Saturday, June 4, 2016

Members of Congress Make a Lot of Money, But Are They Overpaid?

 

Washington is “broken.” Members of Congress are “overpaid and underworked.” A whopping 78 percent of the American public disapproves of lawmakers’ job performances. Thus, like any other group of poorly performing American workers, Congress probably won’t get a raise next year.
Many voters agree with that assessment. Lawmakers already make a hefty six figures and more than three times the U.S. median household income. But although their pay might look rich at first glance, deciding what salary the members of Congress merit is complicated by the political climate—and the potential for legislators to make a whole lot more if they were to work almost anywhere else. 
Lawmakers haven’t given themselves a raise in seven years, and they likely won’t see one next year either. The fiscal-year 2017 appropriations package, which Congress is debating right now, would prolong the freeze. Since 2009, when Democrats controlled Congress, lawmakers’ salaries have stayed stagnant at $174,000, and only a few select members make more than that: Both chambers’ majority and minority leaders and the Senate’s president pro tempore each earn $193,400; and the House speaker takes in $223,500.
Keeping the freeze is, no doubt, good politics. It’s no coincidence the freeze began with the U.S. economy in recession. The private sector took a nosedive and so did government: During the downturn, governments at all levels shed jobs when tax revenue dropped, and some local and state governments cut workers’ pay or forced furloughs. But the freeze persisted even as control of Congress changed hands and the economy began to rebound. Conservative lawmakers don’t believe the economy has recovered, and they aren’t wont to praise Washington. It’d be out of character for them to agree to a pay bump, even if they know they can make much more if they leave the Hill. As Roll Call’s David Hawkings reported last year, members’ support for a freeze immediately came with sacrifices:
That meant forgoing a $2,600 cost-of-living increase [the first year], based on a government calculation of wage gains in the private sector. With budget austerity taking hold on the Hill with ever more force, Congress readily turned aside similar COLAs in the five subsequent years, and now lawmakers are getting ready to spurn the $3,000 inflation adjustment calculated for 2016. ...
[W]ith each passing year, their “no” votes of self-denial are becoming more politically obligatory—and more damaging to their own families. (Adjusting for inflation, the buying power of a member’s salary in the coming year will be smaller than at any time in the previous quarter-century.)
But is it all that damaging? Lawmakers’ decision-making is complicated by the fact that many are, well, stinkin’ rich. And there are the optics: Even if congressional salaries were their only source of wealth, members would still make much, much more annually than other Americans, including other government workers. In 2014, the average American made just over $44,000. Federal, state, and local government workers, on average, made more than that, but their earnings were still tens of thousands of dollars lower than legislators’ salaries. The graphic below details how congressional salaries stacked up against the average wages and salaries of local, state, and federal government workers in 2014, the last year data was available from the U.S. Bureau of Economic Analysis. Federal workers’ pay has changed slightly since 2014; they have received small increases each year after a three-year freeze.

How Congressional Salaries Stack Up

Most members of Congress make $174,000 a year, amounting to roughly four times the annual paycheck of the average American.
Speaker of the House: $223,500
Most common congressional salary: $174,000
Civilian federal employee: $84,153
State/local employee: $56,992
Average U.S. worker: $44,569
The differences in pay here are large, but the government employs a variety of people in a wide range of jobs—from park rangers to mail-room clerks, rocket scientists to policy wonks.
So, instead of comparing the legislative branch with other government employees, a more apt comparison would be between members of Congress and executives or other high-ranking employees in the private sector. Generally speaking, both groups are high-achieving and well educated with leadership skills and marketable experience. Advocates for a congressional pay bump have argued that members’ salaries need to be closer to what they could earn if they left the Hill, in part to ensure Congress retains the best talent. Nonprofits make this argument, too, when defending their own highly paid presidents and CEOs; the wealthiest among them can make upwards of $1 million. After retiring Democratic Representative Jim Moran pushed for an increase in 2014, saying members of Congress were “underpaid,” he was widely mocked. But an executive-compensation consultant told NPR that same year that $174,000 “seems low by today’s standards—both in the for-profit and nonprofit worlds.”Roll Call’s Hawkings defended Moran, arguing that great responsibility deserves greater compensation. After all, Congress runs a federal budget comprising trillions of dollars. “No entire industry, let alone any single corporation, comes as close to having that sort of economic sway,” Hawkings wrote. What’s more:
[The Department of Labor] doesn’t track “lobbyists” or “trade association executives” as distinct job categories, but it’s a safe bet that many of the people who spend their lives advocating on Capitol Hill get paid a whole lot more than the people they are importuning.
If you believe compensation should track comparative power, then one way to guard against government corruption is to make sure the people charged with making decisions can have a standard of living that’s comparable to the people trying to influence those decisions.
It’s no secret that many members leave Congress, by choice or by election defeat, and go straight to lucrative careers in lobbying and other high-paying jobs. The government-watchdog groups Open Secrets and the Sunlight Foundation reported in 2015 that of Congress’s last gang of exiting senators, one serves “as a board member of a Fortune 500 financial company; another is president of a politically aggressive think tank with a strong lobbying shop; one serves as senior counsel for two firms whose clients include top corporations, defense contractors and foreign governments; another is with a law firm whose client roster includes Microsoft, the National Football League and an arm of the Teamsters union.” All four had retired from the Senate (they weren’t ousted in elections) and took these jobs almost immediately.
This maneuvering isn’t new or uncommon. Ohio Governor John Kasich worked at Fox News after leaving Congress in the early 2000s, and as a managing director for investment banking at Lehman Brothers. Retired Senator Chris Dodd became the chairman of the Motion Picture Association of America, “Hollywood’s top lobbying organization,” after months of promising that he would never accept a lobbying job. He made roughly $3 million in base compensation in 2012. Last year, political scientists writing in The Washington Post noted that “more than 45 percent of senators who have left office since 1992 have served on the board of a publicly traded firm.”
Increasing congressional salaries wouldn’t mean this trading up—cynical Washingtonians call it “cashing in”—would entirely go away. Lawmakers aren’t immune to raise-seeking behaviors any more than the rest of America, and they aren’t immune to basic greed, either. Some likely have no qualms at all about using their Hill expertise to benefit their new private-sector employers and to advance their own careers. Besides, given the lack of job security in Congress, with changes in the political winds always threatening to throw them out of office, legislators may want their highly public jobs to come with highly paid salaries.
There is one other set of lawmakers who might argue for a raise: Those who aren’t independently wealthy. Even if members are cushioned by pensions, which can vary depending on age and years of service, they may still have to maintain their home-state household, finance a D.C. apartment, and do all the other expensive things everyone else without personal wealth would like to do, like put their kids through college. Along those lines, salary-increase advocates, including House Democratic Whip Steny Hoyer, argue that pay bumps would curb the millionaire-ization of Congress. Increases would help regular Americans be able to afford to serve in expensive Washington, D.C.
Of course, what Congress deserves is in the eye of the beholder. With congressional approval ratings low, lawmakers who want more money aren’t likely to get very far—even if House Democrats, who have been generally sympathetic to an increase, are in charge next year. Democratic Representative Raúl Grijalva told The Hill last year that “most people would be for a raise” if they were to “state what they really believe.” He, for one, agrees with Hoyer that lawmakers should get a bump. “But in the practical political world?” Grijalva said. “Ain’t gonna happen.”


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