[Congressional Record (Bound Edition), Volume 156 (2010), Part 6]
[Extensions of Remarks]
[Pages 8096-8097]
[From the U.S. Government Publishing Office, www.gpo.gov]




      FEDERAL JUDGES TO APPEAL TO SUPREME COURT OVER COMPENSATION

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                             HON. RON PAUL

                                of texas

                    in the house of representatives

                        Wednesday, May 12, 2010

  Mr. PAUL. Madam Speaker, I would like to enter into the record an 
article from the New York Sun dealing with a court case that could have 
a dramatic impact on current federal legal tender laws. A number of 
federal judges are appealing the elimination of their cost of living 
increase, claiming that this is an unconstitutional diminution of pay. 
In fact, Madam Speaker, even if they had received a cost of living 
increase they may still have received a pay cut, because the 
government's CPI figure is purposely manipulated to underestimate the 
true inflation rate.
  Perhaps the most interesting facet of this case is the potential 
implication for federal legal tender laws. Some experts speculate that 
if the current case is unsuccessful the judges' only recourse would be 
to challenge legal tender laws that artificially prop up the value of 
paper money. Against gold, the paper dollar has lost 80 percent of its 
value over the past decade. No amount of cost of living increases could 
overcome devaluation this severe. I am waiting with anticipation for 
the ultimate resolution of this case, and encourage my colleagues to 
read this thought-provoking article.-

                 [From the New York Sun, May 11, 2010]

    Kagan's First Case Could Involve a Question of Her Own--And Her 
                            Colleagues'--Pay

                     (By Staff Reporter of the Sun)

       New York--If Solicitor General Kagan is confirmed before 
     the start of the Supreme Court's coming term, one of her 
     first big cases on the high bench could touch on one of the 
     most sensitive questions the court has ever handled--the pay 
     of federal judges themselves.
       The case was launched quietly some years ago by a rainbow 
     coalition of some of the most distinguished judges on the 
     federal bench. They are seeking to overturn an act of 
     Congress rescinding an automatic pay increase designed to 
     protect federal judges from the ravages of inflation, and are 
     likely this month to ask the Supreme Court to take the case.
       What makes the case so sensitive--potentially explosive, 
     even--is that it could prove to be a stepping stone, whether 
     intended or not, toward re-opening the question of legal 
     tender. For the question of judges' pay confronts the courts 
     with the question of whether a one-dollar note of legal 
     tender that trades today at less than 1,000th of an ounce of 
     gold is compensation equal to a one-dollar note of currency 
     that was worth, say, a decade ago four times as much. What 
     makes federal judges so special is that it is 
     unconstitutional to diminish the pay of any federal judge 
     while he is in office.
       Were the judges eventually forced to confront that 
     question, says one legal scholar of the monetary system, 
     Edwin Vieira Jr., ``it would have profound economic and 
     political effects, and it would cause a re-evaluation of the 
     entire monetary system. Congress would be forced to undergo a 
     complete re-evaluation of the monetary system.''
       The federal judges asking the Supreme Court to review the 
     rescission of their cost-of-living adjustments aren't raising 
     the legal tender question, at least not yet. They are not 
     asking to be paid in constant--or inflation-adjusted--
     dollars, and they appear to believe that the Supreme Court 
     doesn't have to address that issue to satisfy their claim 
     that Congress violated the anti-diminishment clause of the 
     Constitution when it removed a previously promised cost-of-
     living raise. But they also have to be well aware of the 
     enormity of the issue that lies just beyond the claim they 
     are making.
       The plaintiffs themselves comprise an array of senior 
     judges and some of the most distinguished figures on the 
     federal bench. They include two appointees of President 
     Carter--a district judge of the Eastern District of 
     Louisiana, Peter Beer, and a judge on the district court in 
     central California, Terry Hatter, Jr.; two appointees of 
     President Reagan--Thomas F. Hogan, of the District Court for 
     the District of Columbia, and Laurence H. Silberman, who 
     rides the District of Columbia Circuit of the Court of 
     Appeals for the District of Columbia Circuit.
       Also among the plaintiffs are three appointees of President 
     Clinton--Richard Paez, who rides the Ninth Circuit for the 
     United States Court of Appeals, and Jas. Robertson, of the 
     District Court for the District of Columbia, and A. Wallace 
     Tashima, who was elevated to ride the 9th Circuit by Mr. 
     Clinton after having first served as a district judge on the 
     nomination of Mr. Carter.
       The pay of judges is one of the most sensitive issues in 
     American history. The Declaration of Independence enumerates 
     judges pay as one of the ``injuries and usurpations'' 
     committed by George III against the Americans. The 
     Declaration stated that the British

[[Page 8097]]

     tyrant ``has made judges dependent on his will alone, for the 
     tenure of their offices, and the amount and payment of their 
     salaries.''
       It was that claim that led the Founders to establish, in 
     Article III of the Constitution, that ``[j]udges, both of the 
     supreme and inferior Courts, shall hold their Offices during 
     good Behaviour''--meaning for life--and that they ``shall, at 
     stated Times, receive for their Services, a Compensation, 
     which shall not be diminished during their Continuance in 
     Office.''
       The complaint in the latest case, which is known as Beer v. 
     U.S., would not be the first time federal judges have gone to 
     court with claims in respect of their pay. As recently as 
     2008 at New York State, judges launched a legal case to gain 
     a raise. New York's constitution, like the federal 
     constitution, also prohibits the lowering of a judge's pay. 
     But the argument the New York judges have made, and they have 
     made it in their own courts, is that the way the legislature 
     in Albany has handled the issue violates the principle of 
     separation of powers.
       Beer v. U.S. involves federal judges, who are seeking a 
     hearing by the Supreme Court with a different argument--that 
     when Congress scinded a legislated cost-of-living adjustment, 
     as it did for a number of recent years, the judges' pay was 
     diminished. The judges lost in their early rounds on a 
     complicated set of issues, partly of precedent established in 
     an earlier case when judges fought for a cost of living 
     increase.
       In some recent legal fracases involving judges pay, there 
     have been statements from several Supreme Court justices, 
     including one by Justice Scalia, that seem to have emboldened 
     the judges filing a claim in the latest case. They are 
     expected to file in the next few days a petition for the 
     Supreme Court to hear their claim that earlier precedents 
     were wrongly decided and that rescinding a legislated cost-
     of-living adjustment is a diminishment. The Supreme Court has 
     ruled that in cases where a judge has an interest in the 
     outcome of a case but is by necessity the party who must hear 
     it, it is the judge's duty to rule, despite the conflict of 
     interest. It may be that were Ms. Kagan to be elevated to the 
     Supreme Court she would decide to recuse herself from Beer v. 
     U.S. because of her either direct or tangential involvement 
     in the case as solicitor general.
       One difference between the current case and earlier ones is 
     that the country is now in a historic monetary crisis, in 
     which the value of United States fiat money has collapsed to 
     such a degree that the Supreme Court would have to go through 
     contortions to avoid considering it. In the past decade, the 
     value of a dollar has plummeted to less than a 1,200th of an 
     ounce of gold from, say, the 265th of an ounce of gold that 
     it was worth at the start of the president of George W. Bush.
       This means that the legal tender with which a judge is paid 
     today is worth less than a quarter of what it was worth a 
     decade ago.
       The Supreme Court ruled after the Civil War that the 
     federal government's paper money had to be accepted as legal 
     tender. The centerpiece of the court's rulings was called 
     Knox v. Lee and involved payment for a flock of sheep. But 
     there is a legion of scholars and activists who believe--as 
     did the Chief Justice of the United States at the time of 
     Knox, Salmon Chase--that Knox v. Lee was wrongly decided. 
     Such scholars argue that the majority in Knox v. Lee would 
     never have sustained the monetary system we have today.
       These critics point out that the Founders of America, who 
     used the word ``dollars'' twice in the Constitution, all knew 
     what the word meant--namely, 416 grains of standard silver or 
     371\1/4\ grains of pure silver, the same as was in a then-
     ubiquitous coin known as a Spanish milled dollar, which was 
     also known as a piece of eight. That standard was codified in 
     one of the most famous laws passed in the early years of the 
     republic, the Coinage Act of 1792. Critics of the legal 
     tender law believe that 416 grains of standard silver--or the 
     free market equivalent in gold--is the only form of 
     constitutional money.
       ``If the judges bringing the case of Beer v. United States 
     fail to convince the Supreme Court to restore their cost of 
     living adjustment, federal judges will then have no option 
     left but to reformulate their case so as to challenge the 
     legal tender concept as presently applied,'' says Mr. Vieira.

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