[House Hearing, 106 Congress]
[From the U.S. Government Publishing Office]
SALARY OF THE PRESIDENT OF THE UNITED STATES
=======================================================================
HEARING
before the
SUBCOMMITTEE ON GOVERNMENT MANAGEMENT,
INFORMATION, AND TECHNOLOGY
of the
COMMITTEE ON
GOVERNMENT REFORM
HOUSE OF REPRESENTATIVES
ONE HUNDRED SIXTH CONGRESS
FIRST SESSION
__________
MAY 24, 1999
__________
Serial No. 106-91
__________
Printed for the use of the Committee on Government Reform
Available via the World Wide Web: http://www.gpo.gov/congress/house
http://www.house.gov/reform
__________
U.S. GOVERNMENT PRINTING OFFICE
WASHINGTON : 2000
______
COMMITTEE ON GOVERNMENT REFORM
DAN BURTON, Indiana, Chairman
BENJAMIN A. GILMAN, New York HENRY A. WAXMAN, California
CONSTANCE A. MORELLA, Maryland TOM LANTOS, California
CHRISTOPHER SHAYS, Connecticut ROBERT E. WISE, Jr., West Virginia
ILEANA ROS-LEHTINEN, Florida MAJOR R. OWENS, New York
JOHN M. McHUGH, New York EDOLPHUS TOWNS, New York
STEPHEN HORN, California PAUL E. KANJORSKI, Pennsylvania
JOHN L. MICA, Florida PATSY T. MINK, Hawaii
THOMAS M. DAVIS, Virginia CAROLYN B. MALONEY, New York
DAVID M. McINTOSH, Indiana ELEANOR HOLMES NORTON, Washington,
MARK E. SOUDER, Indiana DC
JOE SCARBOROUGH, Florida CHAKA FATTAH, Pennsylvania
STEVEN C. LaTOURETTE, Ohio ELIJAH E. CUMMINGS, Maryland
MARSHALL ``MARK'' SANFORD, South DENNIS J. KUCINICH, Ohio
Carolina ROD R. BLAGOJEVICH, Illinois
BOB BARR, Georgia DANNY K. DAVIS, Illinois
DAN MILLER, Florida JOHN F. TIERNEY, Massachusetts
ASA HUTCHINSON, Arkansas JIM TURNER, Texas
LEE TERRY, Nebraska THOMAS H. ALLEN, Maine
JUDY BIGGERT, Illinois HAROLD E. FORD, Jr., Tennessee
GREG WALDEN, Oregon JANICE D. SCHAKOWSKY, Illinois
DOUG OSE, California ------
PAUL RYAN, Wisconsin BERNARD SANDERS, Vermont
JOHN T. DOOLITTLE, California (Independent)
HELEN CHENOWETH, Idaho
Kevin Binger, Staff Director
Daniel R. Moll, Deputy Staff Director
David A. Kass, Deputy Counsel and Parliamentarian
Carla J. Martin, Chief Clerk
Phil Schiliro, Minority Staff Director
------
Subcommittee on Government Management, Information, and Technology
STEPHEN HORN, California, Chairman
JUDY BIGGERT, Illinois JIM TURNER, Texas
THOMAS M. DAVIS, Virginia PAUL E. KANJORSKI, Pennsylvania
GREG WALDEN, Oregon MAJOR R. OWENS, New York
DOUG OSE, California PATSY T. MINK, Hawaii
PAUL RYAN, Wisconsin CAROLYN B. MALONEY, New York
Ex Officio
DAN BURTON, Indiana HENRY A. WAXMAN, California
J. Russell George, Staff Director and Chief Counsel
Bonnie Heald, Director of Communications
Mason Alinger, Clerk
Faith Weiss, Minority Counsel
C O N T E N T S
----------
Page
Hearing held on May 24, 1999..................................... 1
Statement of:
Ferracone, Robin, chair, Executive Compensation Advisory
Board, American Compensation Association; Jane Weizmann,
consultant, Watson Wyatt Worldwide; and David Hofrichter,
vice president and managing director, Hay Group............ 105
Gressle, Sharon, specialist, American National Government,
Congressional Research Services; Gary Ruskin, executive
director, Congressional Accountability Project; Paul Light,
director, Center for Public Service, the Brookings
Institution; and Donald Simon, acting president, Common
Cause...................................................... 55
Jones, Ambassador James R., counsel, Manatt, Phelps &
Philips, former Special Assistant to President Johnson;
General Alexander Haig, chairman, Worldwide Associates,
former Chief of Staff to President Nixon; Robert T.
Hartmann, former Counsel to President Ford; Kenneth
Duberstein, chairman, the Duberstein Group, former Chief of
Staff to President Reagan; Governor John H. Sununu,
president, JHS Associates, former Chief of Staff to
President Bush; Samuel Skinner, co-chair, Hopkins & Sutter,
former Chief of Staff to President Bush; and Thomas F.
``Mack'' McLarty III, chairman, McLarty International,
former Chief of Staff to President Clinton................. 7
Letters, statements, et cetera, submitted for the record by:
Duberstein, Kenneth, chairman, the Duberstein Group, former
Chief of Staff to President Reagan, prepared statement of.. 26
Ferracone, Robin, chair, Executive Compensation Advisory
Board, American Compensation Association, prepared
statement of............................................... 107
Gressle, Sharon, specialist, American National Government,
Congressional Research Services, prepared statement of..... 58
Haig, General Alexander, chairman, Worldwide Associates,
former Chief of Staff to President Nixon, prepared
statement of............................................... 11
Hartmann, Robert T., former Counsel to President Ford,
prepared statement of...................................... 22
Hofrichter, David, vice president and managing director, Hay
Group, prepared statement of............................... 124
Horn, Hon. Stephen, a Representative in Congress from the
State of California:
History of presidential pay.............................. 144
Letter dated May 21, 1999................................ 139
Letter dated May 24, 1999................................ 134
Memo dated April 21, 1999................................ 136
Prepared statement of.................................... 3
Prepared statement of James F. Vivian.................... 151
Light, Paul, director, Center for Public Service, the
Brookings Institution, prepared statement of............... 71
McLarty, Thomas F. ``Mack'' III, chairman, McLarty
International, former Chief of Staff to President Clinton,
prepared statement of...................................... 41
Ruskin, Gary, executive director, Congressional
Accountability Project, prepared statement of.............. 64
Simon, Donald, acting president, Common Cause, prepared
statement of............................................... 77
Skinner, Samuel, co-chair, Hopkins & Sutter, former Chief of
Staff to President Bush, prepared statement of............. 34
Sununu, Governor John H., president, JHS Associates, former
Chief of Staff to President Bush, prepared statement of.... 30
Weizmann, Jane, consultant, Watson Wyatt Worldwide, prepared
statement of............................................... 116
SALARY OF THE PRESIDENT OF THE UNITED STATES
----------
MONDAY, MAY 24, 1999
House of Representatives,
Subcommittee on Government Management,
Information, and Technology,
Committee on Government Reform,
Washington, DC.
The subcommittee met, pursuant to notice, at 1:30 p.m., in
room 2154, Rayburn House Office Building, Hon. Stephen Horn
(chairman of the subcommittee) presiding.
Present: Representatives Horn, Turner, and Kanjorski.
Staff present: Russell George, staff director/chief
counsel; Matthew Ebert, policy advisor; Bonnie Heald, director
of communications; Faith Weiss, minority counsel; Ellen Rayner,
minority chief clerk; and Earley Green, minority staff
assistant.
Mr. Horn. A quorum being present, this hearing of the
Subcommittee on Government Management, Information, and
Technology will come to order.
Thirty years ago, the salary of the President of the United
States was set at its current level of $200,000 a year. I'm
sure that to most Americans a salary of that amount seems like
a lot of money. It is. However, it is pay for one of the most
difficult, demanding and important jobs on the face of the
Earth.
The President's salary, unchanged in 3 decades, serves as a
ceiling for almost every other salary in the Federal
Government. I said ``almost'' every other salary because, as
will be discussed during this hearing, it could soon be
surpassed by a limited number of government officials.
This hearing is not about whether President Clinton should
get a pay raise. The Constitution prohibits Presidential pay
changes until the end of the current President's term in
office.
Article II, Section 1 of the Constitution states:
The President shall, at stated Times, receive for his
Services, a Compensation, which shall neither be increased 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.
In other words, the President's salary cannot be changed
during his term in office. The effect of that prohibition is
that if no action is taken before the next President is sworn
into office, he or she could be paid less than the Vice
President.
Vice President Gore as well as the Chief Justice of the
United States and the Speaker of the House currently earn
$175,400 a year. These officials also receive cost-of-living
adjustments to their salaries. As we will hear today, the Vice
President, the Chief Justice and the Speaker of the House could
earn each more than the President before the next Presidential
term ends in 2005.
When President George Washington took office in the year
1789, the salary of the President was established at $25,000 a
year. At that time, Vice President John Adams earned $5,000 a
year, Chief Justice John Jay earned $4,000 a year, and members
of the President's Cabinet made $3,500 a year.
According to computations made by the Congressional
Research Service, by one measure President Washington's $25,000
salary equates to more than $4.5 million today. Now a number of
the witnesses have made that calculation, and I was reminded of
President Truman's great comment that I want a one-armed
economist here because they're always saying on the one hand or
the other hand, and he was tired of listening to it. And we
have several figures in the record today. But, in any case, we
know that it was substantial; and $4.5 million is certainly a
significant figure.
On May 14th, the House Appropriations Subcommittee on
Treasury, Postal Service and General Government included a
provision in the Treasury appropriations bill that would
increase the President's salary to $400,000, effective January
20, 2001. The full Committee on Appropriations is expected to
act on this recommendation shortly.
And at today's hearing we will hear from the most
distinguished assortment of witnesses who will testify about
whether the President's salary should be changed.
Before I introduce the first panel, I'll yield to the
ranking member, Mr. Turner of Texas, for an opening statement.
Mr. Turner.
[The prepared statement of Hon. Stephen Horn follows:]
[GRAPHIC] [TIFF OMITTED] T2932.001
[GRAPHIC] [TIFF OMITTED] T2932.002
Mr. Turner. Thank you, Mr. Chairman.
It's interesting to note that when Babe Ruth was asked in
the early 1930's how in the world he could ask for a higher
salary than President Hoover's, he replied, ``I had a better
year than he did.'' And of course that was true because Babe
Ruth had 46 home runs in 1929 and Hoover presided over the
crash of the stock market.
I guess that's a humorous example of problems inherent in
trying to compare private sector pay with the President's
salary. Clearly, the factors considered while negotiating
salary with baseball players differ significantly from those
considered setting the President's. But, nonetheless, it is
true that the salaries of typical chief executive officers in
this country are increasing rapidly, while the salary of our
President remains static.
People enter public service, of course, for reasons other
than financial compensation, as all of us understand. Clearly
individuals with qualifications and contacts to be elected as
President could garner extremely high salaries in the
competitive business market, yet they choose not to do so.
Presidents run for office because they believe in making a
difference and improving the lives of American citizens. In
fact, President George Washington announced that he would
forego his constitutional compensation, declaring that his
sense of duty required him to serve the country without pay.
Congress didn't allow him to do so, however, and passed a
statute setting his pay at $25,000 per year.
John Page of Virginia stated at the time that the
Constitution requires that the President shall receive
compensation, and it's our duty to provide it. The
constitutional intent is to assure the financial independence
of the President so that he would not be impoverished and not
be susceptible to corruption which might jeopardize the public
interest.
Alexander Hamilton noted in the Federalist Papers, ``Power
over a man's support is power over his will.'' The restriction
against increasing the President's salary during an
administration ensures that the Congress cannot influence the
President by appealing to his avarice. Certainly the past
concerns of our Founding Fathers remain true today, and the
question of whether the current level of salary would likely
make the President susceptible to corrupt influences should be
explored.
The prospect of the Vice President's salary overtaking that
of the President will also be discussed, and there is reason to
learn the lessons of history on this point as well. While the
Constitution said nothing about the Vice President's salary, it
did create the office; and the first Congress made it clear
that some compensation was necessary. Fisher Ames, one of the
first Members of Congress, suggested that if competent support
is not allowed for the Vice President, the choice will be
confined to opulent characters. This is an aristocratic idea
and contravenes, I think, the spirit of the Constitution.
When a House committee proposed paying the Vice President
$5,000 a year, John White of Virginia objected to the princely
sum; and Representative Page responded that he would never have
created the Office of the Vice President, but since we've got
him, he said, we must maintain him.
From these comments we can draw two additional important
conclusions. First, the salary provided to the President and
the Vice President, indeed to all high-level Federal officials,
should be adequate to maintain qualified individuals; and,
second, the salary should allow for those who are not
independently wealthy to serve in these positions.
I think these two simple principles should guide us in our
consideration of the President's compensation: the assurance
that a President's financial condition will not make him or her
susceptible to corruption, and the allowance for those who are
qualified and not independently wealthy to hold office if so
elected or appointed.
Having said that, I look forward, Mr. Chairman, to the
distinguished panel that you have gathered here before us
today.
Mr. Horn. I thank the gentleman.
And let me just note the way the procedure will follow. The
witnesses have been arranged so that the earliest, shall we
say, of the group in the Johnson administration would be the
first witness, and the last in the group will be the current
administration. I will do an introduction on each one of you
before you speak.
This is an investigating subcommittee of the full Committee
on Government Reform, and our tradition is to swear in all
witnesses. So you've taken the oath many times. And if you all
will stand we'll swear you in and then begin.
[Witnesses affirmed.]
Mr. Horn. The clerk will note that all the witnesses have
affirmed the oath.
We will begin with the first witness, from the Johnson
administration, Ambassador James R. Jones.
Now, when I introduce you, your full statement is
automatically part of the record and any attachments you want
to add to it. And then we'd like to have mostly a dialog when
you're all done. And if you would like to summarize, we would
not be offended by that.
Ambassador Jones a number of us have known for 30 years. He
was a Member of Congress. And I remember when I was in
Education he did a wonderful job to help get the budget moving
for higher education in this country. And he began his career
at the White House, which was very unusual. Usually, it's a
more senior person that begins the career there, after they're
30 or 40 or 50.
He graduated from law school and then became staff
assistant to President Lyndon Johnson. At the age of 28, he was
appointed Special Assistant and Appointment Secretary to the
President. He was the youngest person to ever hold that post.
After leaving the White House, he represented his Oklahoma
congressional district for 7 terms in the House of
Representatives. While a Member of the House, he served as
chairman of the Budget Committee and a member of the Ways and
Means Committee, the most prestigious committee in the House,
and the one that goes back the furthest in our constitutional
history.
He was then appointed Ambassador to Mexico in 1993 and
during his 4-year Ambassadorship Mexico faced serious economic
crisis with the devaluation of the peso and other economic
challenges involving implementation of the North Atlantic Fair
Trade Agreement, otherwise known as NAFTA.
The Ambassador has been honored by both the United States
and the Mexican Governments for his leadership. We welcome you,
Mr. Ambassador, to what was once your home here; and we look
forward to your testimony.
STATEMENTS OF AMBASSADOR JAMES R. JONES, COUNSEL, MANATT,
PHELPS & PHILIPS, FORMER SPECIAL ASSISTANT TO PRESIDENT
JOHNSON; GENERAL ALEXANDER HAIG, CHAIRMAN, WORLDWIDE
ASSOCIATES, FORMER CHIEF OF STAFF TO PRESIDENT NIXON; ROBERT T.
HARTMANN, FORMER COUNSEL TO PRESIDENT FORD; KENNETH DUBERSTEIN,
CHAIRMAN, THE DUBERSTEIN GROUP, FORMER CHIEF OF STAFF TO
PRESIDENT REAGAN; GOVERNOR JOHN H. SUNUNU, PRESIDENT, JHS
ASSOCIATES, FORMER CHIEF OF STAFF TO PRESIDENT BUSH; SAMUEL
SKINNER, CO-CHAIR, HOPKINS & SUTTER, FORMER CHIEF OF STAFF TO
PRESIDENT BUSH; AND THOMAS F. ``MACK'' MCLARTY III, CHAIRMAN,
MCLARTY INTERNATIONAL, FORMER CHIEF OF STAFF TO PRESIDENT
CLINTON
Mr. Jones. Thank you very much, Mr. Chairman, members of
the committee, for giving me an opportunity to testify.
In brief, let me just state that the proposal to double the
President's salary to $400,000 is something I totally support.
I will tell you that in my 14 years in Congress, this is the
first time I've had to take the oath to testify in that pay
raise proposal. But I do believe it's a great favor to do so.
Basically, there are two or three reasons why I think the
committee and the Congress should move rapidly and approve this
proposal. The last budget of the Johnson administration, 31
years ago, was the last time the President received a pay
raise. This took effect the first year of President Nixon's
administration. And it is high time after 30 years that it be
revisited for a number of reasons.
No. 1 is the symbolism of the respect we have for that
office. Having been in the private sector now for several years
since leaving the Congress, I can tell you that the President's
salary would rank at about mid-level management of an average
company in the United States; and if you raised it to $400,000,
it would be about equivalent to the CEO's salary of a mid-level
company in the United States.
Now, as was said by Mr. Turner, people don't go into public
service for the salary, for the wages, the benefits; you go in
to serve. But the fact of the matter is, in this country,
particularly with business having such a dominant part in our
lives, people do respect or not respect an office based upon
what we consider that office's worth to the person who holds
it.
Second, there are expenses incurred when you're President;
and those expenses are both the living in the White House, in
addition to what is provided to the President, but also in
maintaining your outside commitments, whether that be a
personal home or payments for education, all the things that go
with the normal family.
Presidents have those expenses, and even if most Presidents
can fully afford to pay them themselves, there ought to be some
recognition that those who cannot should be able to be
President and meet their expenses.
The final reason that I think is very important is the
effect that the President's salary has on other incomes. I have
served as a Member of Congress, as you say. As an ambassador
and as a Member of Congress virtually every year, every month.
We breathed a sigh of relief when my wife and I made it over
the line, were able to educate our kids, et cetera, without
having to borrow a lot of money, et cetera.
Before being an ambassador, I had had time in the private
sector and was able to afford the costs that most Ambassadors
pay from their personal resources to meet the regular expenses
of running an embassy and representing the United States. I
think that's clearly true of most people in public office. And
if the President's salary is not raised, as was pointed out in
your opening remarks, other incomes of high-level officials in
our Federal Government will start bumping up or exceeding the
President's salary, and there will be no opportunity for
another 4 years to raise that and to raise the other salaries.
I personally think that if you took the salaries of all
Federal officials from the President throughout, and including
Members of Congress, at the time the salaries were established
and brought them forward with nothing more than cost-of-living
adjustments, also adjusting for times of depression when you
have a depreciation, everyone in the Federal Government would
be substantially underpaid on that particular scale.
So, I think the effect on the salaries of other Federal
officials of holding the line of the President's salary is
terribly important, because we do want to attract the most
competent, the best people we can to public service. And when
these public servants have to support sometimes two homes, et
cetera, and all the expenses of living, you need to pay those
competent people what they're worth.
Mr. Horn. I thank you very much, Ambassador.
We will now introduce General Alexander M. Haig, Jr., a
very long and distinguished career that most Americans know
about. He served more than 3 decades in the U.S. Army and rose
to be a four star General. That included tours in Japan, Korea,
Europe, and Vietnam, highly decorated for all of the posts he
held in the military.
And in 1969 he was assigned to the staff of Dr. Henry
Kissinger, then the assistant to the President for national
security affairs in the Nixon administration. During that
tenure in the White House, General Haig made about 14 trips to
Southeast Asia on behalf of the President to negotiate the
Vietnam cease-fire and the return of United States prisoners of
war.
He resigned from the military service when President Nixon
appointed him White House Chief of Staff. General Haig remained
in that position until 1974 when President Ford recalled him to
active duty as Commander in Chief of the United States European
Command and later as Supreme Allied Commander in Europe.
Two years after he retired from the Army, General Haig
became the Nation's 59th Secretary of State in the Cabinet of
President Ronald Reagan.
Mr. Horn. We welcome you, General. We look forward to your
testimony.
General Haig. Thank you very much, Chairman Horn. I want to
compliment the subcommittee for holding these very timely
sessions which I think are overdue. I hope they will result in
action.
The only complaint I have is you should put me in the first
chair because I sat alongside General Douglas MacArthur during
his telecon discussions with President Harry Truman at the time
of the North Korean invasion of South Korea. So I go back
through eight Presidents, seven of whom I served fairly
closely, four at intimate range. The most learning experience I
got with President Nixon, during 18 months of Watergate.
I also served with Bob Hartmann here during the transition
of President Ford. I served President Kennedy as a member of
his Cuban Coordinating Committee, where a lot of nefarious
actions took place that they are only recently being written
about. I also served as Pentagon liaison to the Johnson
administration and knew President Johnson well and admired him
greatly.
Beyond that, as NATO Commander, President Ford and, of
course, President Carter, and I met almost monthly. So I think
I knew some of the Presidential travails. And finally, I served
as Secretary of State for President Reagan.
All of these gentlemen testifying today bear scar tissue,
but I think I have the largest load of it. And, having said
that, I heartily endorse everything Ambassador Jones has said.
I'm not going to repeat any of the points he made.
I will say that I think today the Presidency is more
unique, more challenging and more complex than it has ever been
historically; and, in that context, what I mean to say is that
Presidents are learning these complexities. They don't have the
luxury of choosing between foreign affairs and domestic affairs
in the conduct of their office. As the last two Presidents have
learned you have got to deal with both foreign affairs and
domestic affairs simultaneously, and you can't succeed in one
if you fail in the other.
So that's a reality which has added to the complication in
a new world in which globalization is the native of this world.
Second is the impact of the explosion of information
sciences on the institution of the Presidency. Today, the
President lives in a world of real time. Whether it be video or
voice, people demand answers almost instantaneously to every
national crisis that develops or any international crisis that
develops.
Needless to say this has not had what I call a
complimentary impact on the institution of the Presidency. It
means that todays President has got to proceed almost
immediately to make decisions on things that should be thought
about for weeks, if not months; and it leads to what I call
miscalculations and misjudgments by our chief executive.
Also, I think it has developed a new character to the
Office of the Presidency. It has produced the modern populist,
the fellow that has to run his office with his finger to the
wind, rather than bequided by the principles and values which
he brought with him into the job.
Now, having said all that, I can tell you, as a former
chief executive or chief operating officer of one of our
Fortune 500 multinational companies, that government pay is
very, very poor. Also today the thought of a Vice President or
Chief Justice or someone else in the government exceeding in
pay the President of the United States is just simply
unacceptable.
To give you an idea of poor pay in government service--when
I was with United Technologies Corp., left command of--5
million active and reserve troops in Europe, I received a 20-
fold pay increase in moving from four star General to Chief
Operating Officer of United Technologies Corp. Had I stayed
with that job and been successful, today I would be being paid
over $3.5 million in annual salary with hundreds of millions of
dollars in stock options, to say nothing of a retirement pay
built on about $20 million of interest-producing revenue which
is guaranteed and insured.
However, we know we can't pay Presidents in accordance with
their unique job requirements. There is no tougher job in the
world than the Presidency of the United States. He is not just
head of state, he is also head of government. So both
operations and also presentation of values and heritage are all
mingled into one job. If you fail, you fail. You are the one
that's held responsible. When Truman said the buck stops here,
he wasn't off the mark.
I don't think we can match what private sector presidents
earn. We know Presidents don't seek the job because of the
emoluments that it brings. But I do think we have to guarantee
the dignity of the individual. And that means his clothing, his
family monetary requirements, the education of his children if
he has them; and, above all, we shouldn't put in jeopardy what
assets the Presidents bring to the office.
I served one President who left $400,000 in debt having to
pay the legal fees that sometimes develop during the modern
Presidency. So I think we have got to move and move promptly.
In that sense I would strongly recommend that we go even above
the Appropriations Committee recommended salary to a level of
$500,000, which is very low compared to comparable commercial
salaries.
If this committee believes that it would be quicker and a
bipartisan consensus could be developed and it would be more
efficiently done, than $400,000 is better than nothing.
I also believe that the legislature, the Congress has got
to look at the President's retirement pay, which is also less
by a large measure than what it should be.
And, finally, I would suggest that these benefits or
allowances be reviewed in the third term of every Presidency to
be sure that pay is keeping pace with the dynamics of our
economy. That's my feeling, Mr. Chairman.
Mr. Horn. Thank you very much, General.
[The prepared statement of General Haig follows:]
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Mr. Horn. We now move to Mr. Robert T. Hartmann, highly
acclaimed reporter and writer before his 1974 appointment by
President Gerald Ford as counselor to the President.
During his tenure in the Cabinet-level position, Mr.
Hartmann participated in White House policymaking sessions,
accompanied the President on numerous campaign trips and visits
to Europe, the Far East and Soviet Union. In addition, Mr.
Hartmann oversaw the research and correspondence writing staffs
at the White House, personally drafted and edited most of
President Ford's statements and speeches.
Before joining the President's staff, Mr. Hartmann spent
more than 2 decades as a journalist for the Los Angeles Times;
and he was the Washington Bureau head here in the late 1950's
and 1960's. Before he became the Times Washington Bureau Chief,
he covered Congress and the White House, later established the
newspaper's Mediterranean and Middle East Bureau in Rome,
Italy; and throughout his career in journalism Mr. Hartmann has
received numerous honors for his reporting and writing.
We're glad to welcome you today, Mr. Hartmann.
Mr. Hartmann. Thank you, Mr. Chairman, members of the
committee.
Although President Ford's term as President was one of the
shortest in our history, I hope to approach the subject from a
somewhat broader perspective than that of the White House I
spent a great deal of time covering the Hill and working on the
Hill when he was the minority leader of the Congress of the
House.
When I arrived in Washington the year was 1954. It was sort
of a general understanding that I was going to be paid about
the same as a Member of Congress. At that time, this sum was
$2,500. President Eisenhower got $100,000. The Chief Justice,
former California Governor Earl Warren got $35,500; and Vice
President Nixon, also a Californian, was cut $500 and got
$35,000 even. I expect that annoyed him quite a bit.
I detail all this to make the point that's already been
made, that Federal salaries, in Washington particularly, depend
on the President's pay. The President's pay helps set the
benchmarks for almost everybody else in town.
A dozen years after I got here to serve as chief of the Los
Angeles Times Washington Bureau, I went to work for Gerry Ford,
who had just been elected House minority leader; he and a group
of relatively young, Republican Congressmen hoped to create a
new, more vigorous and more progressive image for their party
than had been represented by Charlie Halleck and Ev Dirksen,
who appeared on television every week to conduct ``The Ev and
Charlie Show,'' as it was called.
Now, Ford had just succeeded Halleck, and was waging an
uphill battle trying to get equal time with Dirksen, which
wasn't easy. I didn't volunteer to offer to help win that one.
But we did shift the battlefield by challenging President
Johnson himself at every opportunity. We even demanded equal
time from the networks to put on our reply or rebuttal to the
President's annual State of the Union message.
I must add that I was in no way responsible for the
public's prompt abbreviation of our constructive Republican
alternative proposals.
Now, a few thoughts about how we should pay our Presidents.
Some of them have already been uttered, but I can't revise my
script now.
First, you can never match the President's salary, to the
depth and degree of responsibility that he carries in that job.
It is a totally consuming responsibility without any equal of
which I'm aware and of a magnitude which can be appreciated
only by another President.
Second, the compensations of the office are considerable,
but money is really only a minor one of them. Power, perks,
pensions, protection and a place in history loom much larger in
most Presidents' minds.
As the minority leader in the House, Congressman Ford was
debating Vice President Hubert Humphrey before the Gridiron
Club's annual dinner, and he assured Humphrey that he had
absolutely no designs on the Vice Presidency. Nevertheless,
Ford admitted, every evening as he drove by the White House on
his way home, he heard a small voice saying, ``If you lived
here, you'd be home now.''
I expect he's still using that joke.
In 1969, after the President had remained at $100,000 for 2
decades, Congress doubled that sum to $200,000 and fixed its
own pay at $42,500. This gave me a welcome $6,500 raise as an
assistant here on the Hill, and it also raised almost everybody
else's.
Now, after 30 years, you are considering doubling this to
$400,000 because the salaries of other Federal officials not
limited by the Constitution are pushing upward on the chief
executive's.
I won't say that public servants--as we love to style
ourselves--are poorly paid or that their pensions are miserly.
As Richard Nixon was wont to say, that would not be right. But
the question before you today is not primarily about the next
President's pay; it is about everybody's pay who works for the
government. If I may paraphrase a wise old paraphrase, we have
seen the government, and it is us.
Thank you, Mr. Chairman, and members of the committee.
Mr. Horn. Thank you very much. We appreciate your comments.
[The prepared statement of Mr. Hartmann follows:]
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Mr. Horn. Our next representative is well known in
Washington. Mr. Kenneth M. Duberstein is chairman and chief
executive of the Duberstein Group, and he served as chief of
staff to President Ronald Reagan. Since then, I might say, he's
regarded as one of the most effective advocates on Capitol
Hill. So he learned a lot, and he brings a great deal of
experience to this particular panel.
Prior to assuming the post in 1987, Mr. Duberstein had
served as an advisor to the President on legislative affairs.
Although he came from the private sector, he was no stranger to
public service; and from 1972 to 1976 he held the position of
Director of Congressional Intergovernmental Affairs for the
General Services Administration, later served as Deputy Under
Secretary of Labor during the Ford administration. He was
awarded the President's Citizen Medal by President Reagan in
1989.
And as well as presiding over his Washington-based
consulting firm, he's a member of the Council on Foreign
Affairs and Foreign Relations and serves on the Board of
Governors of the American Stock Exchange and vice chairman of
the Kennedy Center for the Performing Arts, one of the great
centers of performing arts in our Nation.
Mr. Horn. We're glad to welcome you back and look forward
to your testimony, Mr. Duberstein.
Mr. Duberstein. Thank you, Chairman Horn, Congressman
Turner. It's a pleasure to be here; and it's a privilege to be
on this panel with so many distinguished colleagues, all of
whom were taller, much taller before each served as a White
House Chief of Staff.
I am pleased to testify today strongly in favor of a long-
overdue substantial salary increase to $400,000 for the next
President of the United States. This is not even a close call,
Mr. Chairman. This needs to be addressed now. It is a case of
simple equity. This is not about a President, this is about the
Presidency. This is about the compensation of the leader of the
free world, not about the salary of the chief of a not-very-
well-run small startup company or the head of a Third World
country.
This is about our chief executive officer, not the retired
chairman of the board who has been put out to pasture. This is
about the stature and prestige of the leader of the government
of the United States and the person charged with truly awesome
responsibilities, here at home and throughout the world.
To put this in some perspective, the salary of the
President of the United States has not been increased since
those long-ago days when the Dow Jones average was below
$1,000, Neil Armstrong had not yet walked on the moon, the
``Amazin'' Mets hadn't won their first World Series, Strom
Thurmond was a mere child of 66, Charles DeGaulle was President
of France, and Golda Meir was the Prime Minister of Israel.
It was the age of Aquarius, before Woodstock, before the
Concorde's maiden flight, and construction of Walt Disney World
in Orlando, FL. It was a much easier time before C-SPAN, cable
TV, the Internet, and 24 continuous news cycles.
No one should run for the Presidency for the money. But it
deserves remuneration well beyond public housing, public
transportation, and maid service.
Keeping up with the inflation alone since 1969 should
result in a sizable pay increase. I support strongly, Mr.
Chairman, the proposal for a $400,000 salary for the President.
I am concerned, as other members of the panel have stated
as well, with the pay compression for senior executive service
personnel as well as for the Vice President, the Chief Justice,
and others.
I hope this committee and the Congress will move
expeditiously to increase the salary of the Presidency
beginning in January 2001. Thank you very much.
Mr. Horn. Thank you. Appreciate your testimony.
[The prepared statement of Mr. Duberstein follows:]
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Mr. Horn. Our next speaker is probably fairly widely known
across the country. That's Governor John H. Sununu, former
Governor of New Hampshire. He served as Chief of Staff to
President George Bush from 1989 to 1991. In his high-level
advisory position, he oversaw the daily operations of the White
House and its staff. He also served as Counselor to the
President, remains a member of the Board of Trustees for the
George Bush Presidential Library Foundation.
Before joining the President's staff, Governor Sununu
served three consecutive terms as New Hampshire's 93rd
Governor. He gained regional and national recognition as
chairman of the Coalition of Northeastern Governors, chairman
of the Republican Governors Association, and chairman of the
National Governors Association.
From 1968 until 1973, the Governor, who holds a doctorate
degree in mechanical engineering from probably our leading
institution of science and engineering, the Massachusetts
Institute of Technology, served as Associate Dean of the
College of Engineering at Tufts and Associate Professor of
Mechanical Engineering. So he's had experience in the academic
world which some would say is tougher than the political world
because they never forget.
But he took the easy route. He elected himself three times
as Governor of New Hampshire; and he follows in a great
tradition of one Sherman Adams, who was also a great Governor
of New Hampshire and Chief of Staff to President Eisenhower.
Welcome, Governor Sununu.
Mr. Sununu. Thank you very much Chairman Horn, Mr. Turner.
I, too, appreciate this opportunity to talk about an issue that
I do believe is a very significant one. I have no disagreement
with any of the comments made by my colleagues on the panel. I
just want to emphasize a couple of points and then make one
what I hope is an additional point for your consideration.
Mr. Chairman, the $4.5 million that the $25,000 salary that
George Washington received in 1789 represents merely a 2.5
percent inflation rate on an annual basis, and as we look
around at historic inflation rates we realize that we are
patting ourselves on the back when we keep it that low. So it
is an underestimate of what that might have been scaled up to
if it had continued to be scaled in a fair way.
I think it's important to recognize, though, that the issue
before you, if we look at it in economic terms, we would come
with these huge salaries. But you are sensitive, as I think all
of us here on the panel have to be sensitive, to the fact that
we are talking about a political issue; and, therefore, I
believe that you will be forced and, in fact, will have to
examine the level of this salary in the context of what is
politically acceptable to the public of the United States at
this time.
And, therefore, in the paper I presented as my prepared
remarks, I had a number of--which was selected before you
focused on the $400,000. I suggested a number of $500,000. But
I can wholeheartedly endorse the $400,000 that you are
examining as a specific increase.
But the second point I would like to make is that I do
suggest that one of the problems--we have reached this position
of a lack of equity is that the review in the change of the
salary of the President of the United States has incurred, in
fact, too infrequently; and, therefore, I would recommend to
the committee that they seek a way to establish in law a
statutory review period which would require the Congress not to
raise the salary on a periodic basis but to review the salary
for the possibility of raising it on a periodic basis. And I
would suggest that a statutory obligation of an 8- or 12-year
period be established for that review.
I would suggest that with the obligation of review on that
periodic basis and what we would hope would be a series of
enlightened Congresses that would follow that over a period of
time a salary that is politically acceptable would begin to
approach one that is economically appropriate for this, which
is arguably the position of responsibility which deserves
probably the highest salary of anyone in the world.
It is, I think, that mechanism which I present for your
consideration which could begin to alleviate the historic
disparity that seems to exist in the salary of the President
and comparable levels of responsibility around the world.
Thank you very much, Mr. Chairman.
Mr. Horn. Thank you.
[The prepared statement of Mr. Sununu follows:]
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Mr. Horn. Our next panelist is Mr. Samuel K. Skinner, who
served President George Bush both as the President's Chief of
Staff and the Secretary of Transportation. As a Senior Aide to
the President, Mr. Skinner coordinated the President's
activities and managed the White House staff.
During his service in the President's Cabinet, Mr. Skinner
was responsible for overseeing the Department of
Transportation's $30 billion budget and 105,000 employees. He's
been credited with numerous successes in transportation policy,
including the development of the President's national
transportation policy and passage of the landmark aviation and
surface transportation legislation.
Mr. Skinner also developed the administration's open skies
policy, which liberalized the Nation's international aviation
policy and significantly increased the number of international
flights to and from the United States.
We welcome you, Mr. Skinner; and we look forward to your
testimony.
Mr. Skinner. Thank you, Mr. Chairman, Congressman Turner.
I'm delighted to be here as one of the latest to serve as Chief
of Staff to the President. I also think I can bring a little
different perspective to this discussion because, while I agree
with what everybody has said, I have had the opportunity to be
in and out of government on several occasions.
In 1968, as a salesman at IBM making $50,000 a year I left
to join public service for $7,500 a year with a wife and three
children. Some would say that was foolish, but it was clearly
one of the best things I ever did in my life.
I think any comparison of corporate salaries or private
sector income to the salary of the President of the United
States is basically irrelevant. You don't do it for the money.
The benefits and the rewards that you get go well beyond that.
While there is great disparities, I think there will continue
to be disparities.
I do, however, think that the standard that we have to set
deals with basically two factors. No. 1, we should not have a
salary that is so low that people who are serving in government
who have not had the opportunity to go in and out of government
will not be able to serve as President or offer themselves as a
candidate for President because they have no money and it is
impossible to meet the requirements absent compromising one's
integrity or going without.
I have a 3 year old and a 5 year old. I can afford to
educate those children because my wife and I both work. Most
people in government today, many of them in this room and
others come from a family where both couples work. It's very
hard for the spouse of a President to work. So if you take
those two incomes together, we may actually require a family to
take a cut from current salaries and compensation to serve as
President if they don't have independent income.
A President needs to educate his children or her children.
To put money away for education today is no small challenge
unless you have independent wealth.
In Illinois as I left today, the schools in Illinois--and
President Horn would be familiar with this--they all announced
they were raising their tuition in the State by about 5
percent, and one raised the tuition 15 percent. Tuition is
increasing at a rate greater than the rate of inflation, and
our President should have the right and the ability to at least
send his children to college with some assistance as well.
And, finally, we should avoid the appearance of
impropriety. And the idea that a President should have to
accept gratuities or put himself or herself in a situation
where they have to take dresses or gifts or suits or ties or
free tuition or anything like that to make ends meet is not
what we want the President to find themselves in that
situation. He must meet--he or she must meet basic individual
needs, personal living expenses, and they're greater than
normal Americans.
And, No. 2, he should be able or she should be able to
conduct themselves in their office without worrying every
moment about how they're going to meet basic financial needs.
And, finally, obviously when you raise the President's
salary every 30 years, unless we're going to change the
mechanism as Governor Sununu suggested, which I think is worthy
of serious consideration, you have got to bump it up at a level
sufficient enough so what we don't find ourselves in the same
situation without any kind of remedy 5 years from now.
What that amount is, is somewhat controversial. I have been
conducting my own independent poll the last several days. And
while I don't live my life by polls, I asked--I read my remarks
to my wife, and I suggested $500,000 to my wife, and she
reminded me that that was a substantial amount of money, that a
lot of other people weren't making that money and that, you
know, that it might not be acceptable, politically, or
practical.
I then had the opportunity to fly last week--this weekend
with a distinguished public servant who will remain anonymous
because he may run for elected office or reelection again, but
he suggested the number of $500,000.
And then, of course, I flew out this morning and conducted
the final leg of the poll, which was a management consultant
who serves both in government and private sector; and,
ironically, he came up with the number of $500,000 which
Governor Sununu had mentioned in his earlier remarks.
The point is, it is a very politically sensitive number.
But if you're going to do it, let's do it in a way that
accomplishes what we want to accomplish; and that is allow the
President to serve and others to run for the Presidency and
meet their basic minimal expenses of a personal nature as well
as their family educational expenses. Lift it high enough so
that we can really avoid the wage compression that exists for
other government officials who are similarly situated. And, No.
3, put it at a level that will be acceptable to the American
people. I believe they understand the need for a significant
change.
And I applaud this committee for the political strength it
takes to even have this hearing, let alone take a position on
what can be a very controversial issue; and I welcome your
questions.
Mr. Horn. Thank you very much for those thoughtful
comments.
[The prepared statement of Mr. Skinner follows:]
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Mr. Horn. Our last panelist is Thomas F. McLarty III. He is
well known on Capitol Hill and highly respected by members in
both parties in his initial job in the Clinton administration
as Chief of Staff and then Counselor to the President and then
Special Envoy for the Americas.
After joining the White House as President Clinton's Chief
of Staff, Mr. McLarty helped enact the 1993 deficit reduction
package, the North Atlantic Fair Trade Agreement [NAFTA], Free
Trade Agreement, and the family and medical leave law, which
didn't quite get eliminated, I mean, or passed.
In 1994, Mr. McLarty organized the Summit of the Americas
in Miami. He played a critical role in structuring the 1995
Mexican peso stabilization program; and in his role as Special
Envoy for the Americas Mr. McLarty made more than 50 trips to
the region, planned U.S. participation in the 1998 Summit of
the Americas in Santiago. In addition, he's participated in
several G-7 summits and traveled to the Persian Gulf on the
President's behalf to build financial support for the Bosnian
peace process.
Before his White House tenure, Mr. McLarty served in the
Arkansas State Legislature at the age of 23, which is probably
the all-time record, and as chairman of the Arkansas State
Democratic party and also the chairman of one of the major
utilities in Arkansas.
Mr. Horn. We welcome you, Mr. McLarty, and look forward to
your testimony.
Mr. McLarty. Mr. Chairman, thank you very much, Congressman
Turner. It is certainly a privilege for me to appear before you
today for this very timely, very important hearing; and I
certainly appreciate the opportunity to do so, particularly
with my distinguished colleagues from previous administrations.
It is an honor to serve one's country; and we do not and
should not expect, any of us, to profit or become rich from
government service. But sometimes I wonder if we're having the
opposite effect.
Secretary Bob Rubin used to joke that the only way to leave
Washington with a small fortune is to arrive with a large one.
And while I'm not worried about Mr. Rubin's personal finances,
his humor I think has a ring of truth to it.
Mr. Chairman, as you noted, I am a product of the private
sector, both from a third generation family business endeavor
which we are still active in and having the privilege to serve
as chairman and chief executive of a publicly traded Fortune
500 natural gas company before I came to Washington.
I am truly grateful for the opportunity to serve the people
of our country. But I think it's fair to say the opportunity
costs are high and they are increasing, and I am worried that
we are attracting fewer citizens who have proven successful
careers in private life to serve our country.
This committee has documented a number of concerns about
the effect of a fixed Presidential salary. Lloyd Cutler, who
served with distinction both in the Clinton administration and
the Carter administration, led a commission 10 years ago that
recommended the President's salary be raised to $350,000.
Congressman Jim Kolbe's committee I believe has suggested an
increase by the year 2001 to $400,000, a figure that we have
discussed today.
While I was privileged to serve President Bush on two
Presidential commissions and, of course, served President
Clinton in the White House, my primary concern is not about the
personal income of them or any future President, although I
think that's important. My colleagues have pointed out the
reasons very eloquently and thoughtfully. But I am particularly
concerned with the fixed Presidential salary compressing the
wages for others who serve in the public sector; and that goes
from the civil service to the military, General Haig, and
certainly to political appointees.
I think all of us would agree very strongly that the best
government is one that attracts talented people from all walks
of life. You certainly should not have to be independently
wealthy to serve in government. But we have raised the cost of
serving in government rather dramatically.
Detailed filings that we all have to make for appointed
positions can literally cost thousands upon thousands of
dollars. You have to sever existing business relations, which
others have spoken of; and I think that's proper. But I think
these are very real costs, including the cost of relocation
that should be included when we evaluate government service.
In short, whether it be career civil servants, our men and
women in uniform or the people who serve in appointed offices,
all of these people are real American families with mortgages
and tuitions and all of the other challenges of modern life;
and the bottom line is that private sector salaries are
increasing and government salaries are not; and we should
really not put people in the position of making a difficult
choice between their family and their country.
Now, Congressman Turner has already suggested that it was
big news when Babe Ruth earned more than the President, and I'm
not suggesting that we should pay Presidents as much as major
league athletes or even CEOs. That is not the real reason one
seeks public service. But I do think that, as has been pointed
out, that the President's salary should reflect the importance
the American people place on this job.
As you have noted, Mr. Chairman, the President's salary has
been fixed since the Johnson administration. There are a number
of calculations we can make, including the George Washington
calculation. But if we adjust it for the gross domestic product
from 1969, we would have a salary of about $1.7 million. If we
did that on a per capita basis, it would be about $1.3 million.
A more modest suggestion is the President's salary should
increase along with average hourly wages. Other measures might
reflect inflation of the size of the economy, but no measure
perhaps reflects the importance of the connection of the
President to American families.
Since 1969, the last time the President's salary was
changed, average hourly wages have increased 425 percent; and
that would equate to about $850,000. Now, again, I'm not wedded
to any one number. I fully support the $400,000 figure that has
been talked about in the appropriation bill, and perhaps a
larger number is justified, and I think it is an appropriate
one for the challenge and responsibility and the demands that
we make on public people that serve in public life today.
Mr. Chairman, common sense I think tells us that
Presidential salaries should not be fixed for 30 years.
Fairness suggests that we end the pay compression for other
public servants, and the economic reality is that government
competes with the private sector for talent and experience, and
we should recognize that.
I commend you and this committee for holding this hearing
on a very important matter, and I hope Congress will move
forward to address this issue in a timely fashion. Thank you.
Mr. Horn. Well, thank you for your very helpful remarks.
[The prepared statement of Mr. McLarty follows:]
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Mr. Horn. Let me just go down and have you all hear each
colleague. I will like to start with Ambassador Jones and say
did anybody convince you here that you ought to move from
$400,000 to $500,000? That's one part of the question. The
other is Governor Sununu's point of we should have a system
that reviews this on an automatic basis of either every two
terms or 10 years or 15 years, whatever.
In the case of the Comptroller General of the United
States, for example, he gets one salary, and that salary
follows him into retirement--he has a 15-year term, et cetera,
and we haven't gotten into the retirement yet, but we will.
Let's start with you, Ambassador.
Mr. Jones. Well, on both of those points, I will opt for a
higher level of salary increase to at least $500,000; but
recognizing as the others have, the political difficulty,
$400,000 would be the minimum. As far as an annual review, I
think Governor Sununu makes a very good recommendation and at
least as we review the census every 10 years, we ought to
review Presidential salaries, and the impact of that salary on
the rest of government, at least every 10 years, if not
earlier.
Mr. Horn. General, what's your feeling?
General Haig. I recommend the third year of every term of
every President you should take a look at this subject. I would
hope that the committee would look at the $500,000 level. But,
again, there has to be an assessment of the possible and what
can be most efficiently done in a bipartisan way.
Mr. Horn. Mr. Hartmann.
Mr. Hartmann. I can't think of anything more.
Mr. Horn. OK. Do you agree with the $500,000?
Mr. Hartmann. I agree with it.
Mr. Horn. And the review that Governor Sununu is talking
about?
Mr. Hartmann. Yes.
Mr. Horn. OK. Mr. Duberstein.
Mr. Duberstein. I would support $500,000, but my vote isn't
the one that is important; I think you have to look both to the
American people and your colleagues in the Congress of whether
doubling to $400,000 is more politically feasible than
$500,000.
On the second issue on John's suggested review, the
quadrennial commission is not charged with responsibility for a
President's salary; but certainly looking forward every 4
years, I think, makes the ultimate sense as Al Haig said in the
third year of a President, looking forward to the next
Presidential term. So I would strongly support a regular review
of Presidential salary.
Mr. Horn. Governor.
Mr. Sununu. I came in to propose $500,000. I yielded to the
$400,000 that you have, but if you twist my arm, I will go back
to the $500,000. I don't have any argument with utilizing an
existing mechanism like the quadrennial commission or
whatever--I picked 8 years or 12 years as a period--because
thinking in terms of either two or three Presidential terms.
But whatever the period is, I think we can go a long way to
regularizing the process and that's the key to it.
Mr. Horn. OK. Mr. Skinner, you started all of this with
that vast universe of polling that you told us about.
Mr. Skinner. No, you know where I stand. I would say that
if you're going to set a mechanism in place, which I agree
should be set, we ought to do it right. The idea of putting
this on some bill that, you know, is a trailer of some sort,
rather than, you know, really giving some thought to the
mechanism so that it will go through a regular review, I think
is most appropriate so we don't find ourselves in the situation
that where every 30 years and it's subject to all of these
others.
We've done that with Federal pay a number of years ago. It
works. There has been a pay compression problem because of some
other issues. But clearly--and I think that mechanism ought to
be in place and it ought to be adhered to.
I would also add I have a number of friends that sit on the
Federal judiciary, served with me in the U.S. Attorney's Office
and other places, and this compression problem has also created
a very major problem there where we're just not--we're
attracting candidates, but we're not attracting really
qualified candidates because of that.
And the compression would help there, too, but what has
happened is sometimes we don't go through it. We set the
mechanism in place and for one reason or another, because it's
tied to congressional salaries, we don't go through it, and I
don't think anything we set should be tied to congressional
salaries. That's an issue that Congress has got to work through
themselves.
But all of these other people should not be tied to those
salaries, because I think that creates the same compression
problem you have otherwise.
Mr. Horn. Any change in your position, Mr. McLarty?
Mr. McLarty. No, there's not. I think I can certainly
support $500,000. It's got to be tempered, obviously, with
political judgment. I think you can make a case for greater
than that. I strongly support some type of review that is
thoughtful and appropriate. I think that would be a great deal
of help in this situation.
Mr. Horn. I now yield to the ranking member on the
committee, Mr. Turner of Texas, for questioning.
Mr. Turner. Thank you, Mr. Chairman.
Mr. McLarty, I think you were the last to mention the
problem of compression of Federal salaries. It's interesting to
know that the Congress legislated a freeze on congressional
salaries which also applied to the top Federal office, the top
Federal positions as well, not only in 1994, 1995, 1996, 1997.
There was a pay increase in 1998 and in 1999.
And, in fact, if Congress had not legislated that freeze
and had allowed the automatic adjustment, the cost-of-living
adjustment to take place, if my math is correct, the Vice
President would be making the same as the President is today.
So it is a problem that we should address.
Obviously, the Congress has been part of the problem in
trying to deal with it, and I certainly think it reflects the
political charge of nature of the issue to note that for all of
those years that I mentioned the Congress denied itself and the
other top level Federal officials a pay raise.
And I guess the question I would want to ask each of you is
what's the best way to explain this problem to the American
people? We're going to hear on one of our next panels testimony
that shares some results from a Pew Research Center poll which
basically says that the people of this country understand the
President's entitled to a pay raise, but the majority of them
think it's somewhere in the range of $10,000 to $20,000. And in
fact, there appear to be virtually no support for a doubling of
the President's salary.
So to help us through this issue, which obviously is
fraught with political minefields, would any of you like to
offer up a suggestion as to how to best make the case for this
kind of change?
Ambassador, would you like to start helping me on that one?
Mr. Jones. It was very difficult. There's never a good time
for a congressional pay raise. There's never a good time for a
government pay raise in general, politically speaking. And it's
very difficult to convince the American people that one is
deserved. Part of that, I think, Congress brings on itself by
raving and ranting against a pay raise and not giving the kind
of respect that this institution of Congress deserves.
I think that carries over to the American people and the
respect they have for the institution. It was attempted a few
years ago back to make an independent method of assessing what
congressional salaries and other salaries should be, so that
they could occur automatically.
The problem is the appropriations process denies that. It
seems to me some sort of independent mechanism that would give
an independent review and an assessment of Federal salaries is
a better approach, something that would equate to the
independence of our Federal judiciary.
But it's going to have to be something that's proactive.
It's going to have to be something that you can
constitutionally mandate the appropriations process to fulfill.
Whether it's in some form of a trust fund, I'm not sure,
but I think that you're never going to get around the political
obstacles as long as Congress goes through the regular annual
debate on a pay raise. So some sort of independent mechanism is
the way that I think you can go about doing it.
Mr. Turner. Mr. Haig, do you have a suggestion for us?
General Haig. I just suggest to you that we've had every
member of this panel recommend $500,000 or $400,000. I don't
think it's the job of the Congress any more than it is the job
of the President to be dictated to by polls. I think the
American people are ready to take this, if it's given to them,
with the factual data that was presented here at this hearing.
And if it's done and the Congress moves courageously. I
think it will get through.
Mr. Turner. Thank you. Mr. Hartmann, do you have a
suggestion?
Mr. Hartmann. I have nothing to add.
Mr. Turner. Mr. Duberstein.
Mr. Duberstein. I want to echo what General Haig said. I
think this is not a business of polling; this is a question of
equity. I think the American people will, in fact, support a
significant pay raise for the President of the United States. I
don't think the selling job has been done, as far as there
being no pay raise since 1969. That's why I used the examples
that I used.
I think people will understand $10,000 or $20,000, but only
in the sense of a year or two. If you talk about 30 years, I
think people will understand the fundamental change in the
Office of the Presidency with C-SPAN, with cable television,
with the 24-hour news site, et cetera. And I think it is not a
losing issue.
Mr. Turner. Governor.
Mr. Sununu. Mr. Turner, I think it is an issue that the
public can be educated on. But going back to your poll, I
suggest, like all polls, there is a problem in the question not
in the answer. And the question was probably the President of
the United States makes $200,000. What do you think a good pay
raise for the President would be? $20,000 is an absolutely
appropriate answer to that question.
But if the question was not even how much should we pay
this President of the United States, but how much should we pay
the next President of the United States, what is a fair salary
for the next President of the United States? I suggest to you
the poll would probably come in with numbers around $1 million.
And so with all due respect, there are polls and there are
polls and there are polls. $500,000 I think is a good
compromise.
I think that's an educable number, and I commend the
committee for having the hearings. And I think you will have no
trouble selling that point.
Mr. Turner. Thank you. Mr. Skinner.
Mr. Skinner. Well, every once in a while in government
you've got to follow the slogan I think Nike has, ``Just Do
It.'' And I think this is one of those issues that, if we sit
around waiting for all of the input and everybody else and full
education, you will miss this opportunity. I mean, this is
really the first realistic time in 30 years that Congress has
addressed this. And I think you've got the ball moving.
You've got, certainly, a record; and I think if Governor
Sununu's point--if you also said the President of the United
States, the Office of President of the United States salary has
not been raised for 30 years, how much do you think the next
President should make if we're not going to raise it for
another 30 years? I think you might get a far different answer
than $20,000.
Mr. Turner. Thank you. Mr. McLarty.
Mr. McLarty. I would agree with the comments that have been
made. I think it should be approached in a very direct,
straightforward manner. I don't think most people realize the
President's pay has not been raised for over 30 years, and I
think that's the first point. And I think common sense and
equity will be a strong point to make. It certainly should be
done in a bipartisan manner. I think that will go a long way in
terms of how people react to the proposal.
Mr. Turner. Mr. McLarty, I know that most Americans and to
all of us $200,000 is a lot of money. Most people don't make
that kind of money. But one of the issues I raised in my
opening remarks was my belief that the President's salary
should be sufficient so that he would not be susceptible to
corruption.
And you've been there most recently of this panel. It seems
our current President has had a lot of expenses come his way
for various reasons. He's had to raise money privately to cover
legal costs.
Could you describe for us just from your own personal
experience the kind of pressure that exists in the White House
today with regard to finances for a President and the First
Lady or First Spouse?
Mr. McLarty. I don't think some of the pressures are
singular, Mr. Turner, for this administration. I think it's
probably been building over the last several terms of the
Presidency. I think, clearly, disclosure is one of the areas
that I noted, and I think certainly from an overview or a legal
side that the expenses have grown over the years. But I think
we have seen that growing over the years.
It's a very real number, but I think it's a very large
number. But I think it also, of course, reflects not just the
President but those that serve in government as well. And that
was part of the point I was trying to make. I don't think this
particular measure should have as its focus the legal bills or
anything of that aspect.
I think that the cost of public service, of serving in
public service, should be the focus of that. There's no
question that the point you raise is a valid one. It is
expensive, not only in terms of real costs, in many cases
moving to Washington.
It is certainly expensive in terms of opportunity costs.
And I think the last thing we want, whether it be at the
Presidential level or anywhere in the government, is to have
any kind of setting for less than fully appropriate conduct.
And I think in the President's case--you have also seen
with President Carter--there is great ability to do great
public works after tenure as President. So I think that should
go into play as well. And there is other Presidents as well,
not just singling out President Carter.
But there is no question there are stresses. I think Mr.
Duberstein and others have pointed out many of the reasons for
that, and they in all likelihood will continue to grow, whether
we have a Democrat or a Republican in the White House.
Mr. Turner. Thank you. Thank you, Mr. Chairman.
Mr. Horn. I now yield time to the gentleman from
Pennsylvania, Mr. Kanjorski, for the questioning of witnesses.
Mr. Kanjorski. Thank you very much. Does anyone on the
panel know what the President's salary would be today if we
took all the inflation over the last 30 years into
consideration? Have they done the math on any of that?
Mr. Horn. We will have in the next panel.
Mr. Skinner. In the last 30 years, sir?
Mr. Kanjorski. I am just wondering when we think of the
1970's when we had double-digit inflation, where we would be
today if every year we increased the President.
Mr. Sununu. A little under a million.
Mr. Kanjorski. A little under a million.
Do any of the presidents of our major universities, would
it be reasonable to say that they are certainly in the $400,000
or $500,000 range?
Mr. Sununu. And some higher, I believe.
Mr. Kanjorski. I know one of our universities in
Pennsylvania is so high the legislature is not allowed to know
it.
Mr. Skinner. Good pay for a coach is a million a year. It
all packages a year. Some coaches in major institutions have a
total compensation package of $1 million or $1.2 million.
Mr. Kanjorski. It seems that those who criticize this the
most appear on the media on a regular basis. It seems to me
that we in Congress should think about making sure that if they
appear on a licensed television or radio station, the
commentators' salaries should be disclosed.
When you have a newscaster being paid $7, $10, $12 million
a year, it seems hypocritical for him to start the ball rolling
against these unusual high political salaries. Most people are
completely unaware of the fact that these media celebrities are
paid these extraordinary amounts of money.
I do not know who made the observation--I think my good
friend Mr. Jones how we tend to beat ourselves to death up
here. It will be a pleasure to know sometimes we get down there
and it is only one or two Members of Congress.
Invariably, someone is running for Senate or somebody is
running for Governor and they see a political opportunity and
get out there and criticize public salaries, whether they be
judges or Congress or the President.
WHile it will happen again, I tend to agree with the panel,
Mr. Chairman. We just have to bite this bullet, and we should
not play around with the fact. Quite frankly, I think we ought
to pay the President of the United States $1 million a year.
If anyone is not worth $1 million a year to lead this
country, he or she probably should not be President of the
United States. As we all know, it is a 25-year commitment to
rise to the level to aspire to that office. It is not just a
convention meeting. As we all know--those conventions do not
meet that way.
It is a long protracted loss of income in private life that
people would have. On the judiciary level, I have been a little
annoyed with the idea of my friends in the legal profession who
entertain seven-figure salaries on a regular basis, and they
are very difficult to persuade to sit on the bench, whether it
be a district court or an appeals court or a supreme court for
that matter.
It seems now almost the only people that will decide to sit
on a supreme court already have amassed sufficient money, that
they are relevantly independent, several millions of dollars in
net assets. That's unfortunate because some people will not
have that opportunity and therefore have to make terrible
choices.
Talking of this President and being familiar with tuitions,
I am sure Stanford University is not cheap. To my knowledge,
elected officials do not get the opportunity to have any
scholarships, et cetera, so they pay the full tuition. That
amounts to probably $160,000 after-tax income, just to educate
one child.
If a President has three or four children, as I think the
next President may have, not to state who that may be, that
could be a very difficult expenditure.
I am also interested in the President's staff. Assume we
pay $1 million a year to the President or half a million
dollars to the President. How are we going to attract people of
your caliber to leave private life in seven-figure incomes and
come into administrations and serve for 4, 8 years and then
sometimes have to spend $1 million to defend yourselves with
the litigation now that is almost endemic to the system?
There is one other thing I would like the panel to answer.
Have you given any thought about giving an exemption or a
moratorium to a civil lawsuit to the President of the United
States while he serves in office so these extraordinary
expenses are not required to be incurred when, quite frankly, I
would say anybody that stands in a rope line to get to shake
the hand of the President could sue the President for assault
and battery if they were willing to go through that process.
It would necessitate hundreds of thousands, if not
millions, of dollars in legal expenses to go through the legal
process at this point. Address just what type of insulation we
should give to the Office of the President and these inordinate
expenses that are a new political phenomena in our society?
Let's start with Al and move down the panel.
Mr. Jones. With regard to your last recommendation, yes, I
think Congress should give some consideration to an appropriate
constitutionally proper exemption, I mean, deferment of civil
suits against a President.
Obviously, Congress will have to do it if it's going to be
done, because the Supreme Court has ruled on this question. And
so I think that's something that Congress should consider.
With regard to attracting people to other levels at the
White House, et cetera, I think the salary is important, and it
should go up somewhat. But I think you're going to have to
change the attitudes about public service and the people who
come to public service and their motivations. My experience is
that people are truly properly motivated to serve the public
when they leave private sector and come into government
service.
But when you fill out the forms and when you answer all of
the questions, the assumption is that somehow you're going to
try to cheat, lie, and steal; and in order to prevent you from
doing that, you answer a number of questions that leaves you
open to tremendous legal liability if politically motivated
suits are desired.
And then second, you are required in many instances to
divest of whatever you have accumulated for yourself and your
family, as opposed to a total blind trust or something else.
So I think the presumption that many people who would come
into public service and would be asked by a President is that
somehow they think I'm a crook and just going to try to cheat.
I think that presumption needs to be changed, because my
experience is just the opposite is true.
Mr. Kanjorski. General.
General Haig. I would like to add also the observation I
think I'm the only one at this table who actually ran for
President, or at least tried to run. It probably cost me $2
million of my own personal funds to do that, despite the money
that was raised in the campaign. I got into the legal disputes
with the Federal Election Commission. If you really wish to
look at something which makes lawyers rich for little, that
Commission is a very, very good thing to look at.
But having said that, I know there are candidates running
this year who are willing to give $20, $25 million of their own
personal money for the opportunity, the honor, and the
challenge of leading this land.
I don't think the money side of it is nearly as important
as ensuring that the incumbent can live in dignity, educate his
children, et cetera. As you quite rightly pointed out, we most
recognize that these are very dynamic amounts that must be
assessed regularly so that we assure that the incumbent is paid
in a way that he can enter that office and not draw down on the
assets he brought with him.
That gets right back to what you said, Mr. Turner, that, by
God, it's not a rich man's club. It's got to be an office open
to every individual in this land. So I just don't want to get
too astronomical because I'm afraid if $1 million went up there
you would get the regurgitation that we're talking about,
although it is justified.
Mr. Hartmann. Well, I would make the observation that
government----
Mr. Horn. Do you want to get the microphone a little
closer? Thank you.
Mr. Hartmann. I would make the observation that it seems to
me that right now we're in a period of our history in which
government service is at a rather low ebb in public opinion. I
won't say that government service is necessarily to blame for
that, but I do think that when you start waving around half a
million dollars or $1 million in the face of ordinary people,
they aren't going to like it.
I mean we've made very persuasive arguments here for why it
is necessary in the case of government people and particularly
at the top level of government people. But I don't think the
public is going to buy it, not in its present mood. If you want
to get an Eisenhower in here to propose it, you might succeed.
I don't think you're going to succeed right now.
Mr. Horn. Mr. Duberstein.
Mr. Duberstein. Congressman Kanjorski, I don't think salary
is the issue. Government service shouldn't be a punishment;
government service should be the highest calling. The idea of
attracting people who have to run the maze of a confirmation
process in the other body deters so many now. I'm not talking
about the elected officials; I'm talking about those of us who
have been appointed to either confirmable jobs or
nonconfirmable ones.
The price you pay, your family pays, is astronomical; but
it's worth it if you can make a difference. If the salary had
been $10,000 higher when President Reagan asked me to be his
chief of staff, it wouldn't have made any difference. It's the
opportunity to make a difference to serve. That's what it has
to be all about.
Mr. Sununu. I think Ken makes a very important point. When
I had to go out and solicit potential Members of the Cabinet
for President Bush, the issue was never salary. The issue was
abuse in the public domain; and, therefore, that is the biggest
deterrent to participation in government by good people.
I don't mean to suggest that salary is not any factor at
all. I remember my news conference in May 1988 when I announced
I wasn't going to run for a fourth term and the press asked me
how come, and my answer was when you send $20,000 a year to MIT
and $20,000 a year to Stanford and $20,000 a year to the IRS,
it doesn't leave much from a $60,000-a-year salary.
So there are times in which the salary issue is an
important one, but in terms of what we're addressing at the
Cabinet level for the President, I don't think it is the issue.
Mr. Kanjorski. Mr. Skinner.
Mr. Skinner. Well, I have done it twice. The first time I
took a 60, 80 percent pay cut, and the last time about the
same. But every time I did it, I knew I wasn't going to do it
for life. I knew I wasn't going to be excluded from having an
opportunity to go back to the private sector to make up for the
costs, as well as maybe to even, frankly, enhance one's
position.
And so I think in recruiting people at the very top for a
relatively short period of time, it's not a problem. I do,
however, agree with your comments with the judiciary; and as
the only, I guess, practicing lawyer, at least at the table
here today now, I know; and having been a U.S. attorney and
been recruited for that job, it wasn't. But I, again, knew I
was going to go back to the private sector.
When we recruit judges, we recruit for life or good
behavior; and only three, I think, have been removed in the
last 30 years. We are recruiting good judges who are good
lawyers. I think it is very difficult, except for the Supreme
Court, to recruit great lawyers with great experience for the
judiciary.
And I think it is very difficult to keep great judges on
the judiciary for an extended period of time because of the
opportunity that exists or the impossibility to educate,
because we're recruiting them at a time when they have all of
these expenses building up.
And as we recruit younger candidates to run for the
Presidency, they have educational expenses that some of the
others don't. So I think as all of this plays a role, we've got
to give them the ability at least to minimally meet the
expenses that Governor Sununu and others talked about.
Mr. McLarty. I believe we have two or three issues related
here: one is the Presidential pay, which I think really just
goes to the appropriateness and dignity of the office which
we've all spoken to.
I think, second, it is clearly more difficult to recruit
people of standing, of accomplishment, from the private sector,
whether they be from industry or academia or wherever to serve
than it was 5, 10 years ago. I think that probably regrettably
will continue.
Perhaps there's some way we could at least evaluate some of
the findings required, but I think all of us are for
transparency and openness and none of us would--we would want
to be very careful of how we did that. I do think the salary
level makes a difference, however, in some of the civil
servants and some of the younger people in government, not so
much recruited at a Cabinet level, but in a working level.
I think that does make a difference, and I've seen that
time and time again where very capable, bright young people
come into government and just really determine they cannot stay
because of the financial requirements or burdens of the
responsibility. And I think in that case the Presidential
salary does drive that equation to some extent.
Mr. Horn. I thank the gentleman. Let me followup on some of
this. The compression problem without question does have a real
effect on the ability and capacity of an administration to
staff the executive branch, particularly, with the political
appointees. And I certainly remember that under President
Eisenhower when the Secretary of Labor asked me, as his
Assistant, to go out and check them out for solicitor.
There was a year and a half to go into the administration,
and you face a real problem trying to recruit in the last year
and a half of any administration, and you also face the salary
problem.
I think the way your heads nod, you all agree that this is
a problem we have to deal with here, if we're going to get
people for the last half of the administration. I think the
figures used to be that Cabinet officers sort of stick it out
for 4 years; Under Secretaries maybe you've got 3 years;
Assistant Secretaries are maybe 2, 2\1/2\ years. I think all of
you have faced that problem, if you have been in your role as
chief of staff.
Do you have any further advice to us? I've got one more
question then.
OK, one more question, retirement, and how we deal with it.
President Truman once said, and I think he's right on the mark,
when he's out of the Presidency, a lot of boards wanted him to
serve, and so forth. He said they don't want me, they want the
Presidency. I think he's absolutely right. Now the question is,
if we pay the President adequately, if we tie his retirement or
her retirement to it, should we say, OK, you've got that
retirement, you've been President of the United States, the
highest honor any citizen of the United States can give. Can we
say you aren't going to serve on private boards?
What do you think? I know you've been on that, General.
We're not picking on generals; we're just saying Presidents.
General Haig. Well, I think you ought to be very careful
about that, because every President is of a different mold.
Some are older and have been through their careers and
hopefully we will not forget that wisdom sometimes pays off.
Some are younger and more visionary and have a whole life ahead
of them when they leave the Presidency.
I would be very careful. I think we should look at the
retirement pay of the President on the same cycle that we look
at his salary on active duty: there should be a relationship.
But most Presidents are pretty well taken care of. If I'm
looking at the figures that the committee gave us in
preparation for this, in retirement. And I think maybe a very
modest increase is all that's in order. I think it's about
$150,000-some and then it gets aumented with allowances and
benefits, up to a rather substantial number with recent
Presidents.
But it requires more. You know, even an ex-public servant
is--every day I have five or six letters a day that I have to
answer and send out and I have to have a staff to handle for
me.
If I were an ex-President, I would be getting thousands of
letters a week. This is a huge burden. And we've got to handle
it, but I don't think I would want to put any ground rules
other than to link active and retirement pay in a responsible
way.
Mr. Horn. Any other comments on this?
Mr. Sununu. Mr. Horn, I would not attempt to limit what a
President does, either in public service or private service
afterwards. I just think the act of doing that suggests to the
public a conventionality that is not there. And I just would
recommend that that probably carries more of a public service
burden than benefit in the long run.
Mr. Horn. Mr. Skinner.
Mr. Skinner. Well, I think that the retirement should take
into consideration his service and length of service to our
government in many cases, and it should be an appropriate
level. I don't think we should penalize him by giving his
retirement less than what that person would have gotten had
they saved the full time.
Most Presidents don't serve on any significant public
boards. I think they've got plenty of opportunities, as we know
in today's world, to take care of some of the financial
responsibilities they have late in life and still have a
comfortable life; and many, like President Carter and others,
have decided to devote their time in a very, very meaningful
way in the public sector.
And they should have that opportunity. And I think a fair
retirement program consistent with government retirement
programs is appropriate.
Mr. Horn. Well, in the 19th century we had the problem with
many Presidential spouses had hardly any means to exist and
continue once their husband died. I mean should we look at that
also?
Mr. Skinner. I think we still have that problem with the
Federal judiciary. We allow someone to retire from the Federal
judiciary, and they keep their compensation for life and can
serve as a senior status in a less active role and continue to
maintain their salary and all that goes with it. But as I
recall, the pension for widows is basically nonexistent. And
that is just an additional price of public service that's
unwarranted, in my opinion.
We should treat people, you know, consistently as they
serve in government, and I think in doing that, we ought to
have a consistent, fair retirement program for all public
servants.
Obviously, it won't be at the level that some of these
huge, you know, programs that exist from the private sector--
I'm the beneficiary of one of those, so I appreciate that--but
it ought to be at a level that recognizes their contribution
and allows them to serve out the rest of their life and their
family and the rest of their life with some dignity.
Mr. Horn. Mr. Duberstein.
Mr. Duberstein. Mr. Chairman, I think that on retirement,
on retirement benefits, it should be looked at periodically as
the President's salary is reviewed as well. As far as
postemployment limitations, I would strongly advise you not to
do that and place anything, any curtailment, on a former
President of the United States.
Mr. Horn. Any other thoughts?
Mr. Kanjorski. Mr. Chairman, while we have this
distinguished panel, may I ask something totally unrelated to
the hearing?
Mr. Horn. OK. You will have one last question.
Mr. Kanjorski. All of you have dealt with the Office of the
President and the Congress and the various committees and their
jurisdictions. Do you think this would be an appropriate time
for the Congress to form a commission to reorganize the
executive and legislative branches of government and take the
advantage of three living Presidents, and have that commission
return sometime in the next term so that functionally we can
line up the Congress with the executive branch of government?
Have you found that frustrating in your experiences as
chief of staff that your officials have to be testifying before
seven or eight different committees and the games we play up
here to draft legislation to get the specific committees and
avoid others, the pit stops?
Do you think this would be an appropriate time for us to
put a Hoover Commission together, both for the executive branch
and for the legislative branch, do it together, get the
advantage of your experiences now and the living Presidents
while they are here?
Mr. Jones. I chaired a committee for the National Academy
of Public Administration several years back on this very
subject and made some recommendations in that respect. And I
think those recommendations are still sound. I'm not sure that
a full Presidential--or a commission needs to be organized to
study this. I think this is something your relevant committees
and the Congress should deal with on a regular basis, seek the
administration's opinion.
But you put your finger on two of the most frustrating or
the most frustrating problem, is the proliferation of
jurisdiction that overlaps and forces one Cabinet officer to
spend most of his or her time on the Hill testifying basically
the same testimony. But I think that's something that Congress
ought to look at itself.
General Haig. I would comment just briefly, we hear a lot
about the power of the Presidency; and having served as many as
I have, I left that experience with my main concern focused on
the limitations on the power of the Presidency, which today
have gotten out of hand, whether it stems from the courts or,
more importantly, the legislature.
So I would love to see the legislature examine itself and
let the executive branch examine itself rather than to get into
a partisan branch brouhaha that is also bureaucratic in
character; but your question is very well taken and long
overdue.
Mr. Horn. Mr. Duberstein, any comment? Then, Governor.
Mr. Duberstein. No, I agree with Al. I think doing it
separately, the legislative branch and executive branch is the
way to do it rather than forming one Presidential commission. I
agree. I think it is long overdue. I think it should be looked
at, and what better committee of the Congress to do it than
this committee.
Mr. Horn. I'm tempted to say that you're suggesting we
rewrite the Constitution as in 1787. But go ahead, Governor.
Mr. Sununu. I support the idea of separate branch review. I
think with all due respect to the question asked by Mr.
Kanjorski that I suspect any Congress will be clever enough
that no matter what structure you come up with that in about
two congressional cycles they will figure out how to reparcel
it out to the committees and create the same problem all over
again.
But in terms of improving efficiency and bringing
government into a modern structure, I think there is a great
need for it.
Mr. Horn. Mr. Skinner.
Mr. Skinner. Well, having served as a statutory Cabinet
officer of a pretty big department with a lot of different
jurisdictions, I did not find that an insurmountable program. I
was able to work with most of the committees. I did take
probably a little more time than necessary.
You do become concerned, although I think General Haig
said, is are we really in balance and have we by the creation
of multiple commissions--I mean, multicommittees with multiple
jurisdictions, have we kind of thrown the balance of powers,
which I thought was three equal branches of government, a
little off kilter.
And if a joint effort would solve that problem, rather than
an independent effort, I would be all for it, because I think
it is a good idea to visit on occasion whether or not we've got
that constitutionally provided balance of power really and
balance--and sometimes it gets out of kilter.
Mr. Horn. Any comments, Mr. McLarty?
Mr. McLarty. Well, I think we were asked to address a very
serious and heavy list of a subject in the one we've discussed.
This is an equally, I think, serious one. I believe there's a
more efficient, effective way to do it, the vehicle, whether
it's legislative or joint. I think I would leave this an open
question.
But I do think that there's got to be a bit more effective
way than we're currently doing it, stopping short of rewriting
the Constitution, Mr. Chairman.
Mr. Horn. Well, thank you gentlemen. We really appreciate
you coming here. We might have some followup questions if you
wouldn't mind, but thank you. Your perspective and experience
is a real help to us. And that's why we have the committee
system in the Congress of the United States, be it weird
sometimes. OK, thank you very much.
Panel two will come forward.
You might know the routine, and first we will give you the
oath. So please stand and raise your right hands.
[Witnesses affirmed.]
Mr. Horn. The clerk will note all four affirmed.
And we will begin with Sharon Gressle, the specialist in
American National Government of the Congressional Research
Service, which is part of our great Library of Congress, and
they are part of the legislative branch of the government. And
we're glad to have you here.
STATEMENTS SHARON GRESSLE, SPECIALIST, AMERICAN NATIONAL
GOVERNMENT, CONGRESSIONAL RESEARCH SERVICES; GARY RUSKIN,
EXECUTIVE DIRECTOR, CONGRESSIONAL ACCOUNTABILITY PROJECT; PAUL
LIGHT, DIRECTOR, CENTER FOR PUBLIC SERVICE, THE BROOKINGS
INSTITUTION; AND DONALD SIMON, ACTING PRESIDENT, COMMON CAUSE
Ms. Gressle. Thank you, Mr. Chairman, Members of the
committee. I would like to just place a short historical
context for our discussions today. I will not make a lengthy
statement.
In the previous changes of salary for the Presidency, we
had--of course, the first for President Washington, that was in
legislation for the President and the Vice President, that was
the only time in which the salary was not set immediately prior
to the change of administration.
The 1873 and 1909 changes were both part of general
government appropriations, as is this proposal now for treasury
appropriations to change it to $400,000. In 1949, it was
legislation that focused pretty much on top officials'
salaries, but it was taken in the context of a larger
discussion following the Hoover Commission on the whole scheme
of Federal salaries.
In fact, our general schedule which we have today was
created pursuant to those discussions in a separate piece of
legislature. And, of course, in 1969--that was a stand-alone
piece of legislation--it only changed the compensation of the
Presidency. And as you know, we are now at a situation where
the next possible change in that compensation is January 2001.
No one has mentioned the expense allowance that is
available to the President on an annual basis yet today, that
is, a sum of $50,000. It was set in 1949 at that sum. And at
this point in time, it is changed as to whether or not it was
funds directly to the President and whether or not it was
taxable.
At the current time, it is to be used for official purposes
only. Any sums not used for that purpose would revert to the
Treasury; and it is not taxable, because it's not considered to
be personal sums to the Presidency.
I won't go into, unless you want me to, detail on what
might be considered some of the specific perks of the
Presidency. We have touched upon the issue of the pension,
however, that has been in place on a systemic basis only since
1958.
At the present time, that pension is key to the salary of
the Cabinet secretary. When that salary is increased, so too is
the pension of the President. And at current, it is $151,800.
Along with that comes the staff allowance and office space
as well as security. There's currently a proposal in the 106th
Congress to make some changes in that system.
When we are talking about the relationship of the
President's salary to other Federal salaries, I think that it's
sort of interesting to look at how it started out.
The Vice President's salary, for example, was 20 percent of
the President's; the chief justices was 16 percent. And in
1856, when Members first came into an annual pay salary, that
salary was set at 12 percent.
In 1949, the Vice President's salary was 30 percent, and
the chief justice's was 25\1/2\ percent of the Presidency. The
1969 salary changes resulted in 31 percent differentials for
the Vice President and the Chief Justice.
And while there's been some changes, for the most part
those two positions, as well as the Speaker now, are on a par
pretty much with one another and have traveled forward to the
point where they are almost at 90 percent of the President's
salary.
And, of course, the question is, whether there is an
appropriate differential between those salaries? If we were to
look at OPM figures, using an inflator of 3\1/2\ percent would
put those three salaries above the salary of the President by
the year 2003, which means, of course, if there's no change in
2001, we will have a problem.
The question is, then, do we keep those two down and not
change the Presidency, or do we change the President's salary,
allow those salaries to progress, or is there a decision made
that the salary of the President shouldn't bear relationship to
salaries of other officials in the government?
At the current time, if you want to open the discussion of
compression, the senior executive service, which is our
standard core of executives both in management and in their
technical expertise, most of whom, 90 percent, are career
employees and not political.
We have in some localities in the country four of the six
levels of the senior executive service being paid at the same
rate. They are capped out at level three of the executive
schedule.
The base rate for the senior executive service has three of
those six levels frozen. It has not yet reached the general
schedule. The general schedule top level of a GS-15 currently,
depending on which locality you're talking about, ranges from
$102,000 to almost $110,000 at the current time.
The Office of Personnel Management has done a little bit of
thrust in terms of projections. We will get into that
discussion on their behalf today, and, that is, if they took
the 1969 $200,000 mark, and they were to bring it forward based
on the CPI, they would estimate a little over $900,000 for
1999.
If you were to take what has happened with the general
schedule adjustments from 1969 on and apply those to the
$200,000, you would get a little over $685,000 as salary, and
if you were to take it in terms of the executive schedule for
the Cabinet secretaries, there you would reach $506,000.
One of our economists over in CRS took the different
salaries at the different points in history and brought forward
using a differential--arrived at CPU, if you would, because
those measures did not exist back in the 18th century.
But they figure that the $25,000 salary would range--would
be about $240,000 using a very base inflator. As you said, we
also arrived at the figure $4.5 million based on other counts.
If you use the CPI, you would take the $50,000 in effect in
1873, would bring it to over $679,000; the 1909 $75,000 figure
would be $1.4 million; the 1949 $100,000 figure would be back
down to $684,000; and the 1969 rate of $200,000 would be at
just over $888,000. And that, of course, would reflect
fluctuations in price costs and inflation and so on and so
forth. But that just gives a bare bones.
We talk about the Commission on Executive, Legislative, and
Judicial Salaries and their recommendations. In 1969, it was
that group which recommended the $200,000 increase for the
President's salary, and the time was right. The climate was
right, and that did go into effect through legislation.
The fiscal 1989 commission was the last time the
quadrennial commission was activated, and their recommendation
at that time was $350,000, as has been entered in the record
today.
Basically, that wraps up my statement, sir.
Mr. Horn. That's a very helpful statement. And thank you
for all the research. And all of those appropriate documents
will be put in the record at this point.
[The prepared statement of Ms. Gressle follows:]
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Mr. Horn. Mr. Ruskin. Mr. Ruskin is the executive director
of the Congressional Accountability Project. You might, you
know, mention to us what is the focus of that group.
Mr. Ruskin. The Congressional Accountability Project works
primarily on corruption in the Congress.
Thank you for inviting me to testify today regarding
whether the salary of the President of the United States should
be increased. The President's salary has remained unchanged for
more than 30 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 the Presidential pension is $152,000 annually
in fiscal year 1999. Since the founding of our Republic, that
has been customary for the President who is the chief executive
of our 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 Presidential salary now increasingly functions as a cap
on the salaries of Members of Congress and Federal judges. Some
Federal judges and Members of Congress now criticize that cap.
They complain of pay compression at the top of the Federal pay
scale. They want a raise, presumably a large one. That's why
we're here today. The real question for today's hearing is,
does the Presidential salary cap serve the citizens well? I
think it does.
The Congressional Accountability Project opposes the
Presidential pay raise, not only because the President does not
need a raise, but because, more importantly, it would decrease
the President's moral authority to govern, 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.
Of course, the public does not clamor for Presidential pay
raise. It would be wrong if the President's salary were set so
low that it discourages the best, most honorable Americans from
running for President; but to the overwhelming part of
Americans, $200,000 a year plus enormous living expenses,
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 a
year.
Those people who would serve as President only if the
salary were higher are less interested in doing service than in
getting to be rich. We have no need for the greedy in the
highest offices of the Federal Government. In fact, we ought to
weed them out aggressively. Good riddance.
Let them be will 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 the generous $200,000 salary is adequate
compensation for the President. It is mostly the people who
have adopted the values of the corporation 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 of corporate CEOs a case of apples and oranges.
The President's salary and benefits are furnished by the
taxpayers, more than 99 percent who earn far less than the
President. The taxpayers work hard to fill the coffers of the
Federal Government, which is wrong for the differential between
the Presidential salary and the medium Americans 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 Presidential pay-raise boosters
propose a 100 percent increase in the President's salary. The
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-
restraint? The 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 forego 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 President's salary cap, which
Members of Congress currently earn a salary of $136,700 per
year with general perks, pensions, and benefits. Federal
district court judges earn the same. And appellate court
judges, $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 the Federal judges, and it
would also seek to increase the salaries for Members of
Congress and the President, 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.
The Presidential salary cap serves as a useful public
function in counteracting such efforts. It should not be
lifted. This is especially true with regarding its effect on
congressional salaries.
The President, Members of Congress, and the 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. Thank you.
Mr. Horn. Thank you very much. We appreciate having your
perspective.
[The prepared statement of Mr. Ruskin follows:]
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Mr. Horn. Mr. Paul Light is director of the Center for
Public Service at the Brookings Institution in Washington, DC.
Professor Light.
Mr. Light. It's wonderful to be before you again on
arguably the most difficult issue that Congress faces regarding
ultimately its pay and the President's pay. I appreciate the
opportunity to talk about a subject that is so important and a
subject that appears to be frozen in amber as we struggle to
figure out a way to deal with this effort to provide a salary
that's commensurate with responsibility. As you have in my
statement, which I would like to revise and submit to be the
record, especially since it has been pointed out to me that
there is some very good scholarship on this question----
Mr. Horn. Without objection, all the statements are subject
to your revision for another week.
Mr. Light. Thank you very much. I would say that I do
endorse the effort to raise the President's salary. I listened
to hearings and have listened through this hearing as we
struggle for a rational calculus by which to set the
President's salary, is it CPE, is it some other CPI, is it some
other index of wage growth, is it George Washington's salary
adjusted for inflation, plus living expenses, et cetera. But
ultimately those calculus, the search for calculus fails us
because there really is none. It's a question of how we value
the institution itself. Once we've raised the issue of raising
the salary we confront ourselves with a pressure to talk about
the value of this office, which no doubt everybody in this room
would agree has been tarnished over the last period of history.
And we need to address that issue. What is a fair salary to pay
the President is less about Consumer Price Index, less about
the recruitment of millionaires or not millionaires, it's about
how we value this institution and it's a symbolic gesture of
where we think this great and important office belongs.
On the corporate salary scale, which most Americans say we
ought not to use, the Presidency right now would rank No. 785
on a list of the top 800 salaries. Is that good? Is that bad?
Is it an abuse of our authority to argue that the President
should move up ever so slightly on that list? Today,
Congressmen, by raising to $400,000 we would move the President
all the way up to position 670 or so.
We don't intend that the President should be paid as much
as Michael Eisner or the other CEOs at the very top of that
chart. That would be an outrage. Some in this body and
elsewhere around this country might argue that it's an outrage
that Michael Eisner and his colleagues make so much already.
But all we argue here today is a slight movement in the
President in relative terms to suggest a greater valuing of the
office during this period of extraordinary run-up in those
salaries.
In terms of the reasons for increase one can talk about
comparability. I think that's reasonable. One can talk about
compression, the coupling of the President's salary to other
important offices. That's reasonable.
One can talk about the impact of pay on public service, but
I would argue to you that there's very little data to suggest
that pay is a motivator for the distinguished public servants
who serve in this city and elsewhere in this country.
Ultimately for me it's the symbolic impact of valuing this
office properly during a period of significant run-up in other
offices. And most Americans actually acknowledge this. They do
believe that the President's salary should be raised rather
more frequently than once every 30 years.
My caveats about my recommendation are clear in my
testimony. We need to make general note that the higher we
raise the President's salary the more we move away from the
experience of ordinary Americans, which is what my colleague
Mr. Ruskin argues. Ironically the general public reaction of
the proposal for pay increases actually struck me as quite
reasonable and more supportive than I would have expected given
the 15 to 20 years of stated decline in trust in government.
The general division of opinion among the American public
toward the increase is about 45 to 45. When you ask Americans,
as our colleagues recommended here just a bit ago, nuanced
questions about the salary increase, you do get some breaks.
When you tell Americans only that the salary has not been
increased since 1969, 49 percent of Americans say it's time for
salary increase. When you tell Americans that the President's
salary is currently $200,000 a year, the amount of support
drops to 41 percent favorable. And yet in this particular
climate 41 percent favorable is really quite extraordinary. I
expected in the 20 to 15 percent, 10 percent range. I expected
to find no support. Americans tend to be moved, I think, here,
if you talk about strategy, toward the notion that occasionally
you ought to address this issue. Occasionally you ought to
address the President's salary to keep pace at some distant
level with what we're rewarding others in this country, while
at the same time the American public is also telling us don't
let the President get too far away from us. Don't let the
President move so far away that he or she won't know what a
grocery store scanner is for.
At any rate, we have the data from the Pew Research Center
for the people and the press to peruse and discuss if you wish.
My conclusion is that symbolically we've raised the issue. Now
we need to more forward, that by not acting we'll send a
powerful signal not to the public servants who seek the
Presidency, lord knows several of them, $200,000 pay increase
would be rather somewhat of a rounding error in their household
budgets, but because we've made a symbolic statement here that
we value the institution. And that's why in my testimony,
without going into it, I suggest that perhaps we ought to link
the Presidential pay increase with other ways of burnishing the
prestige of this great office, including campaign finance
reform. But I know I'm preaching to the choir on that issue and
I shall be silent.
Thank you for the opportunity to speak.
[The prepared statement of Mr. Light follows:]
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Mr. Horn. Well, thank you. We always enjoy your testimony.
Mr. Donald Simon is the acting president of Common Cause.
Mr. Simon.
Mr. Simon. Thank you, Mr. Chairman. I appreciate the
opportunity to testify before you today on the views of Common
Cause regarding a salary increase for the President.
Common Cause has always taken a keen interest in the issue
of compensation for public officials because we strongly
believe that the public should be the sole source of
compensation for public officials, a belief that reflects our
deeply held view that public officials should be accountable
and beholden exclusively to the public whom they are privileged
to serve.
We also strongly believe that our government officials
should be paid an adequate salary commensurate to their vital
responsibilities as our Nation's leaders. For this reason we
have in the past supported pay increases for Members of
Congress and other government officials. In the 30 years since
1969, when the President's salary was last raised, the Consumer
Price Index, as others have noted, has increased by
approximately 350 percent.
Private sector wages have climbed, compensation for our
Nation's corporate executives has soared, and salaries of other
high ranking officials in all three branches of the Federal
Government have increased to an unprecedented percentage of
what the President makes, now, 88 percent in the case of the
Vice President and the Speaker.
As a result, it is our view that the President's current
salary no longer reflects the high place of office in our
Nation. It no longer compares as favorably as it should to
salaries of other Federal officials and it threatens to cause
compression in salaries throughout the Federal Government, a
phenomenon in the past that has caused serious problems in
recruiting and retaining talented and experienced individuals
in Federal public service.
For all these reasons, Common Cause strongly recommends
that Congress act now to significantly increase the President's
salary.
Now, there are several ways to approach the question of how
much the increase should be. One approach would be simply to
apply increases in the Consumer Price Index to the President's
salary since the last adjustment in 1969. This increase,
approximately 350 percent, would result in a Presidential
salary of about $900,000. Another approach would be to reset
the President's salary relative to congressional salaries at
the same differential it was set at in 1969. Then congressional
salaries of $42,500 were set at approximately 21 percent of the
President's salary of $200,000. Applying the same adjustment
today, the President's salary would be increased to $640,000.
Although each of these calculations is supported by some
logic, they both result in salary adjustments that would
probably be higher than what the public would accept as
appropriate. We believe a simpler approach is just to do again
what Congress did last time it faced this question after a long
hiatus, which is to double the President's salary.
Now, doubling the President's salary to $400,000 is
certainly a significant increase. But we do not believe this
increase is too great. This figure approximates the
recommendation of the 1989 Quadrennial Commission to raise the
salary to $350,000. And if cost of living adjustments since
1989 are taken into account, that recommendation today would
approach $400,000.
The $400,000 figure we believe also reestablishes an
appropriate differential between the President's salary and
that of the Congress and other high ranking Federal officials.
It would also alleviate the problem of compression in the
salaries of other Federal employees, and it would again set the
President's salary at a level that clearly reflects the
importance of the office as compared to the salaries paid to
other public officials.
Finally, it's important that Congress create a statutory
mechanism to provide for more frequent, more regular and more
modest increases in Presidential salary. The President's salary
should not be increased only once every three decades and then
under extraordinary pressures and by extraordinary amounts.
Congress instead should add the President's salary to those of
other high ranking Federal officials, including Congress, which
are periodically adjusted for inflation, in order to make
increases in Presidential salaries more routine.
Now, admittedly the mechanisms to produce regular modest
increases for congressional salaries have not worked entirely
as intended. But they have resulted in more frequent and
reasonable pay raises--12 increases since the congressional pay
mechanism was initially established in 1969--than has been the
case with the Presidency, which has been afforded no salary
increase whatsoever over the same period.
In sum, Common Cause strongly urges Congress to
significantly increase the salary of the President at this
point by doubling it from its current amount, to enact the
increase now so that it can take effect when our next President
assumes office, and to create a regular legislative mechanism
to avoid lengthy periods in the future without an increase.
Thank you.
[The prepared statement of Mr. Simon follows:]
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Mr. Horn. Thank you very much. We appreciate that.
Now I'll yield to the ranking member Mr. Turner to begin
the questioning.
Mr. Turner. Thank you, Mr. Chairman.
Mr. Light, in your testimony, in your written testimony,
you mentioned in a little more detail the results of the Pew
Research Center survey than you mentioned in your oral
testimony. Reading your testimony and the details of that
survey, it would seem that the American people agree with Mr.
Ruskin.
Am I correct in reading that I believe one of your
statements here is we can only surmise that there would have
been virtually no support for an increase of $200,000? Is that
what the Pew study shows?
Mr. Light. Well, I can't speak for the fine scholars at the
Pew Research Center. As an interpreter of public opinion, when
the respondents were asked what size of increase they would be
comfortable with, there was no support at all for anything in
that range.
I read in the general result that there is support for some
sort of increase, well rationalized and well argued. But when
you start asking Americans sort of what a standard increase
might be the notion of a $200,000 salary increase is beyond the
realm of most respondents to endorse. There would have been no
one who said $200,000. It just would have been beyond the pale.
Now, when you ask them--when you tell them that the
President is currently making $200,000 and do you support the
notion of a doubling of the pay, actually 41 percent in the Pew
Research Center sample said yes. And I found that to be an
extraordinarily high response. So as we know from public
opinion research, sometimes the way the question is worded and
presented produces a different result. I find in these data
more support for the increase than I expected. But in the
specific question that you point to, significant problems when
you actually ask Americans how much to give, my goodness, a
$200,000 salary increase is beyond the comprehensible for most
Americans who would be interviewed in a survey like this.
Mr. Turner. I notice in your written testimony you stated
that half of the respondents in the poll were first told that
the President's salary had not gone up since 1969 but they
weren't told what the current salary was. And 55 percent of
those said the President should get an increase. But when the
other half was only told the current figure, the number that
endorsed the raise fell to just 39 percent. So does that tell
me that even advising the respondents that the President's
salary hadn't gone up in 30 years didn't seem to help a whole
lot?
Mr. Light. Well, actually, I have the data in front of me.
And the final analysis by the Pew Research Center was that if
the respondent was just told that the salary had not been
increased since 1969, 49 percent favored an increase. When they
were told that the President now earns $200,000 plus housing
and travel expenses and that the President's salary has not
been increased since 1969, the number who supported was 49--41
percent.
You know, some can take a look at that and say there's
little public support for pay increase. Given my view of what
might have been, I was kind of surprised by the rather
significant support. I think you go forward and talk about this
with the American public in terms of what the institution
needs, not what the occupant needs.
These figures vary to a rather significant extent by
whether you think the President is doing a good job right now
and whether you trust government in Washington. You're going to
get this wrapped up in partisanship and attitudes toward the
current incumbent in office if you don't talk broadly about the
need to make sure that the institution of the Presidency, which
Americans of both parties and of various ideological leanings
support, that this is important for the institution itself.
That's how I would talk with the American public about it.
Mr. Turner. I suppose it is true that if you're going to
support an increase in the salary you have to look at it in
terms of what the institution deserves. I think Mr. Ruskin is
probably correct the salary hasn't kept anybody from running
for office.
Mr. Light. Correct.
Mr. Turner. I'm not sure what effect it may be having on
preventing corruption in the office. In the earlier panel I was
trying to ask Mr. McLarty what his personal experience had been
working in the Clinton administration in terms of the financial
pressures that exist there today. Some suggest that we may have
a President who very well could leave office bankrupt because
of legal expenses. But it is important, I think, to be sure
that a President does not have undue pressure to cause him to
want to seek funds from outside sources just to ensure his
financial future.
And there may be some pressures there. But it does seem in
the final analysis looking at it in terms of what the office
deserves, it may be the right way to do it.
Mr. Ruskin, you placed some emphasis on the fact that you
believed the President's current salary serves as a salary cap
to hold down all other high level government salaries. And I
read between the lines that one of the things you fear is if we
raise the President's salary somehow all these other salaries
are going to be following shortly thereafter in an upward
spiral and cost the taxpayers a lot more money than just simply
increasing the President's salary.
Realizing that 30 years ago the Vice President was making
$60,000-something while the President was making $200,000 and
today the Vice President is at $175,000, almost as much as the
President, it does seem like we need a little larger difference
between the salary of the President and the Vice President than
we have currently.
Do you have any historical precedents to suggest that when
the President's salary is increased all these other salaries
are going to shortly thereafter spiral upward as well? Or could
we do something to prevent that from happening to assure the
public that that's not what is going to take place here.
Mr. Ruskin. Well, I think that's plainly the history here,
that once the Presidential salary goes up, so as well do other
salaries, maybe not exactly at the same time, but that's
clearly what is afoot here. This is primarily, you could tell,
an effort by the Federal judges and some powerful Members of
Congress to get a raise.
I want to point out that, you know, congressional salaries
are already so high that any increase in the congressional
salary I think brings a decrease in quality of Members of
Congress, because you get more and more people who are in it
for the money as opposed to in it for doing service.
I also want to note that many Members of Congress receive
large raises when they get to Congress. There was a study done
in 1996 by the newspaper Roll Call that found that all but 6 of
73 newly elected House members will receive large pay hikes
when they take office compared with their previous employment.
During the last 10 years House Members gave themselves five pay
raises, Senators gave themselves six pay raises. Congressional
salaries grew by $47,200, which is more than $15,000 above
inflation. In 1989 the base congressional salary was $89,500 a
year. It's come a long way from there. So given that history,
Members of Congress don't need a raise, the President doesn't
need one either.
Mr. Turner. Ms. Gressle, how do you respond to Mr. Ruskin's
argument that the President's salary serves as a salary cap and
that if we raise it then we're going to see all these other
salaries follow right on up the ladder rapidly as well?
Ms. Gressle. I don't know how rapidly you would see them
go.
Mr. Horn. Please get the microphone directly in front of
you.
Ms. Gressle. I think that it's fair to say that if the
President's salary is increased, then that provides an
opportunity within which the salaries for other Federal
officials can be a little more flexible in terms of a rise. I
would not fear that there would be a grand and rapid rise in
the salaries of other Federal officials.
Congress is constantly faced with a political expedient in
terms of their own salary, and I think if there were nothing
else to put the brakes on that somewhat, that would serve.
As I recall, about the only time in history that you can
look at the President's salary in conjunction with other
Federal officials' salaries all coming together in sort of a
crisis point was in 1873, when the President's salary was
increased. That was part of a larger pay increase for many,
many Federal officials, and there was quite extreme reaction to
it. In fact, there was an attempt to decrease the President's
salary after that. And largely, as I understand it, the reason
that they wanted to decrease the President's salary was because
of the reaction they got to increasing the Members' salaries at
that time.
But in terms of if the President's salary were increased
today, would everyone else's salary take a rapid gain, I don't
think so. I don't think that it would happen any faster than it
would just in the normal automatic mechanisms in place under
statute right now.
Mr. Turner. What do you think is primarily responsible for
the reluctance of the Congress--and I've only been here two
terms--but I noted in the last 6 years in 5 of those years the
Congress has received no pay increase and has declined even a
cost of living adjustment. From your perspective, what do you
think accounts for the fact that the Congress seems to be even
more sensitive in recent years to increasing its own pay than
it has in years previous?
Ms. Gressle. A personal observation would be that it could
very well be a combination of looking at the office of a Member
of Congress as an opportunity to serve and not one to which
there should be a great deal of monetary recompense. And that
in combination with, again, the political expediency of going
to the constituents and saying we're going to be raising our
salary. We've seen over time that it's difficult for Members to
really explain what the costs of serving in Washington are, in
terms of the two domiciles that they must maintain, the travel
expenses and so on and so forth.
Some Members have lost their election because they bought
into a pay raise. You know, history proves that out. And so I
think that with political expediency, it is a very value-laden,
shall we say, experience to raise a salary on the part of a
Member of Congress. But I think those two things encompass in
combination one with another, help explain the hesitancy.
Mr. Turner. Thank you, Mr. Chairman.
Mr. Horn. Thank you. And I now yield 5 minutes to Mr.
Kanjorski for questioning.
Mr. Kanjorski. Mr. Ruskin, your argument is interesting.
Moral force goes with lower salaries. You think if we were to
do away with any salary for the President it would make the
office more respected?
Mr. Ruskin. Absolutely not. I think that the President
ought to be paid. There are compelling reasons for the
President to be paid a fair salary so that they don't fall prey
to the highest bribery, and that they're paid enough so that we
can attract the most honorable people to the Presidency. So----
Mr. Kanjorski. What do you think of the candidate who runs
for President and because they are independently wealthy they
announce they will not accept a salary. That becomes very
appealing to the electorate people. They think they are getting
something for nothing. You think they really are getting
something for nothing when we allow people to politically mix
the salary of the President or the salary of a Member of
Congress, whether they are going to receive it or not. Would
you prefer most Members of Congress to have no salary?
Mr. Ruskin. No, I think Members of Congress ought to be
paid, though I think they ought to take a pay cut. And I think
it was wrong----
Mr. Kanjorski. Do you think they ought to take a pay cut
now or pay cut when they get elected to office?
Mr. Ruskin. I think Members of Congress are overpaid right
now. I think $136,700 plus perks, pensions and benefits is too
much.
Mr. Kanjorski. You are familiar with the practice of law.
Would you be aware of the fact that a 4-year member of a major
law firm in Washington DC, exceeds the salary of a Member of
Congress or Member of the Supreme Court? Would that surprise
you or disappoint you?
Mr. Ruskin. No, it doesn't surprise me. The issue here is
not the respect that we pay to our Congress or to our
President, but rather the respect that the President and
Members of Congress pay to the taxpayers, who work exceedingly
hard to fill the coffers of this Federal Government.
Mr. Kanjorski. I understand that perfectly well. Mr. Turner
refers to the relationship of potential corruption and
salaries. Do you see a relationship there?
Mr. Ruskin. Absolutely yes. That's why we don't want to pay
our Members of Congress or our President too little so that
they would fall prey to temptation of bribery. However, I don't
think that is a problem with the Presidential salary right now.
I don't think you can come up with evidence.
Mr. Kanjorski. You made a point in your testimony to say
that there are a large number of people that would clearly come
down to Washington and serve as our President with the salary
of $200,000, and I tend to agree with you because it has
nothing to do with salary. But that is like an argument that
there are an awful lot of doctors that will perform brain
surgery at a lower price than a brain surgeon. Do you see the
relationship?
Mr. Ruskin. I don't think so----
Mr. Kanjorski [continuing]. Trying to attract to both the
Presidency and to the judiciary and other high appointed and
elected offices. Sometimes it is the best and the brightest if
we can. And we are competing with the private sector at
different stages of people's lives. I tend to agree with you
that if you want to fill the halls of Congress with 28 and 30-
year-old lawyers who are just getting started in their
profession, the salary of a Member of Congress appeals to them
because it is about the same as what they would be getting in a
successful law practice. But if you are trying to get members
of the bar who are people in the private sector who have--in
their 40's or 50's who have now gone into a stage in life where
they are relatively successful, it would be highly unlikely. I
do not know that the chairman is, but we do have some former
presidents of universities here. I would tend to say there is
not one of those that has not had to take a significant
decrease in salary. And for the record will say that I still do
not earn as a Member of Congress what I did 15 years ago as a
private practitioner in the profession of law. You come up with
these statistics that say all Members of Congress are overpaid,
and Presidents are potentially overpaid, and appointed
officials, I do not see that.
I see what's happening is that those people who can afford
to aspire to elective office, whether it be the Presidency or
appointed office, whether it be a Cabinet position or
something, they are being constrained with their personal net
worth and finances. If they are independently wealthy, they
have a much more likely opportunity for putting in public
service as opposed to if they are just average people coming
out of average walks of life.
And you're not making a distinction there. I am sure Mr.
Forbes has no difficulty coming to the Presidency and accepting
no salary, as Mr. Kennedy did. But Mr. Truman would have a very
difficult opportunity to do that because he just did not have
the personal net worth to do that.
I remember when Mr. Eisenhower came to the Presidency the
Congress of the United States had to pass special legislation
to allow him not to pay taxes on his book so that he could get
a commensurate amount of money to feel free to carry on the
Office of the Presidency, which I think is a 24 hour a day job.
I do not think I want the President worrying about his electric
bill or his gas bill or his children's tuition. I would prefer
he would be worrying about whether or not we are going to put
planes in the air to bomb a country or whether or not we're
going to attend to some emergency in the country. You do not
see those distinctions in your testimony.
Mr. Ruskin. No, the main point that we're trying to make
here is that, look, $200,000 a year, plus pension and other
benefits is a great deal of money. You know, I just don't buy
the theory that the President is down and out on $200,000 a
year and is in need of some kind of dramatic raise. Just like I
think that the, you know, Members of Congress are not down and
out on $136,700 a year plus pension and perks and other
benefits. So, you know, this is just the fundamental.
Mr. Kanjorski. Well, they are not down and out, but you
want your elected officials to be down and out?
Mr. Ruskin. Absolutely not. But there's no question that a
Member of Congress earning $136,700 plus perks and pensions----
Mr. Kanjorski. What are all these perks and pensions you
are talking about? I do not quite understand.
Mr. Ruskin. For example, many Members of Congress retire
with pensions of $80,000, $90,000, $100,000 a year. Members of
Congress get gifts, they get excellent medical benefits.
Mr. Kanjorski. What gifts?
Mr. Horn. Wait a minute. You are not up on the laws, I
guess.
Mr. Kanjorski. Since 1989.
Mr. Horn. That is something that arouses me.
Mr. Kanjorski. I hear these things roll out of your mouth.
The fact of the matter is, Members of Congress--I am going to
address Members of Congress because I think you brought that
into the issue. If a Member of Congress were in business in the
United States and didn't have the restriction of a $3,000 a
year tax write-off, he could write off the cost of his living
expenses in Washington DC. He cannot do that. But if you as a
business person came to Washington and had a second home, you
could write that off as a business expense. So there is
actually not a perk there, there is an anti-perk. There is a
denial of that expense.
Now, I know most Members of Congress have to expend $20 to
$25,000 a year to live in this community as a second home. You
do not put any value on that.
Mr. Ruskin. Well, I think simply that $136,700 is a great
deal of money. And I just think that, you know, you all seem to
exist on a different planet. But back in planet America,
$200,000 a year or $136,700 plus generous benefits is----
Mr. Kanjorski. Generous benefits, so that we can address
that, we have had the pension reform in Congress. To my
knowledge there is no one that can retire from Congress that
served in the last 10 years that could ever get $89,000 a year.
It would take you, what, 65 years service or something to get
to that level.
So, I mean, I think it is important that we take some of
the emotionally charged testimony as you have given today and
comments such as that out of the realm if we are really going
to address this. I do not think that I am suggesting that if we
raise the President's salary, we are doing it to save him from
hunger. I think it is very essential that we send a message
that the President of the United States, who to my knowledge
exercises the greatest power in the entire world, should be
free of monetary considerations for his family and his
household while he serves in the Office of President. Certainly
to compare him to the upper 1 percent of the population of the
United States is not unreasonable. Would you agree?
Mr. Ruskin. To compare him to the upper----
Mr. Kanjorski. The upper 1 percent of the population of the
United States. The upper 1 percent of the population of the
United States earns in excess of what the President of the
United States earns.
Mr. Ruskin. Yes, but with benefits the President is well in
the upper 1 percent.
Mr. Kanjorski. Are you talking about the retirement
benefits?
Mr. Ruskin. Well, retirement benefits you know plus the
long list of living----
Mr. Kanjorski. Well, we could do away with that, Mr.
Ruskin. The point is when Mr. Truman was getting ready to
retire and these benefits were put into place, it was done for
the purpose that we would not have someone in poverty living in
Independence, MO, who was called the former President of the
United States. The only way you can overcome that, and quite
frankly, most of the men that occupy the Office of President,
are multimillionaires. So that they will be able to sustain
themselves. But every now and then we get a very talented
person in America who the American people desire to make
President of the United States and he has to make a terrible
selection and decision, to spend 25 years of his life in going
after the Presidency, and foregoing personal wealth or to end
up without the benefits that we provide him, the minimum
benefits that he will put his family in poverty once he
exercises the role of being President of the United States. You
don't seem to put any relationship on that. I am trying to make
it possible if we pass this that someone like yourself could
aspire to be President of the United States.
Mr. Ruskin. Well, I think you're not talking about the
reality that I know. I mean, most people when they are
President and when they leave the Presidency they clearly have
the opportunity to become multimillionaires when they leave. In
addition----
Mr. Kanjorski [continuing]. I am glad you brought that
point up. Aren't you annoyed that a President of the United
States will leave the Presidency and agree to make a $2 million
speech, that we may have to go and spend $3 or $4 million to
guard his security so that he could earn that $2 million?
Wouldn't it be much wiser to pay him a sufficient salary and
pension so he would not have to engage in that type of
opportunity? And potentially, or at least for impressions,
compromise his office position of the Presidency? Wouldn't you
prefer that?
Mr. Ruskin. Of course the Presidents and former Presidents
ought not to compromise their position. But given $200,000 a
year salary while they're in office plus $152,000 pension while
they're out of office, there should be no need for compromise.
Mr. Horn. The gentleman's time has expired on the
questions. Are there any further comments from the ranking
member?
Well, we thank you all for coming. We deeply appreciate it.
We will be asking the next panel some questions on compensation
which we would also like you to respond to, but given the
shortage of time I think we're going to do it by letter. And
please file it. It will go with the record either at this point
or in panel three's point, because some of them are basic
national comparisons to be made.
Thank you very much, all of you.
Panel three will come forward, please. Ms. Ferracone, Ms.
Weizmann, and Mr. Hofrichter..
If you would stand and raise your right hands.
[Witnesses sworn.]
Mr. Horn. The clerk will note that three witnesses have
affirmed the oath. And we will proceed with Ms. Robin
Ferracone, chair of the Executive Compensation Advisory Board
of the American Compensation Association. Tell us a little bit
about the organization and then we all have your statements and
we've all read them. If you would like to summarize them,
please feel free to. Because I don't want to hear them all read
because we just don't have the time for it. But we want you to
feel free to make your key points. And then we would like to
open it up to dialog of the Members with you. So Ms. Ferracone.
STATEMENTS OF ROBIN FERRACONE, CHAIR, EXECUTIVE COMPENSATION
ADVISORY BOARD, AMERICAN COMPENSATION ASSOCIATION; JANE
WEIZMANN, CONSULTANT, WATSON WYATT WORLDWIDE; AND DAVID
HOFRICHTER, VICE PRESIDENT AND MANAGING DIRECTOR, HAY GROUP
Ms. Ferracone. Mr. Chairman, members of the committee,
thank you for the opportunity to address the issue. As you
requested, I would like to start with a little background about
the American Compensation Association as a context for my
remarks. The association was founded in 1955. It's an
international association with more than 25,000 individual
members. These members design and administer employee
compensation and benefits programs for their organizations.
Our membership includes compensation and benefits to
professionals from Fortune 1000 companies as well as other
organizations of all types, sizes and industries. And this
includes people from government entities as well as educational
institutions.
The work of our members impacts the pay and benefits of
every employee in the United States and has significant impact
beyond our borders as well. The ACA is nonpartisan, a not for
profit organization that does not lobby. It's dedicated to
maximizing the effectiveness of total rewards to enable people
and their organizations to achieve their full potential.
As a result, my testimony today is intended to provide
information as a reference point for the subcommittee as you
consider this issue. It is not advocating for or against
raising the President's pay. However, ACA is uniquely
positioned to provide an objective factual basis for your
decisionmaking and consideration.
The first step that compensation professionals use in
determining appropriate levels of compensation is to
essentially establish a pay philosophy and strategy. Typically
this pay philosophy addresses such issues as external pay
positioning to attract and retain needed talents, fairness of
pay or internal equity within the organization as well as a
variety of other factors. And if we consider internal equity
you are faced with considerable compression, which has been
discussed today.
In the private sector, a CEO receives a salary of
approximately 1.5 times the next highest paid position.
Applying this multiple to the Vice President's salary, the
President would need to earn approximately $260,000 a year to
preserve this relationship.
The current compression between the President's pay level
and that of senior officials is because the President's salary
has not been adjusted since 1969. And as a reference point most
organizations review their salary budgets annually to ensure
that they remain current, competitive and equitable.
Each year for the past 25 years ACA has surveyed its
members to measure changes in salaries. ACA projected the
values of the President's $200,000 salary today as if it had
increased commensurate with other executive salaries from 1969
to 1999. Calculated on this basis, the salary today would be
slightly over $1 million.
ACA also projected the value of the $200,000 salary as if
it had kept pace with inflation, as measured by the Consumer
Price Index. And we calculate the salary would be about
$935,000 today calculated on this basis.
In addition, you may want to consider the external
marketplace for this position; for example, the pay of other
world leaders or executives in the private sector. In the
private sector, for your reference, the median salary for a CEO
of a large U.S. company is approximately $1.15 million today.
When deciding compensation levels for any employee,
including the Nation's chief executive, it's also important to
look at the total package of compensation; that is, not only
the financial package but the indirect components of
compensation as well or employee benefits. Indirect
compensation elements include protection programs such as
insurance and retirement, pay for time not worked such as paid
vacations and employee services and perquisites such as Air
Force One or the White House. The many perquisites and
privileges while in the office as well as benefits should be
factored into the equation for the President. There is also the
``psychic income'' not found in many other jobs as well as the
substantial future stream of income.
In conclusion, we consider--we encourage you to consider
the following critical factors in evaluating the President's
salary: One, the Federal Government's pay philosophy; two, the
internal equity of the President's pay relative to other senior
Federal servants; three, the erosion in value of the current
salary during the past 30 years; and four, the significant
indirect compensation component available to the incumbent in
the position.
While these are important considerations, the position of
the U.S. President is clearly unique. Pay is a small component
and there are no formula solutions. Still the principles I have
outlined today should provide some useful guideposts. As an
educational, not for profit, objective entity, the American
Compensation Association would be pleased to provide additional
information to help this committee formulate an appropriate
response to this challenging issue. Thank you for your--for the
opportunity to assist.
[The prepared statement of Ms. Ferracone follows:]
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Mr. Horn. Well, thank you. Because your data is very
helpful to us and we appreciate that, we're assuming we're
going to have some of the same from the next two witnesses. Ms.
Jane Weizmann is consultant to Watson Wyatt Worldwide.
Ms. Weizmann. Good afternoon.
Mr. Horn. Please put the microphone a little closer. It's
not your fault. It's just the way this hearing room was
designed.
Ms. Weizmann. Thank you. Is that better?
Mr. Horn. Move it still closer. Great.
Ms. Weizmann. Thank you. This is indeed an honor and not
typically, as an executive compensation and senior compensation
consultant, something that I do often. But it has really caused
me to look at the congressional research information that you
have assembled and the history and really put together what I
believe to be benchmark recommendations really in a rationale
for determining appropriateness of pay of the President and
senior officials.
Basically I'm here to present a rationale and really have
four broad categories of recommendations. First, I concur with
all the other testimony we've heard this afternoon.
Presidential pay should be set to be competitive with the level
of accomplishment, status and standard of living of similarly
accomplished professionals. If you use that as a guide, some of
the ACA recommendations, you then begin to stand back and say,
then what are the benchmarks.
In thinking about benchmarking, how do you determine what
is the appropriate pay of similarly accomplished professionals.
You might begin to think about a proxy of benchmark occupations
and work against, perhaps, some pay level differentials,
inflation indices, including the Consumer Price Index or the
Employment Change Index, to come up with a methodology against
which to gauge appropriateness of pay.
And from my own consulting experience and the issue I know
best, I'm here to say that I believe that to the extent that
Presidential pay is set below competitive market levels, it
does serve as a cap to other Federal pay levels and truly does
impede the attraction and retention of the talented not only
elected officials, but career professionals that this country
needs and deserves in the highest offices.
I would be here to say I believe that Federal pay levels
are at a national crisis point in terms of the ability to bring
in the technical skills, know-how, and capability required of
present day technology and required of the issues that they
deal with.
Finally, the fourth point I would like to make is it seems
counterproductive to put this in a political realm at the
change of every term. It's very hard to separate this
discussion from performance, as I think ACA would also concur
is one of the issues that often goes into considering pay.
I would fully recommend that some methodology be
established as you go forward with considering this
recommendation that uses an index or a process by which you
gauge change in the economy, change in pay levels and therefore
the appropriate recommendation for future pay increases.
That basically concludes my testimony. Thank you.
[The prepared statement of Ms. Weizmann follows:]
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Mr. Horn. Well, thank you very much. Our last panelist on
this particular panel is Mr. David Hofrichter.
Mr. Hofrichter. Hofrichter.
Mr. Horn. Vice president and managing director of the Hay
Group. You might tell us a little bit about the Hay Group and
what the focus is.
Mr. Hofrichter. Thank you. Thank you, Mr. Chairman. It's a
pleasure to be with you today. The Hay Group is one of the
oldest compensation consulting firms in the world. We operate
through a series of offices now in four countries around the
world and conduct some of the most comprehensive studies of
executive as well as all forms of compensation.
I think that you have the statement that we prepared. I
think that there are a couple of points I would like to
reiterate and then move to the recommendations. We approached
this as something of a consulting project. What would be the
recommendations that we would make to this body in looking at
the data, and realizing that this is, in fact, clearly a
political situation.
We've all heard that if you took the CPI and moved it
forward, you would be looking at a salary in the neighborhood
of $900,000. If you took CEO pay and just applied those
indicators to it, on just base salary alone, you would be
looking at approximately $1.2 million just on base salary.
When we look at CEO pay as a general kind of concept--and I
purposely in some of the data that I provided to you removed
the very largest corporations in the world, namely those over
$10 billion, which is significant--the average remuneration for
a CEO in total is approximately $3.1 million. Now, that's made
up of a salary, of an annual incentive, of a long term
incentive program, as well as the benefits and perquisites.
Now, the importance of talking about that is relevant in
this context. While it is clearly understood that people do not
become the President for money alone, it is on a measurable
basis the largest executive position in the entire world. On a
measurable content basis it's larger than General Electric,
Microsoft, et al, put together. So when we look at the
complexities of doing the job, we have to really understand
what goes into it. And so while clearly running the United
States is not the same as running a public corporation, it is
worthwhile to visit those numbers and to understand what we're
talking about.
The movement of the salary of the President to the $400,000
to $500,000 range is the equivalent of paying the President at
the 10th to 25th percentile of a CEO running a $1 to $2 billion
company.
Now, to put that in perspective, I mean, when we think
about the size and complexity of the United States, it dwarfs
that size organization in every respect. So it's an important
avenue to look at.
Another thing has been--that has been discussed today--has
been the compression, and compression is a very real
phenomenon. And within the government there are jobs who of
their own complexity, size, and contribution are worthy of
$200,000 plus in their own right today on a full-market value.
So the compression is a significant problem and it's not
just historical relationships that need to be looked at, it's
the fact that, you know, those jobs comparably found in other
parts of the world would be significantly--would be paid more.
Besides the disadvantage that that creates, there is also
one rule of thumb in compensation that has proven true. And
that is that the larger the compensation arrangements--and I
understand these have to be tempered by judgment and public
will and so forth--but the greater is the pool of the people
with the right set of competencies to do the job, and I think
that's an important consideration when we think about the
highest office in the land.
So, in summary, we would like to recommend in our testimony
four points for consideration. One, that the movement to
$400,000 be at least the minimum movement and we clearly could
support movement in the neighborhood of $500,000. $400,000
would be 45 percent of the current CPI adjusted rate and about
35 percent of the real market adjusted rate. So we're hardly
making an egregious adjustment over those 30 years.
The second piece of the testimony recommendation would be
one that was raised before, that this is a process that should
be looked at far more frequently. And we would recommend,
again, that it be reviewed once every 4 years. If possible we
would even like to see it reviewed earlier, but we understand
the constraints on that, but at least once every 4 years for
two reasons. One is I think it would certainly be more
appropriate as a policy matter to do it that--in that
timeframe. And, second, I think the adjustments would start to
mirror a lot more what people have seen in their average
paycheck, the general public as well.
The third issue is perhaps a little controversial, but
that's the question of considering the uncoupling of other
Federal pay rates to that of the President. There is actually
precedent in public service for that occurring. In my own city,
my own hometown of Chicago, that was done a number of years ago
so that the direct report to the mayor could in fact be market
priced, realizing the symbolic nature of the role of mayor.
And last we think that a formal compensation review as
outlined by my colleague Ms. Ferracone from ACA where there
would be a statement of what is the particular compensation
philosophy and how do we move the entire Federal pay schedule
in a more orderly way, not just from a budget standpoint of how
much is available, but rather from a hard look at what is the
market for the various positions.
I thank you for your time.
[The prepared statement of Mr. Hofrichter follows:]
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Mr. Horn. Well, thank you. Let me start with a question for
all three of you. This is the question that I want to ask the
previous panel but we'll do it in writing because we just
didn't have the time. But, what is the relationship that ought
to exist between one's salary during active years as a CEO or
as President of the United States and the retirement pay that
follows that? Is there any particular formula the private
sector uses on this?
Mr. Hofrichter. In general we tend to see in the
neighborhood of 50 to 60 percent of final pay being represented
in the retirement. And that would be all in, meaning, you know,
including social security as well as other forms of retirement
benefit.
Mr. Horn. Ms. Weizmann, do you agree with that?
Ms. Weizmann. Yes, I would concur.
Ms. Ferracone. I would as well.
Mr. Horn. OK. One of the questions, obviously, that comes
up in this situation, is the spouse. Spouses, if they're female
usually outlive us all, but who knows what's going to happen in
the next century, there will be several women Presidents, maybe
they'll all be. And the question is what do you do with the
spouse in terms of retirement. That was the question that faced
General Grant as he wrote his last chapter of his memoirs to
make sure his wife could live at least in the semi-decent house
that they had at the time in New York.
Is that just the job of the retired CEO, usually male in
this country, their worry and not the company's worry? Any
thoughts on this?
Ms. Ferracone. Well, many executive retirement programs
provide for the spouse. So that retirement will apply not only
to the executive who served the company while he or she was
alive but also to the spouse, and it applies to a second-to-die
kind of format. In addition we also see life insurance policy
benefits working this way as well.
Mr. Horn. Ms. Weizmann.
Ms. Weizmann. That's certainly a traditional way to follow
and certainly a good way to think about. I think that the
uniqueness of the position of being President of the United
States and while the spouse is not an employee, certainly is a
figurehead and begins to cause all of us to stand back and
think that naturally some provision does need to be thought of.
So in addition to the traditional kind of coverages I would
think it would be well in the purview of the Congress to think
through surviving benefits and what an appropriate standard of
living would mean for a spouse of the President.
Mr. Horn. Let's get two facts on the table. Presidential
pensions basically are at $151,800. That's the pension not only
for former Presidents of the United States, but there's also
those pensions in the judiciary and in the Vice Presidential
situation.
Now, the Presidential widow, and there's only one right
now, Lady Bird Johnson, is provided a $20,000 annual lifetime
pension and franking privileges. That's one way to get your
Christmas cards out. I'm sure that's appreciated. That doesn't
sound like too much. Now, some are going to be millionaires in
their own right, some aren't. And the question is given the
duties that we impose on the First Lady, and if there's a First
Man or gentleman or whatever in the next century, the fact is
that that isn't too much. Because we don't pay them for 4
years. They give free work to the people. And that is a tough
job. There's a lot of things to do in the President's chief of
state role with all the foreign visitors and all the rest and
the spouses that have to be taken care of. And the First Ladies
have done a great job in this century. And that's not very much
to solve some of the problems they might have in retirement.
But I would be interested in any of the thoughts you might
have. Obviously, what goes with the person when they're
President isn't to be matched in retirement.
President Nixon as I remember dismissed the Secret Service
when he was in retirement and paid the Pinkertons out of his
own pocket and his royalties from memoirs and books and so
forth.
We've had different millionaire situations, nonmillionaire
situations. What we're trying to do is get some rational way to
think about the compensation world. And that's why you're here
because you do that every day of your life. And so we would
welcome any thoughts. I now yield 5 or 10 minutes to the
gentleman from Texas, Mr. Turner, the ranking member.
Mr. Turner. Thank you, Mr. Chairman. Ms. Ferracone, I
believe it was in your testimony when you applied the Consumer
Price Index to the President's $200,000 salary which was set in
1969 and you said that if the salary kept pace with the CPI, it
would be $935,000 today.
And I think one of your testimonies I think shared what the
salary would be if it just kept up with executive compensation,
it was higher than that, by a little over $1 million. You know,
this is a difficult area. And I think every one of us here on
this committee and perhaps in the Congress still believe that
serving the public office is public service. And therefore, we
don't really expect to apply the traditional compensation
schedules of CEO's in the private sector to public service.
I thought it was interesting--and there's a chart in one of
your testimonies that really broke down that the $3 million
average CEO salary and to the actual salary versus the benefits
versus the long term stock options or whatever. In this
presentation actual salary itself was about $600,000 or so.
Seems to me that perhaps the bottom line of what we've
heard today is that the President's salary has not been raised
in 30 years and it deserves to be increased after that period
of time. But how we get to it, obviously the testimony you've
offered to us is helpful, and yet from a political perspective,
in terms of trying to preserve all of these offices as
positions of public service, we are going to temper that
obviously with that concept as well.
Furthermore, what about a CEO's earning capacity after they
leave the position? I believe that there was reference to the
fact that the President has some income potential after he
leaves office as well.
Am I correct, did one of you make reference to benefits
after you leave the position?
Mr. Ruskin. I made reference to it, but didn't quantify it.
Mr. Turner. I see. And it seems to me that a President in
some cases may very well have substantial earning capacity
through publications of books, memoirs, and things like that;
but I think the important thing for us to keep in mind is that,
though we have to respect the office and we understand that we
must acknowledge that the President is running a big business
and deserves to be compensated for it, it is still a position
of public service, that we want to somehow maintain that
concept as well.
Now, I think you've been very helpful to provide us the
analysis that you've done. I get a little nervous when I see
these numbers about increases in CEO's salaries over the last
30 years, so I sometimes wondered if they're justified in terms
of how they compare with average workers' pay increases during
the same period of time.
Mr. Chairman, I don't have any specific questions, just
those observations.
Mr. Horn. Before yielding to Mr. Kanjorski, I just wanted
to note the American Federation of Government Employees AFL-CIO
has given us a very interesting proposal as to the situation in
the civil service of--and the failure, really, to conform to
the Federal Employees Pay Comparability Act of 1990. And
without objection, it will go in the record at this point. I
think we should look in our final report on some of the
interesting suggestions that group has noted.
I'm also going to put in the record at this point a letter
from Joseph A. Califano. He served in the Kennedy, Johnson, and
Carter administrations. And his comments will be available.
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Mr. Horn. I will also put in the record at this point a
memo from Gail Makinen, specialist in economic policy,
government and finance division, Re: presidential pay. Gail
Makinen is with the Congressional Research Service of the
Library of Congress.
[The information referred to follows:]
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Mr. Horn. We also have a letter here from Michael J. Lyle,
the general counsel in the executive Office of the President,
Office of Administration, and attached is Mark Lindsay's
statement to his letter of transmittal on behalf of the
executive Office of the President.
Let me just read the relevant amount here, where they note:
In the last 30 years the President's salary has eroded
significantly in relation to the cost of living and salaries of
other government officials. For example, if the President's
1969 salary had been adjusted to reflect increases in the
Consumer Price Index for urban consumers, the 1999 salary would
be over $900,000.
Had the President's salary been adjusted to reflect
increases in the salary levels of General Schedule employees in
the Washington metropolitan area, the 1999 salary would be
nearly $700,000. If the President's salary had been adjusted to
reflect increases in the salary levels for Executive Level I
employees . . .
Those are the Cabinet, the Director of Management and Budget,
so forth
the 1999 salary would be approximately $500,000. In fact,
by 2003, assuming a modest increase of 3.5 percent per year,
the salaries of certain high-level government officials will
exceed that of the President.
That point of course has been made by other witnesses.
And Mark Lindsay's statement goes on here:
If the President's salary is not increased before the next
President takes office in 2001, the Constitution dictates it
cannot be increased until January of 2005. By then, the
salaries of numerous other high-level government officials,
such as Cabinet officials may begin to approach that of the
President.
This is likely to exacerbate the existing salary
compression for senior government officials and judges,
creating a disincentive to government service and reducing our
ability to attract and retain qualified individuals.
That, I might add, is a major concern in at least the last
four administrations in terms of trying to get someone who has
experience, who has maturity, who has some wisdom and isn't
just out of school. Are they going to give up everything and
come to be a Federal judge, one of the most important positions
in our society? We need to address that, and hopefully this
situation will be addressed.
So he goes on to note:
Thus, given the erosion of the President's salary over the
past 30 years relative to the cost of living and the wages of
other government workers, we believe an increase is well
warranted. More importantly, if not addressed now, this salary
erosion and compression will likely spread to other senior
government officials until we are no longer able to attract and
retain the most qualified individuals to government service.
As I mentioned earlier, from my own experience in the late
1950's, you try to staff an administration in the last year or
1\1/2\ or 2 years and they say, ``What, I've got to move to
Washington?'' and, you know, I really like to do that, Mr.
President, Under Secretary, Assistant Secretary. Those are the
people that make sure the administration policies are carried
out and are the ones that run a good part of the Washington
establishment. So we need to realize what Presidents go through
in that situation.
[The information referred to follows:]
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Mr. Horn. And so now I yield 5 to 10 minutes to the
gentleman from Pennsylvania, Mr. Kanjorski.
Mr. Kanjorski. Mr. Chairman, I want to congratulate you for
holding this hearing and taking this important issue up. I know
from some of the prior testimony that we have had there will be
some who will take advantage of this from a political
standpoint or from an emotional standpoint with the average
citizen, because we are talking about an unusual set of
circumstances were caused to consider that the $200,000 salary
is not an acceptable salary.
But I think that the witnesses who have testified on this
last panel certainly are clear in their statement that if we
were to compare this to anything in the private sector, we
would be talking in the seven figures quite clearly.
I would just like to make the observation that too often
our constituents are not familiar with some of the problems of
compression and pay raises in our society. But most recently, I
have had the occasion to visit with some university leaders and
national laboratory leaders; and some of the major problems
that they are facing is the departure of scientists and highly
competent faculty members who, in some instances, are on pay
schedules are actually paid less than their graduating seniors
that are going off to new jobs.
Our failure to recognize that or to attempt to socialize
income at that level is contradictory to our system. Our system
is one that compensates for capacity and ability. And it is
competitive, using salary as a competitive feature, not as much
certainly in politics and in public office; but I remember
having the testimony of the Chief Justice 1 day before our
committee some 8 years ago, and he was calling our attention to
the fact that it's extremely difficult to serve as Chief
Justice when your students that are under you and writing are
leaving their positions to go to a salary twice what you are
receiving as Chief Justice of the United States.
And at that time I think he called our attention to the
fact that Chief Justice was being paid less than 30 percent of
the practicing members of the bar in the United States. Keeping
these things relative and in their proper perspective is
extremely difficult. Again I congratulate you and the majority
for taking on what is considered a tough political issue in
this time.
And I want to compliment the Members, not to delay them
with further questions; but the fact you came forward and gave
us a perspective from the private sector is vitally important
for us to have to make a political decision. Thank you.
Mr. Horn. I thank the gentleman. And the fact is we will
hear a lot of demagoguery both within the House and without the
House, but that's life.
Mr. Turner, do you have some closing questions?
Mr. Turner. Well, thank you. It might be important to
restate what we have stated earlier and, that is, whatever the
Congress does to change the salary of the President--that
$200,000 has been in place since 1969--it would not be
effective until the election of a new President in 2001.
So with that, Mr. Chairman, I think this has been a very
productive hearing, and we certainly have had a distinguished
group of witnesses on all three panels. And I thank the
chairman for the manner in which the subject has been dealt
with in such a thorough manner, and perhaps it has moved the
discussion forward.
Thank you very much, Mr. Chairman.
Mr. Horn. Well, I thank you.
I'm going to insert in the record at this point a short
history of executive pay increases, which came from the Office
of Personnel Management, which many might remember was the
Civil Service Commission.
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Mr. Horn. But I also want to read portions of the very
interesting statement from James F. Vivian, who could not make
it here today. He's the author of the only book that we know on
this subject, which is, ``The President's Salary: A Study in
Constitutional Declension,'' 1789 to 1990, published in New
York by the Garland Publishers and he published that in 1993.
And we really appreciate his summary here.
And he notes the two--in part:
The two most recent revisions, those of 1949 and 1969,
proceeded almost entirely from the merits of the proposal. They
served to strengthen the standing precedents for doubling the
existing salary, for retaining the separate travel/expense
allowance and for acknowledging the good will of the incumbent
President towards the succeeding administration, regardless of
its as yet unelected identity. Taken together, the four
revisions tend to suggest that certain minimum conditions must
also obtain among other minor observations. The supportive
conditions include an ambiance of economic prosperity, national
self-confidence, the laggard value of the salary as gauged by
most familiar and ordinary standards, and the control of both
Congress and the executive by the same political party.
The absence of this latter condition went far toward
explaining the declension that had grown all too apparent, if
not 1988, certainly by 1992. Never had the salary been of less
importance.
Mr. Vivian concluded.
Never had the difference between it and the next highest
salary been more narrow. Never have others' salaries been
proportionately higher in relation to it. A bipartisan
consensus sufficient to overcome the obstacles inherent in an
era of divided government can prevail.
Should the proposed adjustment of the President's salary to
$400,000 gain congressional approval, as I trust it will, one
of my principal theses will have been destroyed. No matter.
History is more easily revised than the salary, it would seem.
There is, after all, a quite practical consideration
looming. Without an upward revision, the Presidency continues
risking the dilution of an important distinction, namely, the
preeminent compensation in the central government.
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Mr. Horn. We will also be asking Ms. Gressle to come back
and tell us a little bit about the salaries abroad. And we
would just like that, at this point, in the record and then we
will close it out. What we're interested in is just some of the
comparisons abroad. I know some are a lot lower.
Ms. Gressle. Right.
Mr. Horn. But they are not the United States of America,
and some are higher and some are the same.
Ms. Gressle. Right. And we have no idea about the
relationship of the so-called perks of their salaries, for
example whether they have had housing. These data are based on
a very informal telephone survey that was conducted a couple of
weeks ago.
Those which exceed the President's would be the chief
executive of Hong Kong at--the figures I will give you are
converted to United States dollars. So the chief executive in
Hong Kong would be $418,182 a year.
Mr. Horn. And that's United States money, not Hong Kong?
Ms. Gressle. That's right.
Mr. Horn. Yes.
Ms. Gressle. Japan, $381,000. Panama actually is lower, but
it is $180,000. We thought that was sort of an interesting
figure.
Mr. Horn. Now those are both the chiefs of government,
aren't they?
Ms. Gressle. The President of Panama and the Prime Minister
of Japan, that's right.
Mr. Horn. And where is the President of the United States,
chief of state as well as chief of government?
Ms. Gressle. That's correct. The prime minister in
Singapore is at $496,941 a year. The President of Taiwan is
$303,500 a year. If there are any others in which you are
particularly interested--the United Kingdom's prime minister
converts to $165,000 a year.
Mr. Horn. Well, that's very helpful. And we're going to put
all of your figures in the record at this point.
Ms. Gressle. Thank you.
Mr. Horn. Thank you so much.
We've heard some very compelling testimony that has been
supportive of raising the pay of the President of the United
States. Clearly it would be impossible to compensate adequately
any man or woman who will next hold the most powerful and
difficult job in the United States, indeed, in the world.
The fact is that the last pay raise for a President of the
United States was in 1969. Surely few corporate chief
executives would accept such compensation.
I agree with many of our witnesses, however, that such
comparisons may not be relevant. Few seek the Office of
President for its generous salary, because it isn't that
generous; and many others could, if they're interested in
money, go, as was suggested in the private sector or other
places. Nevertheless, being a millionaire is not a
constitutionally endorsed requirement for Presidential
candidates. Although a lot are simply for what was brought up
by many witnesses that increasingly we have millionaires
running for office, and that's fine. Everybody has got a right
to run.
But the fact is that they don't need the salary, but the
ones that aren't millionaires, and if they win, they need it;
if they don't win, they don't need it. And we just should be
equalizing the amount of competition in our society, by having
an appropriate, fair reasonable effective salary for the
President of the United States, so they don't have to try to
pull any punches while they're President at least, and that's
why I stress the retirement.
It seems to me when you go around sort of begging for
Presidential library money while you're still President of the
United States, that you might well favor the millionaires that
are going to give you a million and that bothers me, and that's
why I suggested earlier that maybe the retirement ought to be
adequate so that you don't have to go on boards and all the
rest of it to try to recoup what it has cost you over the
years.
Presidents, regardless of their personal income, ought to
be able to independently and adequately support their
families--and needless to say a few college tuitions were
mentioned here today.
But, it is a very real problem when, as the current
President has a child going to a prestigious school that does
not come cheap.
So let me just thank now those who have prepared this
hearing: J. Russell George, he's our staff director and chief
counsel; Matthew Ebert, policy advisor, down at the end of the
bench there. And Bonnie Heald, the director of communications,
Mason Alinger, the clerk; and for the Democratic side, Faith
Weiss, counsel; and Julia Thomas, who is our court reporter, as
is Cindy Sebo.
And with that, I thank you all on this panel. And with
that, we are adjourned.
[Whereupon, at 4:47 p.m., the subcommittee was adjourned.]