[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.
    [The information referred to follows:]
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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.
    [The information referred to follows:]
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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.

    [The information referred to follows:]
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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.]

                                   
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