[House Hearing, 109 Congress]
[From the U.S. Government Publishing Office]




 
     EXECUTIVE AND JUDICIAL COMPENSATION IN THE FEDERAL GOVERNMENT 
                        (QUADRENNIAL COMMISSION)

=======================================================================

                                HEARING

                               before the

                 SUBCOMMITTEE ON THE FEDERAL WORKFORCE
                        AND AGENCY ORGANIZATION

                                 of the

                              COMMITTEE ON
                           GOVERNMENT REFORM

                        HOUSE OF REPRESENTATIVES

                       ONE HUNDRED NINTH CONGRESS

                             SECOND SESSION

                               __________

                           SEPTEMBER 20, 2006

                               __________

                           Serial No. 109-260

                               __________

       Printed for the use of the Committee on Government Reform


  Available via the World Wide Web: http://www.gpoaccess.gov/congress/
                               index.html
                      http://www.house.gov/reform


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                     COMMITTEE ON GOVERNMENT REFORM

                     TOM DAVIS, Virginia, Chairman
CHRISTOPHER SHAYS, Connecticut       HENRY A. WAXMAN, California
DAN BURTON, Indiana                  TOM LANTOS, California
ILEANA ROS-LEHTINEN, Florida         MAJOR R. OWENS, New York
JOHN M. McHUGH, New York             EDOLPHUS TOWNS, New York
JOHN L. MICA, Florida                PAUL E. KANJORSKI, Pennsylvania
GIL GUTKNECHT, Minnesota             CAROLYN B. MALONEY, New York
MARK E. SOUDER, Indiana              ELIJAH E. CUMMINGS, Maryland
STEVEN C. LaTOURETTE, Ohio           DENNIS J. KUCINICH, Ohio
TODD RUSSELL PLATTS, Pennsylvania    DANNY K. DAVIS, Illinois
CHRIS CANNON, Utah                   WM. LACY CLAY, Missouri
JOHN J. DUNCAN, Jr., Tennessee       DIANE E. WATSON, California
CANDICE S. MILLER, Michigan          STEPHEN F. LYNCH, Massachusetts
MICHAEL R. TURNER, Ohio              CHRIS VAN HOLLEN, Maryland
DARRELL E. ISSA, California          LINDA T. SANCHEZ, California
JON C. PORTER, Nevada                C.A. DUTCH RUPPERSBERGER, Maryland
KENNY MARCHANT, Texas                BRIAN HIGGINS, New York
LYNN A. WESTMORELAND, Georgia        ELEANOR HOLMES NORTON, District of 
PATRICK T. McHENRY, North Carolina       Columbia
CHARLES W. DENT, Pennsylvania                    ------
VIRGINIA FOXX, North Carolina        BERNARD SANDERS, Vermont 
JEAN SCHMIDT, Ohio                       (Independent)
BRIAN P. BILBRAY, California

                      David Marin, Staff Director
                Lawrence Halloran, Deputy Staff Director
                      Benjamin Chance, Chief Clerk
          Phil Barnett, Minority Chief of Staff/Chief Counsel

     Subcommittee on the Federal Workforce and Agency Organization

                    JON C. PORTER, Nevada, Chairman
JOHN L. MICA, Florida                DANNY K. DAVIS, Illinois
TOM DAVIS, Virginia                  MAJOR R. OWENS, New York
DARRELL E. ISSA, California          ELEANOR HOLMES NORTON, District of 
KENNY MARCHANT, Texas                    Columbia
PATRICK T. McHENRY, North Carolina   ELIJAH E. CUMMINGS, Maryland
JEAN SCHMIDT, Ohio                   CHRIS VAN HOLLEN, Maryland

                               Ex Officio
                      HENRY A. WAXMAN, California

                     Ron Martinson, Staff Director
                           Alex Cooper, Clerk
            Tania Shand, Minority Professional Staff Member


                            C O N T E N T S

                              ----------                              
                                                                   Page
Hearing held on September 20, 2006...............................     1
Statement of:
    Hornby, D. Brock, judge, U.S. District Court for the District 
      of Maine, chairman, judicial branch, Committee of the 
      Judicial Conference of the United States; Philip M. Pro, 
      chief judge, U.S. District Court for the District of 
      Nevada; Sean O'Keefe, chancellor, Louisiana State 
      University, former Administrator, National Aeronautics and 
      Space Administration; and Gary Burtless, John C. and Nancy 
      D. Whitehead Chair in Economic Studies, the Brookings 
      Institution................................................    43
        Burtless, Gary...........................................    63
        Hornby, D. Brock.........................................    43
        O'Keefe, Sean............................................    61
        Pro, Philip M............................................    45
    Walker, David M., Comptroller General of the United States...    18
Letters, statements, etc., submitted for the record by:
    Burtless, Gary, John C. and Nancy D. Whitehead Chair in 
      Economic Studies, the Brookings Institution, prepared 
      statement of...............................................    66
    Cummings, Hon. Elijah E., a Representative in Congress from 
      the State of Maryland, prepared statement of...............    16
    Davis, Hon. Danny K., a Representative in Congress from the 
      State of Illinois, prepared statement of...................    12
    Hornby, D. Brock, judge, U.S. District Court for the District 
      of Maine, chairman, judicial branch, Committee of the 
      Judicial Conference of the United States and Philip M. Pro, 
      chief judge, U.S. District Court for the District of 
      Nevada, prepared statement of..............................    48
    Porter, Hon. Jon C., a Representative in Congress from the 
      State of Nevada:
        Prepared statement of....................................     8
        Prepared statement of Mr. Cook...........................     5
    Walker, David M., Comptroller General of the United States, 
      prepared statement of......................................    21


     EXECUTIVE AND JUDICIAL COMPENSATION IN THE FEDERAL GOVERNMENT 
                        (QUADRENNIAL COMMISSION)

                              ----------                              


                     WEDNESDAY, SEPTEMBER 20, 2006

                  House of Representatives,
      Subcommittee on Federal Workforce and Agency 
                                      Organization,
                            Committee on Government Reform,
                                                    Washington, DC.
    The subcommittee met, pursuant to notice, at 2 p.m. in room 
2203, Rayburn House Office Building, the Honorable Jon C. 
Porter (chairman of the subcommittee) presiding.
    Present: Representatives Porter, Davis of Illinois, Norton, 
Cummings.
    Staff present: Ronald Martinson, staff director; Chad 
Bungard, deputy staff director/chief counsel; Jessica Johnson, 
OPM detailee/counsel; Paul Sherry, DOE detailee/senior counsel; 
Alex Cooper, legislative assistant; Tania Shand, minority 
professional staff member; and Teresa Coufal, minority 
assistant clerk.
    Mr. Porter. I would like to call this hearing to order. I 
would like to certainly welcome you all here today. We 
appreciate your being with us, and we will appreciate testimony 
from some of our experts and a few judges that are with us 
today. We appreciate your expertise.
    And in keeping with recent tradition, prior to moving into 
the business of the hearing this afternoon, I want to take a 
few moments to recognize an individual. As the chairman of the 
Subcommittee on the Federal Workforce, I try very hard to 
recognize some of the superstars that have been either retired 
from the Federal work force or are currently part of the 
Federal work force. Today I would like to recognize an 
individual that is in the State of Nevada. Of course, there are 
literally millions of dedicated individuals that work for the 
Federal Government in and around the world. We've recognized 
folks in Afghanistan and Iraq.
    But in Nevada today, I have a gentleman that actually goes 
by the name of Nevada's Knight in Shining Armor. Can you hear 
us OK, Reggie?
    Mr. Knight [via teleprompter]. Yes, I can hear you, 
Congressman Porter.
    Mr. Porter. We appreciate your being with us, and I will be 
formally giving you the certificate of congressional 
recognition in Nevada in a few weeks. But I want to say thank 
you and if I can embarrass you for a moment, I'm going to read 
from the NARF magazine. ``Reginald B. Knight, Reggie to his 
many friends, of the NARF chapter 2276 in Pahrump, Nevada, 
there are very few if any of the offices in the local chapter 
or in the Nevada NARF Federation that Reggie has not held.'' 
For that reason, he is the subject of this month's Faces of 
NARF feature. I think it is a centerfold, but that is OK. 
[Laughter.]
    Your story begins in Detroit, graduated in 1954, joined the 
U.S. Marine Corps, rose through the ranks, retiring in 1974 as 
a sergeant major. You saw combat in Vietnam as a recon platoon 
sergeant and was senior enlisted staff assistant to commanding 
officer of the fighter attack squadron of the Marines. 
Following his retirement from the Marines, Reggie went to work 
for the VA, serving as a representative of the Saddleback 
College of Mission Viejo, California, and took classes and 
received his associate degree. Has been involved in the 
southern Nevada community I believe since 1994, is that right, 
Reggie?
    Mr. Knight. That's correct.
    Mr. Porter. We appreciate all that you have done. I am not 
going to embarrass you with all the other nice things they have 
said about you here. But again, you truly are a knight in 
shining armor. Thank you for all that you do for the retired 
Federal employees, but more importantly, for all those folks in 
Nevada, and all you have done for the Pahrump community.
    So today, I know that you are 2,500 miles away, but on 
behalf of the committee, we are recognizing you with 
congressional recognition. What we have done is entered your 
history in the Congressional Record, it will be part of 
literally the history of our country and thank you so much for 
everything that you have done.
    So since I can't give it to you in person today, if you can 
see it----
    Mr. Knight. I can see it. Thank you very much. I appreciate 
that.
    Mr. Porter. We will bring it back with us, and thank you 
very much for everything you have done and for being with us 
today.
    Mr. Knight. Thank you, sir.
    [Applause.]
    Mr. Porter. Also, you will receive a copy of the 
congressional recognition. There is a Congressional Record that 
will be a part, again, of the Library of Congress. You will 
receive a book and additional information from the U.S. 
Congress. So again, thank you for being with us. Take care.
    Mr. Knight. Thank you very much, Congressman Porter.
    Mr. Porter. And you're welcome to sit through the meeting, 
if you would like.
    Mr. Knight. I appreciate that. With the issues that you're 
dealing with, I want to sit through it. [Laughter.]
    Mr. Porter. Very good. Thank you again very much.
    Now, having a quorum present, we will formally begin the 
meeting. I appreciate the Members being here today.
    It is really an unfortunate reality that there has been and 
always will be a substantial difference in pay between top 
level Federal Government executives and executive branches in 
the private sector. Perhaps Babe Ruth summed it up best when 
asked by a reporter during the Great Depression of the 1930's 
why his salary as a baseball player was more than that of the 
President of the United States, Herbert Hoover. The Babe's 
response was, ``I had a better year.''
    Well, many years have passed since Babe Ruth's humorous, 
yet telling, remark. And needless to say, the Babe did not call 
the shot on the problem of pay erosion and pay compression for 
certain top executives on the Federal level. Inequities in pay 
for certain top level executives of the Federal Government have 
existed for some time and have not gone away.
    In fact, for many, as we will hear today from some of our 
distinguished witnesses, it is getting worse, and it has caused 
the Federal Government to lose some of its best and brightest 
leaders. It is getting worse, and we need to change that. Until 
this problem is properly addressed, the American people will 
continue to pay a high price for the low salaries that are 
being paid to certain top level Federal officials.
    In June 2006, the GAO completed a study undertaken at my 
request entitled Human Capital: Trends in Executive and 
Judicial Pay. The GAO report calls attention to the fact that 
the basic pay rates of certain top level executives and members 
of the judiciary, particularly those under executive schedule 
and judicial pay plans, when adjusted for inflation to 2006 
dollars, have suffered dramatic declines since 1970.
    For example, when adjusted for inflation using the consumer 
price index, well recognized as an official Government index 
and often utilized by Congress, for example, used for Social 
Security and civil service adjustments, pay for Cabinet 
Secretaries declined in value by 41 percent and the pay of the 
Chief Justice by 34 percent since 1970. In terms of actual 
dollars, applying the CPI, this means that in 1970 Cabinet 
Secretaries were paid the equivalent of $309,000 in 2006 
dollars.
    But today, because of pay erosion, Cabinet Secretaries are 
being paid $183,500, or 41 percent less because of inflation, 
or what otherwise might be called pay deflation. And again 
applying the CPI, it means that in 1970 the Chief Justice was 
being paid the equivalent of $321,000 in 2006 dollars, but 
today is receiving $212,000, or 31 percent less because of 
inflation or pay deflation.
    Along with the GAO report, past studies have confirmed that 
certain executives and judicial pay rates are inadequate when 
measured against inflation and changing economic conditions. 
For example, in 2003, the National Commission on Public 
Service, chaired by the distinguished Paul Volcker, found that 
there was a failure of Federal compensation policies at top 
levels within all three branches of comparison to the private 
sector.
    Of particulate note, the 2003 National Commission found the 
state of judicial pay to be so egregious that the Commission 
noted that the first priority of the Congress should be ``an 
immediate and substantial increase in judicial salaries.'' 
Unfortunately, the 2006 GAO report confirms that the problem 
continues.
    It is now time to find a solution that will be successful. 
GAO has noted in this report has noted that certain principles 
should be considered to attract and retain the quality of 
executive and judicial leadership necessary to address the 21st 
century challenges. In particular, GAO has stated that top 
level pay plans should be sensitive to hiring and retention 
trends, reflective of the responsibilities, knowledge and 
skills, of contributions, transparent, market sensitive, 
flexible to economic change, sustainable and competitive. In 
its report, GAO has observed that the reestablishment of a 
salary commission may be an option to consider in maintaining 
reasonable salary relationships across executive and judicial 
positions, something I think that makes a whole lot of sense.
    GAO noted that both in 1967 and 1989 Congress authorized 
the establishment of a commission to study and make 
recommendations with respect to the salary of top level Federal 
employees, including positions with the executive schedule, as 
well as the judiciary. The first of these commissions was 
abolished and the second commission was never appointed. What 
we must do now is devise some system to assure adequate 
compensation for top Federal executives and judges that will 
have the confidence of the public and the members of the 
legislative, executive and judicial branches of the Federal 
Government. At this point, however, we are just sharing 
preliminary thoughts on the matter.
    The purpose of the hearing is to first examine the results 
of the study conducted by GAO and to hear about and discuss 
inequities in the existing system. However, we have asked our 
witnesses and would be most grateful if they would share their 
views with the subcommittee on whether a salary commission or 
some other option could best assure that top level members of 
the executive branch and judges are fairly compensated.
    In addition to our distinguished group of witnesses today, 
testimony has been provided by Fred W. Cook, founding director 
of the Frederic W. Cook and Co., independent consulting firm 
specializing in executive compensation issues. Mr. Cook could 
not be with us today as a witness. He is a well recognized 
expert on compensation issues and is currently vice chairman of 
the Defense Department Business Board, a Federal advisory 
committee that provides DOD senior management advice on the 
best practices from the private sector.
    I ask unanimous consent that Mr. Cook's testimony may be 
included in this hearing.
    [The prepared statement of Mr. Cook follows:]

    [GRAPHIC] [TIFF OMITTED] T4956.001
    
    [GRAPHIC] [TIFF OMITTED] T4956.002
    
    Mr. Porter. Critical to the success of the Federal 
Government in the 21st century is the need to properly address 
a wide variety of human capital issues involving the Federal 
work force. As this subcommittee knows first-hand, as we have 
just witnessed, recognizing Mr. Reggie B. Knight, of my home 
State of Nevada, for his outstanding contributions as a member 
of the work force, Federal employees not only do an outstanding 
job, they often go above and beyond the call of duty. In doing 
so, they should and will be recognized. They are truly one of 
the Nation's greatest resources.
    One of the most critical human capital issues facing the 
Federal Government today concerns the need to make certain that 
employees in the Federal work force are properly compensated 
for the responsibilities they undertake in serving the public. 
In the face of national emergencies, work force shortages and 
the looming retirement tsunami, and the loss of well-qualified 
Federal employees to the private sector, it is essential that 
on the Federal level we explore all options to ensure that 
compensation for job performance is commensurate with the 
responsibilities undertaken. Our Federal employees deserve no 
less.
    And this should especially be the case for those in the 
position of high responsibility in the work force, namely those 
in the top level executive judicial positions in our 
Government.
    Now, having read the formal statement, let me tell you what 
I really think. We have a real challenge before us, and we 
appreciate Mr. Walker being here today to talk about that. But 
we have to make sure we encourage the best and the brightest to 
become a part of our work force. We want to make sure that 
those that are with us are compensated properly and those that 
enter retirement are compensated properly.
    I have always felt, especially from the judiciary side, 
that although it is very important that we have a legislative 
branch and executive branch, but knowing at the end of the day 
that our court system is the best in the world, and we can 
always, as residents of this great country count upon the 
courts. We may not always agree with certain levels of the 
court, but available to us are different steps and at the end 
of the day, the Supreme Court.
    So we have to make sure that we keep the best and 
brightest, we encourage the best and the brightest. And make 
sure that those that are in these top level positions remain 
with us, because I certainly understand why a judge may leave 
and go back in private practice. It is very difficult to 
compete with the private practice with the salaries the way 
they are.
    So in very plain language, this is an area I think that is 
a real challenge for our country. I am pleased that the 
committee is looking at this. I would now like to recognize our 
ranking member, Mr. Danny Davis, for his opening statement.
    [The prepared statement of Hon. Jon C. Porter follows:]

    [GRAPHIC] [TIFF OMITTED] T4956.003
    
    [GRAPHIC] [TIFF OMITTED] T4956.004
    
    [GRAPHIC] [TIFF OMITTED] T4956.005
    
    Mr. Davis of Illinois. Thank you very much, Mr. Chairman. 
Before I give my opening statement, I too would just like to 
congratulate Mr. Knight on his recognition. I was just 
thinking, if the Babe was around today and was asked the same 
question, he would probably give the same answer. [Laughter.]
    But thank you very much, Mr. Chairman.
    Reform of the general schedule and implementation of pay 
for performance plans for rank and file Federal employees has 
been the subject of many of our subcommittee hearings. This is 
the first hearing during which we will focus our attention 
specifically on executive and judicial pay. I am indeed pleased 
that we are doing so.
    I believe that each Federal employee, regardless of 
position, should be paid a living wage and a wage that is 
commensurate with skills, experience and knowledge. Based on 
the report that the GAO issued in June on executive and 
judicial pay, it is clear that the pay of our most senior 
officials and judges has declined in value. The GAO report 
recommends that when restructuring the pay plans for the 
executive and judicial positions, the plans should be sensitive 
to hiring and retention trends, reflective of responsibilities 
and skills, transparent, market sensitive, flexible to economic 
change, sustainable and competitive. And I reemphasize, 
competitive.
    It would be helpful if the witnesses addressed questions 
related to the hiring and retention trends among executive and 
judicial employees. Are we having trouble filling these 
positions? Are we losing current employees to the private 
sector? Also, how do we hold the individuals at the highest 
levels of Government accountable for their actions while 
ensuring fairness and preventing abuse?
    I have always been somewhat amazed, even before running for 
and being elected to public office, why the perception of the 
public seems to be that public employees, for some reason, 
shape, form or purpose, are not as valuable as those in the 
private sector. That is a question I have never been able to 
fully understand. I hope that we can shed some light on that 
philosophical thinking of people in our country, as well as the 
practical application of different kinds of thinking to the 
compensation that we provide for these men and women on whom, I 
think, rest a tremendous value relative to the stability of our 
Government, the stability of our Nation and the continuous 
progress of us as a people. So I look forward to the testimony 
of today's witnesses and thank you very much, Mr. Chairman, for 
holding this hearing.
    [The prepared statement of Hon. Danny K. Davis follows:]

    [GRAPHIC] [TIFF OMITTED] T4956.006
    
    Mr. Porter. Thank you, Mr. Davis.
    Congresswoman Holmes Norton.
    Ms. Norton. Thank you, Mr. Chairman. And I thank the GAO 
for its report.
    I agree with the ranking member, we have been concerned 
with the rank and file salaries, particularly as health care 
has gone up. As we speak, we have done very little to make sure 
that the best and the brightest continue to choose Government. 
I suppose that is where my focus is and where I think it has to 
be.
    But I do not want to be understood as believing that the 
problem that the GAO report addresses is not a serious problem 
and that it shouldn't be considered. I think it certainly must 
be considered. I simply offer the context in which I think all 
thought of pay raises in a period like this must be viewed.
    These very high level leaders are indeed at the height of 
their career. We are talking, let's understand who we are 
talking about. We are talking about political appointees. We 
are talking about judges and justices. We are talking about 
people who, at the moment they decide to come into an 
administration already know that, for example, the students 
that I continue still to teach, whenever I go back to teach at 
Georgetown, instantly make more than a Federal judge and 
instantly--I am talking about the top firms and the first year 
out of law school. They make more the first year out than their 
law professors. They make more than Members of Congress. And 
they make more than Federal judges.
    Any Federal judge, there is no, the plethora of them is the 
only thing we have to worry about, the plethora of lawyers who 
want to be Federal judges or Cabinet Secretaries boggles the 
mind. Bear in mind also that our country has been over-lawyered 
since Thomas Jefferson. There are so many of them that I 
literally, when I first began to teach, and even before I got 
tenure, I told my law students, look, sorry, I told students 
who came to be me because they knew I was a law professor, 
look, if you have a good, analytical mind, I don't want to 
train you away from what you are considering. But you really 
ought to consider that the one profession that is full of folks 
is us. And you ought to consider across the board. That is just 
how seriously I feel about the glut of lawyers seeking 
positions at the highest level with the Government.
    Again, I don't want to be understood as being against 
adjusting the wages of people who have seen no adjustment in 
real terms in 30 years. I do believe it is only fair to note 
that first of all, Cabinet Secretaries have to be separated 
from judges. You want to be a Cabinet Secretary because you 
want to get out here as quick as you can to use the fact that 
you have been a Cabinet Secretary in order to go and really 
cash in. And that is whether you are in Democratic or 
Republican administrations. I don't know why they would be 
lumped together except of course, their salaries have not gone 
up.
    The whole notion of trying to ``attract'' them to political 
appointments that there are maybe 1,000 people for every single 
one of them who are overqualified is not what I think we should 
be about to keep them is a political matter and not a salary 
matter. And we have seen that they do stay, in this 
administration, for example, a fairly long period of time. And 
I have not noticed, even in the last administration, that there 
was a lot of turnover. Yes, some turn over, but not any more 
than one might expect.
    Now, to go to judges, a lawyer has to really make a focused 
decision if he takes a position for life. I disagree with the 
Chief Justice of the United States who said recently in 
testimony that the failure to raise judicial pay was a direct 
threat to judicial independence. Hogwash. This has nothing to 
do with judicial independence. When it says that a judge is 
appointed for life, it doesn't mean that if he leaves before 
his life ends the public loses. For life to him, particularly 
at a period when people often change what they want to do or 
get financial pressure they may not have had before means he 
goes. But he doesn't go because of anything internal to 
judicial administration or justice.
    So the fact that there is some turnover, the ranking member 
is right, we have to understand what kind of turnover we mean. 
Because I suggest to you that the figures do not show that 
there is huge turnover in the Federal judiciary. And 
particularly since lawyers work off of the premise ``know or 
should have known,'' and the notion that your salary hasn't 
been raised in 30 years when you took an appointment last year 
from the President or from the prior President, don't think 
they don't know that.
    So as much as I think adjustments are due, these are the 
very people, these are the last people, people who are the most 
replaceable in our country, a bunch of lawyers. Too much of our 
talent is out there. That's why all of them want to come in and 
get some distinguishing feature, like having been a judge. And 
we have not seen that they hop in and be a judge and then go 
out. But I can tell you this: that even a judge who is a 
district judge or court of appeals judge, and he goes 
someplace, he is going to land big time in a law firm making a 
lot of money. And yet they are not rapidly leaving.
    Democratic Members said this year that they did not think 
the Members of Congress should take a pay raise until the 
minimum wage was raised. Now, Members of Congress are not 
hugely overpaid. But it did seem to me that was the kind of 
thing to do to set an example for the rest of the country. The 
lowest trick that I have ever seen was paid by the majority, 
because what they did was to attach our salary as well as the 
minimum wage to the estate tax, hoping that there would be 
enough greedy Members of Congress so that whole package would 
pass, and it failed, at least in the Senate.
    I would be for some adjustment for these highly paid people 
whose career will land them even better things if they decide 
to leave when in context we deal with first those who have no 
place to land but further at the bottom without an increase in 
minimum wage. Then with the rank and file employee of the 
Federal Government, especially those who are now have seen no 
increase in the amount we will pay, percentage we will pay of 
their health care insurance ever. Same percentage here. And 
when that balance is brought to bear, and that is the only 
context in which I think we should consider adjustments. We 
should look across the board. We will see that the highest 
ranking people are further behind. To him who is given most, he 
should be willing to give back most.
    When that is done and we are just recognizing that these 
people have made a very conscious decision to give up salary in 
order to have these very distinguished positions, and then 
recognize that we are uncompetitive in seeking employees, for 
example, who can go to one of the dot come capitals right out 
here in Northern Virginia, when we see all of that in context, 
then yes, the Justice of the Supreme Court and his eight 
colleagues, and yes, the judges of the district courts and the 
courts of appeals shall and should be adjusted. And they should 
be adjusted in the context of adjustments that are due millions 
of others.
    Thank you, Mr. Chairman.
    Mr. Porter. Thank you. Mr. Cummings.
    Mr. Cummings. Thank you for holding this important hearing 
today, Mr. Chairman, to examine the pay rates for Federal 
executive and judicial positions. I was troubled to learn from 
the Government Accountability Office report that you requested 
that is entitled Human Capital: Trends in Executive and 
Judicial Pay that we are not offering competitive salaries to 
our Government's top officials.
    As you know, the report finds that the salaries for the 
Federal Government's senior leaders, including political 
appointees and Federal judges and justices, have not been 
keeping pace with inflation on the growth of wages over the 
past 30 years. To the contrary, adjusted for inflation, they 
have actually gone down over time.
    Adjusted based on GDP, the salaries for Cabinet Secretaries 
have gone down 27 percent since 1970. Supreme Court justices 
have seen a 19 percent cut. Just think of what that means, 
adjusted for GDP, Chief Justice Warren Burger made more than 
Chief Justice John Roberts makes. And Secretary of State Henry 
Kissinger made more than Secretary of State Condoleezza Rice.
    I think we can all agree this reality is unreasonable. We 
send a poor message to our Nation's most important leaders by 
giving them a pay cut. And the cuts have not only been felt in 
high profile positions. A January 2003 report of the National 
Commission on Public Service found that in 2003, about 70 
percent of the Senior Executive Service received level pay due 
to pay compression.
    We have an obligation to the American taxpayer to keep 
overhead costs in all levels of Government low. But there comes 
a point where we will no longer be able to attract our Nation's 
best and brightest because we are unwilling to pay them. We 
must compete on a level playing field with the other industries 
that are pulling talented individuals in these fields. We can 
only do so by offering appropriate salaries. That is why I 
appreciate your dedication to this issue, Mr. Chairman, and I 
look forward to learning more about how we can implement the 
recommendations that the GAO has made with regard to addressing 
this problem.
    I look forward to the testimony of our witnesses today and 
I yield back.
    [The prepared statement of Hon. Elijah E. Cummings 
follows:]

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    Mr. Porter. Thank you, Mr. Cummings. I ask at this point 
for unanimous consent that all Members have 5 legislative days 
to submit written statements and questions for the hearing 
record, and that any answers to written questions provided by 
the witnesses also be included in the record. Without 
objection, so ordered.
    I ask unanimous consent that all exhibits, documents and 
other materials referred to by Members and the witnesses may be 
included in the hearing record, that all Members be permitted 
to revise and extend their remarks. Without objection, so 
ordered.
    It is also the practice of this committee to administer the 
oath to all witnesses. I have always wanted to have the oath 
done by a judge, so this is a real pleasure for me today. 
[Laughter.]
    So if you would all stand, please. Please raise your right 
hands.
    [Witnesses sworn.]
    Mr. Porter. Let the record reflect that all witnesses have 
answered in the affirmative. Please be seated.
    Our first panel, I would like to invite a witness to the 
table who has spent a little time with us in this subcommittee, 
and we appreciate your being here, Mr. Walker. Mr. Walker is 
the Comptroller General of the Government Accountability 
Office. Again, I think that your office is a part of this 
establishment, for years, and we appreciate what you have done. 
Welcome, and we will appreciate your testimony.

STATEMENT OF DAVID M. WALKER, COMPTROLLER GENERAL OF THE UNITED 
                             STATES

    Mr. Walker. Thank you, Mr. Chairman, Ranking Member Davis, 
other members of the subcommittee. I appreciate the opportunity 
to be here today to report on our latest report dealing with 
trends in executive judicial pay. This is a copy of the report, 
which it is my understanding all of you have had an opportunity 
to receive and review.
    I assume that my entire statement will be entered into the 
record, and therefore, if it will be, I will just summarize. Is 
that all right, Mr. Chairman?
    Mr. Porter. Please.
    Mr. Walker. Thank you.
    In our report on executive and judicial pay, we found that 
generally, the salaries for the Federal Government's senior 
leaders, including political appointees and Federal justices 
and justices, have not kept pace with inflation or the growth 
in wages over the last 30 years. Our work is consistent with 
the National Commission on Public Service's findings that 
salaries for top Government officials have not kept pace with 
inflation or maintained a reasonable relationship to the 
market.
    And I have two exhibits up here that are in my testimony, 
the far one on the left is Appendix No. 1, which is part of my 
testimony, which talks about the differences in pay based upon 
adjusting for CPI as well as the GDP deflator. And the one on 
the right talks about what has happened over time looking at a 
variety of indices, whether it is wages, prices or other types, 
as well as very specific positions, to try to help bring this 
home.
    I would respectfully suggest that while executive and 
judicial pay overall has declined in value when adjusted for 
inflation and as compared to other indices, that any 
restructuring of executive and judicial pay should consider 
basic pay received as only one part of a total compensation 
package. We need to be looking at total compensation, not just 
cash compensation. Total compensation includes such elements as 
cash, basic pay, locality pay, cash awards and bonuses, noncash 
benefits, such as annual and sick leave, health insurance and 
deferred benefits, such as pension and retiree health and other 
benefits such as life insurance.
    For example, at present, selected executive level positions 
or executive schedule positions, administrative law judges, 
inspectors general and Federal justices and judges, do not 
receive cash awards and bonuses due to the nature of their 
positions, while career senior executives may receive them. All 
of the executive level positions may receive noncash benefits, 
such as health and life insurance and retirement. However, 
there are significant differences in retirement benefits, such 
as larger retirement benefits for Federal justices and judges, 
compared to many executive level positions.
    Organizations in the Federal Government may need to be 
flexible in order to look at not only how much they are paying 
but in what form they are paying it, whether it should be in 
cash, current and/or deferred benefits. Thus, the Federal 
Government may need from time to time to shift the balance in 
total compensation between pay and benefits in order to do what 
Ms. Holmes Norton and several of you said, and that is, in 
order to be able to attract and retain top talent.
    I would, however, respectfully suggest that not all 
executive level positions are equal, and that we need to do a 
much more thorough analysis of the difference between these 
types of positions. For example, while there is no question 
that the Federal Government wants to be in a position to 
attract and retain not just enough people but top quality 
people for these critical positions, we need to keep in mind 
that there are several criteria that executive and judicial pay 
plans should meet in our opinion.
    First, they need to be sensitive to hiring and retention 
trends. Do we have a problem or not? Are we having difficulty 
in attracting and retaining an adequate number of people with 
the right type of quality? It is not just number, it is also 
quality. And you don't necessarily want to wait until you have 
a huge problem before you solve the problem. But we need to be 
aware of that. Look at supply and demand, look at whether or 
not we are having a problem.
    Second, we need to pay more attention, I believe, to 
something that Ms. Holmes Norton touched on, and that is, we 
need to look at the responsibilities, the skills and knowledge, 
the tenure and the contributions of these positions. For 
example, I would respectfully suggest that a political 
appointee who is in a policy position who by definition is only 
going to be in that policy position for 2 to 4 years, in most 
circumstances, is fundamentally different than a person who is 
in a professional position that requires a degree of 
independence that is going to be in a position for a number of 
years, and therefore is making much more of a sacrifice as 
compared to the opportunity cost of what they could get in the 
private sector versus the public sector.
    I think we also need to make sure that they are 
transparent, that they are marked as sensitive, flexible to 
economic change, that they are affordable and sustainable and 
that they are competitive. With that, Mr. Chairman and members 
of the subcommittee, I think I would reinforce that yes, there 
is an issue here. There is a very real issue here. But any 
restructuring of executive and judicial pay should not treat 
all positions of the same level necessarily the same, that we 
need to do a more substantive analysis than that, that we need 
to consider total compensation, not just base pay and cash 
compensation.
    And that moving forward, there may be a need for a 
commission to look at various options for how best to handle 
this and to try to de-politicize the issue, including whether 
and to what extent certain positions ought to be coupled with 
congressional pay. Right now, as you know, there are a number 
of positions that are directly coupled with congressional pay. 
I think that has to be looked at. As you know, the National 
Commission recommended a decoupling in that regard.
    And last, but certainly not least, to reemphasize, if we 
look in substance at what type of skills and knowledge is 
necessary, how long a person is likely to be in that job, 
whether or not that job requires a degree of independence, such 
as inspectors general and judges, I think those are factors 
that we need to be considering to a much greater extent than we 
have in the past. I have been a Presidential appointee of 
President Ronald Reagan, President George Herbert Walker Bush 
and President Bill Clinton. The fact is that the first two 
appointments, I knew by definition I was going to be in for a 
short period of time. In my current position, I made a 15 year 
commitment.
    Those are fundamentally different things. And I think that 
we need to understand that and recognize that to a greater 
extent than we have in the past. Thank you, Mr. Chairman.
    [The prepared statement of Mr. Walker follows:]

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    Mr. Porter. Thank you, Mr. Walker. I think maybe you need 
combat pay. I see that your arm is in a sling. We are glad you 
are OK.
    Mr. Walker. You should see the other guy. [Laughter.]
    Mr. Porter. We are glad you are OK. Thank you for your 
testimony, and to your staff. I know they put a lot of time 
into putting this report together. So we appreciate it.
    I would like to elaborate a little bit on the 
reestablishment of the salary type commission. What do you see 
are some of the critical factors that should be discussed, who 
should be on the committee, and your different ideas?
    Mr. Walker. Well, as you know, there have been committees 
in the past, some of which were staffed, some of which exist in 
law but have never been staffed. I think we have to recognize 
the reality that this is an important, complex, controversial 
issue that also has potential political implications. And given 
that fact, I think we have to professionalize the process.
    I think serious consideration needs to be given to having a 
credible and capable commission, comprised of both 
professionals and other noted individuals with credibility on 
both sides of the aisle, who would end up doing the type of 
analyses that I talked about, a more thorough analysis than has 
been done in the past, and could make recommendations that 
would require, for example, a response by the President, would 
require congressional hearings, mandatory, and possibly require 
congressional action within a certain period of time, possibly 
with amendments or limited amendments.
    We need to figure out how we can professionalize the 
process, make it more routine and yet recognize the reality 
that there are problems with the American people. The American 
people don't necessarily understand or appreciate some of the 
issues that we are talking about here to the extent that they 
could and should.
    Mr. Porter. Thank you.
    Mr. Davis.
    Mr. Davis of Illinois. Mr. Walker, I was trying to think, 
do you think it would have any real bearing if we were to ask 
the American public in a way what they thought about the issue? 
And I don't know if we would necessarily make use of a poll, or 
find some way to glean as much thinking from the public as we 
could glean, relative to their thoughts on the issue?
    Mr. Walker. Mr. Davis, I would respectfully suggest that 
there are a number of issues, and this may well be one of them, 
that there needs to be more public education, more outreach, 
and more citizen engagement than there has been in the past. 
Frankly, most members of the public aren't experts in 
competitive compensation practices. They are not experts in the 
nature of compensation in the Federal Government, much less the 
nature of compensation in the private sector. They don't know 
how many of these executive level positions are political 
appointee positions versus career. They don't know, for 
example, how many of these positions are people that come in 
for 2 years, end up going out and making a lot more money in 
the private sector, which, as I say, that should be treated 
fundamentally differently than people who are making a longer 
term commitment.
    So I think education and citizen engagement is an important 
part to addressing this issue, as well as other issues.
    Mr. Davis of Illinois. I was trying to think of, how did we 
get to where we are in terms of how did we actually begin to 
determine value? It seems to me that compensation has a great 
deal to do with one's interpretation or acknowledgement of 
value in terms of saying, this is worth so and so, this is 
worth so and so. It seems to me that whatever the public is 
willing to buy, that is what they are sold. I think of athletes 
who earn $40 million to play baseball, or $100 million to play 
football. The public says, we are willing to buy this, because 
we are prepared to buy the tickets for the games to generate 
the revenue that it takes to be able to pay these individuals.
    Would it be rational to try and look at what takes place in 
the public sector versus what takes place in the private 
sector? Delegate Norton talked about what beginning attorneys 
might expect to earn in certain kinds of practices, and in some 
ways, this will supersede what a senior judge might earn in the 
public environment. Maybe back into compensation by looking at 
the private sector, and then trying to attach public value as a 
possible way of arriving at a decision.
    Mr. Walker. Several thoughts about that. No. 1, I do think 
it is relevant to consider private sector compensation 
practices as an input mechanism to try to help inform the 
public and to try to help inform any decisionmaking that is 
made here. However, I would also respectfully suggest that 
there are fundamental differences between the public sector and 
the private sector. All of us in this room recognize that those 
that go into the public sector are doing it to maximize their 
self-worth, not their net worth, and to make a difference for 
the country and their fellow man, not to be able to maximize 
their bank account.
    So we just need to understand that. So I don't think that 
we have to, nor should we expect to pay the same amount of 
compensation for the same level of responsibility in the public 
level as the private sector, because people are looking for, 
they have different motivations and certain kinds of people are 
going to work in the public sector versus the private sector.
    At the same point in time, we need to pay enough to be able 
to attract and retain top quality people, to be able to compete 
for the best and brightest. And in that circumstance, I think 
we have to do a little bit more through analysis than we have 
done in the past. If you look at our compensation practices, 
they are very hierarchial based. They are kind of like the 
1950's, here is the hierarchy, where are you in the hierarchy.
    One of the things I would respectfully suggest we need to 
do is we need to do something that several of you talked about. 
We need to do a more thorough analysis. What are the skills and 
knowledge and education that is required for this? Is this a 
position that we are asking for a long term commitment for? Is 
this something that we need a degree of independence for? Or is 
it something that somebody is coming in at a high level 
position to serve their country for 2 years and then they are 
going to be going back out to the private sector and they will 
probably, frankly, make money, more money because they did 
that?
    I think we need to have a more professional and thorough 
analysis than has been done in the past, rather than a mere 
hierarchical approach.
    Mr. Davis of Illinois. Thank you very much.
    Thank you, Mr. Chairman.
    Mr. Porter. Congresswoman Norton.
    Ms. Norton. Thank you very much, Mr. Chairman.
    Could I begin, Mr. Walker, by just noting that Federal 
employees, of course, I believe you would agree, work within a 
market system. Federal Government has tried, not always 
successfully, to take that into account. Would you agree that 
there are many Federal employees who, if they chose to leave 
today, could earn more in the private sector?
    Mr. Walker. No question. I think that is something we have 
to consider when constructing Federal compensation practices.
    Ms. Norton. Indeed, what we are finding, of course, is that 
early retirements, it is really heartbreaking to see it, early 
retirements and even before retirement, people go out and work 
for a contractor, because they can instantly make more money. 
So I think I want to just establish for the record that Federal 
employees on whom we depend for homeland security, for vital 
occupations, work non-competitively with the private sector. 
That said, let me move on.
    Considering that we are speaking in the context of supply 
and demand, I have to chuckle, because women are always told, 
that well, you earn less because after all, there are too many 
of you applying for the same job, the same kinds of jobs. The 
Federal Government has made adjustments for a few rarified 
occupations that are indispensable. For example, scientific 
occupations or other highly skilled occupations.
    Is it your view that we have not been able, excuse me, that 
is not my question, I just want to note that for the record.
    Would you agree that being a lawyer in a market system 
based on supply and demand is not a skill that is scarce in 
this society? One of the things I teach in my seminars is that 
if this generation of lawyers does not learn how to cut through 
all the harm lawyers have done the whole economy will suffer 
tremendously.
    So I am trying to get to why we would want to rush in, even 
though I want to stipulate again for the record, I don't think 
anybody should be 30 years without having at least some more 
adjustment in real terms than these very senior people have. 
But I assume that in making this case, GAO has looked at 
whether or not there has in fact been turnover of the kind we 
would want to discourage. What has the turnover been for 
Cabinet Secretaries? What has the turnover been for district 
court judges? What has the turnover been for justices of the 
Supreme Court? What has the turnover been for judges of the 
courts of appeals of the United States?
    Mr. Walker. I believe that it is essential that more 
analysis needs to be done on that. That is one of the reasons 
why I think considering some type of a commission approach is 
appropriate, and for that commission to be informed, not just 
by this type of information, but also the type of information 
you are talking about.
    I think one of the things we have to keep in mind is that 
while this is factually accurate, it also starts with 1970 and 
by starting with 1970, it assumes that everything was properly 
aligned in 1970. We haven't done the baseline analysis that I 
recommended. We have never done the baseline analysis that I 
have recommended, which needs to be done. So this starts with 
that assumption, which may or may not be a valid assumption.
    Ms. Norton. Did the GAO consider, and I appreciate very 
much tat you have separated out the kinds of employees, high 
level employees we are dealing with, and we are not lumping 
people who go out and make a mint with people who have 
appointments for longer periods of time, including life. Did 
you consider the value of having served for the person who has 
not gotten the increase you would like to see him have? Have 
you considered the value of having served for the Cabinet 
Secretary?
    For that matter, did you consider the value of having 
served for a lawyer who has wanted to be a judge all his life, 
even though he may consider now he has children in college and 
has to get out, the great honor that many believe they have 
when they become a district court judge? The value of that, or 
is the value of having served as Cabinet Secretary a part of 
this analysis that says they are underpaid?
    Mr. Walker. It is not part of this analysis. But as I tried 
to touch on, I do think it is relevant to distinguish between 
what is the nature of the position, are we having a problem, 
how long is that person likely to stay there, and to what 
extent it is a true economic sacrifice versus not. Now, one 
would expect that most Federal judges, subject to doing an 
initial analysis, would intend to stay for the long term. So if 
they are making a long-term commitment, then they are going to 
be more affected by not keeping up over time due to power of 
compounding than somebody who you pointed out who comes in to 
be a Cabinet Secretary, comes in to be a deputy Secretary for 2 
years and then goes back out to the private sector. Because by 
definition, their job is temporary.
    Ms. Norton. Mr. Walker, I appreciate something you said in 
your testimony about looking at non-economic compensation. And 
just let me suggest for people who have finally become a judge 
of the Supreme Court, that is only nine people. Sometimes I 
think that being a Justice on the Supreme Court is a guarantee 
of longevity. Because if you want to find a group of people who 
never leave, you just look at how long Justices serve. The only 
question I think Congress may 1 day feel, because the Justices 
and judges themselves have, we have been investigating a judge 
up here, because judges haven't looked closely enough at 
themselves. Somebody gets senile and nobody does anything about 
it, because they are there so long.
    But consider, Mr. Walker, that a Justice who works very, 
very hard, they must be very robust, because they work into old 
age and do a lot of work. But they are off all summer. If they 
get sick, they can be gone for as long as they see fit. If you 
are a senior judge, sitting on as few cases or as many as you 
would like, that means you are retired. You still get your full 
compensation.
    I am trying to find ways in which particularly judges, and 
to separate them out, I should feel sorry for at a time when we 
can't get any increase in the minimum wage and the rank and 
file Federal employees are fleeing the Federal Government as if 
it is a training ground, take what we have invested in them and 
go invest it in the private sector.
    So I am trying to find a way to find somebody to feel sorry 
for in here. And I am not having a lot of luck.
    Mr. Walker. You are making a case for one of the points 
that I made. And that is, you can't just look at base 
compensation. You have to also look at other elements of 
compensation, including pensions and including other provisions 
that go with the job. You just can't look at base pay. You have 
to look at all those issues, too.
    Ms. Norton. Well, I just want to submit for the record, Mr. 
Chairman, I think the Congress has done a good job at doing 
that. Because of the salaries, because of senior judges, 
because of Justices, there may be something we need to look 
for. Again, every time I find somebody to feel sorry for, a 
district judge who may work really hard because trials are 
hard, I keep thinking of the reams of lawyers who want to be 
district court judges. And I can't reconcile that with supply 
and demand that is always thrown in our face and somehow being 
afraid about the quality.
    Therefore I really have to ask you this question. Do you 
believe that the quality of the judiciary has been in any way 
affected by the salaries that you have described?
    Mr. Walker. I cannot say that has been the case. But I 
think the potential exists for it to be the case if something 
is not done eventually.
    Ms. Norton. Again, I want to stipulate again that I think 
something should be done. But I am asking these questions in 
order to stress my point about context. And I am not sure there 
is a Member of this Congress, frankly, in this context, who 
would go now, and the chairman is certainly not suggesting 
that, to the highest level people in the Government.
    One final question, Mr. Chairman. This is a thoughtful 
report. You look for ways that might in fact accomplish what 
you want to accomplish. And you look for options. There is one 
part of your report that I have to take issue with. But maybe I 
don't, maybe you can explain it to me. And that is the notion 
of performance based bonuses. Apparently, for political 
appointees who are subject to Senate appointment, for the life 
of me, I know everybody is into we have to give those who work 
hardest special compensation. But for the life of me, for 
people who, as you say, never intend to work for terribly long, 
are rewarded handsomely, simply by having held the position, 
even if they did a putrid job in the position.
    The notion of putting us to work trying to find whoever 
would do it, and there you come to a real problem, but trying 
to find the difference between the Secretary at HHS and the 
Secretary of Labor, seems to me to be a useless exercise. These 
people are supposed to work their little behinds off for the 
time they are here. I have ever reason to believe they do. They 
are very high pressure jobs. And it is, it seems to me, a 
stretch to take the performance based notion and try to apply 
it to political appointees who should need, and I stress this, 
should need no incentive given all they have to gain. No 
incentive to do the best job they can.
    If the point of the performance based is to say, we want 
you to work harder, if you get this, you will work harder, we 
want to distinguish you, we want to distinguish you between 
those who don't work hard and those who do, then it seems to me 
that it is out of place to say to somebody that high in the 
Government, we are going to distinguish between those of you 
who work hard and those of you who work a little harder.
    Mr. Walker. I do not think it is an across the board issue. 
Let me give you an example where there is a problem right now, 
and which could become more acute. As you know, senior 
executive service members that are career officials who are 
part of a performance based, who have an adequate performance 
oriented appraisal system, can be approved by OPM for that 
agency to have base pay up to level 2, which is what I make.
    In addition to that, they can receive bonuses that will 
allow them to make up to the amount that the Vice President of 
the United States makes. That is a fact. And there are people 
that are in that situation.
    You have certain positions, for example, let's take the 
inspector general position. There are Presidential-appointee 
inspector generals who are supposed to be professional, who are 
supposed to be independent, who by statute are level 4 
positions. So by definition, they are making significantly 
less----
    Ms. Norton. Let me ask you then, the reason I asked this 
question is, you give us examples on page 10 of your testimony, 
and you do give some that one might understand, because they 
are more like SESers. Selected executive schedule positions 
that are appointed by the President, subject to Senate 
appointment, including selected IGs, ALJs and Federal justices 
and judges do not, do not, that is, referring back to receive 
bonuses. Now, would you amend that? How are you going to give a 
bonus to a Federal judge, sir?
    Mr. Walker. And I think there are certain positions where 
you don't want to. All the more reason why you have to look at 
what is an appropriate level of base compensation.
    Ms. Norton. So you are not arguing that judges----
    Mr. Walker. I am not necessarily arguing that you do it 
across the board. There may be circumstances. But if you don't 
give a bonus, then you need to think about what does that mean 
from the standpoint of base compensation.
    Ms. Norton. Thank you, Mr. Chairman.
    Mr. Porter. Thank you.
    Mr. Walker, thank you for being here today. We appreciate 
your testimony, and get well soon.
    Mr. Walker. Thank you.
    Mr. Porter. What I would like to do is combine panel two 
and three. We will be voting here shortly, so I will apologize 
in advance, I am not sure how many votes we are going to have, 
but I will let you know when that comes through.
    Gentlemen, we appreciate your being here. We have with us 
D. Brock Hornby, judge, U.S. District Court for the District of 
Maine, chairman of the Judicial Branch, Committee of the 
Judicial Conference of the United States; Judge Philip M. Pro, 
chief judge and a good friend of mine, U.S. District Court for 
the district of Nevada. And Judge Pro, my partner, Mr. Davis, 
was just in Las Vegas. And he has speeding tickets he would 
like your help with. [Laughter.]
    Not really, just kidding.
    Also the Honorable Sean O'Keefe, chancellor of Louisiana 
State University, former Administrator, National Aeronautics 
and Space Administration. And our third panel is Dr. Gary 
Burtless, John C. and Nancy D. Whitehead Chair in Economic 
Studies, the Brookings Institution.
    I would like to begin with Judge Hornby. Welcome. We 
appreciate your being here today.

 STATEMENTS OF D. BROCK HORNBY, JUDGE, U.S. DISTRICT COURT FOR 
THE DISTRICT OF MAINE, CHAIRMAN, JUDICIAL BRANCH, COMMITTEE OF 
 THE JUDICIAL CONFERENCE OF THE UNITED STATES; PHILIP M. PRO, 
 CHIEF JUDGE, U.S. DISTRICT COURT FOR THE DISTRICT OF NEVADA; 
 SEAN O'KEEFE, CHANCELLOR, LOUISIANA STATE UNIVERSITY, FORMER 
 ADMINISTRATOR, NATIONAL AERONAUTICS AND SPACE ADMINISTRATION; 
  AND GARY BURTLESS, JOHN C. AND NANCY D. WHITEHEAD CHAIR IN 
          ECONOMIC STUDIES, THE BROOKINGS INSTITUTION

                  STATEMENT OF D. BROCK HORNBY

    Judge Hornby. Thank you, Mr. Chairman. Thank you for 
holding this important hearing, and thank you for inviting 
members of the judiciary to attend and participate. As I told 
you in the hall, the only other time I have testified in 
Congress, I was with Judge Pro. So I am pleased to be here 
again testifying with him.
    Mr. Porter. Well, Judge, any good stories on the judge, I 
would like to have them. You can give them to me later. 
[Laughter.]
    Judge Hornby. And can I assume that our written remarks are 
incorporated into the record?
    Mr. Porter. Yes, they will be. Thank you.
    Judge Hornby. We believe that the Federal judiciary is at a 
crossroads. If the current situation is not checked, we believe 
that pay compression is going to threaten our ability to 
recruit and retain experienced, professional judiciary 
employees as well as talented judges. We have 5 years of missed 
COLAs for the Federal judiciary, and for Congress, I point out. 
And they have had a substantial impact, there is a chart up 
here to my left, that shows the salary that you would be paid 
and we would be paid if the COLAs had gone into effect as 
intended by Congress when the system was set up versus what it 
actually is. Those are simply in real dollars and reflect the 
decision of Congress to forego COLAs five times.
    Second, the COLA that Federal judges and members receive is 
automatically lower than what the general schedule employees 
receive. And since 1993, the result of that has been that the 
compensation of Federal judges and members has increased by 
23.7 percent, whereas the compensation of general schedule 
employees has increased by 57.5 percent. The reason for that is 
the locality pay adjustment. Because when the ECI, the COLA 
percentage is fixed, then there is a subtraction of the average 
locality pay. And members and judges do not get the locality 
pay portion.
    The result of that for the judiciary has been severe pay 
compression and indeed, inversion. If you look at the second 
chart, you will see that there was a reasonable hierarchy in 
1994 from the judges on down through the circuit executives, 
the bankruptcy and magistrate judges, down to senior judiciary 
employees. And if you look at 2006, you will see now, it is 
flat, and indeed that senior judiciary employees and circuit 
executives now exceed substantially what magistrate judges and 
bankruptcy judges can be paid, which are capped by statute.
    So we have not simply severe compression, we have actual 
inversion in what has taken place. And because salaries have 
not kept pace with inflation, as you heard the Comptroller 
General say, the purchasing power of Federal judges and 
judiciary staff has declined since 1993, senior judiciary 
staff, whereas compensation in the not-for-profit area and the 
private sector has been spiraling upwards.
    I am sure you have read the stories that we all read about 
what 1st-year associates now make at major law firms. Not only 
does it well exceed what bankruptcy judges and magistrate 
judges are earning, it is exceeding what district judge and 
circuit judges are earning, once you add in the bonuses that 
they are paid. The compensation for judiciary executives is 
lower than that of the executive branch executives. Legislation 
enacted in 2003 raised pay caps for career senior executives to 
as high as $212,000. Similar to what you folks have done for 
your employees, we have capped compensation of non-judge 
employees at $165,200, the pay of a Federal district judge. So 
it is no longer competitive in that respect with the executive 
branch. All these disparities have left the judiciary at a 
serious disadvantage in competing for talent against all other 
sectors, private, not-for-profit, even other government 
entities.
    We think there are three things that need to be done to 
correct the situation. First of all, COLAs for the judiciary 
and for Congress should equal COLAs for the general schedule 
employees, so that those adjustments better reflect annual 
inflation and help the compression problem. Second, we think 
that the missed COLAs for both the judiciary and Congress 
should be restored, alleviating in part the substantial losses 
that have taken place in real dollars over the past years as 
reflected on those graphs. And third, we believe that top level 
salaries have to be raised to alleviate pay compression and 
inversion in the judiciary.
    And I wanted to make a couple of comments about the amount 
of judges' pay. We are concerned about what is going to happen 
in the future to judges. Yes, judges do not expect and should 
not expect to be paid what partners make in major law firms. No 
one makes that argument. They expect to take a financial cut 
because there are wonderful rewards to the job in terms of the 
public service we can perform in terms of what the job holds.
    But more and more judges now are coming out of the public 
service ranks. They are coming from the ranks of bankruptcy 
judges, magistrate judges, U.S. attorneys, people who made the 
decision long ago to spend their career in public service. Do 
we want a judiciary where we cannot find people from the patent 
bar to go on the Federal bench, cannot find people who are 
skilled and experienced in corporate law in dealing with some 
of these very difficult questions that Federal judges have to 
deal with? Do we want only people who are committed to public 
service on the one hand and only people who are independently 
wealthy on the other? Or do we want to maintain our tradition 
of having a diverse judiciary of people from across the board?
    There was reference to Babe Ruth. And I am from New 
England, and so I know more than most of you do that the Red 
Sox lost Babe Ruth to the Yankees. [Laughter.]
    And people in Maine understand that baseball players get 
paid a lot of money, even though they can't. People understand 
how the market works. They understand that Jay Leno gets paid 
more. They understand that their doctors get paid more. They 
understand even that their lawyers get paid more.
    So even though judges should not be paid at the same level 
as their private sector equivalents, there needs to be a 
recognition that it is important to the well-being of this 
country that we have good judges on the bench. And yes, when 
judges take the job, they know there is going to be the 
sacrifice. But they expect to be kept equal. They don't expect 
that they are going to fall behind as life moves on and as 
their kids go to college.
    I see my time is up. And I will summarize simply by saying, 
we are the third branch of the American Government. I believe 
that all Americans want strong, talented people running their 
court system. And I am fearful that the current structure is 
going to have a negative impact on judiciary employees and on 
Federal judges as well.
    Thank you, Mr. Chairman.
    Mr. Porter. Thank you, Judge. We appreciate it very much.
    Next is my friend, Judge Pro, Chief Judge of the U.S. 
District Court for the District of Nevada.

                   STATEMENT OF PHILIP M. PRO

    Judge Pro. Thank you very much, Mr. Chairman and Mr. Davis. 
Thank you so much for allowing me to participate today. I am 
delighted to do this, and want to thank you, Mr. Chairman, for 
convening this hearing and for calling for the study that has 
been conducted.
    I was going to begin by talking from the perspective of a 
Federal judge, but something Mr. Davis said provoked in my mind 
I think a broader and a very important question. If I could 
pick up on that, the value of our employees in government 
service and public service. You both have touched upon the 
importance of this.
    As one who has worked in government in one capacity or 
another and as a judge for 26 years, I can tell you that the 
folks in public service, at least that I work with in the 
courts, and I know this to be true of others, are valuable 
people. They perform wonderful service for this Government. And 
it is important to the citizens of this country, I think, that 
people who seek jobs in public service continue to find some 
incentive to do so, not disincentives, not carry a burden 
beyond that which we might expect them to bear.
    People are drawn to public service for a wide variety of 
reasons. But I think that all of us, for example, who become 
judges cherish the fact that we are honored to hold an office 
such as that of Federal judge. I know that Members of Congress 
surely feel the same way. But so do our probation officers, so 
do our pre-trial services officers, so do our clerks of court 
and deputy clerks of court who feel that they are making a very 
important contribution to the operation of our Government, 
because they are making an important contribution in so many 
different ways.
    Our system depends, our democracy depends upon an informed 
public, certainly, exercising its franchise, but it depends as 
well upon citizens willing to undertake the many 
responsibilities of public service. And it is easy to talk 
about the folks that we characterize as in leadership 
positions, whether they are Members of Congress or judges or 
senior Government officials, and keep the focus on them. But 
the value runs through the entire system, in all of the 
individuals who commit to public service deserve to be 
compensated fairly.
    An independent judiciary is essential to the rule of law. 
It is essential to the democracy that we live in. And I fear 
that as we progress, there has been study after study after 
study which has demonstrated the inequity in the compensation 
that is available currently to Federal judges. As my colleague 
Judge Hornby said, no judge expects to be compensated at the 
same level as a partner in a law firm, anything of that type. 
We have made a choice. And it is a choice, as Congresswoman 
Norton said, with our eyes open.
    And there are other lawyers that would love to be Federal 
judges, I don't doubt that. But if we are to continue to 
attract and retain the best and the brightest available lawyers 
to become Federal judges, if we are to attract and retain the 
best and the brightest people to other sectors of Government, 
we have to compensate them fairly and at least competitively 
with the private sector, so that they are not forced to take 
vows, what a colleague of mine calls vows of dignified poverty.
    A judge who accepts a lifetime appointment does so with his 
or her eyes open, there is no question about it. It is a 
lifetime commitment to public service. And we should not, I 
suggest, after years in office, be forced to consider whether 
we continue to do something that we love doing, that we think 
is important, and choose between that and educating members of 
our family or supporting our family.
    I can speak anecdotally just from the District of Nevada, 
Mr. Chairman, with which you are very familiar. In the past 18 
months, one of my colleagues left the Federal bench to enter 
the private sector, alternative dispute resolution. He did not 
want to leave, it is Judge David Hagen. He did not want to 
leave the bench at all. He had three children in college, he 
simply could not afford to remain as a U.S. district judge.
    We recently selected a new bankruptcy judge, which took 
office last month, in our court, Judge Nakagawa, Mike Nakagawa. 
When the net was cast for applicants, I talked to a great many 
lawyers, members of the bankruptcy bar, excellent lawyers, who 
told me that they would not seek the position, even though they 
would love to do it, because they couldn't afford that economic 
downturn that they would face.
    We have had difficulty in some cases filling positions, 
finding the best people, thankfully we found some good ones, in 
our technology departments, IT departments. That is always a 
difficult for us. And Mr. Davis, I think that poll that you 
talked about would be an interesting poll. But I think if the 
question were posed with where you began, what members of the 
public do you think, not so much as what is the dollar figure 
that these people in various positions should be paid, but what 
is their value, I think you would perhaps get a different 
response, I hope you would.
    And I hope that the American public recognizes, and I know 
it is a difficult matter for the Members of Congress to address 
and to face the scrutiny that you do face and the responses 
that you face when you talk about subjects like pay. It is a 
delicate, delicate subject. It is a difficult subject. Your 
responsibilities are heavy in making those kinds of decisions, 
just as those of a judge are sometimes heavy in making the 
decisions we have to make. And I respect that.
    But we have judges who are leaving the bench. There are, it 
is my understanding in response to one of the questions posed 
earlier, since 1990 there have been 100 article 3 judges who 
have left the bench. I don't have that number in front of me, I 
don't have the numbers, but I believe we can provide that for 
you, it is approximately that number, some eight or nine this 
year alone.
    I don't want to belabor my testimony on this part, other 
than one baseball metaphor that you all mentioned about Babe 
Ruth. I went on the internet last night and I saw that umpires 
are paid between $87,000 and $357,000 a year, depending upon 
their experience, for calling balls and strikes. Well, we spend 
a lot of time calling balls and strikes in a form, too, in our 
courts every day. And I don't know of any judges that are paid 
close to what a baseball umpire is. More power to them, I am 
sure they have a difficult job. But so those who sit as Members 
of Congress, so do those who sit on the Federal bench, so do 
those that work within Government in senior capacities and 
otherwise.
    So I would urge your committee and Congress to move forward 
with relief in this area. Thank you very much.
    [The prepared statement of Judge Hornby and Judge Pro 
follows:]

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    Mr. Porter. Thank you very much.
    There are those that would suggest that we cap attorneys' 
fees. That would equalize this problem. [Laughter.]
    But that is not why we are here today. We have the 
Honorable Sean O'Keefe, Chancellor of Louisiana State 
University, former Administrator, National Aeronautics and 
Space Administration. Welcome.

                   STATEMENT OF SEAN O'KEEFE

    Mr. O'Keefe. Thank you, Mr. Chairman and Congressman Davis. 
I appreciate the opportunity to spend time with you. Of the 
better than 150-odd hearings I have had the opportunity and 
privilege to testify at, this is the first one I have appeared 
at voluntarily. All others were--[laughter.]
    Mr. Porter. We can arrange for you to come back, if you 
would like. [Laughter.]
    Mr. O'Keefe. This is more fun than I can stand, Mr. 
Chairman. I appreciate this. Precedents are to be set just 
once, that is for sure.
    But I appreciate the opportunity. This is an important 
question, and it is one that again I think the fact that you 
are delving into this issue is a sensitive matter, one that 
certainly is not the most publicly popular one to do, but I 
commend you for taking on the question.
    I will say up front that I am not here at all to advocate 
for a specific compensation rate for executive pay. That is not 
a matter I think that will have any bearing, particularly given 
the important analysis you have received from the Comptroller 
General, who can provide far more insightful and helpful ways 
of looking and determining what competitiveness means, and 
comparability. So as a consequence, I will not offer a view one 
way or the other in terms of what rates are more or less 
competitive or comparable. Again, I think the members of the 
judiciary here are far more qualified in that regard, too.
    I would offer, though, just a couple of points. The first 
is that we adhere as a general principle to a very Jeffersonian 
model of how we promote public service opportunities. There are 
varying ways to describe that, but I think the preference that 
I would adhere to is that model, for whatever set of 
circumstances in combination really promotes and motivates a 
fair amount of mobility and it motivates and encourages a level 
of public service across the public spectrum, which is a 
desirable aspect.
    That said, we ought to have eyes wide open in terms of what 
the consequences of that would call for. I think there are 
three very important factors that bear on the executive 
leadership that we are bringing in that have bearing on what I 
would call a subjective competitiveness for compensation rates.
    The first one is that it all depends on where you are in 
your station in life and age and professional experience in 
terms of the willingness and ability to be able to follow 
through. I think the very eloquent statement that Justice Pro 
offered as to what motivates all of us in public service, or 
who have been engaged in it, to involve ourselves in this. If 
you can afford it, you will stay is the bottom line, I think is 
what I heard very eloquently said. And I think fried to its 
lowest denominator, that is it.
    Earlier in a career or later in a career, it becomes a much 
more conducive and easier opportunity, particularly if it 
tracks as closely as possible from a longevity standpoint, with 
the age of each kid that you may have. That has an important 
bearing, or did in my circumstances. I have been appointed to 
Presidential appointments, confirmed by the Senate on four 
separate occasions. On the first two occasions, first as the 
Controller and CFO at the Defense Department, second as the 
Secretary of the Navy, I was at an earlier stage in my career 
in which the kids were an awful lot younger. As a consequence, 
they didn't have a habit of eating quite as much.
    As I came back to public service in the latter two 
capacities, as the Deputy Director at OMB and later as the NASA 
Administrator, they had unfortunately become teenagers and were 
also aspiring to colleges. The combination of all that made it 
extremely difficult, when you compound it with mobility and the 
Jeffersonian model of leaving town, coming back, finding an 
opportunity to live in this town, which is the least affordable 
place probably to look to for housing opportunities. That 
compounds to make this a very short-term kind of opportunity. 
Notwithstanding other interpretations, that was the one that 
certainly influenced mine.
    I would also add to that, though, the second matter, which 
makes it equally difficult in dealing with the matter of what 
is a base level of compensation, which is the compounding 
effect of the ethics rules. They are there for good and present 
reason. They are there to avoid conflict of interest. They are 
there to avoid circumstances in which folks would seek to 
display the kind of professional behavior that I think the 
Congresswoman's comments earlier were right on point, of the 
kind of efforts we seek to avoid in public servants, of coming 
through the revolving door and seeking to establish some kind 
of opportunity that then can be translated to some more 
remunerative case. That is what we seek to discourage by our 
approach. And that is commendable. In my view, I think it 
works.
    But it works to a detriment in some circumstances, because 
as you enter public service as a Presidential appointee or as 
an executive level appointee after having done something else, 
what it usually requires is liquidity of just about everything 
you own. I found upon my return to public service as Deputy 
Director at OMB, the Office of Government Ethics had perfected 
the conflict of interest rules, and determined that if you have 
no interests, you will have no conflicts. And they set about 
the business of assuring that I had no interests, and they were 
all liquidated, every one of which were required to be 
absolved, any investment in anything had to be liquidated. And 
at the time I entered, it was a market condition that was less 
than desirable for that action.
    So it made it virtually impossible for that liquidity to 
make of any value to fall back on to the extent that it was a 
combination of tuition demands as well as mortgage demands of 
moving back to a high-priced town that made it a finite period 
of time which I could serve. That is what determined ultimately 
the reason I had to leave. It finally got down to the stage 
that several colleagues who were in similar station, we all 
compared our Visa bills and determined exactly how much longer 
we could stand to pay the interest on it and then decided to 
withdraw. So it became a very difficult set of circumstances in 
that case.
    The third factor I would say, very quickly, is the 
confirmation process itself. This is one that requires an 
extended period of time for consideration and I offer this not 
as someone who is complaining about it. In all four of the 
capacities in which I was confirmed, not one took longer than 6 
weeks. Matter of fact, the shortest took three. I probably am 
one of the few people who will sit here talking about this 
circumstance that is probably a world record, to have had four 
appointments, all of which took that short a span of time.
    I unfortunately am the anomaly in that case. Most of them 
take 6 to 8 months. As a consequence, most folks who are 
considering executive positions and looking at the requirements 
to liquidate, to do all the things necessary in order to meet 
the requirements there, and then oh, by the way, come to a 
position which is not competitive by any means from the 
executive compensation standpoint, ultimately make the decision 
to withdraw. The volume of that I think is much larger than the 
number who are actually confirmed, just by virtue of the 
consequences that apply in these cases.
    So in sum, I would say that those three factors, what is 
not a competitive rate, but nonetheless a living rate, and I 
think in this regard the Congresswoman's points are just right 
on. But when you compound that with a set of standards that are 
there for good and present reason, they are there in order to 
assure ethical behavior. It has the effect of limiting the 
amount of time that you can spend.
    And the third one is, some folks make the decision to avoid 
it entirely because of the onerous process of even getting 
there in the first place for what in the end will be a 
sacrifice that requires this. The Comptroller General's, I 
think a very important recommendation on a commission would be 
very, very well pursued, with all three of these factors 
weighing in. Because any one of them individually will force a 
motivation of the original intentions, by any one of those 
three.
    And all three have very valid reasons. We seek to avoid 
profiting or coming to public service in order to benefit by 
the remuneration. We certainly seek to avoid folks coming as a 
matter of ethics to public service for the purpose of a 
revolving door. And we seek to go through the confirmation 
process in order to assure those who come have a true objective 
for public service.
    But the combination of all three has the effect, I think, 
of the consequences we see and unfortunately, decisions that 
must be made, certainly in my own case, of withdrawing from 
that service regardless of my personal commitment, objective 
and intention thereof.
    I thank you, Mr. Chairman.
    Mr. Porter. Thank you very much.
    I believe we are being called to vote. So we have about 15 
minutes. I just wanted you to know that the bells indicate we 
are voting in about 15 minutes. What we would like to do is ask 
Mr. Burtless if you would give your testimony, please.

                   STATEMENT OF GARY BURTLESS

    Mr. Burtless. I am a labor economist, and so I look at 
these salaries differently from someone who actually has gone 
through the ordeals that people who have been asked to perhaps 
make big sacrifices to serve in public service have. The basic 
conclusion of GAO's report is that inflation adjusted salaries 
have not risen, in fact have shrunk since 1970. It is very hard 
to argue with this conclusion.
    Figure 1 in my testimony, which uses a somewhat different 
deflator, shows exactly the same trend. We can also consider 
other benchmarks, and as a labor economist, I think looking at 
other benchmarks is also interesting. One benchmark is, what is 
the median income received by four-person families in the 
United States. In Figure 2 in my testimony, I show what has 
happened between 1960 and the present. Between 1960 and 1969, 
the pay of executive schedule 1 job was 4.2 times that of a 
median income four-person family in the United States. But 
between 2000 and 2004, it had slipped to just 2.6 times that 
ratio.
    For office holders in executive 2 schedule, the same ratio 
fell from 3.4 to 2.3. So it is not only the case that inflation 
adjusted salaries at the top end of the Government pay scale 
have declined, they have also fallen in relationship to middle 
class incomes in the United States.
    Another benchmark you might think of is the wage that is 
earned by an average worker. Well, we can go back to 1909, the 
Bureau of Labor Statistics has measured what an average 
manufacturing worker receives in the United States. And in 
chart 3 in my testimony, I track the pay ratio of Cabinet 
officers and Members of Congress, because they represent 
ceilings on wages received by many other people in the 
executive branch and in the judicial branch.
    You can see the top officer holders' pay in the 1960's was 
not an aberration. In fact, it was lower in relationship to 
workers' pay in the 1960's than top executive sector salaries 
were earlier on in the 20th century. So relative to the 
earnings of manufacturing workers, both Cabinet and 
congressional pay was considerably higher before 1969.
    But it is not very likely that the Government is going to 
be recruiting new executives, scientists, lawyers, technicians 
and so forth from the ranks of production workers and 
manufacturing. What we need to do is recruit job candidates 
from the same pool of candidates which supplies executives, 
scientists, lawyers in the private sector and in academia. 
Chart 4 in my written testimony shows how Federal executive 
schedule pay stacks up against the average pay of American 
workers with post-college degrees. As you can see, top Federal 
salaries have slipped in comparison to this benchmark since the 
1970's and also since the early 1990's.
    The reason for this is quite straightforward. Private 
sector salary disparities have increased in the years after 
1970. Workers with the widest management responsibility, the 
highest technical qualifications, have enjoyed much faster pay 
gains than average production workers. But top Federal salaries 
have not kept up. They have declined in inflation adjusted 
dollars.
    When we examine the salaries paid to top Federal executives 
and compare them with the compensation earned by people in the 
private sector who serve in equally demanding or frequently 
much less demanding jobs, the gap in salaries is huge. I am not 
really worried that the Government is going to be unable to 
attract talented candidates for the very top jobs in 
Government. We can always find very good candidates who are 
wiling to serve as Secretary of Defense, as Governor of the 
Federal Reserve or as Assistant Secretary of the Treasury, for 
reasons that David Walker mentioned.
    What the Government might not be able to do is to find 
strong, ambitious candidates to serve lengthy spells in 
Government service to attain GS-14, GS-15 and SES positions 
that have demanding managerial, technical, scientific or legal 
responsibilities. For better or worse, the executive branch 
requires the experience and talents of very good people, as 
does the judiciary. And those talents largely determine the 
Government's success in carrying out policy and administering 
justice.
    When an able 25 or 30 year old is thinking about the risks 
and rewards of different kinds of careers, how many will be 
attracted by a career where the top salary is not far above the 
starting salary in a law firm, where the top salary is below 
the average professor's income in top ranked universities, 
where the top salary is far below the typical partner's income 
in an accounting firm? I am not talking about law firms, I am 
talking about accounting firms. No rational observer would 
claim that the best public servants are motivated solely by 
monetary rewards.
    But no sensible person should think that the decision to 
serve in a demanding position is totally divorced from 
financial considerations. Top executives, top doctors, top 
lawyers, top scientists in business and academia have seen 
their compensation climb much faster than that of ordinary 
workers over the last 25 years. But the people who hold top 
Federal jobs in the judiciary and the executive branch and the 
Congress have seen their pay shrink in purchasing power and in 
relation to the pay of people who do similar and frequently 
much less demanding jobs.
    I think pay levels affect candidates' decisions to begin or 
to continue a career in Federal service. The long-term decline 
in top Federal pay has reduced the attractiveness of Government 
employment and it has deprived the senior Federal service of 
many able candidates.
    Thank you.
    [The prepared statement of Mr. Burtless follows:]

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    Mr. Porter. Thank you, Doctor.
    I want you to know you are all very lucky today, because we 
have to be in the Capitol in about 6 minutes to vote and there 
is a series of three votes, which could take 30 to 40 minutes. 
So instead of us asking you questions at this point, we will be 
submitting questions for the record. We appreciate very much 
that you are here today.
    Mr. Davis of Illinois. Mr. Chairman, could I just have a 
last word. We talked about the umpires and referees and 
baseball players. I was just reminded of three guys getting 
ready for the World Series. [Remarks being made off mic.] One 
said, let me take all the close balls and strikes. The second 
guy said, well, give me all the close ones and strikes. The 
third umpire said, well, now, as far as I'm concerned, ain't 
none of them nothing until I call them. [Laughter.]
    Mr. Porter. That sounds like some judges that I know. 
Again, thank you all very much for being here. To Mr. Walker, 
thank you for your time.
    And one last point. I would like to recognize Tania, who is 
the staff director of the minority side. She was engaged over 
the weekend, so congratulations.
    [Applause.]
    Mr. Porter. The meeting is adjourned. Thank you all for 
being here.
    [Whereupon, at 3:35 p.m., the subcommittee was adjourned.]
    [Additional information submitted for the hearing record 
follows:]

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