are thinner, but their moral authority grows. This intangible virtue is very important.
As I mentioned before, this effort to increase the President's salary is driven by Members of Congress and federal judges who wish to lift the presidential salary cap. Members of Congress currently earn an annual salary of $136,700, plus generous perks, pensions and benefits. Federal district court judges earn the same. Appellate court judges earn $145,000 per year. Many Members of Congress and federal judges chafe under these salaries, even though they are lavish.
In March, a wave of avarice swept the upper reaches of our federal government. The U.S. Judicial Conference announced that it would "vigorously seek" pay raises for federal judges, and that it also would work to increase the salaries for Members of Congress and the President.(6)
At the same time, the public was met with news reports that some House Members want to raise their salaries and cash benefits by as much as $25,000 per year. House Administration Committee Chairman Bill Thomas wants to allow House Members to receive a tax-free $125 per diem, worth perhaps $18,000 to $20,000 per year, from their congressional office budgets.(7) The Thomas per diem plan would amend the rules governing Members Representational Allowances. It could be approved in the Administration Committee, and would not require a House floor vote.
In addition, both House Speaker Dennis Hastert and Minority Leader Richard Gephardt are also supporting a proposed $4,600 pay raise for Congress this year.(8) On May 16th, House Majority Whip Tom DeLay said that "we're working very hard" to pass this congressional pay raise.(9)
The presidential salary cap serves a useful public function in counteracting such efforts. It should not be lifted. That is especially true regarding its effect on congressional salaries.
Congressional salaries are already so high that they attract not only the most honorable people to Congress. It is perhaps inevitable that the power of Congress lures not only candidates who are wise and honest, but also those who wish to exercise power. When congressional salary is set too high, as it is now, it lures the greedy, selfish and the power-hungry, in addition to those who merely wish to serve their country, and are deserving of the public trust.
Many Members of Congress receive large raises when they come to Congress. A 1996 Roll Call study found that "all but six of the 73 newly elected House Members will receive large pay hikes when they take office" compared with their previous employment.(10)
At this time, any further increase in Congressional salaries would lead to decreased quality of candidates for Congress. This negative effect of excessive congressional salaries on the quality of our Members of Congress is not so strong as the negative effects of our corrupt campaign finance system, but we ought to be concerned about it.
During the last ten years, House Members gave themselves five pay raises, Senators six. Congressional salaries grew by $47,200 -- more than $15,000 above inflation. In 1989, the base congressional salary was $89,500.
Many Americans haven't been so fortunate. The median income for full-time, year-round male workers was higher in 1970 ($35,691) adjusted for inflation, than it was in 1997 ($35,248).(11) The median income in families where the wife is not in the paid labor force was higher in 1969 ($36,170) adjusted for inflation, than it was in 1997 ($36,027).(12) That means many families haven't had a real wage increase in more than a generation. If so many Americans have not received a real salary increase for so long, then Members of Congress do not deserve yet another raise either.
The President, Members of Congress and federal judges ought to lead by example, and sacrifice so that their moral authority might grow. They will be the richer for it, and so will the citizenry, in a way that is far more important than money.
1. Stephanie Smith, "Former Presidents: Federal Pension and Retirement Benefits." Congressional Research Service report 98-249 GOV, updated January 4, 1999.
2. U.S. Constitution, Article II, Section 1: "The President shall, at stated Times, receive for his Services, a Compensation, which shall neither be encreased nor diminished during the Period for which he shall have been elected, and he shall not receive within that Period any other Emolument from the United States, or any of them."
3. Joan Biskupic, "Judicial Group Favors One Less D.C. Judgeship; 69 New Court Seats Urged, Along With Resource Shift." The Washington Post, March 17, 1999.
4. "Thanks to a pay structure that has linked most executive compensation to the stock market through huge option grants, the head honcho at a large public company made an average $10.6 million last year. That's a 36% hike over 1997 -- and an astounding 442% increase over
the average paycheck of $ 2 million pocketed in 1990." Jennifer Reingold and Ronald Grover, "Executive Pay." Business Week, April 19, 1999.
5. "Good news for in-house lawyers: corporate counsel positions in New York are
more lucrative than ever....A survey of chief legal officers in Manhattan corporations shows median total cash compensation of salary and bonus rising over the past six years to $487,500 last year, up 60 percent from 1993." Anna Snider, "In-House Pay Rises; Salary Plus Bonus Equals Hefty Compensation." New York Law Journal, February 11, 1999. See also Susan Orenstein, "Down & Out On $100,000 A Year." The American Lawyer, October, 1998.
6. Joan Biskupic, "Judicial Group Favors One Less D.C. Judgeship; 69 New Court Seats Urged, Along With Resource Shift." The Washington Post, March 17, 1999.
7. A. B. Stoddard, "Rep. Thomas Urges Tax-free Per Diem." The Hill, March 17, 1999. Faye Fiore, "The Washington Connection; Paying the Price" Los Angeles Times, March 30, 1999.
8. Jim VandeHei, "Hastert, Gephardt Want COLA Quiet Effort May Lead to Pay Raise For Members." Roll Call, March 15, 1999. Juliet Eilperin, "House Studies Cost-of-Living Pay Increase; Plan to Add Per Diems Is Also Under Review." The Washington Post, March 19, 1999. Jim VandeHei, "Majority in House Likely to Favor COLA Informal Counts Show Support;
Vote Months Away." Roll Call, March 22, 1999.
9. NBC News Transcripts, Interview with Representative Tom DeLay. Meet the Press, May 16, 1999.
10. Amy Keller, "Winning Means A Pay Raise For Most Freshmen." Roll Call, November 11, 1996.
11. U.S. Census Bureau, Historical Income Tables -- People, March Current Population Survey, Table P-29, <http://www.census.gov/hhes/income/histinc/p29.html>. Figures in 1997 CPI-U adjusted dollars.
12. U.S. Census Bureau, Historical Income Tables -- Families, March Current Population Survey, Table F-7, <http://www.census.gov/hhes/income/histinc/f07.html>. Figures in 1997 CPI-U adjusted dollars.